Ordinance 2004-33 4000 IS 72S
F i t fir{ If or Record i n
KENDALL COUNTY P ILI._INDIS
PAUL. ANDERSON
07--07-21j114 At 02720 pm.
ARDINANC:E 359.01}
UNITED CITY OF YORKVILLE
KENDALL COUNTY
STATE OF ILLINOIS
ORDINANCE NUMBER 2004-33
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2004-106
TOTAL GRANDE RESERVE VARIABLE RATE DEMAND
SPECIAL TAX BONDS, SERIES 2004 (MPI GRANDE RESERVE PROJECT)
AND PROVIDING FOR THE LEVY OF A DIRECT
ANNUAL TAX ON TAXABLE PROPERTY IN SUCH
SPECIAL SERVICE AREA FOR THE PAYMENT OF
PRINCIPAL OF AND INTEREST ON SUCH BONDS
ADOPTED BY THE
CITY COUNCIL
OF THE
UNITED CITY OF YORKVILLE
KENDALL COUNTY
STATE OF ILLINOIS
The 22nd day of June, 2004
Published in pamphlet form by authority of the City Council of the United City of Yorkville,
Kendall County, Illinois this 22nd day of June, 2004.
011.560726.2
ORDINANCE NO. 2004-33
AN ORDINANCE PROVIDING FORA COUNTY,OF
ILLINOIS
UNITED CITY OF YORKVILLE, KENDAL
SPECIAL SERVICE AREA NUMBER 2004-106
TOTAL GRANDE RESERVE
VARIABLE RATE DEMAND
SPECIAL TAX BONDS, SERIES 2004
(MPI GRANDE RESERVE T AND
ON TAXABLE
PROPERTY THE LEVY OF A DIRE
HE
PROPERTY IN SUCH L OF AN NTEIREST ON SUOCHTBONDS
PAYMENT OF PRINCI
BE IT ORDAINED BY THE CITY A NCIL O FOLLOWS:
UNITED CITY OF
YORKVILLE, KENDALL COUNTY,ILLINOIS, S
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
2004-106 Total Grande Reserve described _Exhibit A to
adopt drdon June 22ce
"Special Service Area") pursuant to Or dinance
2004 (the "Establishing 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 Constitution Sed by the Spetate of Illinois,
has otherwise complied with all other co nditions precedent requ
Service Area Act.
b. It is necessary and in the best interests of the City to provide at this time
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
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 mate rials necessary for ei ndamit gation
thereof, public parks, park improvements, bicycle paths, landscaping,
and tree installation, costs for land easement acq foriwaterrorasan tart' sewer services improvements, required tap-on and related fees
ty
other eligible costs to serve the Special Service Area (t Services ogether ewith costs lof
presently estimates the total cost of these Special
borrowing money for that purpose, funding administrative
(collectively,
mntt the "Costs providing of the
necessary debt service reserves and capital
Special Services") to be not more than $16,000,000.
011.560726.2
C. The City does not have sufficient funds on hand or available from other
sources with which to pay the costs of the Special Services.
d. It is in the best interests of the City to issue not to exceed $16,000,000
principal amount of its Special Service Area Number 2004-106 Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project)
(the "Bonds") as provided in this Ordinance, to pay or provide funds for a portion of the
Costs of the Special Services.
e. The borrowing of the sum of not to exceed $16,000,000 and the issuance
of the Bonds in that amount are for purposes constituting special services in the Special
Service Area under the Special Service Area Act.
f. After due publication of a notice as required by the Special Service Area
Act, a public hearing to consider the establishment of the Special Service Area, the
issuance of the Bonds for the purpose of paying the costs of the Special Services and the
manner in which the Bonds are proposed to be retired and the proposed tax levy, was
held on March 23, 2004 at 7:00 p.m. No objection petition has been filed with respect to
the establishment of the Special Service Area or the issuance of the 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
$16,000,000 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
2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds, Series 2004 (MPI
Grande Reserve Project)," and shall be issued for the purpose of providing a portion of the funds
needed for the Costs of the Special Services. 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.
Section 3. Approval 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 LaSalle
Bank National Association, as Trustee, to be dated as of July 1, 2004, which form of
Indenture is attached as Exhibit B to this Ordinance;
b. a form of Bond Purchase Agreement (the "Bond Purchase Agreement")
among the City, ABN AMRO Financial Services, Inc. and William Blair & Company,
L.L.C., as Underwriters (collectively, the "Underwriter"), and MPI-2 Yorkville Central
LLC, MPI-2 Yorkville North LLC and MPI-2 Yorkville South I LLC (collectively, the
"Developer") to be dated as of the date the offer of the Underwriter to purchase the
Bonds is accepted by the City, which form of Bond Purchase Agreement is attached as
Exhibit C to this Ordinance;
2
011.560726.2
C. a form of Public Improvement Agreement between the City and the
Developer,which form of Public Improvement Agreement is attached as Exhibit D to this
Ordinance;
d. a form of Remarketing Agreement (the "Remarketing Agreement")
of July
among the City, the Developer and ABN AMRO a is 1 attached as _Exhibit dated Es to this
1, 2004, which form of Remarketing Agreement
Ordinance;
e. a form of Reimbursement Agreement (the "Reimbursement
Agreement") dated as of July 1, 2004 among the City, the Developer and LaSalle Bank
National Association (the "Credit Entity"), which form of Reimbursement Agreement is
attached as Exhibit F to this Ordinance;
f. a form of Letter of Credit (the "Letter of Credit") to secure the Bonds to
be issued by the Credit Entity, which form of Letter of Credit is attached as Exhibit G to
this Ordinance;
g. a form of the preliminary Official Statement (the "Official Statement")
used by the Underwriter in its initial offering of the Bonds, which form of Official
Statement is attached as Exhibit H to this Ordinance;
h. a form of the Agreement for
ich Administrative Services
for Administration
n straUon
Taussig & Associates, Inc. and the City W
Services is attached as Exhibit I 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 Official Statement in substantially the form
of the preliminary Official Statement presented es of the Bondscthe Indenture and other matters.
as they deem appropriate to reflect the final t
Section 4. Bond Terms. The Bonds shall be issued as provided in the Indenture and
shall be issued in the principal amount not to exceed $16,000,000, shall be dated, shall mature,
shall bear interest at the rates (not to exceed in any year seven percent (7%) per annum), shall be
3
011.560726.2
subject to redemption, and optional and mandatory tender at the times and prices as set forth in
the Indenture, and shall be sold to the Underwriter at a purchase price of not less than 98.5% of
the principal amount of the Bonds with an original issue discount of not to exceed 2% of the
principal amount of the Bonds, all as set forth in the Bond Purchase Agreement. The execution
and delivery of the Bond Purchase Agreement by the Mayor and the City Clerk shall evidence
their approval of the terms of the Bonds set forth above.
Section 5. Execution and Delivery of Bonds. The Mayor and the City Clerk are
authorized and directed to execute and deliver the Bonds and, together with other Authorized
Officers (as defined in the Indenture), to take all necessary action with respect to the issuance,
sale and delivery of the Bonds, all in accordance with the terms and procedures specified in this
Ordinance and the Indenture. The Bonds shall be delivered to the Trustee who is directed to
authenticate the Bonds and deliver the Bonds to the Underwriter upon receipt of the purchase
price for the Bonds.
The Bonds shall be in substantially the form set forth in the Indenture. Each Bond shall
be executed by the manual or facsimile signature of the Mayor and the manual or facsimile
signature of the City Clerk and shall have the corporate seal of the City affixed to it (or a
facsimile of that seal printed on it). The Mayor and the City Clerk (if they have not already done
so) are authorized and directed to file with the Illinois Secretary of State their manual signatures
certified by them pursuant to the Uniform Facsimile Signatures of Public Officials Act, as
amended, which shall authorize the use of their facsimile signatures to execute the Bonds. Each
Bond so executed shall be as effective as if manually executed. In case any officer of the City
whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be
such officer before authentication and delivery of any of the Bonds, that signature or facsimile
signature shall nevertheless be valid and sufficient for all purposes, the same as if the officer had
remained in office until delivery.
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 and in accordance with the Special Tax Roll and Report (as defined 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 set forth
in Section 2.4 of the Indenture (assuming an interest rate of 7% per annum) and to pay for the
Administrative Expenses (as defined in the Indenture) of the City and Kendall County, if any, for
4
011.560726.2
each year including specifically the following amounts for the following years (the "Special
Taxes"):
An Amount Sufficient
Year of Levy to Produce the Sum of:
2005 $ 2,000,000
2006 $ 2,000,000
2007 $ 2,000,000
2008 $ 2,000,000
2009 $ 2,000,000
2010 $ 2,000,000
2011 $ 2,000,000
2012 $ 2,000,000
2013 $ 2,000,000
2014 $ 2,000,000
2015 $ 2,000,000
2016 $ 2,000,000
2017 $ 2,000,000
2018 $ 2,000,000
2019 $ 2,000,000
2020 $ 2,000,000
2021 $ 2,000,000
2022 $ 2,000,000
2023 $ 2,000,000
2024 $ 2,000,000
2025 $ 2,000,000
2026 $ 2,000,000
2027 $ 2,000,000
2028 $ 2,000,000
2029 $ 2,000,000
2030 $ 2,000,000
2031 $ 2,000,000
2032 $ 2,000,000
Pursuant to the Special Tax Roll established by the Special Tax Roll and Report prepared
for the Special Service Area (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 2005 through 2032 to calculate or cause the Consultant appointed pursuant to
the Indenture to calculate the projected Special Tax Requirement (as defined in the Indenture);
for the immediately succeeding year and to adopt an ordinance approving the amount of the
projected Special Tax Requirement for the immediately succeeding year. Each month the
Consultant shall adjust the projected Special Tax Requirement to reflect actual debt service owed
on the Bonds. The Special Tax shall be levied and billed directly to and collected from the
5
011.560726.2
property owners by the City through the Consultant on a monthly basis to coincide with the
interest payments owed on the Bonds. The Special
and Report,aand divid d computed,
mong the taxable
collected in accordance with the Special Tax Roll he terms of the
real property within the Special Service Area in rSal Tax t levied by his O dsinanlce for
The
Ordinance and the Special Tax Roll and Report. P ec a
collection by the County Clerk of Kendallbill and collelct be
he Special Tax direct y or through
procedures are in place for the City to levy,
the Consultant. On or before the last Tuesday of January Credit Entity of he amount of the projected
2033 the City shall notify the Trustee and the C Y
Special Tax Requirement for the current year and the actual SpearalThe City shall take all actions
by the Consultant each month for the immediately preceding y
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 by institution of foreclosure
procedures as provided by law. Interest
The Special Taxes levied as provided above shall be deposited in
irrevocably pledged to
Fund created
used only for the purposes set forth in Section of the Indenture.
and shall be Y
Section 7. Special Covenants. The City covenants with the holders of the Bonds from
avoid
time to time outstanding that it (i)will take all acti w hateinterest on the Bonds will be
any actions which it is necessary to avoid being to ken) so
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 other funds the tytwhich would resulthn
Bonds, amounts held under the Indenture or any
making interest on the Bonds subject to federal income taxes by reason of causing the Bonds to or
any
be "arbitrage bonds" within the meaning of Section he Code Bas as promulgated andras am nd dltfrom
action inconsistent with the regulations under
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
to the use
limitation, to make any representations and certifications underhhe Indenturepnrorder tolestablish that
of the proceeds of the Bonds and other moneys held
the Bonds shall not constitute arbitrage bonds as so defined.
The City further covenants with the holders of the Bonds from time to time outstanding
that:
a. it will take all actions, if any, which shall be necessary in order further to
provide for the 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
6
011.560726.2
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;
b. 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 fi' elable
extension and collection of the Special Taxes; in each c ase so that the City shall be
to pay the principal of and interest on the Bonds as they come due 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.
Section 8. Additional Authority. The Mayor, the City Clerk and the other officers of
the City are authorized to execute and deliver on behalf of the City such other documents,
agreements and certificates and to do such other things consistent with the terms of this
Ordinance as such officers and employees shall deem necessary or appropriate in order to
effectuate the intent and purposes of this Ordinance, including without limitation to make any
representations and certifications they deem proper pertaining to the use of the proceeds of the
Bonds in order to establish that the Bonds shall not constitute arbitrage bonds as defined in
Section 7 above.
Section 9. 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 10. 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 11. 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.
7
011..560726.2
PASSED BY THE CITY COUNCIL OF THE UNITED CITY OF YORKVILLE,
KENDALL COUNTY, ILLINOIS this ay of June, 2004.L
VOTING YE: 'Lt`Li ^� L�.'Lci;' �-{ ��`l�Cl �►-lli.�t��� ' _` �;�t�') � K{'�
TING
VOTING NAY: , r
ABSENT:
ABSTAINED:
NOT VOTING:
APPROVED:
Mayor
ATTEST:
it C
8
011.560726.2
Exhibit A
Lep,al Description
011.560726.2
GRANDE RESERVE NORTH REGION
THAT PART OF THE SOUTHEAST ST OF THE THIRD PRINCIPAL MERIDIAN
TOWNSHIP
37 NORTH, RANGE 7 EA MERIDIAN
DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEAST CORNER OF SAID SOUTHEAST
QUARTER; THENCE WESTERLY ALONG THE NORTH LINE OF SAID
SOUTHEAST QUARTER 2029.92 FEET TO THE EAST LINE OF LOT 5 OF
SAID SECTION 11; THENCE SOUTHERLY ALONG SAID EAST LINE 1469.90
FEET TO THE CENTERLINE OF MILL ROAD; THENCE SOUTHEASTERLY
ALONG SAID CENTERLINE 1039.40 FEET TO A TRACT OF LAND
CONVEYED TO COMMONWEALTH EDISON COMPANY BY TRUSTEE'S
DEED RECORDED JUNE 28, 1973 AS DOCUMENT 73-3089; THENCE
NORTHEASTERLY ALONG SAID NORTHERLY LINE 1062.36 FEET TO THE,
EAST LINE OF SAID SOUTHEAST QUARTER;
ALONG
SAID EAST LINE 1489.22 FEET TO THE POINT OF BEGINNING IN BRISTOL
TOWNSHIP, KENDALL COUNTY, ILLINOIS.
ALSO:
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 2,
PART OF THE
NORTHEAST QUARTER OF SECTION 11 AND PART OF THE RANGE 7NORT WEST
QUARTER OF SECTION 12, TOWNSHIP 37 NORTH, OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID SECTION 2;
THENCE
SOUTH 89 DEGREES 28 MINUTES 21 SECONDS EAST ALONG THE NORTH
LINE OF SAID SECTION 12, 99.96 FEET; THENCE SOUTH 2 DEGREES 26
MINUTES 28 SECONDS EAST 2654.27 FEET TO A POINT ON THE SOUTH
LINE OF THE NORTHWEST QUARTER OF SAID SECTION 12, 236.28 FEET
EAST OF THE SOUTHWEST CORNER OF SAID NORTHWEST QUARTER;
THENCE NORTH 89 DEGREES 28 MINUTES 58 SECONDS WEST ALONG
SAID SOUTH LINE 236.28 FEET TO THE SOUTHWEST CORNER OF SAID
NORTHWEST QUARTER; THENCE NORTH 89 DEGREES 31 MINUTES 16
SECONDS WEST ALONG THE SOUTH LINE OF THE NORTHEAST
QUARTER OF SAID SECTION 11, 2028.27 FEET TO THE EXTENSION
SOUTHERLY OF THE EASTERLY LINE OF LOT 1 OF STORYBOOK
HIGHLANDS, A SUBDIVISION IN SAID SECTION 11; THENCE NORTH 1
DEGREE 06 MINUTES 53 SECONDS EAST ALONG SAID EXTENDED LINE
1030.0 FEET; THENCE SOUTH 89 DEGREES 06 MINUTES 37 SECONDS
EAST 239.40 FEET; THENCE NORTH 1 DEGREE 06 MINUTES 53 SECONDS
EAST 872.93 FEET TO THE CENTERLINE OF CANNONBALL TRAIL; THENCE
NORTH 66 DEGREES T! SECONDS EAST ALONG S
CENTERLINE 898.31 FEET; THENCE NORTHEASTERLY ALONG SAID
1
CENTERLINE, BEING ALONG A CURVE TO THE LEFT HAVING A RADIUS OF
2290.82 FEET, A DISTANCE OF 495.34 FEET;LINE 654.29 FEET TO THE EAST DEGREES
46 MINUTES EAST ALONG SAID CENTER
LINE OF SAID SECTION 2; THENCE SOUTH 0 DEGREES 30 MINUTES 10
SECONDS WEST ALONWNSHIP OF BR STOL?KENDALL COUNTYOILLINOIS.
BEGINNING, IN THE TO
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION
DI, TODESCRIBED q NORTH,
RANGE 7 EAST OF THE THIRD PRINCI PAL
FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SECTION 11; THENCE
SOUTH 0 DEGREES 57 MINUTES 0 SECONDS WEST 442 FEET TO THE
NORTH LINE OF THE RIGHT OF WAY OF THE CHICAGO, BURLINGTON
AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17 MINUTES 0
SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE
SOUTH LINE OF SECTION 11; THENCE SOUTH NE OF SAID SECT
ON
SECONDS EAST 1001.25 FEET ALONG THE S OUTH L
11 TO THE SOUTHEAST CORNER OF THE WEST HALF OF SAID SECTION
11; THENCE NORTH 89 DEGREES 54 MINUTES 0 SECONDS EAST 1339.5
FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE SOUTHEAST
CORNER OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID
SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES 0 SECONDS EAST
977.5 FEET TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH 74
DEGREES 15 MINUTES 0 SECONDS WEST 727.2 FEET ALONG SAID
CENTERLINE; THENCE NORTH 79 DEGREES 10 MINUTES 0 SECONDS
WEST 2877.4 FEET ALONG SAID CENTERLINE TO THE CENTERLINE OF A
NORTH AND SOUTH HIGHWAY; THENCE SOUTH 7 DEGREES 7 MINUTES 0
SECONDS EAST 364.8 FEET ALONG THE CENTER OF SAID NORTH AND
SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0 SECONDS
WEST 503.33 FEET TO THE WEST LINE OF SAID SECTION 11; THENCE
SOUTH 0 DEGREES 52 MINUTES 0 SECONDS WEST ALONG SAID WEST
LINE 1327.6 FEET TO THE POINT OF BEGINNING (EXCEPT THAT PART OF
RIGHT OF WAY OF THE CHICAGO, BURLINGTON AND QUINCY RAILROAD
RUNNING THROUGH SECTION 11 AFORESAID, AND ALSO EXCEPT THAT
PART LYING WESTERLY OF THE CENTERLINE OF KENNEDY ROAD, AND
ALSO EXCEPT THAT PART LYING SOUTHERLY OF THE CHICAGO,
BURLINGTON AND QUINWNSHIP OF BRISTOL, KENDALL COUNTY,
ION 11
AFORESAID), IN THE TO
ILLINOIS.
2
GRANDE RESERVE CENTRAL REGION
THAT PART OF THE SOUTHEAST QUARTER NORTH HALOF OFISECTION 23T
OF SECTION 14, AND THAT PART OF THE
TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL
MERIDIAN DESCRIBED AS
BEGINNING AT THE INTERSECTION NE OF THE CENTERLINE
NORTHERN KENNEDY
ROAD WITH THE SOUTHERLY L
14
THENCE NORTH
RAILROAD RI MINUTES, Y21HSEOCONDSAEAST ALONG SAID SOUTHERLY
73 DEGREES 14
LINE 1239.61 FEET TO THE NORTH NORTH 88 DEGREES 04 MINUTES 00 TE
OF SAID SECTION 14; THENCE
SECONDS EAST, ALONG sS IDNORTH NORTHWEST QUARTER; THENCE NORTH OF NORTHEAST CORNER ES
87 DEGREES 54 MINUTES 03 SECONDS SECTION 1, A DISTANCE OF SOUTH 329.33E OF
SAID SOUTHEAST QUARTER OF
FEET TO THE WEST LINE OHENCE NORTH 01 DEGREES 2R1 MINUTES 20
SOUTHEAST QUARTER,
SECONDS WEST ALONG SBUR WEST LINE, 511.01
BURLINGTON NORTHERNERAI ROAD; THENCE
SOUTHERLY LINE OF THE
ALONG SAID
NORTH 73 DEGREES 14 MINUTES COENTDERECENTERLINE,,OF MILL ROAD;
SOUTHERLY LINE, 837.66 FE ET TO THE
THENCE SOUTH 74 DEGREES 18 MINUTES 13 SECONDS EAST TO THE EAST LINE OF SA D SOUTOHEAST
SAID CENTERLINE 546.02 FEET
QUARTER OF SECTION 11; THENCE SOUTH 01 DEGREE 19 MINUTES 08
SECONDS EAST ALONG SAID SAID LINE, 556.17 FEET
QUARTER;OTHENCE SOUTH
SOUTHEAST CORNER OF INE
01 DEGREE 19 MINUTES 08 SECOA DS EAST
D SECTION 104, A DISTANCELOF 111022.0
THE NORTHEAST QUARTER OF
FEET; THENCE SOUTH 87 DEGREES MINUTES OF LYNWOOD SUBDIVISION,
438.0 FEET TO THE NORTHEAST CORNER
EXTENSION FOUR; THENCE SOUTH 87 DEGREES 45 MINUTES 51
SECONDS WEST, ALONG THE R 168.80 FEET TO THE NORNORTHWEST SUBDIVISION, EXTENSION FOUR,
CORNER THEREOF; THENCE�SOUTH 01 DGREE 46 MINUTES
WESTERLY E NE OF YNWOOD 18
SECONDS EAST, ALONG TH
SUBDIVISION, EXTENSIONS FOUR AND D MINUTES 490SECONDS EAST,ON
STAKE; THENCE SOUTH 01 DEGREE
3
ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION, EXTENSION
FIVE, 376.25 FEET TO AN IRON STAKE; THENCE S LINES p DEGREES 01
MINUTES 46 SECONDS EAST ALONG THE
LYNWOOD SUBDIVISION, EXTENSIONS FIVE AND SIX, 1950.62 FEET TO
AN IRON STAKE; THENCE SOUTH 01 DEGREE 51 MINUTES 08 SECONDS
EAST, ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION,
EXTENSION SIX, 879.29 FEET TO THE CENTERLINE OF U. S. ROUTE NO.
34; THENCE SOUTH 45 DEGREES 14 MINUTES 47 SECONDS WEST ALONG
SAID CENTERLINE 878.60 FEET; THENCE NORTH 37 DEGREES 07
MINUTES 26 SECONDS WEST, 2106.30 FEET;THENCE NORTH 47
DEGREES 17 MINUTES 26 SECONDS ROAD AND THE EASTERNMOST CORNER CENTERLINE OF KENNEDY CORNER OF
A TRACT DESCRIBED IN A QUIT CLAIM DEED TO GEORGE AND GLENNA
PATTERSON, HUSBAND AND WIFE, RECORDED AS DOCUMENT NO. 72-
375 ON JANUARY 25, 1972; THENCE NORTH 25 DEGREES 56 MINUTES 49
SECONDS EAST ALONG SAID CENTERLINE 236.34 FEET; THENCE
NORTHEASTERLY AND NORTHERLY, A RADIUS OF 800.0 FEET; AN ARC
DISTANCE OF 419.10 FEET; THENCE NORTH 04 DEGREES 04 MINUTES 07
SECONDS WEST ALONG SAID CENTERLINE 531.06 FEET; THENCE NORTH
05 DEGREES 06 MINUTES 07 SECONDS WEST ALONG SAID CENTERLINE
FEET TO" ,
TTY ILLINOIS AND CONTAINING 372.2223 ACRES HIP,
KEND ALL COUN
KEND
ALSO:
THAT PART OF SECTIONS FOURTEEN (14), FIFTEEN (15) AND TWENTY-
THREE (23), ALL IN TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE
SEVEN (7) EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS
FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE
LAKE UNIT NO. 1, (SAID POINT ALSO BEING THE INTERSECTION OF THE
CENTERLINE OF BRISTOL ROAD AND THE CENTERLINE OF KENNEDY
ROAD), AS SHOWN ON THE SUBDIVISION PLAT OF STRUKEL'S PARADISE
LAKE UNIT NO. 1 RECORDED AS DOCUMENT#71-215;
THENCE NORTH 60
DEGREES 17 MINUTES 26 SECONDS EAST, 724.86 FEET ALONG THE
CENTERLINE OF KENNEDY ROAD TO THE POINT OF CURVATURE OF A
1094.72 FOOT RADIUS CURVE TO THE LEFT; THENCE NORTHEASTERLY
631.18 FEET ALONG SAID CURVE WHOSE CHORD BEARS NORTH 43
DEGREES 46 MINUTES 24 SECONDS EAST 622.47 FEET TO THE POINT OF
TANGENCY OF SAID CURVE; THENCE NORTH 27 DEGREES 15 MINUTES
21 SECONDS EAST 11.57 FEET ALONG SAID CENTERLINE TO A POINT;
THENCE SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1776.45
FEET TO A POINT;343.89C DEGREES
SECONDS WEST FEET TO A POINT IN THE CENTERLINE OF
4
BRISTOL ROAD; THENCE GO SAID CENTERLINE TO TIHE POINT OFCONDS
WEST 1778.85 FEET ALON
BEGINNING.
ALSO:
THAT PART OF SECTIONS FOURTEEN > RANGE SEVEN (7) EAST OF L
IN TOWNSHIP THIRTY-SEVEN ( ) NORTH
THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
ISE
COMMENCING AT THE SOUTHERLY BEING NG OF STRUKEL'S
INTERSECTION OFDTHE
LAKE UNIT NO. 1, (SAID POINT ALSO
CENTERLINE OF BRISTOL ROUBDIVIAND
S ON PLAT OF STRUOKEL'S PARADISE
ROAD), AS SHOWN ON THE
LAKE UNIT NO. 1, RECORDED AS DOCUMENT#71-215; THENCE SOUTH 37
DEGREES 39 MINUTES 00 SECONDS FOR THE POINT FEET NGTTHEN.
CENTERLINE OF BRISTOL ROAD CE
NORTH 52 DEGREES 21 MINUTES 9 MINDUTES 00 SECONDS EAST O A
POINT; THENCE SOUTH 37 DEGREES
1645.23 FEET TO A POINT IN THE MCENTERLINE OF ILLINIS INUTES 17 SECONDS WESTT 1350 80
THENCE SOUTH 46 DEGREES 33
FEET ALONG SAID CENTERLINE E CENTERLINE OF BRISTOL ROAD;OTHENCE NORTH
INTERSECTION OF TH
37 DEGREES 39 MINUTES 00 SECONDS TO THE POINT OF BEGENNING ALONG SAID
CENTERLINE OF BRISTOL ROAD
ALSO:
THAT PART OF SECTIONS FOURTEEN ) RANGE SEVEN (7) EAST OF ALL
IN TOWNSHIP THIRTY-SEVEN (37) N ORTH
THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER R OE INTERSECTION OF PARADISE
LAKE UNIT NO. 1, (SAID POINT
CENTERLINE OF BRISTOL RBVI ON PLAT OF OF KENNEDY
SUDI KEL'S PARADISE
ROAD), AS SHOWN ON THE SU
LAKE UNIT NO. 1, RECORDED AS DO EASTN24.86 FEET ALONG THO NORTH 60
E
DEGREES 17 MINUTES 26 SECOND
CENTERLINE OF KENNEDY ROAD TOE LEFT; NORTHEASTERLY
1094.72 FOOT RADIUS CURVE TO
631.18 FEET ALONG SAID CURVE ECONDS EAST 622.47 BEARS
EE TTO O
DEGREES 46 MINUTES 24 S HE POINT OF
TANGENCY OF SAID CURVE; THENCE NORTH 27 DEGREES 15 MINUTES SAID CENTERLINE FOR THE POINT
21 SECONDS EAST 11.57 FEET ALONG T
NORTH 27 DEGREES 155 MINUTES 21
OF BEGINNING; THENCE CONTINUE
SECONDS EAST 551.92 FEET ALONG SAID CENTERLINE TO A POINT;
5
THENCE SOUTH 45 DEGREES 56 MINUTES 15 SECONDS EAST 1501.96
FEET ALONG AN EXISTING FENCE 035
DEGREES 48 MINUTES 56 SECONDS EAST 2104.69 FEET ALONG SAID
FENCE LINE TO A POINT IN THE CENTERLINE OF ILLINOIS ROUTE 34;
THENCE SOUTH 46 DEGREES 33 MINUTES 17 SECONDS WEST 652.28
FEET ALONG SAID CENTERLINE TO WEOIIN 342 THENCE FE NORTH
THE POINT
DEGREES 39 MINUTES 00 SECONDS
OF BEGINNING.
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION 11 AND PART OF THE
NORTHWEST QUARTER OF SECTION 14, TOWNSHIP 37 NORTH, RANGE 7
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FO ENCES.
BEGINNING AT THE SOUTHWEST CORNER OF SECTION 11;
SOUTH 0 DEGREES 57 MINUTES 0 SECONDS WEST 442 FEET TO THE
NORTH LINE OF THE RIGHT OF WAY OF THE CHICAGO, BURLINGTON
AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17 MINUTES 0
SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE
SOUTH LINE OF SECTION 11; THENCE SOUTH 89 DEGREES 53
SOUTH LINE OF SAIDISECTION
SECONDS EAST 1001.25 FE ET ALONG
11 TO THE SOUTHEAST CORNER DEGREES OF
4 MINUTES 0 SECONDS EAST 1339.5
11; THENCE NORTH 89 DEG 339.5
FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE SOUTHEAST
CORNER OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID
SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES 0 SECONDS EAST
977.5 FEET TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH 74
DEGREES 15 MINUTES 0 SECONDS WEST 727.2 FEET ALONG SAID
CENTERLINE; THENCE NORTH 79 DEGREES 10 MINUTES 0 SECONDS
WEST 2877.4 FEET ALONG SAID CENTERLINE TO THE CENTERLINE OF A
NORTH AND SOUTH HIGHWAY; THENCE THE SOUTH 7
OF SAID ENORTIH AND 0
SECONDS EAST 364.8 FEE ALONG
SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0 SECONDS
WEST 503.33 FEET TO THE WEST LINE OF SAID SECTION 11; THENCE
SOUTH 0 DEGREES 52 MINUTES 0 SECONDS WEST ALONG SAID WEST
LINE 1327.6 FEET TO THE POINT OF BEGINNING; EXCEPT THAT PART
LYING NORTHERLY OF THE SOUTHERLY RIGHT OF WAY LINE OF THE
CHICAGO, BURLINGTON AND QUINCY RAI ROAD AFORESAID IN THE
TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
6
GRANDE RESERVE SOUTH REGION
THAT PART OF SECTIONS 15, 22 AND 23, TOWNSHIP 37 NORTH, RANGE 7
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE POINT OF INTERSECTION OF THE NORTH AND
SOUTH CENTERLINE OF SAID SECTION 15 WITH THE TANGENT OF THE
CENTERLINE OF STATE AID ROUTE 20 AS ESTABLISHED BY INSTRUMENT
RECORDED MAY 12, 1952 AS DOCUMENT 125479; THENCE WESTERLY
ALONG SAID TANGENT 185.32 FEET; THENCE SOUTH 17 DEGREES 20
MINUTES 0 SECONDS EAST TO THE CENTERLINE OF SAID STATE AID
ROUTE 20; THENCE SOUTH 17 DEGREES 20 MINUTES 0 SECONDS EAST
1303.46 FEET FOR THE POINT OF BEGINNING; THENCE NORTH 17
DEGREES 20 MINUTES 0 SECONDS
DEGREES 08 MINUTES 0 SECO NDS WEST 428.4 FEET; THENCE NORTH 17
DEGREES 28 MINUTES 0 SECONDS WEST 1370.9 FEET TO THE
CENTERLINE OF STATE AID ROUTE 20; THENCE NORTH 81 DEGREES 05
MINUTES 0 SECONDS WEST ALONG SAID CENTERLINE 254.26 FEET TO A
POINT 194.7 FEET EASTERLY AS MEASURED ALONG SAID CENTERLINE
OF THE NORTHEAST CORNER OF ERICKSON'S SUBDIVISION; THENCE
SOUTHERLY PARALLEL WITH THE EASTERLY LINE OF SAID ERICKSON'S
SUBDIVISION,04F SAED ROAD N94.7 WESTERLY FEET TO THE EASTERLY LH THE
NEOF SAID
CENTERLINE
SUBDIVISION; THENCE SOUTHERLY ALONG SAID EASTERLY LINE TO THE
SOUTHEAST CORNER OF SAID SUBDIVISION; THENCE WESTERLY ALONG
THE SOUTHERLY LINE OF SAID SUBDIVISION AND SAID LINE EXTENDED
1785.3 FEET TO A POINT ON THE WEST LINE OF THE SOUTHWEST
QUARTER OF SAID SECTION 15; THENCE SOUTH 0 DEGREES 55 MINUTES
0 SECONDS EAST ALONG SAID WEST LINE 904 FEET; THENCE NORTH 88
DEGREES 03 MINUTES 0 SECONDS EAST 1629 FEET; THENCE SOUTH 36
DEGREES 11 MINUTES 0 SECONDS EAST 2187 FEET; THENCE SOUTH 39
DEGREES 18 MINUTES 0 SECONDS EAST 3776.7 FEET TO THE
CENTERLINE OF U. S. ROUTE 34; THENCE NORTHEASTERLY ALONG SAID
CENTERLINE 1353 FEET TO THE SOUTHWEST CORNER OF UNIT THREE,
RIVER RIDGE; THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY
LINE OF SAID UNIT THREE, RIVER RIDGE AND ALONG THE
SOUTHWESTERLY LINE OF UNIT TWO, RIVER RIDGE 2686 FEET TO THE
NORTHWEST CORNER OF SAID UNIT TWO, RIVER RIDGE; THENCE
NORTHEASTERLY
TWO, RIVER RID GE AND ALONG THE NORTHWESTERLY LINE OF UNIT
7
ONE, RIVER RIDGE 824.42
NORTHWESTERL THE CENTERLINE Y Y ALO G SAID COEN TESTATE
RLINEI 886.5
ROUTE 20; THENCE
FEET TO A LINE DRAWN NORTGINN NEG;THENCE SOUTH 69 DEGREES 10
EAST FROM THE POINT OF BE
MINUTES 0 SECONDS WEST 1084.7 FEE L O THE POILLINO �S BEGINNING,
IN THE TOWNSHIP OF BRISTOL,
EXCEPT FROM SAID PARCE E COMMENCING AT TOHE
RTHERLY OF SOU HWEST E
FOLLOWING DESCRIBED LIN
CORNER OF STRUKEL'S PARADISE LAKE UNIT 1;
THENCE
NORTHWESTERLY L UNIT ALONG SOUTHWESTERLY
STRUKEL'S PARADISE ISE 1, BEING THE CENTERLINE OF BRISTOL
RIDGE ROAD, ON A BEARING OF NORTH 37 DEGREES 10 MINUTES 58
SECONDS WEST WHICH HIS LINE, A DISTANCCE OF 230.00 FEET;DESCRIPTION OF T ; THENCE
SOUTH 52 DEGREES 49 MT13SM NUTE SECONDS
SECONDS WEST 361 .39
THENCE SOUTH 67 DEGREES
FEET; THENCE NORTH 58 DEGREES
139.28 FEET; THENCE SOUTH DEGREES 25 MINUTES 29 SECONDS
WEST 152.64 FEET; THENCE SOUTH 40 DEGREES 17 MINUTES 18
ENCE SOUTH 40 SECONDS WEST 92.20 FEET; THTHENCE NORTH 770 DEGREES 52NUTES
21 SECONDS WEST 71.59 FEET,
MINUTES 22 SECONDS WEST 180.28
T 570.09 FEET; THENCE NORTH DEGREES
NORTH 83
04 MINUTES 20 SECONDS WEST
DEGREES 13 MINUTES 28 SECONDS WEST 194.49 FEET; THTHENCE NORTH
80 DEGREES 06 MI NUTS M NUTES 56DSEC0 DS WEST 178S WEST 293.64 FEET;
SOUTH 79 DEGREE
THENCE SOUTHWESTERLY ALONG 00 FEETFHAVING A CHORD CONCAVE TO
THE SOUTH, HAVING A RADIUS OF 180
BEARING OF SOUTH 82 DEGREES SOUTHWESTERLY Y 947.34 S WEST,FEET,A
DISTANCE OF 306.52 FEET, TH ENCE
MORE OR LESS, TO A POINT IN THNORTHWESTERNY OF THED SAID
SAID POINT BEING 1,100.00 FE
OF KENNEDY ROAD AS MEASURED ALONG SAID WESTERLY LINE, FOR
THE TERMINUS OF SAID LINE.
8
Exhibit B
011.560726.2
TRUST INDENTURE
Between
UNITED CITY OF YORKVILLE,ILLINOIS
And
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of July 1, 2004
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2004-106
TOTAL GRANDE RESERVE
VARIABLE RATE DEMAND
SPECIAL TAX BONDS, SERIES 2004
(MPI GRANDE RESERVE PROJECT)
011.552614.7
TABLE OF CONTENTS
Page
ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS.................................................4
Section 1.1 Authority for this Indenture.
......................................................................4
Section 1.2 Agreement for Benefit of Owners of the Bonds.........................................4
Section1.3 Definitions...................................................................................................4
ARTICLEII THE BONDS.. ..................................................................................................... 17
Section 2.1 Authorized Amount of Bonds........................................
.......... 17
Section 2.2 Issuance of Bonds. ...................................
Section 2.3 Interest Rates on Bonds. ........................................................................... 17
Section 2.4 Manner of Paying for the Bonds.................................................
Section 2.5 Execution; Limited Obligation. ...................................................
Section 2.6 Authentication...........................................................................................23
Section 2.7 Form of Bonds. ...........................................................................
Section 2.8 Delivery of Bonds.. ................................................................................ 23
Section 2.9 Mutilated, Lost, Stolen or Destroyed Bonds................
Section 2.10 Registration and Exchange of Bonds, Persons Treated as Owners. .........25
........... 26
Section 2.11 Temporary Bonds........ ..........• 26
Section 2.12 Alternate Credit Facility. ...............................................................
Section 2.13 Book-Entry Only System... .....
Section 2.14 Successor Securities Depository; Transfers Outside Book-Entry
OnlySystem....................................................................
Section 2.15 Payments and Notices to Cede & Co........................................................ 28
ARTICLE III REDEMPTIONS AND TENDERS OF BONDS .................................................. 28
............................................................................
.............28
Section 3.1 Redemption. ,,,,,,,,,,,, 31
Section 3.2 Selection of Bonds to Be Redeemed........................................,,,,,
Section 3.3 Procedure for Redemption........................................................................ 32
Section 3.4 No Partial Redemption After Event of Default...............
Section 3.5 Payment of Redemption Price. ...........
Section 3.6 Optional Tenders While Bonds Bear Interest at the Weekly Rate or 33
Monthly Rate. .......... .........................................................
................ .....
Section 3.7 Mandatory Tender Upon Rate Conversion Date; Expiration or
Substitution of Credit Facility; and Event of Default under Credit 38
Facility Agreement.................
............................................
Section 3.8 Inadequate Funds for Tenders...................................................................40
Section 3.9 Duties of the Trustee. ............................................................. 40
.............
Section 3.10 Duties of the Remarketing Agent. ............................................................40
Section 3.11 Untendered Bonds..................................................................................... 40
Section 3.12 Cancell ation. ............................................................................................. 41
Section 3.13 Bonds Redeemed in Part........................................................................... 41
Section 3.14 Holding and Purchase of Purchased Bonds. ............................................. 41
Section 3.15 Tender Fund.............................................................................................. 42
Section 3.16 Book-Entry Only System; Redemptions; Tender of Bonds...................... 42
i
011.552614.7
ARTICLE IV GENERAL COVENANTS; LEVY OF SPECIAL TAX...................................... 42
Section 4.1 Payment of Principal and Interest............................................................. 42
Section 4.2 Performance of City Covenants................................................................42
Section 4.3 Instruments of Further Assurance............................................................. 43
Section 4.4 Levy and Collection of Taxes................................................................... 43
Section 4.5 Inspection of Records; Books...................................................................43
Section 4.6 List of Bondholders...................................................................................44
Section 4.7 Tax Covenants. .........................................................................................44
Section 4.8 Levy of Special Tax. (a)...........................................................................45
Section 4.9 Against Encumbrances............. ......................................................46
Section 4.10 No Continuing Disclosure Undertaking....................................................
46
Section 4.11 Recapture Agreement................................................................................46
ARTICLE V FUNDS AND APPLICATION OF SPECIAL TAXES AND OTHER 46
MATTERS..................................................................................................... 46
Section 5.1 Establishment of Funds and Accounts...................................................... 47
Section 5.2 Bond and Interest Fund.............................................................................
Section 5.3 Improvement Fund. ... 50
............................................................................
Section 5.4 Cost of Issuance Fund. ...................... 51
........................................................
Section 5.5 Application of Bond Proceeds. ................................................................. 51
Section 5.6 Application of Funds................................................................................. 51
Section 5.7 Disposition of Bonds Upon Payment........................................................ 51
Section 5.8 The Trustee's Maintenance of Records on Payment of Bonds................. 51
Section 5.9 Rebate Fund. ............................................................................................. 52
Section 5.10 Administrative Expense Fund. ... 52
...............................................................
ARTICLE VI INVESTMENT OF FUNDS AND CREDIT FACILITY DRAWS...................... 52
Section 6.1 Investment of Funds and Accounts Held by the Trustee.......................... 52
Section 6.2 Valuation. ... 53
...........................................................................................
Section 6.3 Sale of Investments. ................................................................. 53
Section 6.4 Liability of the Trustee and City for Investments..................................... 53
Section 6.5 Draws on the Credit Facility. (a)..............................................................
53
ARTICLE VII DEFEASANCE ................... 54
.................................................................................
Section7.1 Defeasance................................................................................................ 54
ARTICLE VIII REMEDIES OF TRUSTEE AND BONDHOLDERS UPON EVENT OF 56
DEFAULT ................................................................................................. 56
Section 8.1 Events of Default. .....................................................................................
Section 8.2 Enforcement of Remedies......................................................................... 57
Section 8.3 Right of Credit Entity to Direct Proceedings............................................ 58
Section 8.4 Priority of Payments. ................................................................................ 58
Section 8.5 Remedies Vested in the Trustee............................................................ 60
Section 8.6 Rights and Remedies of Bondholders....................................................... 60
Section 8.7 Termination of Proceedings...................................................................... 61
Section 8.8 Waivers of Events of Default.................................................................... 61
Section 8.9 Notice of Default; Opportunity to Cure Defaults. .................................... 61
ii
011.552614.7
ARTICLEIX TRUSTEE.............................................................................................................. 62
Section 9.1 Acceptance of the Trusts........................................................................... 62
Section 9.2 Fees, Charge and Expenses of the Trustee,the Paying Agent,the 64
Bond Registrar and the City.........................................................
Section 9.3 Notice to Bondholders if Event of Default Occurs................................... 64
Section 9.4 Intervention by the Trustee....................................................................... 65
Section 9.5 Successor to the Trustee............................................................................ 65
Section 9.6 Resignation by the Trustee........................................................................ 65
Section 9.7 Removal of the Trustee.
........................................................................... 65
Section 9.8 Appointment of Successor Trustee by the Bondholders; Temporary
Trustee........................... ......................................
...................... 65
Section 9.9 Concerning Any Successor Trustee.......................................................... 66
Section 9.10 Designation and Succession of Paying Agents......................................... 66
Appointment of Co-Trustee. .........""' 67
Section 9.11 App .......................................................
Section 9.12 Remarketing Agent...................................................................,.
ARTICLE X SUPPLEMENTAL INDENTURES....... ••••
Section 10.1 Supplemental Indentures Not Requiring Consent of Registered 68
Owners. ...........................................
.........................................
Section 10.2 Supplemental Indentures Requiring Consent of Registered Owners........ 69
Section 10.3 Execution of Supplemental Indentures..................................................... 70
ARTICLEXI RESERVED........................................................................................................... 70
...................................................................................... 70
ARTICLE XII MISCELLANEOUS...... 70
Section 12.1 Consents, etc., of Registered Owners. ....................................
Section 12.2 Limitation of Rights.................................................................................. 71
Section 12.3 Severability. .......................................................................
Section12.4 Notices. ..................................................................................................... 71
Section 12.5 Payments Due on Saturdays, Sundays and Holidays............... 73
Section 12.6 Counterparts.............................................................................
Section 12.7 Applicable Provisions of Law................................................................... 73
Section 12.8 Rules of Interpretation. ..............................................
Section12.9 Captions. ...................................................................................................73
Section 12.10 Referen ces to Credit Entity Ineffective During Certain Periods. ............. 73
Section 12.11 Consent and Directions i n Writing Authorized Representatives.............. 73
Section 12.12 No Personal Liability................................................................................73
Section 12.13 Notices to Rating A gency.......................................................
EXHIBITS
Exhibit A Legal Description of the Special Service Area
Exhibit B Form of Bonds
Exhibit C Satisfaction of Tax Lien
Exhibit D Form of Disbursement Request
011.552614.7
TRUST INDENTURE
THIS TRUST INDENTURE dated as of July 1, 2004 is entered into by and
between 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 "City"), and
LASALLE BANK NATIONAL ASSOCIATION, a national bank duly organized and existing
under the laws of the United States and duly authorized to accept and execute trusts, having its
principal place of business in Chicago, Illinois, as trustee (the "Trustee").
WITNESSETH:
WHEREAS, by Ordinance No. 2004-32 adopted by the City on June 22, 2004
(the "Establishing Ordinance") the City has established the "United City of Yorkville Special
Service Area Number 2004-106 Total Grande Reserve" as further described in Exhibit A to this
Indenture (the "Special Service Area"); and
WHEREAS, pursuant to Ordinance No. 2004-33 adopted on June 22, 2004 (the
"Bond Ordinance") and pursuant to the Special Service Area Tax Law, 35 ILCS 200/27-5 et
se . (the "Special Service Area Act") it was determined in the best interests of the City to issue
not to exceed $16,000,000 principal amount of the United City of Yorkville Special Service Area
Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project) (the "Bonds") for the purpose of providing a portion of the funds
needed for costs of the Special Services (defined below); 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 Underwriter (defined below); and
WHEREAS, pursuant to the terms so established the City will issue
$ principal amount of the Bonds upon the terms specified in this Indenture; and
WHEREAS, a portion of the costs of the Special Services will be financed
through the issuance of the City's SpecM too be0 ssuedtpursuantdto
Reserve Special Tax Bonds, Series 2004 PI Grande Reserve Project)
a separate trust indenture and ordinance of the City; 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
WHEREAS, the City has determined that a substantial reduction in the interest
cost payable by the City with respect to the Bonds will result if a Credit Facility (as hereinafter
defined) is obtained from LaSalle Bank National
o the outstandi
Nng principal of the Bonds t be used
"Credit which bo
drawn upon to pay (a) an amount equal
pay the principal of the Bonds upon redemption, acceleration or maturity, or to enable the
011.552614.7
Trustee to pay the portion of the Tender Price (as defined herein) equal to the principal o an t
of Bonds delivered or required to be delivered for purchase and not
amount equal to interest on (computed for 45 days to the outstanding te t due onitof the Bonds Bonds at
the rate of 7% per annum) the Bonds to be used pay he
ate (as defined herein), or to
redemption, acceleration, maturity or any other Interest
equallto the interest amount of the
enable the Trustee to pay the portion of the Tender P
Bonds delivered or deemed delivered for purchase and not remarketed; and
WHEREAS, the obligation of the City to reimburse the Credit Entity (as defined
in Article I hereof) for drawings on the Credit Facility will be evidenced and secured by the
Credit Facility Agreement (as defined in Article I hereof) and is to be further secured under this
Indenture; and
WHEREAS, all things necessary to cause the Bonds, when executed by the City
and issued as provided in the Special Service Area Indenture,Local
legal�vandDandt binding and
(as defined below), the Bond Ordinance and this to cause
special obligations of the City in accordance with toff this Indenture nden ures and the creation,
the creation, authorization, execution
authorization, execution and issuance of the Bonds, subject to the terms of this Indenture,have in
all respects been duly authorized;
NOW, THEREFORE,THIS INDENTURE OF TRUST WITNESSETH:
GRANTING CLAUSES
the Trustee of
That the City in consideration of the premises, the acceptance by
ers thereof,
the trusts created hereby and the purchase and acceptance of Amseri a, it_ duly paid by
and of the sum of one dollar, lawful money of the United States the Trustee at or before the execution and delivery °which are presents,
hereby acknowledged, o der
valuable consideration, the receipt and sufficiency of
to
to secure the payment of the principal of, premium, Hof the interest
Crty under h enCredit Facgity
their tenor and effect, the payment of the oblig ations
observance by the
Agreement (as defined in Article I hereof) and to secure
Bonds, doeerformance and
hereby pledge and
City of all the covenants expressed or implied herein and
assign, and grant a security interest in, the following to LaSalle Bank National Association, 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 Tax and any monies
held under this Indenture by the Trustee, including
ethe�eof (otherlth Bonds amount held by the
profits and other income derived from the investment
er Fund or
Trustee in the Rebate Fund, the Administrative Expense red or deemed del vexed for purchase
elsewhere to pay the Purchase Price of Bonds delivered
pursuant to Article III hereof);
2
011.552614.7
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 as to the lien or otherwise of any of the Bonds over any of the other Bonds (except as
otherwise provided herein), and, for the benefit, security, and protection of the Credit Entity with
respect to the obligations of the City under the Credit Facility Agreement but only after all
owners of the Bonds have been paid all principal, premium, if any, interest and Purchase Price
(as hereinafter defined) due them or provision has been made for the payment thereof;
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
Article III of 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 formed and
accordance with the terms and provisions hereof, and s kept,
by the City to
observed all of the covenants and conditions to be kept, p erformed and observed
be kept pursuant to the terms of the Credit Facility Agreement and shall pay or cause to be paid
all sums of money due or to become due and owing by the City in accordance with the terms and
provisions of the Credit Facility Agreement, 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 and covenanted, and does hereby agree and covenant with the Trustee and with the
respective owners of the Bonds as follows:
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011.552614.7
ARTICLE I
STATUTORY AUTHORITY AND
DEFINITIONS
Section 1.1 Authority for this IndentureThis 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 R form Act and respective provisions
Ordinancef the Special
Service Area Act,the Local Government
Section 1.2 Agreement ed by Benefit
onitbehal of the City e Bonds.
derthis The denture shall
covenants and agreements to be perform
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
ave
Indenture, and of any certificate, opinion or other document mentioned in this Indenture,
"Sections"I d hand
the meanings specified below. All references in this Indenture to Articles,
other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture,
and the words herein," "hereof," "hereunder and other words of similar .import refer to this
Indenture as a whole and not to any particular Article, Section or subdivision of this Indenture.
"Act of Bankruptcy" means the filing of a voluntary or involuntary petition in
bankruptcy (or the other commencement of bankruptcy or similar proceedings) by or against the
City under any applicable bankruptcy,etitonno�lproceedingghallahaveobeen as now or such
hereafter in effect, unless p
dismissal shall be final and not subject to appeal.
"Adjustable Rate" means the interest rate per annum applicable during each Rate
Period and determined as provided in Section 2.3(e)hereof.
"Administrative Expenses" means the following actual or reasonably estimated
costs permitted in accordance with the Special Service Area Act and directly 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 Tax and of preparing the annual
Special Tax collection schedules and the amended Special Tax Roll; the costs of collecting the
Special Tax (whether by the City, the County or otherwise), the costs of remitting the Special
Tax 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, costs of obtaining or maintaining ratings on the Bonds, any termination payments
purchase
owed by the City in connection f ifunds held guaranteed investment
Indenture; the costs of t e Rebate
agreement or other investment of
011.552614.7
Consultant; the costs of the City or its designee in complying with disclosure Acincluding,reie eats of
applicable federal and state securities laws and of the Special Service A
limited to, public inquiries regarding the Special Tax, costs of converting the interest rate on the
Bonds; the Remarketing Agent fees; the costs associated with the release of funds from any
escrow account or fund held under this Indenture; and amounts advanced by the City for any
other administrative purposes of the Special Service Area, including the costs of prepayment of
annual Special Tax, recordings related to the prepayment, discharge delinquent satisfaction of
Tax peand
Tax; the costs of commencing foreclosure and pursuing collection of q Special
the reasonable fees of legal counsel to the City relating to the foregoing.
"Administrative Expense Fund" means the fund by that name established
pursuant to Section 5.10 of this Indenture.
"Alternate Credit Facility" means any Credit Facility delivered to the Trustee in
accordance with Section 2.12 hereof to replace the Credit Facility then in effect.
"Annexation Agreement" means that certain Annexation Agreement and
Planned Unit Development Agreement entered into as of August 7, 2003 among the City, the
Developer and MPI-2 Yorkville South II LLC.
"Authorized City Representative" means such person or persons duly
designated by the City to act on its behalf Iola certificate of Mayor or City
executed by therMayor and
other officer designated as such pursuant
delivered to the Trustee.
"Authorized Denominations" Bonds bear at the Weekly RateyMonthly
multiple of$1,000 in excess thereof when the onds bear
Rate or Adjustable Rate and $1,000 principal amount or any integral multiple thereof when the
Bonds bear interest at the Fixed Rate.
"Bankruptcy Code" means Title 1 I of the United States Code, as amended.
"Bond Counsel" means a firm of attorneys of nationally recognized expertise
with respect to the tax-exempt obligations of political subdivisions, selected by the City and
reasonably acceptable to the Trustee.
"Bond and Interest Fund" means the Bond and Interest Fund established and
created by Section 5.2 of this Indenture.
"Bondholder" or "Holder" or "Owner of the Bonds" or "Registered Owner"
means the registered owner of any Bond.
"Bond Ordinance"has the meaning set forth in the recitals.
"Bond Registrar" means the Trustee or any successor or successors to such
position under this Indenture.
5
011.552614.7
"Bonds" means the United City of Yorkville, Kendall County, Illinois Special
Service Area Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax
Bonds, Series 2004 (MPI Grande Reserve Project) in the original principal amount of
$ authorized by the Bond Ordinance and this Indenture.
"Bond Service Charges" means (a) during any period of time, principal of and
interest and any premium due on the Bonds for that period or payable at that time, as the case
may be, and (b) with respect to the Credit Facility, the principal of and interest on and any
premium on the Bonds to the extent payable under and in accordance with the terms of the Credit
Facility.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the city in which the principal corporate trust office of the Trustee
or the principal trust office of the Depository or the principal office of the Credit Entity or the
Remarketing Agent is located, or in the City of Chicago, Illinois, are required or authorized by
law to remain closed, or other than a day on which the New York Stock Exchange is closed.
"Capitalized Interest Account" means the account by that name in the Bond and
Interest Fund as created by Section 5.2(b) of this Indenture.
"Cap Rate" means with respect to Bonds other than Purchased Bonds, the rate
per annum equal to the lesser of (a) 7% or (b) the maximum rate, if any, at the time then
specified in the Credit Facility for computing the interest component thereof.
"City" means the United City of Yorkville, Kendall County, Illinois, and its
successors and assigns.
"City Bonds" means Bonds owned or held by the City, or by the Trustee or the
agent of the Trustee for the account of the City or with respect to which the City has notified the
Trustee, were purchased by another person for the account of the City or by a person directly or
indirectly controlled by or under direct or indirect common control with the City, including but
not limited to Purchased Bonds.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and the Regulations thereunder.
"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 Report.
"Corporate Authorities" means the City Council of the City.
"Cost of Issuance Fund" means the Cost of Issuance Fund established and
created by Section 5.4 of this Indenture.
"County" means Kendall County, Illinois which is the County in which the
Special Service Area is located.
6
011.552614.7
"Credit Account" means the account so designated within the Bond and Interest
Fund established and created by Section 5.2(b) of this Indenture.
"Credit Entity" means LaSalle Bank National Association, and the provider of
any Alternate Credit Facility.
"Credit Facility" means the irrevocable direct pay letter of credit initially issued
by the Credit Entity in connection with the Bonds, as extended or renewed, pursuant to the Credit
Facility Agreement, or any letters of credit, lines of credit or any other instruments, such as a
policy of bond insurance, collateral agreement, surety bond or guarantee issued by a financial
institution, which provide security for or acceleraytion interest and
Price on the Credit
Bonds when due or upon redemption
Facility hereunder.
"Credit Facility Agreement" means, initially, the Reimbursement Agreement,
dated as of July 1, 2004 by and among the City, the Developer and the Credit Entity, as amended
from time to time, pursuant to which the City and Developer have agreed to reimburse the Credit
Entity for honoring draws under the Credit Facility and in the event an Alternate Credit Facility
is provided the agreement between the City, the Developer and the Credit Entity pursuant to
which the Credit Entity provides such Alternate Credit Facility or Credit Facility.
"Credit Facility Substitution Date" means the effective date of the substitution
of an Alternate Credit Facility pursuant to Section 2.12 hereof.
"Depository" means any bank, trust company, savings and loan association or
other financial institution selected by the Trustee as a depository of monies and securities held
under the provisions of this Indenture, and may include the Trustee.
"Developer" means collectively MPI-2 Yorkville North LLC, MPI-2 Yorkville
Central LLC and MPI-2 Yorkville South I LLC, each an Illinois limited liability company, and
their respective successors and assigns.
"Developer Representative" means any one of Tom Small General Manager
MPI Projects, Arthur C. Zwemke or Tony Pasquinelli or any other person designated in a written
certificate from the Developer addressed to the City and the Trustee.
"Developer's Agreement" means the Public Improvement Agreement dated as of
July 1, 2004 between the Developer and the City.
"Disbursement Request" means a request from the City signed by an Authorized
City Representative requesting a disbursement of amounts held in the Improvement Fund.
"DTC" means The Depository Trust Company,New York,New York.
"DTC Participant" means those broker-dealers, banks and other financial
institutions reflected on the books of DTC.
7
011.552614.7
"Eligible Funds" means amounts held by the Trustee which are (A) amounts
drawn under the Credit Facility (and the proceeds of the investment thereof); (B)the proceeds of
the Bonds; (C) the proceeds of any bonds issued to refund the Bonds (and the proceeds of the
investment thereof) if an opinion of nationally recognized counsel experienced in federal
bankruptcy matters (selected by the City and the Trustee) has been obtained to the effect that
such proceeds shall not constitute a voidable preference`under Section 54he Bans which
Code in a case commenced by or against the City or any insider of the City; D)
have been on deposit in the Bond and Interest Fund, other than those monies mentioned in (A),
(B) or (C) above, with the Trustee (and the proceeds of the investment thereof) for a continuous
period of at least 124 consecutive days (or such shorter period as may be approved in a written
opinion of counsel (selected by the City and the Trustee) with nationally recognized expertise in
matters of federal bankruptcy law to the effect that payment of the Bond Service Charges with
such moneys shall not result in a voidable preference under Section 547 of the Bankruptcy Code)
during which no Act of Bankruptcy by or against the City, or any "insider" (within the meaning
of the Bankruptcy Code) of the City shall have occurred; (E) the proceeds of remarketing of the
Bonds (except to the City or any "insider" of the City or any "insider" thereof within the
meaning of the Bankruptcy Code); and (F) any other monies for which an opinion of nationally
recognized counsel (selected by the City and the Trustee) experienced in federal bankruptcy
matters has been obtained to the effect that payment of the Bond Service Charges with such
monies shall not constitute a voidable preference under Section 547 of the Bankruptcy Code in a
case commenced by or against the City or any "insider" of the City.
"Establishing Ordinance" means Ordinance Number 2004-32 adopted on
June 22, 2004 by the Corporate Authorities.
"Event of Default" means any occurrence or event specified and defined in, or
pursuant to, Section 8.1 hereof.
"Expiration Date" means the date specified in the Credit Facility as the
expiration date of said Credit Facility, including any date to which the expiration or termination
of said Credit Facility may be extended from date on which the Credit
Facility may terminate prior to its stated expiration date for any reason,
"Federal Obligations" means obligations of or unconditionally guaranteed as to
principal and interest by the United States of�America but excludes obligations which are
mortgage-backed securities or which are rated r by S&P.
"Fiduciary" means the Trustee and any Paying Agent for the Bonds.
"Fixed Rate" means the fixed interest rate per annum applicable until the
maturity or earlier redemption of the Bonds and determined as provided in Section 2.3(f)hereof.
"Foreclosure Proceeds" means the p of aorelore action of the lien of the sale of
property in the Special Service Area sold as the result
Special Tax.
"General Account" means the account so designated within the Bond and
Interest Fund established and created by Section 5.2(b) of this Indenture.
8
011.552614.7
"Improvement Fund" means the Improvement Fund established and created by
Section 5.3 of this Indenture.
"Indenture" means this Trust Indenture, and any amendments hereof and
supplements hereto.
"Independent Counsel" means an attorney duly admitted to practice law before
the highest court of the State who is not a full-time employee of the City, the Developer, the
Credit Entity or the Trustee.
"Interest Index" means the indication of the lowest rate appropriate for securities
similar to the Bonds in terms of security, creditworthiness, term, tax-exempt status and tender
privilege which would permit the Bonds to be sold at a purchase price equal to their principal
amount, plus accrued interest, if any. The Interest Index shall be determined, first, by referring
to the best available data base in the reasonable opinion of the Remarketing Agent in a
publication of national recognition selected by the Remarketing Agent containing a recent
calculation of such an interest rate for comparable securities and multiplying such interest rate by
one hundred and ten percent (110%) and, second, if that is not possible, by multiplying the last
determined Weekly Rate or Monthly Rate, as applicable, by one hundred and fifteen percent
(115%).
"Interest Payment Date" means (i) in the case of Bonds bearing interest at the
Weekly Rate and the Monthly Rate, (A) the first Business Day of each month prior to the
Maturity Date, commencing July 1, 2004, (B) each Mandatory Tender Date, and (C)the Maturity
Date, and (ii) in the case of Bonds bearing interest at the Adjustable Rate or the Fixed Rate, each
March 1 and September 1 commencing with the first such March 1 or September 1, occurring
after the Rate Conversion Date for the Adjustable Rate or Fixed Rate and each Rate Conversion
Date.
"Investment Obligations" or "Permitted Investments" means any of the
following which at the time are legal investments for the City under applicable State laws and
which are not prohibited investments under the Code, for the monies held hereunder then
proposed to be invested therein:
(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
9
011.552614.7
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 account,
interest bearing time deposits, or other investments constituting direct obligations of any
bank as defined by the Illinois Banking Act whose deposits are insured by the Federal
Deposit Insurance Corporation;
(e) repurchase agreements of government securities) unless sreg steredt to or
Government Securities Act of 1986. The government
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 meeting the following requirements:
(1) The securities, unless ks or trust companies authorized to do
the City, are purchased through
business in the State of Illinois.
(2) An Authorized City Representative after ascertaining which
firm will give the most favorable rate of interest, directs the custodial bank
to "purchase" specified securities from a designated institution. The
"custodial bank" is the bank or trust company, or agency of government,
which acts for the 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.
(3) 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 mustmember accomplished on a Reserve
the Federal Reserve Sstrems
computer records through a
These securities must be credited u°be confirmed in writing tosthe City
custodial bank and the transaction
by the custodial bank.
(4) 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.
(5) The security interest must be perfected.
(6) The City must enter into a written master repurchase
agreement which outlines the basic responsibilities and liabilities of both
buyer and seller.
10
011.552614.7
(7) The repurchase agreement shall be for periods of 330 days
or less.
(8) The City must inform the custodial bank in writing of the
maturity details of the repurchase agreement.
(9) 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.
(10) 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 City Representative.
(11) 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 invested in short-term obligations of such corporation as
evidenced by a certificate from an Authorized City Representative delivered to the
Trustee;
(h) money market mutual funds registered under the Investment Company Act
of 1940, as amended, invested solely in obligations listed in paragraphs (a) and (b) above
and in agreements to repurchase such obligations; and
(i) any other investment as shall be lawful for the investment of the City's
funds and shall be approved by the Credit Entity.
"Issuance Date" means July_, 2004, the date of the initial issuance and
delivery of the Bonds.
"Local Government Debt Reform Act" means the Local Government Debt
Reform Act, 30 ILCS §350/1 et seq., as amended.
"Mandatory Tender Date" means any date on which Bonds shall be subject to
mandatory tender pursuant to Section 3.7 hereof.
11
011.552614.7
"Maturity Date" means March 1, 2034.
"Monthly Rate" means the interest rate per annum applicable during each Rate
Period and determined and redetermined on a monthly basis as provided in Section 2.3(d)hereof.
"Moody's" means Moody's Investors Service, Inc., a corporation duly organized
and validly existing under the laws of the State of Delaware, and its successors and assigns.
"Notice by Mail" or "notice" of any action or condition "by Mail" (except as
otherwise expressly provided herein) shall mean a written notice meeting the requirements of
this Indenture mailed by first-class mail to the Registered Owners at the addresses shown in the
registration books maintained pursuant to this Indenture; provided, however, that if, because of
temporary or permanent suspension of mail service, it is impossible or impracticable to mail
notices in the manner herein described, then such notification in lieu thereof as shall be made
with the approval of the Trustee (or, if there be no trustee hereunder, the City) shall constitute a
sufficient giving of such notice.
The terms "outstanding" or "Bonds outstanding" mean all Bonds which have
been authenticated and delivered by the Trustee under this Indenture, except:
(a) Bonds canceled after purchase in the open market or because of payment
at or redemption prior to maturity;
(b) Bonds for the payment of which cash or Federal Obligations shall have
been theretofore deposited with the Trustee (whether upon or prior to the maturity or
redemption date of any such Bonds) and which are deemed paid within the meaning of
Article VII hereof; and
(c) Bonds in lieu of which others have been authenticated under Sections 2.9,
2.10 or 2.11 hereof; and
(d) Untendered Bonds.
"Paying Agent" means those institutions designated as such in or pursuant to
Section 9.10 hereof.
"Parcel" shall have the meaning given that term in the Special Tax Report.
"Penalty" shall have the meaning given that term in Section 4.7(b) of this
Indenture.
"Principal Office", when used with respect to a Fiduciary, means the principal,
or corporate trust, or head or principal trust, office of such Fiduciary situated in the city in which
such Fiduciary is described as being located.
"Purchase Price" means an amount equal to one hundred percent of the principal
amount of any Bond tendered or deemed to have been tendered for purchase, plus unpaid and
accrued interest, if any, to the date of purchase.
12
011.552614.7
"Purchased Bond Rate" means the rate or rates of interest established in any
Credit Facility Agreement as the rate or rates of interest Purchased Bonds bear not to exceed the
Cap Rate.
"Purchased Bonds" means Bonds purchased pursuant to any Credit Facility
Agreement from and including the date they are registered in the name of the Credit Entity, or its
designee, nominee or agent to but not including, the earliest of(i) their payment at maturity, (ii)
their payment at redemption, (iii) their remarketing by the Remarketing Agent pursuant to the
Remarketing Agreement, (iv) their sale by the Credit Entity, its designee, nominee or agent, on
the open market or(v) their satisfaction and discharge otherwise.
"Rate Adjustment Date" means the date from and after which a particular
Weekly Rate, Monthly Rate or Adjustable Rate as applicable, shall be effective. In the case of
the Weekly Rate, the Rate Adjustment Date for each Rate Period shall be (i) in the case of a
conversion from another interest rate determination method to the Weekly Rate, the Rate
Conversion Date and (ii) otherwise, the later of Thursday of each week or such other day as shall
be necessary as provided in the last sentence of the first paragraph of Section 2.3(c) hereof. In
the case of the Monthly Rate, the Rate Adjustment Date for each Rate Period shall be (i) in the
case of a conversion from another interest rate determination method to the Monthly Rate, the
Rate Conversion Date and (ii) otherwise, the later of the first Business Day of each month or
such other day as shall be necessary as provided in the last sentence of the first paragraph of
Section 2.3(d) hereof. In the case of the Adjustable Rate, the Rate Adjustment Date for each
Rate Period shall be the day which is the Rate Conversion Date.
"Rate Conversion Date" means the date on which the interest rate determination
method for the Bonds is changed as provided in Section 2.3(b) hereof. In the case of a
conversion from the Weekly Rate to the Monthly Rate, from the Monthly Rate to the Weekly
Rate or from the Weekly Rate or the Monthly Rate to the Adjustable Rate or the Fixed Rate, the
Rate Conversion Date shall be the first Business Day of a month. In the case of a conversion
from the Adjustable Rate to another Adjustable Rate, the Weekly Rate, the Monthly Rate or the
Fixed Rate, the Rate Conversion Date shall be the first Business Day of a month and the day
which follows by one day the final day of the Rate Period for the Adjustable Rate.
"Rate Determination Date" means the day on which the Remarketing Agent
determines the Weekly Rate, the Monthly Rate or the Adjustable Rate, as applicable, for the next
Rate Period. In the case of the Weekly Rate and the Monthly Rate, the Rate Determination Date
for each Rate Period shall be the Rate Adjustment Date. In the case of the Adjustable Rate, the
Rate Determination Date for each Rate Period shall be the Business Day selected by the
Remarketing Agent (and concurred to by the City) and occurring not earlier than ten (10)
Business Days and not later than two (2) Business Days prior to the Rate Conversion Date. If
any Rate Determination Date would not be a Business Day, such Rate Determination Date shall
be the immediately preceding Business Day.
"Rate Period" means the period during which a particular Weekly Rate, Monthly
Rate or Adjustable Rate, as applicable, determined on a particular Rate Determination Date, is
effective. The initial Rate Period is effective from and including the Issuance Date to and
including _, 2004. Thereafter, each subsequent Rate Period shall become
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011.552614.7
effective on and including the applicable Rate Adjustment Date and remain in effect until and
including, the day next preceding the earlier of(i) the next following Rate Adjustment Date, (ii)
the next following Rate Conversion Date or (iii) the Maturity Date. In the case of the Weekly
Rate, with the exception of any Rate Period whose last day is a Rate Conversion Date or the
Maturity Date, each Rate Period shall commence on Thursday and end on the next following
Wednesday. In the case of the Monthly Rate, with the exception of the Rate Period whose last
day is the Maturity Date, each Rate Period shall commence on the first Business Day of a month
and end on the day next preceding the first Business Day of the next following month. The Rate
Period shall not be deemed to have been changed in the case of a Weekly Rate or Monthly Rate
which is changed pursuant to the last sentence of the first paragraph of Section 2.3(c) or the last
sentence of the first paragraph of Section 2.3(d). In the case of the Adjustable Rate, with the
exception of the Rate Period which ends on the Maturity Date, each Rate Period shall commence
on the Rate Conversion Date, and end on the day next preceding the first Business Day of a
month and be at least six (6) months or an integral multiple of six (6) months in length.
"Rating Agency" means S&P, Moody's or any nationally recognized securities
rating agency which has been requested to and has assigned a rating to the Bonds.
"Rating Category" or "Rating Categories" means one or more of the generic
rating categories of a nationally recognized securities rating agency, without regard to any
refinement or gradation of such rating category or categories by a numerical modifier or
otherwise.
"Rebate Consultant" means an entity selected by the City expert in the
calculation of rebate amounts pursuant to Section 148 of the Code. If at 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 created pursuant to Section 5.9
hereof.
"Rebate Requirement" shall have the meaning given that term in Section 4.7(b)
of this Indenture.
"Recapture Agreement" means the Recapture Agreement substantially in the
form attached as Exhibit K to the Annexation Agreement approved as of August 7, 2003, among
the City, MPI-2 Yorkville South II, LLC and the Developer with such changes therein as are
approved by the City and the Developer to reflect the requirements of Section 5.2(f) of this
Indenture.
"Recapture Fees" means the "Recapture Costs" as such term is defined in the
Recapture Agreement.
"Recoveries" means the water tap fees charged by the City for properties located
along U.S. Route 34 in the City as further described in , collected by the City.
"Record Date" or "Regular Record Date" means (i) with respect to any Interest
Payment Date when the Weekly Rate or the Monthly Rate is in effect, the Business Day next
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011.552614.7
preceding that Interest Payment Date and (ii) with respect to any Interest Payment Date when the
Adjustable Rate or the Fixed Rate is in effect, the fifteenth day of the month next preceding the
month of that Interest Payment Date.
"Remarketing Agent" means LaSalle Capital Markets, A Division of ABN
AMRO Financial Services, Inc. and any successor to such position under the Remarketing
Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated as of the
date of this Indenture among the City, the Developer and the Remarketing Agent and any
successor to such agreement.
"Representation Letter" shall mean the Blanket Issuer Letter of Representations
by and between the City and DTC.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., and its successors and assigns.
"Special Record Date" means the date and time established by the Trustee for
determination of which Registered Owners shall be entitled to receive overdue interest on the
Bonds pursuant to Section 2.4(b)(iii)hereof.
"Special Redemption Account" means the account by that name created
pursuant to Section 5.9 hereof.
"Special Service Area" means the United City of Yorkville Special Service Area
Number 2004-106 Total Grande Reserve, 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.
"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, public parks,
park improvements, bicycle paths, 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 Developer's
Agreement.
"Special Tax Report" means the United City of Yorkville Special Service Area
Number 2004-106 Total Grande Reserve Special Tax Roll and Report prepared by the
Consultant.
15
011.552614.7
"Special Tax Requirement" means the "Special Tax Requirement" as defined in
the Special Tax Report 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
other than amounts on deposit in the Credit Account of the Bond and Interest Fund.
"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 Report.
"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, this Indenture and the Bond
Ordinance.
"State"means the State of Illinois.
"Substitution Date" means the effective date of the substitution of an Alternate
Credit Facility pursuant to Section 2.12 hereof.
"Tax Agreement" means one or more Tax Compliance Certificates and
Agreements of the City dated the date of issuance and delivery of the Bonds, as amended from
time to time.
"Tender Date" means (i) in the case of Bonds tendered at the option of their
Holders pursuant to Section 3.6 hereof, the date specified by the Holder, in the written notice
delivered to the Trustee pursuant to Section 3.6 hereof, as the purchase date of the Bonds, which
must be a Business Day occurring not prior to the seventh day after receipt by the Trustee of the
written notice of tender, (ii) in the case of Bonds tendered pursuant to Section 3.7(a) hereof, the
Rate Conversion Date or (iii) in the case of Bonds tendered pursuant to Sections 3.7(b) or (c)
hereof, the date designated pursuant to such applicable Section.
"Tender Fund" means the fund by that name created pursuant to Section 3.15
hereof.
"Title Company" means such title company selected by the Developer and
acceptable to the City which has entered into an Escrow Agreement with the City, the Trustee
and the Developer pursuant to which the title company agrees to accept prepayments of the
Special Tax on behalf of the City and record the Satisfaction of Tax Lien as set forth in Section
4.8(c) hereof.
"Trustee" means LaSalle Bank National Association, and any qualified entity at
the time serving as successor trustee hereunder.
"Trust Estate" means the property conveyed to the Trustee pursuant to the
Granting Clauses of this Indenture.
"Underwriter" means LaSalle Capital Markets, A Division of ABN AMRO
Financial Services, Inc. and William Blair& Company, L.L.C.
"Untendered Bonds"has the same meaning as set forth in Section 3.11 hereof.
16
011.552614.7
"Weekly Rate" means the interest rate per annum applicable during each Rate
Period and determined and redetermined on a weekly basis as provided in Section 2.3(c)hereof.
ARTICLE II
THE BONDS
Section 2.1 Authorized Amount of Bonds. No Bonds may be issued under the
provisions of this Indenture except in accordance with this Article. The total principal amount of
Bonds that may be issued is hereby expressly limited to $_.
Section 2.2 Issuance of Bonds. The Bonds d2004106 Total Grande
Yorkville, Kendall County, Illinois, Special Service Area Number --
Reserve Variable Rate Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project).
The Bonds shall have a Maturity Date of March 1, 2034 (subject to prior redemption as
hereinafter provided in Article III hereof).
Each Bond shall be dated as of the date of authentication, shall be subject to prior
redemption, and shall be subject to purchase upon the terms and conditions hereinafter set forth,
shall be issued as fully registered bonds without coupons in Authorized Denominations, and shall
be numbered consecutively from R-1 upward.
Each Bond shall bear interest as provided in Section 2.4(b) hereof. If interest on
the Bonds shall be in default, Bonds issued
st date to which interest exchange h as been paid m fullor transfer or
exchange shall bear interest from the la
The principal of, premium, if any, and interest on the Bonds shall be payable in
any coin or currency of the United States of America which, at the respective dates of payment
thereof, is legal tender for the payment of public and private debts, and such principal, premium,
if any, and interest shall be payable at the Principal Office of the Paying Agent.
Section 2.3 Interest Rates on Bonds.
(a) General. The Bonds shall be issued on the Issuance Date bearing interest
shall be
at the Weekly Rate. During the initial Rate
subsequent Rate the
WeeklylyRatee shall be
per annum. Thereafter for su bse q
determined as provided in Section 2.3(c) hereof. Anything herein to the contrary
notwithstanding, interest on the Bonds sham not e Purchased Bond Ratennum in excess of the Cap
Rate. Purchased Bonds shall bear interest
During any Rate Period when the Bonds bear interest at the Weekly Rate or the
Monthly Rate, interest on the Bonds shall be computed on the basis of a 365-day year (366 days
during any calendar year containing a February 29) for the actual number of days elapsed during
such Rate Period. During any Rate Period when the Bonds bear interest at the Adjustable Rate
or during any period when the Bonds bear interest at the Fixed Rate interest on such Bonds shall
be computed on the basis of a 360-day year, consisting of twelve 30-day months. All
determinations of any Weekly Rate, any Monthly tof�Rate,rcent (0.001%) Rate or a
11 be conclusive
live
shall be rounded to the nearest one thous P
17
011.552614.7
and binding upon the City, the Trustee, the Remarketing Agent, the Credit Entity and the
Holders. The Remarketing Agent and, in certain limited instances as provided in this Article, the
Trustee, shall determine the Weekly Rate, the Monthly Rate, the Adjustable Rate, but it shall be
the duty of the Trustee to calculate the amount of interest payable for any period on the Bonds
and due and owing to each Holder.
(b) Selection of Interest Rate Determination Method. During any Rate Period
when the Bonds bear interest at the Weekly Rate or the Monthly Rate or at the conclusion of any
Rate Period when the Bonds bear interest at the Adjustable Rate, the City shall have the option
with the prior written consent of the Credit Entity and the Developer (i) to select a new interest
rate determination method for the Bonds (i.e., from Weekly Rate to the Monthly Rate, the
Adjustable Rate or the Fixed Rate; from the Monthly Rate to the Weekly Rate, the Adjustable
Rate or the Fixed Rate; or from the Adjustable Rate to the Weekly Rate, the Monthly Rate or the
Fixed Rate) or (ii) where the Bonds have, during the current Rate Period, been bearing interest at
the Adjustable Rate, to select an Adjustable Rate with a Rate Period of the same or different
length from the length of the current Rate Period; provided that, from and after such time as the
Bonds bear interest at the Fixed Rate, the City shall no longer have the option to select a
different interest rate determination method for the Bonds.
The City may exercise this option by written notice (the "Determination
Notice") given to the Trustee, the Developer, the Credit Entity, and the Remarketing Agent.
Such notice shall contain the written consent of the Credit Entity and the Developer and shall (i)
state the City's intention to select either a new interest rate determination method for the Bonds
(specifically the choice of the Weekly Rate, the Monthly Rate, the Adjustable Rate or the Fixed
Rate) or the City's decision that the Bonds should continue to bear interest at the Adjustable
Rate, (ii) specify the Rate Conversion Date, (iii) if the City elects to convert to or continue the
Adjustable Rate, the length of the Rate Period, (iv) state whether the Bonds will be rated, and if
so what the rating will be, (v) describe the nature and terms of the Credit Facility, which will
secure payment of the Bond Service Charges and which will provide for the Purchase Price of,
the Bonds under the proposed interest rate determination method, including the identity of the
Credit Entity, and (vi) if the Bonds are not then held under the book-entry only system, the
notice shall include the CUSIP number and Bond number of any Bond being converted. In
addition, no Rate Period shall extend past the expiration date of the applicable Credit Facility.
No conversion to an Adjustable Rate or Fixed Rate shall be effective unless prior
written notice of same is provided to the Rating Agencies and the Credit Facility has been
increased to cover 194 days' interest at the Cap Rate or the Fixed Rate, as may be applicable (or
such other number of days as may be required by the Rating Agency, if a rating is applied for).
The Determination Notice shall be given by the City at least forty-five (45) days
prior to the Rate Conversion Date. On or before the thirty-fifth day preceding the Rate
Conversion Date, the City shall (i) furnish the Trustee, the Credit Entity, the Developer and the
Remarketing Agent with the form of an opinion of Bond Counsel, addressed to the City, the
Trustee, the Credit Entity, and the Remarketing Agent and to be dated the Rate Conversion Date
(together with such certificates, opinions, resolutions or such other material as Bond Counsel
determines are necessary to render such opinion), stating that such redetermination of the method
by which interest borne by the Bonds shall be calculated is permitted by, and has been conducted
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011.552614.7
in accordance with, this Indenture and that such redetermination will not adversely affect the
exclusion of the interest on the Bonds from the gross income of the Holders for purposes of
Federal income taxation and (ii) furnish the City, the Trustee, the Credit Entity, the Developer
and the Remarketing Agent with written evidence that the Credit Facility or any Alternate Credit
Facility to be in effect on the Rate Conversion Date, have or will have as of the Rate Conversion
Date a stated expiration date that is not sooner than the earlier of the Maturity Date or one
calendar year from the Rate Conversion Date.
In the event of a conversion to the Adjustable Rate or the Fixed Rate, the Credit
Facility shall include coverage for payment of any premium pursuant to Section 3.1(a)(1)(B)
hereof.
The redetermination of the method by which interest borne by the Bonds is to be
calculated is a circumstance compelling a mandatory tender of Bonds pursuant to Section 3.7
hereof. The Trustee shall give Notice by Mail to the Holders of any such redetermination.
The foregoing notwithstanding, no redetermination of the interest rate
determination method pursuant to the procedures set forth in this Section 2.3(b) shall be required
at the conclusion of any Rate Period when the Bonds bear interest at the Weekly Rate or the
Monthly Rate or the Adjustable Rate, but rather, absent the exercise by the City of the option set
forth in this Section, the Bonds shall continue to bear interest at the Weekly Rate, the Monthly
Rate or the Adjustable Rate, as applicable and, with respect to Bonds bearing interest at the
Adjustable Rate, the Adjustable Rate Period shall be the same as the immediately preceding
Adjustable Rate Period. In addition, except as provided in the last sentence of this paragraph, no
redetermination of the interest rate to be borne by the Bonds shall occur if the conditions
specified in this Section and in Section 3.7(a) hereof are not met for any reason on or prior to the
Rate Conversion Date. Upon learning that a condition necessary to the redetermination of the
interest rate to be borne by the Bonds cannot or will not be met, the City, or the Remarketing
Agent, as applicable, shall immediately notify the Trustee. Upon being so notified or upon itself
so learning, the Trustee shall as soon as possible thereafter notify the City, the Remarketing
Agent, the Developer and the Credit Entity, that the proposed redetermination of the interest rate
to be borne by the Bonds cannot be accomplished and the reasons for such failure. If the
conditions to redetermination of the interest rate to be borne by the Bonds specified in this
Section and in Section 3.7 hereof cannot or will not be met for any reason on or prior to the Rate
Conversion Date, the Bonds will continue to bear interest in accordance with the rate
determination method in effect immediately prior to the new Rate Conversion Date, and the
Bonds, nevertheless, will be mandatorily tendered on the proposed Rate Conversion Date.
Except as otherwise expressly provided in this Section, all notices to persons
other than Holders under this Section may be given by telephone, confirmed within one Business
Day in writing.
(c) Weekly Rate. For all Weekly Rate Periods commencing with the second
Weekly Rate Period, the Weekly Rate shall be determined in the following manner: At or before
11:00 a.m., Chicago time, on each Rate Determination Date, the Remarketing Agent shall
determine the interest rate which the Bonds shall bear during the next Rate Period. Such interest
rate shall be the lowest interest rate which, in the sole and exclusive judgment of the
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011.552614.7
Remarketing Agent (having due regard for prevailing financial conditions and the yields at
which comparable securities are then being sold), would equal (but not exceed) the interest rate
necessary to enable the Remarketing Agent to sell the Bonds (exclusive of accrued interest, if
any) on the Rate Adjustment Date at a price equal to one hundred percent (100%) of the
principal amount thereof. The interest rate so determined shall be effective on the Rate
Adjustment Date. The Weekly Rate may be increased with respect to all the Bonds on any
Business Day (but not decreased) if, in the sole and exclusive judgment of the Remarketing
Agent, such an increase in the Weekly Rate is necessary to enable the Remarketing Agent to
remarket all or part of the Bonds (exclusive of accrued interest, if any) at a price equal to one
hundred percent (100%) of the principal amount thereof.
If, for any reason, the Weekly Rate cannot at any time be established as provided
in the preceding paragraph of this Section or is held invalid or unenforceable by a court of law,
then the Weekly Rate for the Rate Period shall be an interest rate equal to the Interest Index.
On each Rate Determination Date, and on any date on which the Weekly Rate is
increased pursuant to the last sentence of the first paragraph of this Section, the Remarketing
Agent shall give the Trustee and the Credit Entity telephonic notice, promptly confirmed in
writing, of the Weekly Rate determined by the Remarketing Agent on such date.
(d) Monthly Rate. For all Monthly Rate Periods the Monthly Rate shall be
determined in the following manner: At or before 11:00 a.m., Chicago time, on each Rate
Determination Date, the Remarketing Agent shall determine the interest rate which the Bonds
shall bear during the next Monthly Rate Period. Such interest rate shall be the lowest interest
rate which in the sole and exclusive judgment of the Remarketing Agent (having due regard for
prevailing financial conditions and the yields at which comparable securities are then being
sold), would equal (but not exceed) the interest rate necessary to enable the Remarketing Agent
to sell the Bonds (exclusive of accrued interest, if any) on the Rate Adjustment Date at a price
equal to one hundred percent (100%) of the principal amount thereof. The interest rate so
determined shall be effective on the Rate Adjustment Date. The Monthly Rate may be increased
with respect to all the Bonds on any Business Day (but not decreased) if, in the sole and
exclusive judgment of the Remarketing Agent, such an increase in the Monthly Rate is necessary
to enable the Remarketing Agent to remarket all or part of the Bonds (exclusive of accrued
interest, if any) at a price equal to one hundred percent (100%) of the principal amount thereof.
If, for any reason, the Monthly Rate cannot at any time be established as provided
in the preceding paragraph of this Section or is held invalid or unenforceable by a court of law,
then the Monthly Rate for the Rate Period shall be an interest rate equal to the Interest Index.
On each Rate Determination Date, and on any date on which the Monthly Rate is
increased pursuant to the last sentence of the first paragraph of this Section, the Remarketing
Agent shall give the Trustee telephonic notice, promptly confirmed in writing, of the Monthly
Rate determined by the Remarketing Agent on such date; provided that such telephonic notice
need not be given unless the Monthly Rate so determined is different from the Monthly Rate for
the preceding Rate Period. The Trustee shall, promptly after having been informed of the
Monthly Rate, notify the Credit Entity of the Monthly Rate.
20
011.552614.7
(e) Adjustable Rate. For all Adjustable Rate Periods, the Adjustable Rate
shall be determined in the following manner: At or before 5:00 p.m., Chicago time, on each Rate
Determination Date, the Remarketing Agent shall determine the interest rate which the Bonds
shall bear during the next Adjustable Rate Period. Such interest rate shall be that interest rate
which, if borne by Bonds, would, in the sole and exclusive judgment of the Remarketing Agent
(having due regard for the length of the proposed Rate Period, prevailing financial conditions
and the yields at which comparable securities are then being sold), equal (but not exceed) the
lowest interest rate necessary to enable the Remarketing Agent to sell all of the Bonds (exclusive
of accrued interest, if any) on the Rate Conversion Date at a price equal to one hundred percent
(100%) of the principal amount thereof. No later than the Business Day following the Rate
Determination Date, the Remarketing Agent shall notify the Trustee of the Adjustable Rate so
determined.
(f) Fixed Rate. The Fixed Rate shall be determined in the following manner:
At or before 5:00 p.m., Chicago time, on a day not earlier than ten (10) Business Days prior but
no later than two (2) Business Days prior to the Rate Conversion Date, the Remarketing Agent
shall determine the interest rate which the Bonds shall bear to and including the Maturity Date.
Such interest rate shall be that interest rate which, if borne by the Bonds, would, in the sole and
exclusive judgment of the Remarketing Agent (having due regard for the length of time
remaining until the Maturity Date, prevailing financial conditions and the yields at which
comparable securities are then being sold), equal (but not exceed) the lowest rate necessary to
enable the Remarketing Agent to sell all of the Bonds (exclusive of accrued interest, if any) on
the Rate Conversion Date at a price equal to one hundred percent (100%) of the principal amount
thereof. No later than the Business Day following the date the Fixed Rate is determined, the
Remarketing Agent shall notify the Trustee of the Fixed Rate so determined. The Trustee shall,
within one Business Day after having been informed of the Fixed Rate, notify the City and the
Credit Entity of the Fixed Rate so determined.
Section 2.4 Manner of Paying for the Bonds.
(a) The principal or redemption price of each Bond shall be payable upon
surrender of such Bond at the Principal Office of the Trustee. Payments of principal or
redemption price of each Bond shall be payable in immediately available funds in the city where
the Principal Office of the Trustee is located. Such payments shall be made to the Registered
Owner of the Bond so surrendered, as shown on the registration books maintained by the Bond
Registrar on the date of payment. Any Holder of the Bonds in an aggregate principal amount of
$1,000,000 or more shall also have the right to have payment of the principal of and premium on
its Bonds to be made by wire transfer in accordance with, and by the procedures set forth in
Section 2.4(b)(iv) hereof; provided that such Holder shall still be required to present and
surrender its Bonds as provided in the first sentence of this Section before any payment of
principal or premium (whether by wire transfer or otherwise) shall be made.
(b) Subject to the further provisions of this Section 2.4, each Bond shall bear
interest and be payable as to interest as follows:
(i) Each Bond shall bear interest (at the applicable rate determined
pursuant to Section 2.3 hereof) (A) from the date of authentication,
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011.552614.7
if authenticated on the Issuance Date or an Interest Payment Date
to which interest has been paid or provided for, or (B) from the last
preceding Interest Payment Date to which interest has been paid or
provided for (or the date of original issuance of the Bonds if no
interest thereon has been paid) in all other cases.
(ii) Subject to the provisions of subparagraph (iii) below, the interest
due on any Bond on any Interest Payment Date shall be paid to the
Registered Owner of such Bond as shown on the registration books
kept by the Registrar on the Regular Record Date.
(iii) If the available funds under this Indenture are insufficient on any
Interest Payment Date to pay the interest then due, the Regular
Record Date shall no longer be applicable with respect to the
Bonds. If sufficient funds for the payment of such overdue interest
thereafter become available, the Trustee shall immediately
establish a special interest payment date for the payment of the
overdue interest and a Special Record Date (which shall be a
Business Day) for determining the Registered Owners entitled to
such payments. Notice of each date so established shall be mailed
by the Trustee to each Registered Owner at least ten (10) days
prior to the Special Record Date, but not more than thirty (30) days
prior to the special interest payment date. The overdue interest
shall be paid on the special interest payment date to the Registered
Owners, as shown on the registration books kept by the Bond
Registrar as of the close of business on the Special Record Date.
(iv) All payments of interest on the Bonds shall be paid to the
Registered Owners entitled thereto pursuant to Section 2.4(b)(ii) or
(iii) above by the Trustee on the Interest Payment Date or special
interest payment date, as applicable, by check or draft mailed by
first class mail on the Interest Payment Date to the Registered
Owners entitled thereto at such address appearing in the
registration books of the Bond Registrar at the close of business on
the Record Date or at such other address as has been furnished to
the Trustee in writing by such Registered Owners. The foregoing
notwithstanding, if a Holder of Bonds in an aggregate principal
amount of$1,000,000 or more shall have given the Trustee notice
of the wire transfer address in the continental United States of such
Holder at least one day prior to a Record Date, then, for all Interest
Payment Dates thereafter until such notice is revoked or modified
in writing given to the Trustee, payment of the interest on the
Bonds of that Holder shall be made by the Trustee by wire transfer
to the wire transfer address set forth in such notice.
Section 2.5 Execution; Limited Obligation. The Bonds shall be executed on
behalf of the City with the manual or facsimile signature of the Mayor of the City, shall have
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011.552614.7
impressed or imprinted thereon the official seal of the City and shall be attested with the manual
or facsimile signature of its Clerk of the City. All authorized facsimile signatures shall have the
same force and effect as if manually signed. In case any official whose signature or a facsimile
of whose signature shall appear on the Bonds shall cease to be such official before the delivery
of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such official had remained in office until delivery. The Bonds may be
signed on behalf of the City by such persons who, at the time of the execution of such Bonds, are
duly authorized or hold the appropriate office of the City, although on the date of the Bonds such
persons were not so authorized or did not hold such offices.
The Bonds together with interest thereon and redemption premium, if any are not
and never shall become general obligations of the City, but are special limited obligations
payable by the City solely and only from the Trust Estate, including the Special Tax B and
amounts on deposit in the funds and accounts pledged to the Owners for such purpose pursuant
to the granting clauses of this Indenture and from payments provided under the Credit Facility,
which amounts, together with any other security provided herein, are hereby specifically
assigned and pledged to such purposes in the manner and to the extent provided herein. The
Bonds are issued pursuant to the Special Service Area Act and the Local Government Debt
Reform Act and the Bond Ordinance.
No recourse shall be had for the payment of the principal of, premium, if any, or
the interest on the Bonds or for any claim based thereon or any obligation, covenant or
agreement in this Indenture against any past, present or future member, officer, agent or
employee or official of the City or any independent contractor of the City or any person
executing the Bonds. No covenant, stipulation, promise, agreement, or obligation contained in
the Bonds, this Indenture, or any other document executed in connection therewith shall be
deemed to be the covenant, stipulation, promise, agreement or obligation of any present or future
official, officer, agent or employee of the City in his or her individual capacity and neither any
official of the City nor any officers executing the Bonds shall be liable personally on the Bonds
or be subject to any personal liability or accountability by reason of the issuance of the Bonds.
Section 2.6 Authentication. No Bond shall be valid or obligatory for any
purpose or entitled to any security or benefit under this Indenture unless and until a certificate of
authentication of such Bond shall have been duly executed by the Trustee, and such executed
certificate of the Trustee upon any such Bond shall be conclusive evidence that such Bond has
been authenticated and delivered under this Indenture. The certificate of authentication on any
Bond shall be deemed to have been executed by it if signed by an authorized officer of the
Trustee, but it shall not be necessary that the same officer sign the certificate of authentication on
all the Bonds.
Section 2.7 Form of Bonds. The Bonds issued under this Indenture shall be
substantially in the form set forth in Exhibit B hereto with such variations, omissions and
insertions as are permitted or required by this Indenture.
Section 2.8 Delivery of Bonds. Prior to the release by the Trustee of the
Bonds,there shall be filed with the Trustee:
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011.552614.7
(i) Copies, duly certified by an Authorized City Representative, of the
Bond Ordinance adopted by the City authorizing the issuance and
the sale of the Bonds and the execution and delivery of this
Indenture;
(ii) A request and authorization to the Trustee on behalf of the City
and signed by the Authorized City Representative to authenticate
and deliver such Bonds to the Underwriter upon payment to the
Trustee, but for the account of the City, of a sum specified in such
request and authorization in the aggregate principal amount of the
Bonds;
(iii) An opinion of counsel to the City acceptable to the Underwriter
stating to the effect that, in the opinion of such counsel, the Credit
Facility Agreement, the Bonds and this Indenture have been duly
authorized and lawfully executed and delivered on behalf of the
City;
(iv) Original duly executed counterparts of the Credit Facility
Agreement, the Remarketing Agreement and this Indenture;
(v) The Credit Facility;
(vi) An opinion or opinions of counsel for the Credit Entity stating, in
the opinion of such counsel, subject to the expectations set forth
therein acceptable to counsel for the City, counsel for the
Underwriter and Bond Counsel, that the Credit Facility and Credit
Facility Agreement are valid and binding obligations of the Credit
Entity enforceable against the Credit Entity, in accordance with
their terms under the laws of the United States of America and the
State of Illinois;
(vii) An opinion of Bond Counsel stating that (i) such Bonds and this
Indenture are valid and binding obligations of the City enforceable
in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws, judicial decisions or
principles of equity relating to or affecting the enforcement of
creditors' rights or contractual obligations generally, and (ii) the
interest on the Bonds is excludable from gross income for Federal
income tax purposes;
(viii) Any other instruments, certificates, documents or opinions
reasonably required by the City, the Underwriter, the Credit Entity
or Bond Counsel.
When the documents required above shall have been filed with the Trustee and
when such Bonds shall have been executed and authenticated as required by this Indenture, the
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011.552614.7
Trustee shall deliver such Bonds at one time to or upon the order of the Underwriter, but only
upon payment to the Trustee of the purchase price of such Bonds. The Trustee shall be entitled
to rely upon such documents as to all matters stated therein.
Section 2.9 Mutilated Lost Stolen or Destroyed Bonds. I n the event any
Bond is mutilated, lost, stolen or destroyed, the City may execute and the Trustee may
authenticate a new Bond of like date, interest rate, maturity and denomination to that mutilated,
lost, stolen or destroyed Bond, provided that, in the case of any mutilated Bond, such mutilated
Bond shall first be surrendered to the Trustee, and in the case of any lost, stolen or destroyed
Bond, there shall be first furnished to the City and the Trustee evidence of such loss, theft or
destruction satisfactory to the Trustee, together with an indemnity for the benefit of the City and
the Trustee, satisfactory to the Trustee. In the event any such Bond shall have matured, instead
of issuing a duplicate Bond, the Trustee on behalf of the City may pay the same without
surrender thereof making such requirements as it deems fit for its protection including a lost
instrument bond. The Trustee may charge the owner of such Bond with its reasonable fees and
expenses in this connection.
Section 2.10 Registration and Exchange of Bonds Persons Treated as Owners.
The City shall cause books for the registration and for the transfer of the Bonds as
provided in this Indenture to be kept by the Trustee, which is hereby constituted and appointed
the Bond Registrar of the City. Bonds shall not be registered to bearer. Upon surrender for
transfer of any Bond at the Principal Office of the Trustee (or the Tender Agent with respect to
tendered Bonds), duly endorsed for transfer or accompanied by an assignment duly executed by
the Registered Owner or his attorney duly authorized in writing, the City shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or transferees a new fully
registered Bond for a like aggregate principal amount.
Fully registered Bonds may be exchanged at the Principal Office of the Trustee
for a like aggregate principal amount of fully registered Bonds of other Authorized
Denominations. The City shall execute and the Trustee shall authenticate and deliver Bonds
which the Bondholder making the exchange is entitled to receive, bearing numbers not
contemporaneously then outstanding. The execution by the City of any fully registered Bond in
an Authorized Denomination shall constitute full and due authorization of such denomination
and the Trustee shall thereby be authorized to authenticate and deliver such registered Bond.
The City or the Trustee shall not be required to issue, register, transfer or
exchange any Bond during the period beginning with the Record Date and ending on the next
Interest Payment Date, nor during the period beginning fifteen (15) days before the mailing of
notice of redemption of Bonds and ending on the redemption date, except Bonds for which a
notice of optional tender has been received by the Trustee pursuant to Section 3.6 of this
Indenture.
In each case the Trustee shall require the payment by the Bondholder requesting
exchange or transfer of any tax or other governmental charge required to be paid with respect to
such exchange or transfer.
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Notwithstanding anything to the contrary set forth above, while the Bonds are
held in a book-entry only system, it shall be the duty of the Remarketing Agent to effect transfers
and exchanges of beneficial interests in the Bonds in accordance with the foregoing provisions.
Section 2.11 Temporary Bonds. Until the definitive Bonds are prepared, the
City may execute and deliver, in lieu of definitive Bonds, but subject to the same provisions,
limitations and conditions as the definitive Bonds, except as to exchangeability for Bonds, one or
more temporary fully registered Bonds substantially of the tenor of the definitive Bonds in lieu
of which such temporary Bond or Bonds are issued in Authorized Denominations and with such
omissions, insertions and variations as may be appropriate to temporary Bonds. The City shall
promptly prepare and execute for exchange for surrender temporary Bonds, and deliver in
exchange therefor, at the Principal Office of the Trustee, definitive Bonds of the same aggregate
principal amount and maturity as the temporary Bonds surrendered. Until so exchanged, the
temporary Bonds shall in all respects be entitled to the same benefits and security as definitive
Bonds issued pursuant to this Indenture. All temporary Bonds surrendered in exchange for a
definitive Bond or Bonds shall be forthwith canceled by the Trustee.
Section 2.12 Alternate Credit Facility.
(a) The City may, at any time not prohibited under any applicable Credit
Facility Agreement, deliver an Alternate Credit Facility to replace the Credit Facility then in
effect and in any such event the Bonds will be subject to mandatory tender pursuant to Section
3.7(b)(ii)hereof.
(b) Any Alternate Credit Facility delivered to the Trustee must be
accompanied by (i) an opinion of Bond Counsel selected by the City stating that delivery of such
Alternate Credit Facility is authorized under this Indenture and complies with its terms, (ii) an
opinion of counsel to the issuer or provider of such Alternate Credit Facility, stating that such
Alternate Credit Facility is a legal, valid, binding and enforceable obligation of such issuer or
provider in accordance with its terms (subject only to usual exceptions relating to bankruptcy and
similar matters), and in form and substance substantially identical to the opinion of counsel to the
Credit Entity with respect to a replacement of a Credit Facility delivered on the Issuance Date,
(iii) an opinion of Bond Counsel to the effect that the delivery of the Alternate Credit Facility
will not adversely affect the exclusion from gross income of interest on the Bonds for Federal
income tax purposes, and (iv) only if required by a Rating Agency, an opinion of counsel with
national expertise in matters of federal bankruptcy law (selected by the City, the Rating Agency
and the Trustee) to the effect that payments from the Alternate Credit Facility do not constitute
voidable preferences in the case of a bankruptcy by the City or any insider of the City.
Section 2.13 Book-Entry Only System. It is intended that the Bonds be
registered so as to participate in a securities depository system with DTC (the "DTC System"),
as set forth herein. The Bonds shall be initially issued in the form of a separate single fully
registered Bond for each of the maturities of the Bonds. Upon initial issuance, the ownership of
each such Bond shall be registered in the bond register in the name of Cede & Co., as nominee of
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 DTC System, including the
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Representation Letter. DTC may exercise the rights of a Bondholder only in accordance with the
terms hereof applicable to the exercise of such rights.
With respect to Bonds registered in the bond register in the name of Cede & Co.,
as nominee of DTC, the City, the Trustee and the Remarketing Agent 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 "DTC Participant") or to any person on
behalf of whom such a DTC Participant directly or indirectly 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 Trustee and the Remarketing Agent shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or
any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any
DTC Participant or any Indirect Participant or any other person, other than a Bondholder, as
shown in the bond register, of any notice with respect to the Bonds, including y notice of
redemption, (iii) the payment to any DTC Participant or Indirect Participant or any o anther Person,
other than a Bondholder, as shown in the register, of any amount with respect to principal of,
premium, if any, or interest on, the Bonds or (iv) any consent given by DTC as registered owner.
So long as certificates for the Bonds are not issued pursuant to this Section 2.13, the City, the
Remarketing Agent and the Trustee may treat DTC or any successor securities depository as, and
deem DTC or any successor securities depository to be, the absolute owner of the Bonds for all
purposes whatsoever, including without limitation (i) the payment of principal and interest on the
Bonds, (ii) giving notice of redemption and other matters with respect to the Bonds, (iii)
registering transfers with respect to the Bonds and (iv) the selection of Bonds for redemption.
While in the DTC System, no person other than Cede & Co., or any successor thereto, as
nominee for DTC, shall receive a Bond certificate with 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 in this Indenture with respect to
interest checks or drafts being mailed to the registered owner 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.
Section 2.14 Successor Securities Depository• Transfers Outside Book-Entry
Only System. In the event that (a) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (b) the Representation Letter
shall be terminated for any reason or (c) the City determines that it is in the best interest 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 on the bond register 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 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 an 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.
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Section 2.15 Payments and Notices to Cede & Co. Notwithstanding any other
provision of this Indenture to the contrary, so long as any of the Bonds are registered in the name
of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any,
and interest on such Bond and all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Representation Letter.
ARTICLE III
REDEMPTIONS AND TENDERS OF BONDS
Section 3.1 Redemption. The Bonds shall be subject to redemption prior to
maturity as follows:
(a) Optional Redemption. (i) The Bonds are subject to optional redemption
prior to their stated maturity date as follows:
(A) During any Rate Period when the Bonds bear interest at the
Weekly Rate or the Monthly Rate, the Bonds are subject to optional redemption
by the City, upon written direction delivered to the Trustee, the Remarketing
Agent and the Credit Entity together with the written consent of the Credit Entity,
at least forty-five (45) days prior to the proposed redemption date, in whole or in
part on any Business Day at a redemption price of one hundred percent (100%) of
the principal amount redeemed, plus accrued interest, if any, thereon to the
redemption date.
(B) During any Adjustable Rate Period having a length in excess of
two years or any Fixed Rate Period, the Bonds are subject to optional redemption
by the City, upon written direction delivered to the Trustee, the Remarketing
Agent and the Credit Entity, together with the written consent of the Credit Entity,
at least thirty-five (35) days prior to the proposed redemption date, in whole or in
part on any Business Day at the redemption prices (expressed as a percentage of
the principal amount of the Bonds to be redeemed), plus accrued interest, if any,
thereof to the redemption date as follows:
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS
UNTIL THE MATURITY DATE DATE ON WHICH
FOLLOWING CONVERSION REDEMPTION IS
TO A FIXED RATE ALLOWED TO COMMENCE REDEMPTION PRICE
More than 15 years Tenth anniversary of Rate 102%, declining by 1%on each
Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
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011.552614.7
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS
UNTIL THE MATURITY DATE DATE ON WHICH
FOLLOWING CONVERSION REDEMPTION IS
TO A FIXED RATE ALLOWED TO COMMENCE REDEMPTION PRICE
More than 10,but not more than Seventh anniversary of Rate 102%,declining by 1%on each
15 years Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
More than 7,but not more than 10 Fifth anniversary of Rate 101-1/2%,declining by 1/2%on
years Conversion Date each succeeding anniversary of
Rate Conversion Date.until
reaching 100%and 100%thereafter
More than 4,but not more than 7 Third anniversary of Rate 101%,declining by 1/2%on each
years Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
More than 2,but not more than 4 Second anniversary of Rate 100-1/2%,declining by 1/2%on
years Conversion Date each succeeding anniversary of
Rate Conversion Date until
reaching 100%and 100%thereafter
2 years or less Not subject to optional redemption
(C) During any Rate Period, the Bonds are subject to optional
redemption by the City, upon written direction, delivered to the Trustee, the
Remarketing Agent and the Credit Entity together with the written consent of the
Credit Entity on any Tender Date at a redemption price of one hundred percent
(100%) of the principal amount redeemed, plus accrued interest, if any, thereon to
the redemption date.
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 Section 3.1(d) hereof, and so as to maintain the proportion of principal maturing:in
each year to the total original principal amount of Bonds.
(b) Mandatory Redemption from Condemnation Proceeds or Proceeds
transferred from the Improvement Fund. (i) The Bonds, are subject to mandatory redemption by
the City upon written direction delivered to the Trustee, the Remarketing Agent and the Credit
Entity, together with the written consent of the Credit Entity, 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, in an amount equal to amounts on
deposit in the Bond and Interest Fund consisting of the proceeds received by the City in
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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.
(ii) The Bonds are subject to redemption on any Interest Payment Date, in
part, at a redemption price equal to the principal amount to be redeemed, without premium, from
amounts transferred from the Improvement Fund to the Bond and Interest Fund as described in
Section 5.3 hereof.
Any mandatory redemption of the Bonds pursuant to this Section 3.1(b) shall be
applied, to the extent possible, to reduce pro rata the amount required to be redeemed by
mandatory sinking fund redemption pursuant to Section 3.1(d) hereof, and so as to maintain the
proportion of principal maturing in each year to the total original principal amount of Bonds.
(c) Special Mandatory Redemption from Prepayment of Special Taxes,
Recapture Fees and Recoveries. The Bonds are subject to mandatory redemption at any time by
the City, to the extent permitted by the Credit Facility Agreement, upon written direction of the
City delivered to the Trustee, the Remarketing Agent and the Credit Entity, together with the
written consent of the Credit Entity and the Developer Representative, in part, in an amount
equal to amounts available for disbursement from the Special Redemption Account pursuant to
Section 5.2(f) as follows:
(i) During any Rate Period when the Bonds bear interest at the
Weekly Rate or the Monthly Rate, the Bonds are subject to
mandatory redemption in an amount equal to prepayments,
Recapture Fees and Recoveries on deposit in the Special
Redemption Account, at a redemption price of 100% of the
principal amount of the Bonds to be redeemed, together with
accrued interest on such Bonds to the date fixed for redemption.
(ii) During any Adjustable Rate Period or any Fixed Rate Period, the
Bonds are subject to mandatory redemption in an amount equal to
prepayments, Rec apture Fees and Recoveries on deposit in the
Special Redemption Account at the redemption prices (expressed
as a percentage of the principal amount of the Bonds to be
redeemed) plus accrued interest, if any, to the redemption date, as
provided in the Schedule set forth in Section 3.1(a)(i)(B) hereof, or
in the event Bonds are redeemed during any period they are not
subject to optional redemption at a price of 103% of the principal
amount of the Bonds to be redeemed.
Any mandatory redemption of the Bonds pursuant to this Section 3.1(c) shall be
applied, to the extent possible, to reduce pro rata the amount required to be redeemed by
mandatory sinking fund redemption pursuant to Section 3.1(d) hereof, and so as to maintain the
proportion of principal maturing in each year to the total original principal amount of Bonds.
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011.552614.7
(d) Mandatory Sinking Fund Redemption. The Bonds maturing March 1,
2030 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
2028
2029
2030
2031
2032
2033
2034
The City covenants that it will redeem the Bonds pursuant to the mandatory sinking fund
redemption requirements for the Bonds. 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.
(e) Purchase in Lieu of Redemption. In lieu of redemption as provided in
this Section 3.1, and provided the Credit Facility permits draws for such purpose, Bonds may be
purchased by the City, 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. Moneys in the Bond and Interest Fund may be used and
withdrawn by the Trustee to reimburse the Credit Entity for draws on the Credit Facility applied
to purchase Bonds in lieu of redemption.
Section 3.2 Selection of Bonds to Be Redeemed. A redemption of Bonds shall
be a redemption of the whole or of any part of the Bonds from any funds available for that
purpose in accordance with the provisions of this Indenture, provided, that there shall be no
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partial redemption of any Bond which would result in the unredeemed portion not being of an
Authorized Denomination. If less than all the Bonds shall be called for redemption under any
provision of this Indenture permitting such partial redemption, the particular Bonds to be
redeemed shall be selected first from Purchased Bonds, and thereafter by the Trustee, in such
manner as the Trustee in its discretion may deem fair and appropriate (except when the Bonds
are held in a book-entry system, in which case the selection of Bonds to be redeemed will be
made in accordance with the procedures established by DTC or any other applicable book-entry
depository), in the principal amount designated to the Trustee by the City or otherwise as
required by this Indenture. If it is determined that a portion, but not all, of the principal amount
represented by any such Bond is to be called for redemption, then, upon notice of intention to
redeem such portion, the Registered Owner of such Bond upon surrender of such Bond to the
Trustee for payments to such Registered Owner of the redemption price of the portion called for
redemption shall be entitled to receive a new Bond or Bonds in the aggregate principal amount of
the unredeemed balance of the principal amount of such Bond. New Bonds representing the
unredeemed balance of the principal amount of such Bond shall be issued to the Registered
Owner thereof, without charge therefor. If the Registered Owner of any such Bond of a
denomination greater than the principal amount to be redeemed shall fail to present such Bond to
the Trustee for payment and exchange as aforesaid, such Bond shall, nevertheless, become due
and payable on the date fixed for redemption to the extent of the portion of the principal amount
called for redemption (and to that extent only).
Section 3.3 Procedure for Redemption.
(a) In the event any of the Bonds are called for redemption, the Trustee shall
give notice, in the name of the City, of the redemption of such Bonds, which notice shall (i)
specify the Bonds to be redeemed, the redemption date, the redemption price, and the place or
places where amounts due upon such redemption will be payable (which shall be the Principal
Office of the Trustee) and, if less than all of the Bonds are to be redeemed, the numbers of the
Bonds, and the portion of the Bonds, so to be redeemed, (ii) state any condition to such
redemption, and (iii) state that on the redemption date, and upon the satisfaction of any such
condition, the Bonds to be redeemed shall cease to bear interest, provided that Eligible Funds are
available for such purpose on that date, and if Eligible Funds are not available on such date, the
redemption shall be canceled. Such notice may set forth any additional information relating to
such redemption. Such Notice by Mail shall be given at least thirty (30) days and not more than
sixty (60) days prior to the date fixed for redemption to the Credit Entity, the Remarketing
Agent, the Developer and to the holders of Bonds to be redeemed. No defect in any such notice
shall in any manner defeat the effectiveness of the call for redemption. Notwithstanding the
foregoing, the notice requirements set forth in this Section 3.3(a) shall not apply to Bonds
redeemed on their Tender Date pursuant to Section 3.1(a)(i)(C).
(b) Any Bonds and portions of Bonds which have been duly selected for
redemption and which are deemed to be paid in accordance with Article VII hereof shall cease to
bear interest on the specified redemption date.
(c) Official notice of redemption having been given as aforesaid, the Bonds or
portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at
the redemption price therein specified, and from and after such date (unless there shall be a
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011.552614.7
default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to
bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such
Bonds shall be paid by the Trustee at the redemption price. Upon surrender for any partial
redemption of any Bonds, there shall be issued to the Registered Owner a new Bond or Bonds in
the amount of the unredeemed principal in an Authorized Denomination. All Bonds which have
been redeemed shall be canceled and destroyed by the Trustee and shall not be reissued.
(d) In addition to the official notice of redemption, if the Bonds are not then
held under a book-entry only system, further notice shall be given by the Trustee in the name of
the City as set out below; provided, however, that neither the failure to give any such notice nor
any defect in any notice so given shall affect the sufficiency or validity of any proceedings for
the redemption of the Bonds. Each further notice of redemption given hereunder shall contain
the information required for an official notice of redemption plus: (i) the CUSIP numbers of all
Bonds being redeemed; (ii) the date of issue of the Bonds as originally issued; (iii) the rate of
interest borne by each Bond being redeemed; (iv) the maturity date of each Bond being
redeemed; and (v) any other descriptive information needed to identify accurately the Bonds
being redeemed. Each further notice of redemption shall be sent at least 30 days before the
redemption date by certified mail or overnight delivery service to all registered securities
depositories then in the business of holding substantial amounts of obligations of the type
comprising the Bonds and to one or more national information services, chosen in the discretion
of the Trustee, that disseminate notice of redemption of obligations such as the Bonds.
Section 3.4 No Partial Redemption After Event of Default. Anything in this
Indenture to the contrary notwithstanding, if there shall have occurred and be continuing any
Event of Default under this Indenture, there shall be no redemption of less than all of the Bonds
at the time Outstanding.
Section 3.5 Payment of Redemption Price. For the redemption of any of the
Bonds pursuant to Section 3.1(a), the City shall cause to be deposited in the Bond and Interest
Fund an amount of Eligible Funds sufficient to pay the principal of, premium, if any, and interest
to become due on such Bonds on the date fixed for such redemption. Any amount in the Bond
and Interest Fund available on such redemption date for payment of the principal of and accrued
interest and premium, if any, on the Bonds to be redeemed shall be credited against any amount
required to be caused to be so deposited in the Bond and Interest Fund.
Section 3.6 Optional Tenders While Bonds Bear Interest at the Weekly Rate or
Monthly Rate.
(a) Purchase Date. During any Rate Period when the Bonds bear interest at
the Weekly Rate or the Monthly Rate, the Registered Owners of Bonds may elect to have their
Bonds (or portions thereof in Authorized Denominations; provided, however, that Bonds may
not be tendered for purchase in part unless the principal amount not to be tendered for purchase
is an Authorized Denomination) purchased at the Purchase Price. Any such Bond may be
tendered for purchase on the demand of the Registered Owner at the Purchase Price payable in
immediately available funds on any Business Day upon delivery of a written notice of tender,
meeting the further requirements of subsection (b) below, to the Trustee at its Principal Office
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011.552614.7
not later than 4:00 p.m., Chicago time, on a Business Day not fewer than seven (7) days prior to
the purchase date specified in such notice.
(b) Notice of Optional Tender. Each notice of optional tender:
(i) shall be delivered to the Trustee at its Principal Office and be in
form satisfactory to the Trustee;
(ii) shall state in writing (A) the principal amount of the Bonds and the
Bond number or numbers to which the notice relates, (B) that the
Registered Owner irrevocably demands purchase of such Bonds or
a specified portion thereof in an Authorized Denomination
(provided, however, that Bonds may not be tendered for purchase
in part unless the principal amount not to be tendered for purchase
is an Authorized Denomination), (C) the date on which such Bonds
or portion is to be purchased, (D) payment instructions with
respect to the Purchase Price, and (E) that the Bonds will be
delivered to the Principal Office of the Trustee on the purchase
date; and
(iii) shall automatically constitute, (A) an irrevocable offer to sell the
Bonds (or portion thereof) to which the notice relates on the
purchase date, at the Purchase Price, (B) an irrevocable
authorization and instruction to the Trustee to effect transfer of
such Bonds (or portion thereof) upon payment of the Purchase
Price to the Trustee on the purchase date, (C) an irrevocable
authorization and instruction to the Trustee to effect the exchange
of the Bonds to be purchased in whole or in part for other Bonds in
an equal aggregate principal amount so as to facilitate the sale of
such Bonds (or portion thereof to be purchased), and (D) an
acknowledgment that upon payment of such Purchase Price to the
Trustee on the purchase date, such Registered Owner will have no
further rights with respect to such Bonds (or portion thereof)
except for the right of such Registered Owner to receive such
Purchase Price upon surrender of such Bonds to the Trustee and,
irrespective of whether such Bond or Bonds are actually delivered
to the Trustee on the purchase date, any such Bond will be deemed
to have been delivered for purchase at the Purchase Price on the
purchase date and cease to accrue interest thereafter, and that after
the purchase date such Registered Owner will hold such
undelivered Bonds as agent for the Trustee.
The determination of the Trustee as to whether a notice of tender has been
properly delivered pursuant to the foregoing shall be conclusive and binding upon the Registered
Owner.
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011.552614.7
(c) Bonds to be Remarketed. Not later than 11:00 a.m., Chicago time, on the
Business Day immediately following the date of receipt of any notice of tender, the Trustee shall
notify the Remarketing Agent and the City, by telephone promptly confirmed in writing, of the
principal amount of Bonds (or portions thereof)to be purchased and the date of purchase.
(d) Purchase of Tendered Bonds.
(i) Notices by Remarketing Agent. At or before 3:00 p.m., Chicago
time, on the Business Day preceding the date fixed for purchase of
tendered Bonds, the Remarketing Agent shall give notice by
telephone, telegram, telecopy, or other similar communication to
the Trustee (promptly confirmed in writing) and the Credit Entity,
of the principal amount of tendered Bonds which have been
remarketed by that time and the portion of the Purchase Price
which has been deposited. Such Bonds which have not been
remarketed shall be held by the Trustee and registered as provided
in Section 3.14 hereof, until remarketed, except as otherwise
instructed by the Credit Entity. At or before 3:00 p.m., Chicago
time, on the Business Day prior to the purchase date to the extent
known to the Remarketing Agent, the Remarketing Agent shall
give notice to the Trustee by telephone (promptly confirmed in
writing) of the principal amount of Bonds remarketed, and, if the
Bonds are no longer held in a book-entry only system, the names,
addresses and taxpayer identification numbers of the purchasers
and the denominations of Bonds to be delivered to each purchaser.
(ii) Remarketing of Tendered Bonds. Pursuant to and subject to the
Remarketing Agreement, the Remarketing Agent shall offer for
sale and use its best efforts to find purchasers for all Bonds or
portions thereof for which notice of optional tender has been
received pursuant to Section 3.6(b) above; provided, however, that
the Remarketing Agent shall not offer for sale or sell such Bonds
to the City (or any guarantor of the City or to any person who is an
"insider" of the City or any such guarantor within the meaning of
the Bankruptcy Code). The Remarketing Agent shall provide
notice (promptly confirmed in writing) to the Trustee of the
amount of remarketing proceeds it has for the payment of the
Purchase Price for tendered Bonds (in exchange for new registered
Bonds) in immediately available funds at or before 9:00 a.m.,
Chicago time, on the purchase date. The Remarketing Agent shall
provide for the payment to the Trustee of the remarketing proceeds
from the purchasers of tendered Bonds on each purchase date in
immediately available funds at or before 9:00 a.m. Chicago time,
and shall provide the Trustee with the applicable Federal Funds
wire transfer number as soon as possible after initiating such
transfer. Notwithstanding the foregoing, the Remarketing Agent
shall not sell any Bond as to which a notice of conversion of
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011.552614.7
interest rate or notice of redemption has been given by the Trustee
unless the Remarketing Agent has advised the party to whom the
sale is made of the proposed conversion or redemption; and,
provided further, that the Remarketing Agent shall not sell any
Bonds for which it has received a notice from the City that such
Bonds are subject to optional redemption pursuant to Section
3.1(a)(i)(C)hereof.
(iii) Sources of Payment - Credit Facility. Prior to 9:30 a.m. Chicago
time, on the date fixed for purchase (a "Credit Facility Draw
Date"), the Trustee shall make a demand under the Credit Facility
in accordance with its terms (and shall also give notice of such
demand to the City and the Developer by telephone, telecopy or
other similar communication) for an amount equal to the difference
between the total principal amount of Bonds tendered on such date
and the amount of remarketing proceeds corresponding to principal
received from the Remarketing Agent on the purchase date, plus an
amount corresponding to accrued and unpaid interest for such
Bonds that have not been remarketed. Following such demand the
Credit Entity shall, at or before 1:00 p.m., Chicago time, on the
Credit Facility Draw Date honor its obligations with respect to
such demand. All monies drawn by the Trustee under this Section
shall be deposited by the Trustee in the Tender Fund to be used
solely for the payment of the Purchase Price of tendered Bonds and
shall not be commingled with other funds held by the Trustee and
shall not be invested.
(iv) Payments by the Trustee. At or before 1:30 p.m., Chicago time, on
the date set for purchase of tendered Bonds and upon receipt by the
Trustee of 100% of the aggregate Purchase Price of the tendered
Bonds, the Trustee shall pay the Purchase Price of such Bonds to
the Registered Owners at its Principal Office or, upon request of a
Registered Owner, by bank wire transfer. Such payments shall be
made in immediately available funds. As provided in Section 3.8
hereof, if sufficient funds are not available for the purchase of all
tendered Bonds, no purchase shall be consummated.
(v) Registration and Delivery of Tendered or Purchased Bonds. On
the date of purchase, the Trustee shall register and deliver (or hold)
or cancel all Bonds purchased on any purchase date as follows: (A)
Bonds remarketed by the Remarketing Agent for which the Trustee
shall have received the Purchase Price shall be registered and made
available to the Remarketing Agent by 1:15 p.m., Chicago time, in
accordance with the instructions of the Remarketing Agent; and
(B) Bonds purchased with amounts provided by the Credit Entity
under the Credit Facility shall be registered as provided in Section
3.14 hereof.
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(vi) Delivery of Bonds. All Bonds to be purchased on any date shall be
required to be delivered to the Principal Office of the Trustee on
the date specified in the optional tender notice delivered pursuant
to Section 3.6(b) hereof and with respect to a mandatory tender
pursuant to Section 3.7 on the dates specified therein. Each
Bondholder of any Bonds which are to be so tendered as described
above in Section 3.6(a) shall be entitled to receive the Purchase
Price of such Bonds by delivery of such Bonds to the Trustee,
provided that, in order to receive payment on the date on which
such Bonds are to be purchased, such delivery must be made at any
time prior to 12:30 p.m., Chicago time, on the date on which such
Bond must be delivered. Owners of such Bonds delivered at any
time after 12:30 p.m., Chicago time, on such date shall not be
entitled to receive payment until the Business Day next following
the date of delivery of the Bonds.
(vii) Bonds Tendered After Call for Redemption. Any Bond tendered
after a call for redemption, but before the applicable redemption
date, shall be purchased pursuant to the tender. If such Bond has
been selected for redemption and is remarketed prior to the
redemption date, the replacement Bond issued upon such
remarketing shall be redeemed on the redemption date.
(viii) Monies Uninvested. Monies held by the Trustee to pay the
Purchase Price of Bonds shall not be invested while so held.
(ix) Priority of Payment of Purchase Price. The payment of the
Purchase Price shall be in the following priority:
(A) First, remarketing proceeds pursuant to (ii) hereof; and
(B) Secondly, amounts drawn under the Credit Facility pursuant to (iii)
hereof.
If the Registered Owner of any Bond (or portion thereof) that is subject to
purchase pursuant to this Section fails to deliver such Bond to the Trustee for purchase on the
date specified above, and if the Trustee is in receipt of Eligible Funds in an amount equal to the
Purchase Price therefor, such Bond (or portion thereof) shall nevertheless be deemed purchased
on the day fixed for purchase thereof and ownership of such Bond (or portion thereof) shall be
transferred to the purchaser thereof as provided in subsection (d)(v) above. Any Registered
Owner who fails to deliver such Bond for purchase shall have no further rights thereunder except
the right to receive the Purchase Price thereof upon presentation and surrender of said Bond to
the Trustee. The Trustee shall, as to any tendered Bonds which have not been delivered to it,
promptly notify the Remarketing Agent and the Bond Registrar of such nondelivery, and the
Bond Registrar shall place a stop transfer against an appropriate amount of Bonds registered in
the name of such Registered Owner(s) on the Bond registration books. The Bond Registrar shall
place such stop(s) commencing with the lowest serial number Bond registered in the name of
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such Registered Owner(s) until stop transfers have been placed against an appropriate amount of
Bonds until the appropriate tendered Bonds are delivered to the Trustee. Upon such delivery, the
Trustee shall notify the Bond Registrar, and the Bond Registrar shall make any necessary
adjustments to the Bond registration books.
Tendered Bonds must be physically delivered by their owners properly endorsed
for transfer. Each Bond must be accompanied by an instrument of transfer satisfactory to the
Trustee executed in blank by the Registered Owner and with the signature of such Registered
Owner guaranteed by a bank, trust company or member firm of the New York Stock Exchange.
The Trustee may refuse to accept delivery of any Bond for which a proper instrument of transfer
has not been provided.
Section 3.7 Mandatory Tender Upon Rate Conversion Date; Expiration or
Substitution of Credit Facility' and Event of Default under Credit Facility Agreement.
(a) Mandatory Tender on Rate Conversion Date. On any Rate Conversion
Date pursuant to Section 2.3 hereof, Bonds are subject to mandatory tender for purchase at the
Purchase Price.
At least thirty (30) days prior to a Rate Conversion Date, the Trustee shall give
notice of the Tender Date (i) to the Holders, (ii) the Credit Entity, and (iii) the Remarketing
Agent.
The notice of mandatory tender pursuant to this Section shall state (i) the City's
decision to request a redetermination of the interest rate applicable to the Bonds as provided in
Section 2.3 hereof and that such decision requires the Holders to tender the Bonds for purchase
pursuant to this Section, (ii) the Tender Date and the procedures set forth in this Section for
making a mandatory tender of Bonds, (iii) the right of Holders of $1,000,000 or more in
aggregate principal amount of Bonds to request payment of the Purchase Price by wire transfer
in the continental United States and that, in order to exercise this right, written wire transfer
instruction must be given to the Trustee at least one Business Day prior to the Tender Date, (iv)
if the Bonds are no longer held in a book-entry only system, that no payment of the Purchase
Price shall be made to any Holder until it makes physical delivery of its Bonds to the Trustee, (v)
if the Bonds are no longer held in a book-entry only system, that if a Holder does not make
physical delivery of its Bonds, such Bonds will be deemed tendered and such Holder will be
entitled to no payment (including interest to accrue subsequent to that Tender Date) other than
the Purchase Price for such Bonds upon surrender of such Bonds to the Trustee and (vi) that if
the conditions to redetermination of the interest rate to be borne by the Bonds cannot or will not
be met for any reason on such Tender Date, the Bonds will continue to bear interest based on the
same rate determination method as in effect immediately preceding the proposed Rate
Conversion Date, but the Bonds will be subject to mandatory tender on the proposed Rate
Conversion Date.
(b) Mandatory Tender Upon Expiration or Substitution of Credit Facility.
Bonds shall be subject to mandatory tender in whole for purchase as follows:
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(i) The Bonds are subject to mandatory tender on the Expiration Date
if the City has not delivered to the Trustee by the thirty-fifth day
prior to the Expiration Date a written copy of an extension of the
Expiration Date of the Credit Facility. Such mandatory tender
shall be at the Purchase Price. No draw on an Alternate Credit
Facility shall be made prior to the termination of the Credit Facility
which it is to replace.
(ii) The Bonds are subject to mandatory tender on each Substitution
Date. Such mandatory tender shall be at the Purchase Price. No
draw on an Alternate Credit Facility shall be made prior to the
termination of the Credit Facility which it is to replace.
(iii) Not less than thirty days prior to the Expiration Date and each
Substitution Date, the Trustee shall give a notice of mandatory
tender to each Registered Owner which shall state the Tender Date
and payment instructions with respect to the Purchase Price. In
addition, if the Trustee receives notice from the City of an
extension of the Credit Facility, the Trustee shall provide notice of
such extension to each Registered Owner and to the Remarketing
Agent. No action taken by the City (or at the City's direction)
subsequent to the thirty day period shall negate the mandatory
tender as provided herein.
(c) Mandatory Tender on Event of Default Under Credit Facility Agreement.
Upon the written direction of the Credit Entity stating that the Bonds shall be subject to
mandatory tender because there has been an Event of Default under the Credit Facility
Agreement, the Bonds shall be subject to mandatory tender on the Tender Date described in the
next sentence at the Purchase Price. The Trustee shall immediately send written notice to the
Remarketing Agent and all Registered Owners that the Bonds will be subject to mandatory
tender by the Bondholders on a Business Day not more than two (2) Business Days after the date
the Trustee delivers said notice to the Bondholders.
(d) (Reserved.)
(e) Failure to Receive Notice of Mandatory Tender. The failure to receive
notice of a mandatory tender under this Section 3.7 or any defect in that notice as to any Bond
shall not affect the validity of the proceedings for the mandatory tender of that Bond or any other
Bond. All notices to Holders under this Section shall be given by Mail. All notices to persons
other than Holders pursuant to this Section may be given by overnight delivery services or as
otherwise provided in Section 12.4 hereof.
(fl Remarketing of Tendered Bonds. In accordance with the terms of the
Remarketing Agreement, the Remarketing Agent shall offer for sale and use its best efforts to
find purchasers for Bonds tendered or deemed tendered under Section 3.7(a) and (b)(ii) hereof.
In the event of a conversion of interest on the Bonds to the Adjustable Rate or to a Fixed Rate, in
no event shall the Remarketing Agent sell any such Bond to any party, unless the Remarketing
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Agent has advised such party that after the Rate Conversion Date, the Bonds will not be subject
to tender at the option of the Registered Owner. The Trustee shall hold such funds for the
purchase of such tendered Bonds pursuant to Section 3.6(d)(iii) hereof. Pending payment of
such funds as aforesaid,the Trustee shall hold such funds uninvested.
(g) Purchase of Tendered Bonds. The provisions of Section 3.6(c) and (d)
hereof shall apply to tenders pursuant to this Section 3.7.
Section 3.8 Inadequate Funds for Tenders. If the funds available for purchases
of Bonds pursuant to this Article III are inadequate for the purchase of all Bonds tendered on any
purchase date, the Trustee shall: (i) return all tendered Bonds to the Registered Owners; (ii)
return all monies received for the purchase of such Bonds to the parties providing such monies;
and (iii) notify the Remarketing Agent, if applicable, the Credit Entity, the Developer
Representative and the City of the return of such Bonds and monies and the failure to make
payment for tendered Bonds.
Section 3.9 Duties of the Trustee.
(a) The Trustee agrees that, in the event the Bonds are no longer held in
book-entry only form, it shall hold all Bonds delivered to it pursuant to Sections 3.6 or 3.7 hereof
in trust solely for the benefit of the respective Bondholders which shall have so delivered such
Bonds until monies representing the Purchase Price of such Bonds shall have been delivered to
or for the account of or to the order of such Bondholders.
(b) The Trustee agrees that it shall hold all monies delivered to it pursuant to
Sections 3.6 and 3.7 hereof for the purchase of Bonds in trust solely for the benefit of the party
which shall have so delivered such monies until the purchase date; and on and after the purchase
date, the Trustee shall hold all such monies in trust solely for the benefit of the respective owners
of the Bonds so purchased until the Trustee shall have paid the Purchase Price with respect to
such Bonds to such owners; provided, that if any monies remain after the payment in full of the
Purchase Price of all Bonds tendered for purchase pursuant to Sections 3.6 and 3.7 hereof, such
monies shall be held in trust for the benefit of the City, to be applied in accordance with
Article V hereof.
Section 3.10 Duties of the Remarketing Agent. The Remarketing Agent shall
perform the duties set out in this Article III and the Remarketing Agreement. Notwithstanding
any other provisions herein to the contrary, the Remarketing Agent shall be under no obligation
to remarket Bonds if an Event of Default has occurred and is continuing hereunder, and the
Remarketing Agent shall not sell any Bond in such circumstances unless the Remarketing Agent
has advised the party to whom the sale is made of the Event of Default. The Remarketing Agent
shall not remarket Bonds to the City or any guarantor of the Bonds (excluding the Credit Entity)
or to any person who is an "insider" of the City or any such guarantor within the meaning of the
Bankruptcy Code.
Section 3.11 Untendered Bonds. Bonds which are not presented for payment on
the purchase date due to acceleration or otherwise or due to an optional or mandatory tender, will
nonetheless be deemed purchased on such date. Accrued interest payable to the date of purchase
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of Bonds tendered pursuant to Sections 3.6 or 3.7 hereof, or portions thereof, purchased as
provided above will be paid to the Holder as of the Record Date next preceding the date of
purchase of such Bonds or portions thereof in the same manner as if such Bonds or portions
thereof were not purchased. Such Bonds (or beneficial interests therein) or such portions thereof
will be deemed "Untendered Bonds." Promptly after the date required for purchase, the Trustee
will provide a Notice by Mail to each Holder of an Untendered Bond, which notice will state that
interest on such Untendered Bond ceased to accrue on such date referred to above, and that
monies representing the Purchase Price for such Untendered Bond (less any accrued interest paid
to such Holder pursuant to the terms of the Bonds) are available against surrender thereof at the
Principal Office of the Trustee. The Trustee will hold such monies, without liability for interest
thereon, in trust in the Tender Fund for the benefit of such Holder, who will thereafter be
restricted exclusively to such monies for any claim of whatever nature under the Indenture or on,
or with respect to, such Untendered Bond. Any monies so deposited with and held by the
Trustee and not so applied to the payment of such Untendered Bonds within two years after such
date referred to above will be paid by the Trustee to the City (provided, however, that if the City
then owes any amounts to the Credit Entity (as certified in writing by the Credit at
to the
Trustee)to the Credit Entity to the extent of monies owed to the Credit Entity) and the balance, if
any, to the City) and thereafter the former Holders will be entitled to look only to the City for
payment and then only to the extent of the amount so repaid.
Section 3.12 Cancellation. All Bonds which have been redeemed shall be
canceled and destroyed by the Trustee as provided in Section 5.6 hereof.
Section 3.13 Bonds Redeemed in Part. Any Bond which is to be redeemed only
in part shall be surrendered (with due endorsement by, or a written instrument of transfer in form
satisfactory to the City and the Trustee duly executed in blank by, the Holder thereof or his
attorney duly authorized in writing) and the City shall execute and the Trustee shall authenticate
and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of any
Authorized Denomination or Denominations as requested by such Holder, and in an aggregate
principal amount equal to the unredeemed portion of the principal of the Bonds surrendered.
Section 3.14 Holding and Purchase of Purchased Bonds. Purchased Bonds
purchased pursuant to Section 3.6 or Section 3.7 hereof with monies provided by the Credit
Entity under the Credit Facility shall be registered in the name of the Credit Entity or its
designee, shall be held by the Trustee in trust for the benefit of the Credit Entity, and shall not be
transferred or exchanged by the Trustee until the Trustee (on behalf of the Credit Entity) has
received pursuant to a remarketing of the Bonds by the Remarketing Agent the amount disbursed
under the Credit Facility to pay the Purchase Price of such Bonds, which amount the Trustee
shall promptly pay to the Credit Entity and until the Trustee has received in writing notice from
the Credit Entity that, if not already reinstated, the commitment of the Credit Entity to purchase
such Bonds has been reinstated in the amount of the aggregate principal amount of such Bonds
plus the amount originally provided under the Credit Facility to pay the portion of the Purchase
Price equal to the accrued interest, if any, on such Bonds and further until the Trustee sends a
request for such reinstatement to the Credit Entity as provided in the Credit Facility. In such
event, the Trustee shall then release such Bonds, and register the transfer of such Bonds in the
name or names of the new Registered Owners thereof as shall be provided by the Remarketing
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Agent by notice, as the case may be. Unless otherwise directed in writing by the Credit Entity,
proceeds of the remarketing of such Purchased Bonds shall be paid to the Credit Entity.
Section 3.15 Tender Fund. In connection with the tender of any Bonds
hereunder, it shall be the duty of the Trustee to hold the monies received by the Trustee pursuant
to Sections 3.6 or 3.7 hereof in accordance with the provisions of this Article, without liability
for interest thereon, for the benefit of the former Holder of any Untendered Bond, who shall
thereafter be restricted exclusively to such monies for any claim of whatever nature on its part
under this Indenture on, or with respect to, such Untendered Bond. Such monies shall be held in
a separate and segregated fund by the Trustee designated the "Tender Fund" and shall not be
invested, and the Trustee shall not be liable to the City for any interest thereon, and any monies
shall be held and applied as provided in Section 3.11 hereof.
Section 3.16 Book-Entry Only System; Redemptions; Tender of Bonds. The
Trustee acknowledges that references in this Article III regarding Bonds should be read, where
applicable, to include beneficial interests therein and Bondholders or Registered Owners should
be read to include DTC Participants, but while the Bonds are in the Book-Entry Only System (i)
all rights of ownership must be exercised through DTC and the Book-Entry Only System and (ii)
all notices are to be given only to DTC, all pursuant to the terms and conditions of the
Representation Letter.
ARTICLE IV
GENERAL COVENANTS; LEVY OF SPECIAL TAX
Section 4.1 Payment of Principal and Interest. The City covenants that it will
promptly pay the principal of, premium, if any, and interest on every Bond issued under this
Indenture at the place, on the dates and in the manner provided herein and in each said Bond
according to the true intent and meaning thereof, but solely from the payments and other
amounts pledged for payment of the Bonds pursuant to the granting clauses of this Indenture,
including the Special Tax and amounts made available from draws on the Credit Facility and
nothing in the Bonds or in this Indenture shall be construed as pledging any other funds or assets
of the City.
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 their
payment.
Section 4.2 Performance of City Covenants. The City covenants that it will
faithfully perform at all times any and all covenants, undertakings, stipulations and provisions
contained in this Indenture, in the Bond Ordinance and in any and every Bond executed,
authenticated and delivered hereunder and in all of its proceedings pertaining hereto. The City
covenants that it is duly authorized under the Special Service Area Act and the Local
Government Debt Reform Act to issue the Bonds authorized hereby and to execute this
Indenture, that all action on its part for the execution and delivery of this Indenture has been duly
and effectively taken, and that the Bonds in the hands of the owners thereof are and will be valid
and enforceable limited obligations of the City according to the terms thereof and hereof except
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as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditor's rights generally.
Section 4.3 Instruments of Further Assurance. The City covenants that it will
do, execute, acknowledge and deliver such further acts, instruments and transfers as the Trustee
may reasonably require for the better assuring, transferring, pledging, assigning and confirming
unto the Trustee all and singular the rights assigned and the amounts pledged to the payment of
the principal of, premium, if any, and interest on the Bonds.
Section 4.4 Levy and Collection of Taxes. The City covenants with the
holders of the Bonds from time to time outstanding that:
(i) 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 Tax by institution
of foreclosure proceedings as provided by law;
(ii) 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 Report;
and
(iii) 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 it will take all actions necessary to
assure the timely collection of the Special Taxes, including without
limitation, the enforcement of any delinquent Special Tax by the
commencement and maintenance of an action to foreclose the lien
of any delinquent Special Taxes in the manner provided by law.
Section 4.5 Inspection of Records; Books. 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 Tax. Such books of record and accounts shall at all times
during business hours be subject to the inspection of the Credit Entity and 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 Remarketing Agent, the Developer Representative and the Credit
Entity 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.
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Section 4.6 List of Bondholders. The Trustee will keep on file a list of names
and addresses of the owners of all Bonds as from time to time registered on the registration
books of the City maintained by the Trustee as Bond Registrar, together with the principal
amount and numbers of such Bonds. The Trustee shall be under no responsibility with regard to
the accuracy of said lists other than to accurately record the information furnished it. At
reasonable times and under reasonable requirements established by the Trustee, said list may be
inspected and copied by the Credit Entity or by owners (or a designated representative thereof)
of fifteen percent (15%) or more in principal amount of Bonds, such ownership and the authority
of such designated representative to be evidenced to the satisfaction of the Trustee.
Section 4.7 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
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,
Clerk and Treasurer of the City 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 "Penalty"), then the City shall pay such Penalty.
(iii) The City shall, not less frequently than annually, cause to be
transferred to the Rebate Fund created pursuant to Section 5.9
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hereof 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 and the
Administrative Expense 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 Penalty, but only if necessary after
application of investment earnings as aforesaid and only as
appropriated by the Corporate Authorities.
Section 4.8 Levy of Special Tax. (a) Pursuant to the Bond Ordinance there
has been levied a Special Tax upon all taxable real property within the Special Service Area
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 an assumed interest rate of
7%.
(b) The Clerk of the City 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 Kendall
County. Pursuant to the Special Tax Roll, the Special Tax shall be divided among all taxable
real property within the Special Service Area in accordance with the terms of the Establishing
Ordinance and the Special Tax 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 2005
through 2032 to calculate or cause the Consultant to calculate the projected Special Tax
Requirement for the immediately succeeding year and to adopt an ordinance approving the
amount of the projected Special Tax Requirement for the immediately succeeding year. Each
month the Consultant shall adjust the projected Special Tax Requirement to reflect actual debt
service owed on the Bonds. The Special Tax shall be levied and billed directly to and collected
from the property owners by the City through the Consultant on a monthly basis to coincide with
the interest payments owed on the Bonds. The Special Tax shall be computed, extended and
collected in accordance with the Special Tax Report and the Special Tax Roll, 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 Report. The Special Tax levied by the Bond
Ordinance for collection by the County Clerk of Kendall County shall be abated each year to the
extent procedures are in place for the City to levy, bill and collect the Special Tax directly or
through the Consultant. On or before the last Tuesday of January for each of the years 2006
through 2033 the City shall notify the Trustee, the Developer Representative and the Credit
Entity of the amount of the projected Special Tax Requirement for the current year and the actual
Special Tax Requirement as adjusted by the Consultant each month for the immediately
preceding year. The City shall take all actions which shall be necessary to provide for the levy,
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extension, collection and application of the Special Tax, including enforcement of such taxes by
institution of foreclosure procedures as provided by law.
(c) Upon receipt by the Trustee (or the Title Company on behalf of the
Trustee) of any prepayment of Special Tax in an amount calculated by the Consultant as being
required pursuant to the Special Tax 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 (or the Title Company, on
behalf of the Trustee) shall file the Satisfaction of Tax Lien with the Recorder of Deeds of
Kendall County, Illinois. The Trustee (or the Title Company, on behalf of the Trustee) shall
deliver a copy of each such Satisfaction of Tax Lien to the Developer Representative.
Section 4.9 Against Encumbrances. The City will not encumber, pledge or
place any charge or lien upon any of the Special Tax or other amounts pledged to the Bonds
superior to or 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 4.10 No Continuing Disclosure Undertakinp— Based upon the fact that
the Bonds are being issued in minimum denominations of$100,000 and that the Underwriter has
advised the City of its intention (as further described in the Official Statement dated June
2004, relating to the Bonds) to offer the Bonds to 35 or fewer sophisticated investors, the
offering and sale of the Bonds is exempt from the provisions of Rule 15c2-12, in effect as of the
date of this Indenture,promulgated under the Securities and Exchange Act of 1934, as amended.
Section 4.11 Recapture Agreement. The City agrees that prior to entering into
any Recapture Agreement with the Developer, it will amend the provisions of the form of such
Recapture Agreement to conform to the requirements of Section 5.2(f) of this Indenture.
ARTICLE V
FUNDS AND APPLICATION OF SPECIAL
TAXES AND OTHER MATTERS
Section 5.1 Establishment of Funds and Accounts. The following special
funds and accounts shall be established and maintained pursuant to the provisions of this
Indenture:
(a) Bond and Interest Fund
(i) Credit Account
(ii) General Account
(iii) Capitalized Interest Account
(iv) Special Redemption Account
(b) Improvement Fund
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(c) Cost of Issuance Fund
(d) Administrative Expense Fund
(e) Rebate Fund
Section 5.2 Bond and Interest Fund.
(a) There is hereby created and established a "Special Service Area Number
2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bond and Interest Fund"
(the "Bond and Interest Fund"), which shall be held by the Trustee and which shall be used for
the purpose of paying the principal and redemption price of and interest on the Bonds and of
retiring such Bonds at or prior to maturity at the times and in the manner provided herein and to
provide moneys to reimburse the Credit Entity to the extent principal of, and interest and
redemption premium on the Bonds is paid with amounts made available under the Credit
Facility. All monies deposited in the Bond and Interest Fund shall be disbursed and applied by
the Trustee at the times and in the manner provided in this Indenture.
(b) There are hereby created and established in the Bond and Interest Fund
four accounts herein called the "Credit Account", the "General Account", the "Capitalized
Interest Account", and the "Special Redemption Account". There shall be deposited into the
respective accounts of the Bond and Interest Fund:
(i) To the Capitalized Interest Account, the amount specified in
Section 5.6(a)hereof;
(ii) To the Credit Account, all payments received pursuant to a draw
on the Credit Facility to pay principal of, premium, if any (if
premium is covered by the Credit Facility), or interest on the
Bonds; and
(iii) To the General Account, the Special Tax collected by the City and
any other amounts received by the Trustee for the payment of
principal of, premium, if any, and interest on the Bonds (other than
amounts deposited to the Special Redemption Account).
(iv) To the Special Redemption Account, the prepayments of Special
Tax as specified in paragraph (f) of this Section 5.2.
(v) To the Special Redemption Account, the Recapture Fees as
specified in paragraph (f) of this Section 5.2.
(c) When collected, the Special Tax and the Foreclosure Proceeds, including
any interest and penalties collected in connection with such Special Tax or Foreclosure Proceeds,
shall be placed in the General Account of the Bond and Interest Fund. In addition, 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 shall be deposited in the Bond and Interest Fund to
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the extent not used by the City to rebuild the Special Services. Moneys deposited in the General
Account of 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, but this paragraph shall not prevent the City from utilizing amounts in
the Bond and Interest Fund for any purpose related to the Special Service Area (other than
amounts on deposit in the Credit Account which shall be used solely to pay principal of and
interest and redemption premium on the Bonds), as long as doing so shall not result in the
amounts in the General Account of the Bond and Interest Fund being insufficient to pay principal
of and interest and redemption premium on the Bonds as they come due or to reimburse the
Credit Entity for such payments. When the amount of condemnation proceeds deposited to the
General Account of the Bond and Interest Fund equals $1,000 or more, Bonds in a principal
amount equal to such amount shall be redeemed pursuant to Section 3.1(b) of this Indenture on
the next Interest Payment Date but only upon the written direction of the City with the written
consent of the Credit Entity. The Trustee shall establish separate subaccounts within the General
Account for each deposit (including any investment income thereon) made into the Bond and
Interest Fund so that the Trustee may at all times ascertain the date and source of deposit of the
funds in such accounts.
(d) Amounts deposited in the Bond and Interest Fund (other than amounts on
deposit in the Credit Account which shall be used solely to pay principal of and interest on and
redemption premium on the Bonds) 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 to reimburse the Credit Entity for such purpose, or for any other purpose related to
the Special Service Area, as set forth in this Indenture, but may be used for purposes other than
the payment of the principal of and interest and redemption premium on the Bonds only with the
written consent of the Credit Entity except for transfers to the Administrative Expense Fund as
set forth in paragraph(e) of this Section 5.2.
(e) On the first Business Day of each month, after the Trustee has determined
that sufficient amounts are on deposit in the General Account of the Bond and Interest Fund to
pay Bond Service Charges for the current month or to reimburse the Credit Entity for such
payment, the Trustee shall notify the City 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 General
Account of 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 current month. Written notice of each such transfer shall promptly be given
to the Credit Entity.
(f) (i) All prepayments of Special Tax made in accordance with the Special
Tax Report and (ii) the first [$521,000] of Recapture Fees and Recoveries collected by the City
or the Developer shall be deposited in the Special Redemption Account of the Bond and Interest
Fund. Prepayments of Special Tax, Recapture Fees and Recoveries deposited to the Special
Redemption Account shall be used exclusively to redeem Bonds pursuant to Section 3.1(c) of
this Indenture or to reimburse the Credit Entity for payment of the redemption price of Bonds
from amounts made available under the Credit Facility except as provided in the last sentence of
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this paragraph. 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 or to reimburse the
Credit Entity for such payment. After payment of all Bonds outstanding and payment of all
amounts owed to the Credit Entity under the Credit Facility Agreement, any amounts on deposit
in the Special Redemption Account shall be rebated to the last taxpayer of record. All
investment earnings on amounts on deposit in the Special Redemption Account shall be
transferred monthly to the General Account. The Trustee shall not redeem Bonds to the extent
that it would result in the unredeemed portion not being of an Authorized Denomination as
required by Section 3.2 of this Indenture, but rather shall accumulate such prepayments to the
extent necessary to comply with such Section 3.2. The foregoing provisions of this paragraph
notwithstanding, any amounts up to $ of the moneys deposited into the Special
Redemption Account may, upon the Trustee's receipt of consent of the Credit Entity, be
transferred to the Improvement Fund and used in accordance with Section 5.3 hereof to acquire,
construct, install and perform the Special Services.
(g) The Bond and Interest Fund shall be drawn upon for the purpose of paying
the principal and redemption price of and interest on the Bonds with Eligible Funds and to
provide moneys to reimburse the Credit Entity to the extent Bond Service Charges are paid with
amounts made available under the Credit Facility. Payments from the Bond and Interest Fund
shall be made as follows: (i) to the extent of interest due on any Interest Payment Date, for so
long as any moneys remain therein, first from the Capitalized Interest Account and (ii) as to
principal, premium (if provided under the terms of the Credit Facility) and, to the extent the
amounts on deposit in the Capitalized Interest Account are not sufficient to pay the interest due
on the Bonds, from the Credit Account. No monies from any source other than the proceeds of a
draw on a Credit Facility will be deposited into the Credit Account. The City shall not have any
interest in the Credit Account, the General Account, the Capitalized Interest Account, the Special
Redemption Account or the monies and Permitted Investments therein, all of which shall be held
in trust by the Trustee for the sole benefit of the Holders except as otherwise expressly set forth
herein. Monies set aside from time to time with the Trustee and Paying Agent for the payment
of such principal, redemption price and interest shall be held in trust for the Holders of the Bonds
in respect of which the same shall have been so set aside. Until so set aside for the payment of
principal, redemption price or interest as aforesaid, all monies in the Bond and Interest Fund
shall be held in trust for the benefit of the Holders of all Bonds at the time outstanding equally
and ratably and without any preference or distinction as between Bonds.
Upon the receipt of the Trustee of a Disbursement Request, the Trustee is also
authorized to apply moneys from the Capitalized Interest Account to the payment of fees of the
Credit Entity. Any moneys remaining in the Capitalized Interest Account after
200_ shall be transferred to the Bond and Interest Fund, or, upon receipt of the prior written
consent of the City and the Credit Entity, to the Improvement Fund to be used to acquire,
construct, install and perform additional Special Services.
If the Bonds shall be refunded or otherwise defeased pursuant to this Indenture in
whole or in part, moneys in the Capitalized Interest Account held for the payment of interest on
such refunded or defeased Bonds may be withdrawn from the Capitalized Interest Account and
used to pay or provide for the payment of the principal of, premium if any, and interest on such
refunded or defeased Bonds; provided, however, that immediately after such withdrawal there
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shall remain on deposit in the Capitalized Interest Account an aggregate amount at least
sufficient to pay all interest required to be paid from the Capitalized Interest Account on any
Bonds that will remain outstanding after such refunding or defeasance.
(h) In the event any Bond shall not be presented for payment when the
principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption
thereof, if Eligible Funds sufficient to pay such Bond shall have been deposited in the Bond and
Interest Fund, all liability of the City to the owner thereof for the payment of such Bond shall
forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of
the Trustee to hold such monies, without liability for interest thereon, for the benefit of the owner
of such Bond who shall thereafter be restricted exclusively to such monies, for any claim of
whatever nature on his part under this Indenture or on, or with respect to, said Bond. Such
monies shall be held in a separate and segregated fund and shall not be invested.
Section 5.3 Improvement 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 2004-106 Total Grande Reserve Variable Rate Demand Special Tax
Bonds, Improvement Fund" (the "Improvement Fund"). Moneys in the Improvement Fund
shall be disbursed solely for the payment of the cost of acquiring, constructing, installing and
performing the Special Services. Disbursements from the Improvement Fund shall be made by
the Trustee upon receipt of a request of the City substantially in the form attached as Exhibit D to
this Indenture executed by an Authorized City Representative (a "Disbursement Request")
which shall (i) set forth the amount required to be disbursed, the purpose for which the
disbursement is to be made, that such Special Services have been completed or acquired in
accordance with the terms of the Developer's Agreement, that the disbursement is for a Special
Service, and payment instructions to the Trustee for the amount to be disbursed; 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 on which an Authorized City Representative files with the
Trustee a certificate stating the Special Services have been completed (the "Completion Date"),
the Trustee shall transfer all amounts remaining in the Improvement Fund to the General
Account of the Bond and Interest Fund to be applied to the redemption of the Bonds pursuant to
Section 3.1(b)(ii) hereof; provided, however, that any amounts transferred to the General
Account of the Bond and Interest Fund which do not equal $1,000 or an integral multiple of
$1,000 may be applied to pay interest owing on the Bonds on the next succeeding Interest
Payment Date; and provided further, however, upon written direction of an Authorized City
Representative, the Trustee shall transfer to the Capitalized Interest Account an amount specified
by the City upon the delivery to the Trustee of an opinion of Bond Counsel to the effect that the
transfer of such amounts will not adversely affect the exclusion from gross income of interest on
the Bonds for federal income tax purposes and is permitted by Illinois law. Any monies
transferred to the Improvement Fund from the Special Redemption Account of the Bond and
Interest Fund pursuant to Section 5.2(f) hereof remaining in the Improvement Fund on
1, 2014 shall be transferred to the Special Redemption Account of the Bond and
Interest Fund and used to redeem Bonds pursuant to Section 5.2(f) hereof. Notwithstanding the
provisions of Section 6.1 hereof, earnings from investment of moneys on deposit in the
Improvement Fund shall be transferred to the Bond and Interest Fund, quarterly or at such other
regular interval chosen by the Trustee, and shall not be attributed to the Improvement Fund.
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Section 5.4 Cost of Issuance 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 2004-106 Total Grande Reserve Variable Rate Demand Special
Tax Bonds, Cost of Issuance Fund" (the "Cost of Issuance Fund"). The net proceeds received
by the City from the sale of the Bonds not otherwise deposited to the Improvement Fund, the
Administrative Expense Fund or the Bond and Interest Fund shall be deposited with the Trustee
in the Cost of Issuance Fund. Amounts in the Cost of Issuance Fund shall be used to pay
issuance costs on the Issuance Date as set forth in a schedule provided by the City on the
Issuance Date or upon filing with the Trustee a written requisition of the Authorized City
Representative. 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 Cost of Issuance Fund to the Improvement
Fund.
Section 5.5 Application of Bond Proceeds. The City hereby authorizes the
deposit of the proceeds of the Bonds with the Trustee and authorizes the Trustee to apply such
monies as described in Section 5.6 below. The Trustee is hereby authorized to receive the
proceeds of the Bonds for and on behalf of the City and to give receipt therefor.
Section 5.6 Application of Funds. The Trustee shall deposit all of the proceeds
from the sale of the Bonds ($ representing $ principal amount less
underwriter's fee of$ ) as follows:
(a) Deposit $ to the Capitalized Interest Account of the Bond and
Interest Fund to pay interest payments due on the Bonds during construction of the Special
Services and to pay the fee of the Credit Entity;
(b) Deposit $ to the Improvement Fund;
(c) Deposit $ to the Administrative Expense Fund; and
(d) Deposit the remainder of the proceeds ($ ) to the Cost of
Issuance Fund which shall be disbursed as provided in Section 5.4 hereof.
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.
Section 5.7 Disposition of Bonds Upon Payment. All Bonds paid and
redeemed by the Trustee under the provisions of this Indenture, either at or before maturity, shall
be canceled when such payment or redemption is made, and such Bonds, unless then held by the
Trustee, shall be delivered to the Trustee.
Section 5.8 The Trustee's Maintenance of Records on Payment of Bonds. In
connection with the payment, redemption or purchase of all Bonds under the provisions of this
Indenture, the Trustee shall keep or cause to be kept accurate records of the source of the monies
used to pay, redeem or purchase such Bonds.
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Section 5.9 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 Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds,
Rebate Fund (the "Rebate Fund"), into which there shall be deposited as necessary investment
earnings in the Bond and Interest Fund and the Administrative Expense Fund 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.
Section 5.10 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 2004-106 Total Grande Reserve Variable Rate Demand
Special Tax 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 its order upon receipt by the Trustee of a written request from an Authorized City
Representative 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. On or before
December 15 of each year, but only upon written request of an Authorized City Representative,
the Trustee shall withdraw any amounts then remaining in the Administrative Expense Fund that
have not been allocated to pay Administrative Expenses incurred but not yet paid, and which are
not otherwise encumbered, and transfer such amounts to the General Account of the Bond and
Interest Fund.
ARTICLE VI
INVESTMENT OF FUNDS AND CREDIT FACILITY DRAWS
Section 6.1 Investment of Funds and Accounts Held by the Trustee. All
monies held in the Bond and Interest Fund, the Administrative Expense Fund, the Cost of
Issuance Fund, and the Improvement Fund shall be invested by the Trustee at the written
direction of the City in Investment Obligations. Monies drawn under the Credit Facility shall be
held uninvested; provided, that monies from the Credit Facility drawn to pay interest prior to an
Interest Payment Date while the Bonds bear interest at the Weekly Rate or Monthly Rate may be
invested in Federal Obligations maturing on or before the next Interest Payment Date. In the
event that the Trustee does not receive directions from the City to invest funds held hereunder,
the Trustee shall invest such funds in a money market 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. 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.
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Section 6.2 Valuation. In computing the amount in any fund or account held
by the Trustee under the provisions of this Indenture, obligations purchased as an investment of
monies therein shall be valued at the cost or market price thereof, whichever is lower, exclusive
of accrued interest.
Section 6.3 Sale of Investments. The Trustee shall sell at the market price, or
present for redemption, any obligation purchased by it as an investment whenever it shall be
necessary in order to provide monies to meet any payment or transfer from the fund or account
for which such investment was made. The Trustee shall provide the City and the Credit Entity
with a written statement, as of the last day of each calendar quarter, listing all of the Investment
Obligations, if any, held for the credit of each fund or account in its custody under the provisions
of this Indenture and supplements hereto as of the end of the preceding quarter.
Section 6.4 Liability of the Trustee and City for Investments. The City shall
authorize, direct and confirm in writing all investments by the Trustee. The Trustee shall not be
liable or responsible for the making of, or failure to make, any investment authorized by the
provisions of this Article, in the manner provided in this Article, or for any loss resulting from
any such investment so made, nor shall the City have any liability in connection therewith.
Section 6.5 Draws on the Credit Facility. (a) The City hereby authorizes and
directs the Trustee, and the Trustee hereby agrees, to draw on the Credit Facility as follows:
(i) Prior to 12:00 noon Chicago time on the Business Day preceding
each Interest Payment Date, in an amount which will be sufficient
to pay the interest due and payable on such Interest Payment Date
on all outstanding Bonds (except Purchased Bonds) (drawn at the
interest rate due on the Bonds, if the interest rate has been
determined, or at the Cap Rate in the event the interest rate for any
day or days has not been determined less the amounts in the
Capitalized Interest Account, if any);
(ii) Prior to 12:00 noon Chicago time on the Business Day preceding
any date fixed for redemption of Bonds pursuant to Article III of
this Indenture (except Purchased Bonds but including purchases in
lieu of redemption pursuant to Section 3.1(f)), in an amount which
will be sufficient to pay the redemption price, including accrued
interest to the date of redemption;
(iii) Prior to 12:00 noon Chicago time on the Business Day preceding
the date fixed for payment of the Bonds in connection with any
declaration of the acceleration of the maturity of the Bonds
following an Event of Default, as provided in Section 8.1 hereof, in
an amount which will be sufficient to pay all principal and interest
due on the Bonds (except Purchased Bonds) as a result of such
declaration on the date fixed for such payment;
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(iv) Prior to 9:30 A.M. Chicago time on each date fixed for purchase of
tendered Bonds, as provided in Section 3.6 and Section 3.7 hereof,
in an amount sufficient to pay the Purchase Price of any Bonds
tendered pursuant to Section 3.6 or Section 3.7 hereof, less the
amount already received by the Remarketing Agent from
remarketing proceeds; and
(v) Prior to 12:00 noon Chicago time on the Business Day preceding
the final maturity date of the Bonds, in an amount which will be
sufficient to pay the principal and interest due on all outstanding
Bonds (except Purchased Bonds) on such final maturity date.
Each such drawing shall be timely made. The Trustee shall give notice of each
such drawing to the Developer Representative at the time of each draw. The Trustee shall
comply with all provisions of the Credit Facility in order to realize upon any drawing thereunder,
and will not draw upon the Credit Facility at any time for payment of the principal or Purchase
Price of and interest on any Bonds registered in the name of the Credit Entity or the City, or
known by the Trustee to be registered in the name of any nominee of the Credit Entity or the
City (provided that the Trustee shall have no duty to investigate whether Bonds are registered in
the names of such nominees). In calculating the amount to be drawn on the Credit Facility for
payment of principal of and interest on the Bonds on any Interest Payment Date, the Trustee
shall take into account the existence of moneys in the Capitalized Interest Account of the Bond
and Interest Fund that are on hand and immediately available for payment as of 11:00 a.m. on the
Business Day prior to such Interest Payment Date, and shall draw on the Credit Facility for the
amount of principal and interest coming due on the Bonds less such moneys. In calculating the
amount to be drawn on the Credit Facility for payment of principal of and interest on the Bonds
at maturity or upon redemption or acceleration, the Trustee shall not take into account the
existence of other moneys in the Bond and Interest Fund, but shall draw on the Credit Facility for
the full amount of principal and interest coming due on the Bonds.
(b) The Trustee shall give all required notices to the Credit Entity in
accordance with the provisions of the Credit Facility including, but not limited to, notice of a
substitute Letter of Credit, notice of a successor Trustee, and notice of discharge or defeasance of
this Indenture.
ARTICLE VII
DEFEASANCE
Section 7.1 Defeasance. If the City shall pay or cause to be paid, or there shall
otherwise be paid or provision for payment made, to the owners of the Bonds, the principal and
interest due or to become due thereon at the times and in the manner stipulated therein, and if the
City shall pay or cause to be paid to the Trustee all sums of money due or to become due
according to the provisions hereof, the City shall pay or cause to be paid to the Credit Entity all
sums of money due or to become due according to the provisions of the Credit Facility
Agreement, then the estate and rights granted by this Indenture shall cease, determine and be
void, whereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute
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and deliver to the City such instruments in writing as shall be requisite to release such lien, and
reconvey, release, assign and deliver unto the City any and all the estate, right, title and interest
in and to any and all rights or property conveyed, assigned or pledged to the Trustee by this
Indenture or otherwise subject to the lien of this Indenture, except cash or Federal Obligations
held by the Trustee for the payment of the principal of, and premium, if any, and interest on the
Bonds and shall return the Credit Facility to the Credit Entity.
Any Bond shall be deemed to be paid within the meaning of this Article and for
all purposes of this Indenture when (a) payment of the principal of and premium, if any, on such
Bond, plus interest thereon to the due date thereof, either (i) shall have been made or caused to
be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably
depositing with the Trustee, or held by a Depository on behalf of the Trustee pursuant to an
investment agreement, in trust and irrevocably set aside exclusively for such payment, (1)
Eligible Funds sufficient to make such payment without investment and/or (2) Federal
Obligations, not subject to redemption prior to maturity, purchased with Eligible Funds, which
Federal Obligations are payable as to principal and interest in such amounts and at such times as
will ensure the availability of sufficient monies to make such payment and pay any Purchase
Price to the owners of the Bonds, without reinvestment, and (b) all necessary and proper fees,
compensation and expenses of the Trustee and the City pertaining to the Bonds with respect to
which such deposit is made shall have been paid or the payment thereof provided for to the
satisfaction of the Trustee. At such times as a Bond shall be deemed to be paid hereunder, as
aforesaid, it shall no longer be secured by or entitled to the benefits of this Indenture and the
supplements hereto, except for the purposes of any such payment from such monies or Federal
Obligations.
The City hereby covenants that it will make no deposit hereunder and make no
use of any such deposit which would cause the Bonds to be treated as arbitrage bonds within the
meaning of the Code. Before accepting or using any such deposit, the Trustee may request the
opinion of Bond Counsel as to whether such use or acceptance would cause the Bonds to be so
treated and may conclusively rely on such opinion with regard thereto.
Notwithstanding any provision of any other Article of this Indenture which may
be contrary to the provisions of this Article, all monies or Federal Obligations set aside and held
in trust pursuant to the provisions of this Article for the payment of Bonds (including interest
thereon) shall be applied to and used solely for the payment of the particular Bonds (including
interest thereon) with respect to which such monies and Federal Obligations have been so set
aside in trust.
The above notwithstanding, prior to any defeasance becoming effective under this
Article VII, there shall have been delivered to the City and to the Trustee (i) an opinion of
counsel experienced in bankruptcy matters, addressed to the City, the Trustee and the Credit
Entity, to the effect that (A) interest on any Bonds being discharged by such defeasance will not
become subject to federal income taxation by reason of such defeasance, and (B) payments of
principal of, Purchase Price of, and interest on the Bonds from the proceeds of any such deposit
to effectuate defeasance shall not constitute voidable preferences under Section 547 of the
Bankruptcy Code in a case commenced under the Bankruptcy Code by or against the City, (ii) if
the Bonds are not in a Fixed Rate Period, written evidence of each Rating Agency then rating the
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Bonds, that the proposed defeasance will not cause a reduction or withdrawal of the then current
rating for the Bonds, and (iii) an opinion or certification from a nationally recognized firm of
certified public accountants stating that any deposit made pursuant to this Section is sufficient to
defease the Bonds in accordance with the terms hereof.
ARTICLE VIII
REMEDIES OF TRUSTEE AND BONDHOLDERS UPON EVENT OF DEFAULT
Section 8.1 Events of Default. Each of the following events is hereby defined
as and shall constitute an "Event of Default" with respect to the Bonds issued under this
Indenture:
(a) Default in the due and punctual payment of the interest on any of the
Bonds;
(b) Default in the due and punctual payment of the principal of or premium on
any of the Bonds, whether at maturity or otherwise;
(c) Default in the payment of the Purchase Price of any Bond tendered or
deemed tendered for purchase by the owner thereof in accordance with this Indenture;
(d) Default in the performance or observance of any other of the covenants,
promises, stipulations, agreements or conditions on the part of the City contained in this
Indenture for the benefit of the Bonds and written consent of the Credit Entity and the
continuation thereof for the period after notice specified in Section 8.9 hereof;
(e) Receipt by the Trustee of written notice from the Credit Entity of an event
of default under the Credit Facility Agreement and directing the Trustee to accelerate the Bonds;
and
(f) Receipt by the Trustee of written notice from the Credit Entity resulting in
the failure of the Credit Facility to be reinstated following an interest draw and directing the
Trustee to accelerate the Bonds.
If an Event of Default with respect to any of the Bonds at the time outstanding
occurs and is continuing, then and in each and every such case, unless the principal of all the
Bonds shall have already become due and payable, either the Trustee or the Holders of more than
fifty percent (50%) in aggregate principal amount of the Bonds then outstanding hereunder, by
notice in writing to the City (and to the Trustee and the City if given by Holders), but only with
the prior written approval of the Credit Entity (upon the occurrence of an Event of Default under
(d) above), or the Trustee, at the direction of the Credit Entity, shall declare,the principal amount
of all the Bonds to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything in this Indenture, a
supplemental indenture or in the Bonds contained to the contrary notwithstanding. Anything to
the contrary herein notwithstanding without the prior consent of the Credit Entity or any other
party, the Trustee shall immediately, and in all events prior to the expiration of the Credit
Facility declare the principal amount of all the Bonds to be due and payable immediately if the
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Event of Default occurs under (a), (b), (c), (e) or (f) above. Immediately upon such declaration,
the Trustee shall draw on the Credit Facility pursuant to its terms and upon such declaration,
interest on the Bonds shall cease to accrue. The foregoing provisions are, however, subject to
the condition that if, at any time after the principal amount of the Bonds shall have been so
declared due and payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the City shall pay or shall deposit
with the Trustee, but only from the sources herein described, a sum sufficient to pay all matured
installments of interest upon the Bonds and the principal of and premium, if any, on any and all
Bonds which shall have become due otherwise than by acceleration (with interest on overdue
installments of interest, to the extent that payment of such interest is enforceable under
applicable law, and on such principal and premium, if any, at the rate of interest borne by the
Bonds, to the date of such payment or deposit) and the reasonable expenses of the Trustee
(including reasonable attorneys' fees), and any and all Events of Default under this Indenture or
the appropriate supplemental indenture, other than the nonpayment of principal of or premium, if
any, or accrued interest on Bonds which shall have become due by acceleration, shall have been
remedied, then and in every such case the Holders of more than fifty percent (50%) in aggregate
principal amount of the Bonds then outstanding, by written notice to the City and to the Trustee,
may waive all Events of Default with respect to the Bonds and rescind and annul such
declaration and its consequences, provided the Credit Entity has consented in writing to such
rescission and annulment (and a notice sent pursuant to Section 8.1(e) or (f) has been rescinded)
and the Credit Facility is in full force and effect and has been reinstated in full but no such
waivers or rescissions and annulments shall extend to or shall affect any subsequent Event of
Default, or shall impair any right consequent thereon.
Section 8.2 Enforcement of Remedies. Upon the happening and continuance
of any Event of Default with respect to the Bonds, the Trustee, in its own name and as trustee of
an express trust, on behalf of and for the benefit and protection of the Holders of all Bonds, upon
being indemnified as provided herein, may proceed to protect and enforce its rights and any
rights of City by such suits, actions or proceedings in equity or at law, either for the specific
performance of any covenant or contract contained herein or in aid or execution of any power
herein granted or for the foreclosure on the security held for the benefit of the Bonds under this
Indenture, or for any proper, legal or equitable remedy as the Trustee shall deem most effectual
to protect and enforce the rights aforesaid.
If an Event of Default shall have occurred with respect to the Bonds, and if
requested in writing so to do by the Holders of more than fifty percent (50%) in aggregate
principal amount of Bonds then outstanding, the Trustee, upon being indemnified as provided
herein, shall be obligated to exercise one or more of the rights and powers conferred by this
Article, as the Trustee, being advised by counsel, shall deem most expedient in the interests of
the Holders of the Bonds.
Notwithstanding the foregoing provisions, if a Credit Facility shall then be in
effect with respect to the Bonds, the Trustee shall not, without the prior written consent of the
Credit Entity exercise any right or remedy hereunder with respect to the affected Bonds to
accelerate the indebtedness thereunder so long as (i) the Credit Entity obligated under the Credit
Facility then in effect with respect to such Bonds shall not be in default thereunder and shall be
making the required payments with respect to principal of and interest on such Bonds and
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Purchase Price payments in accordance with such Credit Facility; or (ii) the Credit Entity shall
be the owner of all such affected Bonds or all such Bonds are Purchased Bonds, provided that
this restriction shall in no way limit the right of the Trustee to apply monies on deposit under this
Indenture to the payment of principal of, premium, if any, and interest on, the Bonds or the right
of the Trustee or any Bondholder to make a claim for payment under a Credit Facility or take any
other action to enforce the payment and performance of the City's obligations hereunder.
No remedy by the terms of this Indenture conferred upon or reserved to the
Trustee (or to the Holders of the Bonds) is intended to be exclusive of any other remedy, but
each and every such remedy shall be cumulative and shall be in addition to any other remedy
given to the Trustee or to the Holders of the Bonds hereunder or now or hereafter existing at law
or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any Event of
Default shall impair any such right or power or shall be construed to be a waiver of any such
Event of Default or acquiescence therein, and every such right and power may be exercised from
time to time as often as may be deemed expedient.
No waiver of any Event of Default hereunder, whether by the Trustee or by the
Holders of the Bonds to which such Event of Default relates shall extend to or shall affect any
subsequent Event of Default or shall impair any rights or remedies consequent thereon.
Section 8.3 Right of Credit Entity to Direct Proceedings. Anything in this
Indenture to the contrary notwithstanding, the Credit Entity shall have the right, at any time, by
an instrument or instruments in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection with the enforcement
of the terms and conditions of this Indenture with respect to an Event of Default, or for the
appointment of a receiver or any other proceedings hereunder, provided that such direction shall
not be otherwise than in accordance with the provisions of law and of this Indenture; provided,
that if the Credit Entity has failed to honor a properly presented and conforming draw under the
Credit Facility, the owners of the majority in aggregate principal amount of the Bonds then
outstanding, shall have the rights, subject to the conditions, described in this Section.
Section 8.4 Priority of Payments. All monies received from draws on the
Credit Facility or held pursuant to Section 7.1 shall be applied exclusively to the payment of
principal of, premium (if the Credit Facility provides for the payment of such), if any, interest on
the Bonds (other than Purchased Bonds) and the Purchase Price. All other monies received by
the Trustee pursuant to any right given or action taken under the provisions of this Article shall
be applied by the Trustee after payment of the costs and expenses of the proceedings resulting in
the collection of such monies (including reasonable attorneys' fees) and of the charges, expenses
and liabilities incurred and advances made by the Trustee, as follows:
(a) Unless the principal of all the Bonds shall have become or been
declared due and payable:
FIRST: To the payment of the persons entitled thereto of all installments of
interest then due on the Bonds other than City Bonds which are not Purchased Bonds in
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the order of the maturity of such installments, and, if the amount available shall not be
sufficient to pay in full any installment, then to the payment thereof, ratably, according to
the amounts due on such installment, to the persons entitled thereto, without any
discrimination or preference;
SECOND: To the payment to the persons entitled thereto of the unpaid principal
of any of the Bonds which shall have become due (other than Bonds matured for the
payment of which monies are held pursuant to the provisions of this Indenture and other
than City Bonds which are not Purchased Bonds) and Purchase Price, and in the order of
their due dates, if the amount available shall not be sufficient to pay in full Bonds due on
any particular date, then to the payment thereof ratably, according to the amount of
principal due on such date, to the persons entitled thereto without any discrimination or
privilege;
THIRD: To be held for the payment to the persons entitled thereto as the same
shall become due of the principal of and interest on the Bonds (other than 'City Bonds
which are not Purchased Bonds) which may thereafter become due at maturity and, if the
amount available shall not be sufficient to pay in full such Bonds due on any particular
date, together with interest then due and owing thereon, payment on such Bonds shall be
made ratably according to the amount of principal due on such date to the persons
entitled thereto without any discrimination or privilege;
FOURTH: To the payment on behalf of the City of all of the City's obligations
under the Credit Facility Agreement as shall be certified in writing by the Credit Entity to
the Trustee;
FIFTH: To be held for the payment of principal and interest on City Bonds
which are not Purchased Bonds; and
SIXTH: Any balance remaining, to the City.
(b) If the principal of all the Bonds shall have become or been
declared due and payable then, first, to the payment of the principal and interest then due
and unpaid upon the Bonds (other than City Bonds which are not Purchased Bonds) and
Purchase Price without preference or priority of principal over interest or of interest over
principal, or of any installment of interest over any other installment, or if any such Bond
over any other such Bond, ratably, according to the amounts due respectively for
principal and interest, to the persons entitled thereto without any discrimination or
preference, and thereafter to the payment on behalf of the City of all of the City's
obligations under the Credit Facility Agreement, and thereafter to the payment of City
Bonds which are not Purchased Bonds, with any balance remaining to the City.
(c) If the principal of all the Bonds shall have been declared due and
payable, and if such declarations shall thereafter have been rescinded and annulled under
the provisions of this Article then, subject to the provisions of(a) above, in the event that
the principal of all the Bonds shall later become due or be declared due and payable, the
monies shall be applied in accordance with the provisions of(b) above.
011.552614.7 59
Whenever monies are to be applied pursuant to the provisions of this Section,
such monies shall be applied at such times, and from time to time, as the Trustee shall determine,
having due regard to the amount of such monies available for application and the likelihood of
additional monies becoming available for such application in the future. Whenever the Trustee
shall apply such funds, it shall fix the date upon which such application is to be made and upon
such date interest on the amounts of principal to be paid on such dates shall cease to accrue;
provided that if the Trustee has declared the principal amount of all Bonds to be due and payable
immediately pursuant to Section 8.1 hereof, then interest shall cease to accrue on the date of such
declaration. The Trustee shall give such notice as it may deem appropriate of the deposit with it
of any such monies and of the fixing of any such date, and shall not be required to make payment
to the owner of any Bond until such Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Section 8.5 Remedies Vested in the Trustee. All rights of action (including the
right to file proof of claims) under this Indenture or under any of the Bonds may be enforced by
the Trustee without the possession of any of the Bonds or the production thereof in any trial or
other proceeding relating thereto and any such suit or proceeding instituted by the Trustee shall
be brought in its name as the Trustee without the necessity of joining as plaintiffs or defendants
any owner of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit
of the Holders of the outstanding Bonds.
Section 8.6 Rights and Remedies of Bondholders. No owner of any Bond shall
have any right to institute any suit, action or proceeding at law or in equity for the enforcement
of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or
any other remedy hereunder, unless (i) an Event of Default with respect to the Bonds held by
such owner has occurred of which the Trustee has been notified as provided in Section 9.1(h)
hereof, or of which by said subsection it is deemed to have notice, (ii) the owners of not less than
twenty-five percent in aggregate principal amount of Bonds then outstanding shall have made
written notice to the Trustee and shall have offered it reasonable opportunity either to proceed to
exercise the powers hereinbefore granted or to institute such action, suit or proceeding in their
own name or names, (iii) such owners of Bonds have offered to the Trustee indemnity as
provided in Section 9.1(1) hereof, and (iv) the Trustee shall thereafter fail or refuse to exercise
the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name,
and such notification, request and offer of indemnity are hereby declared in every case, at the
option of the Trustee, to be a condition precedent to the execution of the powers under this
Indenture or for any action or cause of action for the enforcement of this Indenture, or for the
appointment of a receiver or for any other remedy hereunder, it being understood and intended
that no one or more owners of the Bonds shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by its, his or their action 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 and
ratable benefit of the owners of all Bonds then outstanding. However, nothing contained in this
Indenture shall affect or impair the right of any Bondholders to enforce the payment of the
principal of and interest on each of the Bonds issued hereunder to the respective owners thereof
at the time and place, from the source and in the manner expressed in the Bonds.
011.552614.7 60
Section 8.7 Termination of Proceedings. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a receiver or
otherwise, and such proceeding shall have been discontinued or abandoned for any reason, or
shall have been determined adversely, then and in every such case the City, the Trustee and the
Holders of the Bonds to which such proceeding related shall be restored to their former positions
and rights hereunder, respectively, with regard to the property subject to this Indenture, and all
rights, remedies and powers of the Trustee shall continue as if no such proceedings had been
taken.
Section 8.8 Waivers of Events of Default. The Trustee may at its discretion
waive any Event of Default hereunder and its consequences, and shall do so upon the written
request of the owners of(i) more than two-thirds in aggregate principal amount of all the Bonds
then outstanding in respect to which default in the payment of principal or interest, or both,
exists, or (ii) more than fifty percent in aggregate principal amount of all the Bonds then
outstanding in the case of any other Event of Default, provided, however, that there shall not be
waived (i) any Event of Default in the payment of the principal of any outstanding Bonds at the
date of maturity, or (ii) any default in the payment when due of the interest on any such Bonds
unless, prior to such waiver or rescission, all arrears of interest or all arrears of payments of
principal or both, when due, as the case may be, with interest on overdue principal at the rate
borne by the Bonds, and all expenses of the Trustee in connection with such default shall have
been paid or provided for, and in case of any such waiver or rescission, or in case any
proceedings taken by the Trustee on account of any such Event of Default shall have been
discontinued or abandoned or determined adversely, then and in every such case the City, the
Trustee, and the owners of the Bonds shall be restored to their former positions and rights
hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other
default, or impair any right consequent thereon. Notwithstanding anything herein to the
contrary, if there is a Credit Facility in effect with respect to the Bonds, the Trustee shall not
waive any Event of Default with respect to the Bonds without the prior written consent of the
Credit Entity provided the Credit Facility provides payment of all principal and interest of the
Bonds and the Purchase Price in a timely manner and the Credit Facility is reinstated in full (as
confirmed in writing to the Trustee). With respect to an Event of Default under Section 8.1(e) or
(f) hereof, a written notice of reinstatement of the Credit Facility in the amount of all principal
and interest of the Bonds and the Purchase Price must be provided to the Trustee by the Credit
Entity and written notice of the rescission by the Credit Entity of the default under Section 8.1(e)
or(f) must be provided by the Credit Entity to the Trustee.
Section 8.9 Notice of Default; Opportunity to Cure Defaults. Anything herein
to the contrary notwithstanding, no default under Section 8.1(d) hereof shall constitute an Event
of Default until actual notice of such default by registered or certified mail shall be given to the
City by the Trustee or by the Owners of not less than 25% in aggregate principal amount of all
Bonds Outstanding, and the City shall have had 30 days after receipt of such notice at their
option to correct said default or to cause said default to be corrected, and shall not have corrected
said default or caused said default to be corrected within the applicable period; provided,
however, that if said default be such that it cannot be corrected within the applicable period, it
shall not constitute an Event of Default if corrective action is instituted by the City within the
applicable period and diligently pursued until the default is corrected.
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ARTICLE IX
TRUSTEE
Section 9.1 Acceptance of the Trusts. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to
the following express terms and conditions:
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are expressly set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), subject to
subsection (1) hereof, the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in its exercise, as a prudent
person would exercise or use under the circumstances in the conduct of their own affairs.
(b) The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or employees but shall
not be answerable for the conduct of the same except for failure to select such agents in
accordance with the standard specified above, and before the Trustee acts or refrains from
acting, the Trustee shall be entitled to advice of counsel concerning all matters of trusts
hereof and the duties hereunder, and may in all cases pay such reasonable compensation
to all such attorneys, agents, receivers and employees as may reasonably be employed in
connection with the trusts hereof. The Trustee may act upon the opinion or advice of any
attorneys (who may be the attorney or attorneys for the City or the Credit Entity),
approved by the Trustee in the exercise of reasonable care. The Trustee shall not be
responsible for any loss or damage resulting from any action or nonaction based on its
good faith reliance upon such opinion or advice. The Remarketing Agent shall not be
deemed an agent of the Trustee for any purpose and the Trustee shall not be responsible
for the compliance of the Remarketing Agent as to its obligations under this Indenture or
in connection with the transactions contemplated herein.
(c) The Trustee shall not be responsible for any recital herein, or in the
Bonds, the legality, sufficiency or validity of this Indenture, the Bonds or any document
or instrument relating thereto or for the validity of the execution by the City of the Bonds
or this Indenture or of any supplements hereto or instruments of further assurance, or for
the sufficiency of the security for the Bonds issued hereunder or intended to be secured
hereby and by indentures supplemental hereto.
(d) The Trustee shall not be accountable for the use of any Bonds
authenticated or delivered hereunder. The Trustee may become the owner of Bonds
secured hereby with the same rights which it would have if not the Trustee.
(e) The Trustee shall be protected in acting upon any notice, request,
consent, certificate, order, affidavit, letter, telegram or other paper or document believed
by it in good faith to be genuine and correct and to have been signed or sent by the proper
person or persons. Any action taken by the Trustee pursuant to this Indenture upon the
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request or authority or consent of any person who at the time of making such request or
giving such authority or consent is the owner of any Bond shall be conclusive and
binding upon all future owners of the same Bond and upon Bonds issued in exchange
therefor or in place thereof.
(f) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be
entitled to rely upon a certificate signed by an Authorized City Representative as
sufficient evidence of the facts therein contained and prior to the occurrence of an Event
of Default of which the Trustee has been notified as provided in subsection (h) of this
section, or of which by said subsection it is deemed to have notice, shall also be at liberty
to accept a similar certificate to the effect that any particular dealing, transaction or action
is necessary or expedient, but may, at its discretion, secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same. The Trustee
may accept a certificate of the City under its seal to the effect that a resolution in the form
therein set forth has been adopted by City as conclusive evidence that such resolution has
been duly adopted and is in full force and effect.
(g) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and it shall not be answerable for other than its
negligence or willful misconduct.
(h) The Trustee shall not be required to take notice or be deemed to
have notice of any Event of 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 IV hereof for
payment when due of principal, premium or interest on any Bond, unless the Trustee
shall be specifically notified in writing of such Event of Default by the City, the Credit
Entity or by the owners of at least twenty-five percent in aggregate principal amount of
the Bonds then outstanding and all notices or other instruments required by this Indenture
to be delivered to the Trustee must, in order to be effective, be delivered at the Principal
Office of the Trustee, and in the absence of such notice so delivered, the Trustee may
conclusively assume there is no Event of Default except as aforesaid.
(i) Reserved.
0) The Trustee shall not be required to give any bond or surety in
respect of the execution of the said trusts and powers or otherwise in respect of the
premises.
(k) Notwithstanding anything elsewhere in this Indenture contained,
the Trustee shall have the right, but shall not be required, to demand, in respect of the
authentication of any Bonds, the withdrawal of any cash, or any action whatsoever within
the purview of this Indenture, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by the terms
hereof required as a condition of such action by the Trustee deemed desirable for the
purpose of establishing the right of the City to the authentication of any Bonds, the
withdrawal of any cash, or the taking of any other action by the Trustee. No provision of
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this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights of powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against risk or liability is not reasonably
assured to it.
(1) Before taking the action referred to in Section 8.2 hereof or any
action following an Event of Default, other than a drawing on a Credit Facility or a
declaration of acceleration pursuant to Section 8.1 hereof, the Trustee may require that a
satisfactory indemnity bond be furnished for the reimbursement of all expenses to which
it may be put and to protect it against all liability, except liability which is adjudicated to
have resulted from its gross negligence or willful misconduct by reason of any action so
taken.
(m) All monies 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 but need not be segregated from other funds except to the extent
required herein or by law. Neither the Trustee nor any Paying Agent shall be under any
liability for interest on any monies received hereunder except such as may be agreed
upon.
(n) The Trustee shall have the right and power to disclaim any interest
which, in the Trustee's sole discretion, will or may cause the Trustee to be considered an
"owner" or "operator" of property held subject to this Indenture, under the provisions of
any Environmental Law as amended from time to time, or which shall otherwise cause
the Trustee to incur liability under any Environmental Law, or any other federal, State or
local law, rule or regulation. In the event of an Event of Default, the Trustee may, in its
sole discretion, after being indemnified by the Bondholders, inspect, review and monitor,
or require the inspection, review and monitoring of any and all property subject to this
Indenture for the purpose of determining compliance with any law, rule or regulation
affecting such property. All expenses of such inspection, review and monitoring shall be
paid by the Bondholders.
Section 9.2 Fees Charge and Expenses of the Trustee the Paying Agent, the
Bond Registrar and the City. The Trustee, the Paying Agent, the Bond Registrar and the City
shall be entitled to its reasonable fees, charges and expenses for serving hereunder including
those of its agents, counsel, servicer, Paying Agent and co-trustee. Such fees, charges and
expenses shall be paid as Administrative Expenses in accordance with this Indenture. Upon an
Event of Default, but only upon an Event of Default, the Trustee shall have a first lien with right
of payment prior to payment on account of principal of and interest on any Bond upon the Trust
Estate (other than monies received from draws on the Credit Facility or held pursuant to
Section 7.1 hereof) for the charges and expenses incurred by it as described in Section 8.4
hereof.
Section 9.3 Notice to Bondholders if Event of Default Occurs. If an Event of
Default occurs of which the Trustee is by Section 9.1(h) hereof required to take notice or if
notice of an Event of Default be given as in Section 9.1(h) hereof provided, then the Trustee
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shall promptly give written notice thereof by registered or certified mail to the Credit Entity and
the City and by first-class mail to the owners of all Bonds then outstanding, shown by the List
required by Section 4.6 hereof to be kept at the Principal Office of the Trustee.
Section 9.4 Intervention by the Trustee. In any judicial proceeding concerning
the issuance or the payment of the Bonds to which the City is a party and which in the opinion of
the Trustee and its counsel has a substantial bearing on the interests of owners of the Bonds, the
Trustee may, to the extent permitted by the court, intervene on behalf of owners of the Bonds
and shall do so, to the extent permitted by the court, if provided with indemnity satisfactory to
the Trustee and requested in writing by the owners of at least twenty-five percent of the
aggregate principal amount of the Bonds then outstanding.
Section 9.5 Successor to the Trustee. Any corporation or association into
which the Trustee may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale, merger, consolidation
or transfer to which it is a party, ipso facto shall be and become successor to the Trustee
hereunder and vested with all of the title to the Trust Estate and all the trusts, powers, discretion,
immunities, privileges and all other matters as was its predecessor, without the execution or
filing of any instrument or any further act, deed or conveyance on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. Any such successor trustee shall give
notice thereof to the City,the Credit Entity and each Rating Agency then rating the Bonds.
Section 9.6 Resignation by the Trustee. The Trustee and any successor
Trustee may at any time resign from the trusts hereby created by giving thirty (30) days' written
notice by registered or certified mail to the City,the Remarketing Agent,the Credit Entity and by
first-class mail (postage prepaid) to the owner of each Bond shown by the list required by the
terms of Section 4.6 hereof to be kept at the office of the Trustee, and such resignation shall not
take effect until the appointment of a successor Trustee by the City or the owners of the Bonds as
provided in Section 9.8.
Section 9.7 Removal of the Trustee. The Trustee may be removed at any time,
by an instrument or concurrent instruments in writing delivered to the Trustee, the City and the
Credit Entity, and signed by the owners of a majority in aggregate principal amount of the Bonds
then outstanding. The City may remove the Trustee at any time with the consent of the Credit
Entity, except during the existence of an Event of Default as defined in Section 8.1 hereof, for
such cause as shall be determined in the sole discretion of the City by filing with the Trustee and
the Credit Entity an instrument signed by an Authorized City Representative. Any removal shall
not take effect until the appointment of a successor Trustee by the City or the owners of the
Bonds as provided in Section 9.8 hereof.
Section 9.8 Appointment of Successor Trustee by the Bondholders. Temporary
Trustee. In case the Trustee or Bond Registrar hereunder shall resign or be removed, or be
dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable
of action hereunder, or in case it shall be taken under the control of any public officer or officers,
or of a receiver appointed by a court, a successor may be appointed with the consent of the City
by the owners of the aggregate principal amount of Bonds then outstanding so long as no Event
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of Default is existing hereunder, and if such Event of Default is existing then by the owners of a
majority in aggregate principal amount of the Bonds then outstanding, by an instrument or
concurrent instruments in writing signed by such owners, or by their attorneys in fact, duly
authorized and a copy of which shall be delivered personally or sent by registered mail to the
City. Nevertheless, in case of such vacancy, the City shall promptly appoint a temporary Trustee
to fill such vacancy until a successor Trustee shall be appointed by the owners of the Bonds in
the manner above provided. If such vacancy shall continue for thirty days, the Trustee or any
owner of Bonds may apply to any court of competent jurisdiction to appoint a successor Trustee
and any such temporary Trustee so appointed by the City or court shall immediately and without
further act be superseded by the Trustee so appointed by such owners. Notice of the
appointment of a successor Trustee shall be given in the same manner as provided by Section 9.6
hereof with respect to the resignation of a Trustee. Every such Trustee appointed pursuant to the
provisions of this Section shall be a trust company or bank in good standing and shall have net
assets of not less than $25,000,000. Notwithstanding anything herein to the contrary, if there is a
Credit Facility in effect with respect to the Bonds, the Credit Entity shall have the right to
approve any successor Trustee in its sole discretion.
Section 9.9 Concerning Any Successor Trustee. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its or his predecessor and also to
the City and the Credit Entity an instrument in writing accepting such appointment hereunder,
and thereupon such successor, without any further act, deed or conveyance, shall become fully
vested with all the estate, properties, rights, powers, trusts, duties and obligations of its
predecessor, but such predecessor shall, nevertheless, execute and deliver an instrument
transferring to such successor Trustee all the estate, properties, rights, powers and trusts of such
predecessor hereunder, including the rights of the Trustee under the Credit Facility except any
rights to payment due or indemnification rights, and every predecessor Trustee shall deliver all
securities and monies held by it as the Trustee hereunder to its or his successor upon payment of
all amounts due to the predecessor Trustee. Should any instrument in writing from City be
required by any successor Trustee for more fully and certainly vesting in such successor the
estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any
and all such instruments in writing shall, on request, be executed, acknowledged and delivered
by City. The resignation of any Trustee and the instrument or instruments removing any Trustee
and appointing a successor hereunder, together with all other instruments provided for in this
Article, shall be filed or recorded by the successor Trustee in each recording office where this
Indenture shall have been filed or recorded.
Section 9.10 'Designation and Succession of Paying Agents. LaSalle Bank
National Association, as Trustee, is hereby appointed as Paying Agent hereunder. Any bank or
trust company with or into which any Paying Agent may be merged or consolidated, or to which
the assets and business of such Paying Agent may be sold, shall be deemed the successor of such
Paying Agent for the purposes of this Indenture. If the position of Paying Agent shall become
vacant for any reason, the City shall, within thirty days thereafter, appoint a bank or trust
company located in the same city as such Paying Agent to few such vacancy, provided, however,
that if the City shall fail to appoint such Paying Agent within said period, the Trustee shall make
such appointment. The Paying Agent may resign upon notice to the Trustee and the City. Other
Paying Agents or fiscal agents may be appointed pursuant to Article IX hereof by the City and
approved by the Trustee if in its discretion additional Paying Agents or fiscal agents are deemed
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advisable. In each case the Paying Agent must be approved by the Credit Entity in its sole
discretion. The Trustee hereby covenants and agrees to cause the necessary arrangements to be
made for the making available of funds hereunder by the Trustee or the Paying Agent for the
payment of the Bonds from the Bond and Interest Fund and from the Tender Fund.
The Paying Agent shall enjoy the same protective provisions in the performance
of its duties hereunder as are specified in Section 9.1 hereof with respect to the Trustee insofar as
such provisions may be applicable.
Notice of the appointment of additional Paying Agents or fiscal agents shall be
given in the same manner as provided by Section 9.8 hereof with respect to the appointment of a
successor Trustee.
Section 9.11 Appointment of Co-Trustee. It is the purpose of this Indenture that
there shall be no violation of any law of any jurisdiction (including particularly the law of the
State) denying or restricting the right of banking corporations or association is to transact
business as the Trustee in such jurisdiction. It is recognized that, in case of litigation under this
Indenture, and, in particular, in case of the enforcement thereof on an Event of Default, or in case
the Trustee deems that by reason of any present or future law of any jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the
properties in trust as herein or in indentures supplemental hereto granted, or take any other action
which may be desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an additional individual or institution as a separate or Co-Trustee. The following
provisions of this Section are adapted to these ends. In each case, each separate or Co-Trustee
must be approved by the City and the Credit Entity in their sole discretion.
In the event that the Trustee appoints an additional individual or institution as a
separate or Co-Trustee, each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised
by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or Co-Trustee but only to the extent necessary to enable such separate or
Co-Trustee to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate or Co-Trustee shall run to and be enforceable
by either of them.
Should any instrument in writing from the City be required by the separate or
Co-Trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to
him or it such properties, rights, powers, trusts, duties and obligations, any and all such
instruments in writing shall, on request, be executed, acknowledged and delivered by the City.
In case any separate or Co-Trustee, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate or Co-Trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a successor to such separate or Co-Trustee.
Section 9.12 Remarketing Agent. ABN AMRO Financial Services, Inc. is
hereby appointed as the initial Remarketing Agent for the Bonds. The Remarketing Agent has
designated its Principal Office to the Trustee, the Credit Entity, the City and the Paying Agent
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011.552614.7
and has signified its acceptance of the duties and obligations imposed upon it hereunder and
pursuant to the Remarketing Agreement by execution of the Remarketing Agreement. The
Remarketing Agent shall (i) compute the interest rates pursuant to and in accordance with the
provisions hereof and give such notices thereof mdustrovlracdtice and to make such books and
and records as shall be consistent with prudent industry P
records available for inspection by the Trustee and the City at all reasonable times.
The Remarketing Agent shall be a recognized municipal bond dealer, shall have a
"net capital" of greater than or equal to $10,000,000 and shall be authorized by law to perform
all the duties imposed upon it by this Indenture and the Remarketing Agreement. The
Remarketing Agent may at any time resign and be discharged of the duties and obligations
created by this Indenture by giving at least thirty (30) days' notice to laced the Credit
time by Entity
and the Trustee. The Remarketing Agent may be removed and replaced the
City, by an instrument signed by the City and filed with the Remarketing Agent, the Paying
Agent, the Credit Entity and the Trustee and provided by first-class mail to all Bondholders not
less than thirty (30) days prior to the effective date of such removal and/or replacement,but only
with the prior written consent of the Credit Entity.
In the event of a resignation or discharge of the Remarketing Agent,ge the City shall
promptly appoint a successor Remarketing Agent acceptable to the Entity. In
shall any resignation or removal of the Remarketing Agent take effect until a successor
Remarketing Agent shall have been appointed.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Not Reauirin� Consent of Re isg�tered the Cre
ut
Owners. The City and the Trustee may, with the prior written
Owneconsent nt of into and ndenturebor
without consent of, or notice to, any of the Registered
indentures supplemental to this Indenture which shall not be inconsistent with the terms and
provisions hereof for any one or more of the following purposes:
(i) To cure any ambiguity or formal defect or omission in this
Indenture;
(ii) To grant or to confer upon the Trustee for the benefit of the
registered owners any additional rights, remedies, powers or
authority that may lawfully be granted to or conferred upon the
Registered Owners or the Trustee, or to make any change which, in
the judgment of the Trustee, is not to the prejudice of the
Registered Owners;
(iii) To subject to this Indenture additional taxes, revenues, properties
or collateral;
(iv) To modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification
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011.552614.7
hereof and thereof under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in effect or to
permit the qualification of the Bonds for sale under the securities
laws of any of the states of the United States of America, and, if
they so determine, to add to this Indenture or any indenture
supplemental hereto such other terms, conditions and provisions as
may be permitted by said laws;
(v) To evidence the appointment of a separate Trustee or a Co-Trustee
or the succession of a new Trustee, Remarketing Agent or Paying
Agent hereunder;
(vi) To modify, amend or supplement this Indenture or any indenture
supplemental hereto to provide for any modifications on any
Mandatory Tender Date; or
(vii) To modify, amend or supplement this Indenture with regard to
obtaining or maintaining a rating on the Bonds based on a Credit
Facility or Alternate Credit Facility, provided, however, that such
modification, amendment or supplement is not adverse to the rights
of the Owners of Bonds then outstanding.
(viii) To modify, amend or supplement this Indenture in any other
manner which does not materially impair the rights of the Owners
of the Bonds or the Trustee upon the written direction of, or with
the prior written consent of, the Credit Entity, provided the Credit
Entity is not in default on its obligations under the Credit Facility.
Section 10.2 Supplemental Indentures Requiring Consent of Registered Owners.
Exclusive of supplemental indentures covered by Section 10.1 hereof, with the prior written
consent of the Credit Entity, and subject to the terms and provisions contained in this Section and
not otherwise, the owners of not less than a majority in aggregate principal amount of the Bonds
then outstanding shall have the right, from time to time, anything contained in this Indenture to
the contrary notwithstanding, to consent to and approve the execution by the City, and the
Trustee of such other indenture or indentures supplemental hereto as shall be deemed necessary
and desirable by the City for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any
supplemental indenture; provided, however, that nothing in this Section or in Section 10.1 hereof
shall permit, or be construed as permitting, without the consent of the owners of all outstanding
Bonds, (i) a reduction in the principal amount of any Bond or the rate of interest thereon, or (ii) a
privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (iii) a reduction in
the aggregate principal amount of the Bonds required for consent to such supplemental
indentures, or (iv) the creation of any lien ranking prior to or on a parity with the lien of the
Indenture on the Trust Estate or any part thereof, or (v) deprivation of the owner of any Bond
then outstanding of the lien created on the Trust Estate, or (vi) an extension of the maturity of the
Bonds.
69
011.552614.7
If at any time the City shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of
such supplemental indenture to be given by first-class mail to the owner of each Bond affected
shown by the lists required by the terms of Section 4.6 hereof to be kept at the office of the
Trustee. Such notices shall briefly set forth the nature of the proposed supplemental indenture
and shall state that copies thereof are on file at the Principal Office of the Trustee for inspection
by all Bondholders. If, within sixty days or such longer period as shall be prescribed by the City
following such notices, the owners of not less than a majority in aggregate principal amount of
the Bonds outstanding at the time of the execution of any such supplemental indenture shall have
consented to and approved the execution thereof as herein provided, no owner of any Bond shall
have any right to object to any of the terms and provisions contained therein, or the operation
thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee or City from executing the same or from taking any action pursuant to the
provisions thereof. Upon the execution of any such supplemental indenture as in this Section
permitted and provided, this Indenture shall be and be deemed to be modified and amended in
accordance therewith.
Section 10.3 Execution of Supplemental Indentures. In executing, or accepting
the additional trusts created by, any supplemental indenture permitted by this Article or the
modifications therefore of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 9.1) shall be fully protected in relying upon, an opinion of
counsel stating that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into such supplemental
indenture which affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
ARTICLE XI
RESERVED
ARTICLE XII
MISCELLANEOUS
Section 12.1 Consents etc of Registered Owners. Any consent, request,
direction, approval, objection or other instrument required by this Indenture to be signed and
executed by the Registered Owners may be in any number of concurrent documents and may be
executed by such Registered Owners in person or by an agent appointed in writing. Proof of the
execution of any such consent, request, direction, approval, objection or other instrument or of
the writing appointing any such agent and of the ownership of Bonds, if made in the following
manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in
favor of the Trustee with regard to any action taken by it under such request or other instrument,
namely:
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011.552614.7
(i) The fact and date of the execution by any person of any such
writing may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments
within such jurisdiction that the person signing such writing
acknowledged before him the execution thereof, or by an affidavit
of any witness to such execution.
(ii) The fact of ownership of Bonds and the amount or amounts,
numbers and other identification of such Bonds, and the date of
holding the same shall be proved by the registration books of the
City maintained by the Trustee pursuant to Section 4.6 hereof.
Section 12.2 Limitation of Rights. With the exception of any rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or
the Bonds is intended or shall be construed to give to any person or company other than the
parties hereto, the Paying Agent, the Remarketing Agent, the Credit Entity, and the owners of the
Bonds, any legal or equitable right, remedy or claim under or with respect to this Indenture or
any covenants, conditions and provisions herein contained, this Indenture and all of the
covenants, conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto, the Trustee, the Remarketing Agent, the Credit Entity and
the owners of the Bonds as herein provided.
Section 12.3 Severability. If any provision of this Indenture shall be held or
deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render the same invalid, inoperative or
unenforceable to any extent whatsoever, provided, however, that no finding of illegality or
unenforceability shall require payment by the City of any funds from any source other than from
the Trust Estate.
Section 12.4 Notices. Except as otherwise specifically provided herein, any
notice, request, complaint, demand, communication or other paper shall be in writing and shall
be given (i) by first class or certified mail, postage prepaid; (ii) by facsimile transmission and
confirmed by the sender's telephone call to the recipient and by mailing or delivering a copy as
provided in clause (i), clause (iii) or clause (iv) hereof, (iii) by hand delivery; or (iv) by courier
service (including overnight courier service), and shall be directed as follows:
To the City: 800 Game Farm Road
Yorkville, Illinois 60560
Attention: Mayor
Telephone: (630) 553-4350
Telecopier: (630) 553-7575
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011.552614.7
To the
Remarketing Agent: LaSalle Capital Markets, A Division of ABN
AMRO Financial Services, Inc.
181 West Madison Street
Chicago, Illinois 60602
Attention: Public Finance
Telephone: (312) 904-5752
Telecopier: (312) 904-7727
To the Trustee: LaSalle Bank National Association
135 S. LaSalle Street, Suite 1960
Chicago, Illinois 60674-9135
Attention: Corporate Trust Department
Telephone: (312) 904-2000
Telecopier: (312) 904-2236
To the Credit Entity: LaSalle Bank National Association
135 S. LaSalle Street, Suite 1960
Chicago, Illinois 60674-9135
Attention:
Telephone: (312) 904-2000
Telecopier: (312) 904-2236
To the Developer: MPI-2 Yorkville Central LLC
6880 North Frontage Road
Suite 100
Burr Ridge, Illinois 60527
Attention: Anthony Pasquinelli
Telephone: (630) 455-5400
Telecopier: (630) 455-2591
To Standard & Poor's: Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
25 Broadway
New York,New York 10004
Attention: Municipal Finance Department
A duplicate copy of each notice required to be given hereunder by the Trustee to the City shall
also be given to the Credit Entity and each Rating Agency. The City and the Trustee may
designate any further or different addresses to which subsequent notices, certificates or other
communications shall be sent.
Notice given as provided in clause (i) hereof shall be effective five (5) days from
the date of mailing. Notice given as provided in clause (ii) and (iii) hereof shall be ef fective on
the day sent if sent by 12:00 p.m. (local time in Chicago, Illinois) on a Business Day and
otherwise on the next Business Day following the day of sending. Notice given as provided in
clause (iv)hereof shall be effective on the Business Day following the day of sending.
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011.552614.7
Section 12.5 Payments Due on Saturdays Sundays and Holidays. In any case
a
where the date of payment or performance hereunder shall not be a Business Day, then payment
or performance need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date originally due and in the case of
payment no interest shall accrue for the period after such date.
Section 12.6 Counterparts. This nd all of which shall be
tote but one and the
counterparts, each of which shall be an original
same instrument.
Section 12.7 Applicable Provisions of Law. This Indenture shall be governed
by and construed in accordance with the laws of the State.
Section 12.8 Rules of Intemretation. Unless expressly indicated otherwise,
references to Sections or Articles are to be construed as references to Sections or Articles of this
instrument as originally executed. Use of the words herein, "hereby", "hereunder , "hereof',
"hereinbefore", "hereinafter" and other equivalent words refer to the Indenture and not solely to
the particular portion in which any such word is used.
Section 12.9 Captions. The captions or headings in this Indenture are for
convenience only and in no way define, limit or describe the scope or intent of any provisions or
Sections of this Indenture.
Section 12.10 References to Credit Entity Ineffective During Certain Periods.
During any period of time in which no Credit Facility is in effect and no amounts
remain unreimbursed to the Credit Entity
Entity has failed to honor a properly presented and conforming draw under the Credit Facility,
references in this Indenture to the Credit Entity shall be ineffective.
Section 12.11 Consent and Directions in Writing Authorized Representatives.
Any consent from, certification of or direction by the Credit Entity to be provided
to the Trustee hereunder shall be in writing. Any consent, certification, request or direction by or
from the City shall be in writing and in each case shall be executed by an Authorized City
Representative.
Section 12.12 No Personal Liability. No covenant or agreement contained in the
Bonds or in this Indenture or any agreement or instrument in connection therewith shall be
deemed to be the covenant or agreement of any present or future member, officer, agent,
employee or attorney for the City in his individual liable alersonally,onahe Bonds orsbe,subject to any
such person executing the Bonds shat P
personal liability or accountability by reason of the issuance thereof.
Section 12.13 . If the Bonds are rated by a Rating
Agency, written notice shall be provided to such Rating Agency not less than two (2) Business
Days prior to any of the following events with respect to (i) the appointment of any successor
Trustee, Remarketing Agent or Paying Agent, (ii) the appointment of any agent by the Trustee to
perform any material duties of the Trustee under this Indenture, (iii) the expiration, termination
or extension of any Credit Facility, (iv) any Rate Conversion Date, (v) any amendment or
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011.552614.7
supplement to the Indenture, Credit Facility or the Remarketing Agre'emenntt, (vi) the payment in Tender
full of all of the Bonds, (vii) the substitution of anY defea ancelolf the Bonds pursuant to Section
Date and (ix) any Supplemental Indenture, (x) y p
7.1 of this Indenture, (xi) any redemption of the Bonds (other than a mandatory sinking fund
redemption pursuant to Section 3.1(d) of this Indenture), and (xii) any acceleration of the Bonds.
IN WITNESS WHEREOF, the City has caused these ffixed and signed in its attested
name and on its behalf by its Mayor and its official seal to be here unto ahas caused
by its Clerk, and to evidence its acceptance of the�Trusts e and onbt created,
by the
it duly authorized
these presents to be signed and sealed in its
officers, as of the date first above written.
UNITED CITY OF YORKVILLE
By:
Its: Mayor
(SEAL)
Attest:
By:
Its: City Clerk
LA SALLE BANK NATIONAL
ASSOCIATION,as Trustee
By:
Its:
(SEAL)
Attest:
By:
74
011.552 614.7
EXHIBIT A
UNITED CITY OF YORKVILLE
SPECIAL SERVICE AREA NUMBER 2004-106
TOTAL GRANDE RESERVE
Legal Description
A-1
011.552614.7
EXHIBIT B
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF KENDALL
UNITED CITY OF YORKVILLE
SPECIAL SERVICE AREA NUMBER 2004-106 TOTAL GRANDE RESERVE
VARIABLE RATE DEMAND SPECIAL TAX BONDS
SERIES 2004
(MIP GRANDE RESERVE PROJECT)
Bond No. CUSIP:
Date of Bond: , 2004 Maturity Date: March 1, 2034
Registered Owner: Cede & Co. Principal Amount: $
Rate Determination Method: Weekly
FOR VALUE RECEIVED, the UNITED CITY OF YORKVILLE, KENDALL
COUNTY, ILLINOIS (the "City") promises to pay to the Registered Owner named above, or
registered assigns, but solely from the sources and in the manner hereinafter referred to, (a) the
principal amount stated above on, unless called for earlier redemption or acceleration, the
Maturity Date stated above and (b)the interest thereon from the date of this Bond stated above at
the rate established pursuant to the applicable interest rate determination method on each Interest
Payment Date until the principal of this Bond is paid. The principal of and premium, if any, and
interest on this Bond (the "Bond Service Charges") are payable in lawful money of the United
States of America. The term "Interest Payment Date" means (a) in the case of Bonds bearing
interest at the Weekly Rate and Monthly Rate: (i) the first Business Day of each month prior to
the Maturity Date, commencing _, 2004, (ii) each Mandatory Tender Date, and
(iii) if applicable the Maturity Date, and (b) in the case of Bonds bearing interest at the
Adjustable Rate or the Fixed Rate, each March 1 and September 1, commencing with the first
such March I or September 1 occurring after the Rate Conversion Date for the Adjustable Rate
or Fixed Rate and each Rate Conversion Date. Principal of and premium, if any, on this Bond
shall be payable when due to the Registered Owner upon presentation and surrender of this Bond
at the principal corporate trust office of the Paying Agent, LaSalle Bank National Association, as
Trustee, presently located at 135 South LaSalle Street, Chicago, Illinois 60674, Attention:
Corporate Trust Department (together with any successor Paying Agent appointed pursuant to
the hereinafter defined Indenture, the "Paying Agent"). Interest on this Bond shall be paid to the
Registered Owner hereof whose name appears on the registration books kept by the Trustee as of
the close of business on the applicable Regular or Special Record Date (as such record dates are
defined below): (a) by check or draft mailed to such Registered Owner at the address appearing
in the registration books of the Trustee, or (b) by wire transfer to such Registered Owner if such
B-1
011.552614.7
Registered Owner is an owner of an aggregate principal amount of Bonds greater than or equal to
$1,000,000 and if such Registered Owner shall have given the Trustee in writing the wire
transfer address of such Registered Owner not less than one day prior to the Record Date for that
Interest Payment Date; provided, however, that interest payable at the maturity of this Bond shall
be paid only upon presentation and surrender of this Bond. A Registered Owner of an aggregate
principal amount of Bonds greater than or equal to $1,000,000 shall also have the right to have
payment of the principal and premium on its Bonds to be made by wire transfer in accordance
with and by following the procedures set forth in the preceding sentence, provided such
Registered Owner shall still be required to present and surrender its Bonds as provided above
before any payment of principal or premium (whether by wire transfer or otherwise) shall be
made. The term "Record Date" or "Regular Record Date" means (a) with respect to any
Interest Payment Date when the Weekly Rate or the Monthly Rate is in effect, the Business Day
next preceding the Interest Payment Date and (b) with respect to any Interest Payment Date
when the Adjustable Rate or the Fixed Rate is in effect, the fifteenth day of the month next
preceding the month of the Interest Payment Date. If sufficient funds for the payment of interest
becoming due on any Interest Payment Date are not on interest shall be
Trustee may establish a special interest paym ent date on
paid and a special record date (the "Special Record Date") relating thereto.
The Bonds are issued pursuant to and in full compliance with the Constitution and
laws of the State, particularly the Special Service Area Tax Law 35 ILCS § 200/27-5, as
amended, (the "Special Service Area Act") and the provisions of the Local Government Debt
Reform Act, 30 ILCS § 350/1 et seq., as amended and pursuant to an ordinance of the City
adopted on June 22, 2004 (the "Bond Ordinance") and a Trust Indenture (the "Indenture")
dated as of July 1, 2004 between the City and the Trustee. Principal of and interest on the Bonds
are payable from a special tax (the "Special Tax") levied on all taxable real property within the
United City of Yorkville Special Service Area Number 2004-106 Total Grande Reserve (the
"Special Service Area"). THE BONDS, TOGETHER WITH THE INTEREST THEREON,
ARE SPECIAL LIMITED OBLIGATIONS OF THE CITY, PAYABLE SOLELY FROM THE
TRUST ESTATE, INCLUDING THE COLLECTION OF THE SPECIAL TAX AND OTHER
MONEYS DEPOSITED IN THE FUNDS AND ACCOUNTS ESTABLISHED PURSUANT
TO THE INDENTURE, INCLUDING AMOUNTS RECEIVED PURSUANT TO THE
CREDIT FACILITY, AS HEREINAFTER DEFINED. FOR THE PROMPT PAYMENT OF
THE PRINCIPAL OF AND INTEREST ON THIS BOND, THE SPECIAL TAX IS HEREBY
IRREVOCABLY PLEDGED. THE BONDS DO NOT CONSTITUTE GENERAL
OBLIGATIONS OF THE CITY AND NEITHER SHALL BE PLEDGEDDAS NOR THE
FOR
UNLIMITED TAXING POWER OF THE
THE PAYMENT OF THE BONDS.
A trustee, officer, member, agent or employee, as such of the City shall not have
any liability for any obligations of the City under the Bonds, the Indenture or the Bond
Ordinance, or for any claim based on such obligations or their creation. The owner of this Bond
by accepting this Bond waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of this Bond.
It is certified and recited that all acts and conditions necessary to be done or
performed by the City or to have happened precedent to and in the issuing of the Bonds in order
B-2
011.552614.7
to make them the legal, valid and binding limited obligations of the City enforceable in
accordance with their terms, and precedent to and in the execution and delivery of the Indenture
have been performed and have happened in regular and due form as required by law.
This Bond shall not be valid or become obligatory for any purpose or be entitled
to any benefit or security under the Indenture until it shall have been authenticated by the
execution by the Trustee of the certificate of authentication endorsed hereon.
ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL
HAVE THE RESPECTIVE MEANINGS ASSIGNED TO SUCH TERMS IN THE
INDENTURE.
1. Structure of and Security for Bonds. This Bond is one of a duly
authorized issue of United City of Yorkville, Kendall County, Illinois Special Service Area
Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project) (the "Bonds") issued pursuant to the Indenture aggregating in
principal amount $ issued for (i) financing or reimbursing the City for a portion of
the costs of acquiring, constructing and improving certain special services to benefit the Special
Service Area, (ii) financing capitalized interest on a portion of the Bonds, (iii) financing a
portion of the costs of administering the Special Service Area, and (iv) paying certain expenses
incurred in connection with the issuance of the Bonds.
Each Bond is issued under and is to be secured and entitled to the protection given
by the Indenture. The Indenture is on file in the offices of the City and the Trustee, and
reference is hereby made to the Indenture for a more complete description of the provisions,
among others, with respect to the nature and extent of the security, the rights, duties and
obligations of the City, the Trustee and the Registered Owners of the Bonds, and the terms and
conditions upon which this and all of the other Bonds are issued and secured, to all of the
provisions of which Indenture each Registered Owner, by the acceptance hereof, assents.
In addition to the levy of the Special Tax, as further security for the Registered
Owners, the City has caused LaSalle Bank National Association (the "Credit Entity")to provide
to the Trustee a transferable irrevocable direct pay letter of credit (the "Credit Facility") in an
initial stated amount equal to the principal amount of the Bonds, plus up to forty-five (45) days'
interest on the Bonds. The City may provide an Alternate Credit Facility (as defined in the
Indenture) as permitted under the Indenture. The Trustee will use the Credit Facility to pay (a)
principal of and interest on and redemption premium, if any, on the Bonds when due on Interest
Payment Dates, stated maturity dates, redemption dates and any accelerated maturity date and (b)
the Purchase Price of Bonds on each tender date, as provided in the Indenture. The initial Credit
Facility expires, by its terms, on the close of business on , 200_, unless terminated
earlier in accordance with its terms.
The Bonds are issued pursuant to and in compliance with the Special Service
Area Act, the Constitution and laws of the State of Illinois and pursuant to the Bond Ordinance.
The Bonds are limited obligations of the City and the Bond Service Charges thereon and the
Purchase Price thereof shall be payable equally and ratably solely from the Special Tax, amounts
B-3
011.552614.7
on deposit in certain Funds and Accounts established under the Indenture and the Credit Facility
then in effect and as otherwise provided in the Indenture.
2. Interest. The Bonds shall bear interest initially at the Weekly Rate which
may be converted to the Monthly Rate, the Adjustable Rate or the Fixed Rate, as provided in the
Indenture. The interest rate on the Bonds may not exceed the lesser of 7% or the rate per annum
specified in the then applicable Credit Facility as the maximum interest rate per annum to be
used in determining the amount of moneys available for the payment of interest on the Bonds.
The interest rate determination method applicable to this Bond is stated above. Interest shall be
paid in arrears on the Interest Payment Dates for the Bonds which are specified for each Rate
Period in the Indenture. Reference is made to Article II of the Indenture for the provisions as to
the interest rate determination method and the interest rate applicable to the Bonds.
3. Redemption.
(a) Optional Redemption. During any Rate Period when the Bonds bear
interest at the Weekly Rate or the Monthly Rate, the Bonds are subject to optional redemption by
the City, upon written direction delivered to the Trustee and the Credit Entity, together with the
written consent of the Credit Entity, at least forty-five (45) days prior to the proposed redemption
date, in whole or in part on any Business Day at a redemption price of one hundred percent
(100%) of the principal amount redeemed, plus accrued interest, if any, thereon to the
redemption date.
During any Adjustable Rate Period having a length in excess of two years or any
Fixed Rate Period:
The Bonds are subject to optional redemption by the City, upon the
written direction delivered to the Trustee and the Credit Entity, together with the written
consent of the Credit Entity, at least thirty-five (35) days prior to the proposed
redemption date, in whole or in part on any Business Day at the redemption prices
(expressed as a percentage of the principal amount of the Bonds to be redeemed), plus
accrued interest, if any, thereof to the redemption date as follows:
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS DATE ON WHICH
UNTIL THE MATURITY DATE REDEMPTION
FOLLOWING CONVERSION IS ALLOWED TO
TO A FIXED RATE COMMENCE REDEMPTION PRICE
More than 15 years Tenth anniversary of Rate 102%,declining by 1%on each
Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
More than 10,but not more than 15 Seventh anniversary of Rate 102%,declining by 1%on each
years Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
B-4
011.552614.7
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS DATE ON WHICH
UNTIL THE MATURITY DATE REDEMPTION
FOLLOWING CONVERSION IS ALLOWED TO
TO A FIXED RATE COMMENCE REDEMPTION PRICE
More than 7,but not more than 10 Fifth anniversary of Rate 101-1/2%,declining 1/2%on each
years Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
More than 4,but not more than 7 Third anniversary of Rate 101%,declining by 1/2%on each
years Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%and 100%thereafter
More than 2,but not more than 4 Second anniversary of Rate 100-1/2%,declining by 1/2%on
years Conversion Date each succeeding anniversary of
Rate Conversion Date until
reaching 100%and 100%thereafter
2 years or less Not subject to optional redemption
During any Rate Period, the Bonds are subject to optional redemption by the City, upon written
direction delivered to the Trustee, the Remarketing Agent and the Credit Entity together with the
written consent of the Credit Entity on any Tender Date at a redemption price of one hundred
percent (100%) of the principal amount redeemed, plus accrued interest, if any, thereon to the
redemption date.
Any optional redemption of the 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, and so as to maintain the proportion of principal maturing in each year
to the total original principal amount of Bonds.
(b) Mandatory Redemption. The Bonds, are subject to mandatory redemption
by the City upon written direction delivered to the Trustee, the Remarketing Agent and the
Credit Entity, together with the written consent of the Credit Entity, 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, in an amount equal to
amounts on deposit 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.
The Bonds are also subject to mandatory redemption on any Interest Payment
Date, in part, at a redemption price equal to the principal amount to be redeemed, without
premium, from amounts transferred from the Improvement Fund to the Bond and Interest Fund
as described in the Indenture.
B-5
011.552614.7
Any such mandatory redemption of the Bonds shall be applied, to the extent
possible, to reduce pro rata the amount required the proportion o mandatory p nc palkmaturing
redemption pursuant to the Indenture, and s o as to maintain
in each year to the total original principal amount of Bonds.
The Bonds are subject to mandatory redemption at any time by the City, to the
extent permitted by the Credit Facility Agreement, upon written direction of the City delivered to
the Trustee, the Remarketing Agent and the Credit Entity, together with the written consent of
the Credit Entity and the Developer, in
Account pursuant to the Indent
an suu B as follows:
(1) for
disbursement from the Special Redemp tion P
(1) During any Rate Period when the Bonds bear interest at the Weekly Rate
or the Monthly Rate, the Bonds are subject to mandatory redemption in an amount equal
to prepayments and Recapture Fees on deposit in the Special Redemption Account, at a
redemption price of 100% of the principal amount of the Bonds to be redeemed, together
with accrued interest on such Bonds to the date fixed for redemption.
(2) During any Adjustable Rate Period or any Fixed Rate Period, the Bonds Recapture
are subject to mandatory redemption in an amount equal
prices(expressed
Fees on deposit in the Special Redemption Account at the
as a percentage of the principal amount of the Bonds to be redeemed) plus accrued
interest, if any, to the redemption date, as provided in the Schedule set forth in the
Indenture relating to optional redemptions, or in the event Bonds are redeemed during
any period they are not subject to optional redemption at a price of 103% of the principal
amount of the Bonds to be redeemed.
Any such mandatory redemption of the 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, and so as to maintain the proportion of principal maturing
in each year to the total original principal amount of Bonds.
(c) Mandatory Sinking Fund Redemption. The Bonds maturing March 1,
2034 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
2007
2008
2009
2010
2011
2012
2013
2014
2015
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011.552614.7
Year Amount
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
The City covenants that it will redeem the Bonds pursuant to the mandatory sinking fund
redemption requirements for the Bonds. Proper provision for mandatory redemption having
been made, the City covenants that the Bonds so selected for redemption shall be payable upon
redemption and special taxes have been levied and will be collected as provided in the Indenture
and in the Bond Ordinance for such purposes.
The Indenture permits the purchase of Bonds in lieu of redemption as described
therein under the circumstances set forth therein.
The Trustee shall provide notice by mail to the Registered Owner of redemptions
at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption
as provided in the Indenture. Failure to duly give notice of redemption by mail to any particular
Bondholder, or any defect therein, shall not affect the validity of any proceedings for the
redemption of Bonds for which notice has been properly given. Reference is made to Article III
of the Indenture for the provisions applicable to the redemption of the Bonds, including the
selection of Bonds to be redeemed.
4. Optional Tender.
(a) Purchase Date. During any Rate Period when the Bonds or beneficial
interests in a Bond bear interest at the Weekly Rate or the Monthly Rate, the Registered Owners
of Bonds may elect to have their Bonds or beneficial interests in a Bond (or portions thereof in
Authorized Denominations; provided, however, that Bonds may not be tendered for purchase in
part unless the principal amount not to be tendered for purchase is an Authorized Denomination)
purchased at a Purchase Price equal to 100% of the principal amount of such Bonds (or
portions), plus accrued interest, if any. Any such Bond may be tendered for purchase on the
demand of the Registered Owner at a Purchase Price payable in immediately available funds on
any Business Day upon delivery of a written notice of tender, meeting the further requirements
of subsection (b) below, to the Trustee at its respective Principal Offices not later than 4:00 p.m.,
B-7
011.552614.7
Chicago time, on a Business Day not fewer than seven (7) days prior to the purchase date
specified in such notice.
(b) Notice of Optional Tender. Each notice of optional tender:
(i) shall be delivered to the Trustee at its Principal Office and be in
form satisfactory to the Trustee;
(ii) shall state in writing (A) the principal amount of the Bond or
Bonds and the Bond number or numbers to which the notice
relates, (B) that the Registered Owner irrevocably demands
purchase of such Bond or Bonds or a specified portion thereof in
an Authorized Denomination (provided, however, that Bonds may
not be tendered for purchase in part unless the principal amount
not to be tendered for purchase is an Authorized Denomination),
(C) the date on which such Bond or Bonds or portion is to be
purchased, (D) payment instructions with respect to the Purchase
Price, and (E) that the Bonds will be delivered to the Principal
Office of the Trustee on the purchase date; and
(iii) shall automatically constitute, (A) an irrevocable offer to sell the
Bond or Bonds (or portion thereof) to which the notice relates on
the purchase date, at a price equal to the principal amount of such
Bond or Bonds (or portion thereof) plus any interest thereon
accrued and unpaid as of the purchase date, (B) an irrevocable
authorization and instruction to the Trustee to effect transfer of
such Bond or Bonds (or portion thereof) upon payment of such
price to the Trustee on the purchase date, (C) an irrevocable
authorization and instruction to the Trustee to effect the exchange
of the Bond or Bonds to be purchased in whole or in part for other
Bonds in an equal aggregate principal amount so as to facilitate the
sale of such Bond or Bonds (or portion thereof to be purchased),
and (D) an acknowledgment that upon payment of such Purchase
Price to the Trustee on the purchase date, such Registered Owner
will have no further rights with respect to such Bond or Bonds (or
portion thereof) except for the right of such Registered Owner to
receive such Purchase Price upon surrender of such Bond or Bonds
to the Trustee and that after the purchase date such Registered
Owner will hold such undelivered Bond or Bonds as agent for the
Trustee.
The determination of the Trustee as to whether a notice of tender has been
properly delivered pursuant to the foregoing shall be conclusive and binding upon the Registered
Owner. The Trustee may, with the written consent of the Credit Entity waive irregularities in
conforming tenders.
B-8
011.552614.7
(c) Bonds to be Remarketed. Not later than 11:00 a.m., Chicago time, on the
Business Day immediately following the date of receipt of any notice of tender, the Trustee shall
notify the Remarketing Agent and the City, by telephone promptly confirmed in writing, of the
principal amount of Bonds (or portions thereof)to be purchased and the date of purchase.
(d) Purchase of Tendered Bonds.
(i) Notices by Remarketing Agent. At or before 3:00 p.m., Chicago
time, on the Business Day preceding the date fixed for purchase of
tendered Bonds, the Remarketing Agent shall give notice by
telephone, telegram, telecopy, or other similar communication to
the Trustee (promptly confirmed in writing) and the Credit Entity
of the principal amount of tendered Bonds which have been
remarketed by that time and the portion of the Purchase Price
which has been deposited. Such Bonds which have not been
remarketed shall be held by the Trustee and registered as provided
in Section 3.14 of the Indenture, until remarketed, except as
otherwise instructed by the Credit Entity. At or before 3:00 p.m.,
Chicago time, on the Business Day prior to the purchase date to the
extent known to the Remarketing Agent, the Remarketing Agent
shall give notice to the Trustee by telephone (promptly confirmed
in writing) of the principal amount of Bonds remarketed, and, if
the Bonds are no longer held in a book-entry only system, the
names, addresses and taxpayer identification numbers of the
purchasers and the denominations of Bonds to be delivered to each
purchaser.
Remarketing of Tendered Bonds. Pursuant and subject to the
Remarketing Agreement, the Remarketing Agent shall offer for
sale and use its best efforts to find purchasers for all Bonds or
portions thereof for which notice of optional tender has been
received pursuant to Section 3.6(b) of the Indenture; provided,
however, that the Remarketing Agent shall not offer for sale or sell
such Bonds to the City (or any guarantor of the City or to any
person who is an "insider" of the City, or any such guarantor
within the meaning of the Bankruptcy Code). The Remarketing
Agent shall provide notice (promptly confirmed in writing) to the
Trustee of the amount of remarketing proceeds it has for the
payment of the Purchase Price for tendered Bonds (in exchange for
new registered Bonds) in immediately available funds at or before
9:00 a.m., Chicago time, on the purchase date. The Remarketing
Agent shall provide for the payment to the Trustee of the
remarketing proceeds from the purchasers of tendered Bonds on
each purchase date, in immediately available funds at or before
9:00 a.m. Chicago time, and shall provide the Trustee with the
applicable Federal Funds wire transfer number as soon as possible
after initiating such transfer. Notwithstanding the foregoing, the
B-9
011.552614.7
Remarketing Agent shall not sell any Bond as to which a notice of
conversion of interest rate or notice of redemption has been given
by the Trustee unless the Remarketing Agent has advised the party
to whom the sale is made of the proposed conversion or
redemption; and, provided further that the Remarketing Agent
shall not sell any Bonds for which it has received a notice from the
City that such Bonds are subject to optional redemption pursuant to
the Indenture.
(iii) Sources of Payment - Credit Facility. At or before 9:30 a.m.
Chicago time, on the date fixed for purchase (a "Credit Facility
Draw Date"), the Trustee shall make a demand under the Credit
Facility in accordance with its terms (and shall also give notice of
such demand to the City and the Developer Representative by
telephone, telecopy or other similar communication) for an amount
equal to the difference between the total principal amount of Bonds
tendered on such date and the amount of remarketing proceeds
received from the Remarketing Agent on the purchase date, plus an
amount corresponding to accrued and unpaid interest for such
Bonds that have not been remarketed. Following such demand the
Credit Entity shall, at or before 1:00 p.m., Chicago time, on the
Credit Facility Draw Date honor its obligations with respect to
such demand. All monies drawn by the Trustee under this
provision shall be deposited by the Trustee in the Tender Fund to
be used solely for the payment of the Purchase Price of tendered
Bonds and shall not be commingled with other funds held by the
Trustee and shall not be invested.
(iv) Payments by the Trustee. At or before 1:30 p.m., Chicago time, on
the date set for purchase of tendered Bonds and upon receipt by the
Trustee of 100% of the aggregate Purchase Price of the tendered
Bonds, the Trustee shall pay the Purchase Price of such Bonds to
the Registered Owners at its Principal Office or, upon request of a
Registered Owner, by bank wire transfer. Such payments shall be
made in immediately available funds. As provided in the
Indenture, if sufficient funds are not available for the purchase of
all tendered Bonds, no purchase shall be consummated.
(v) Registration and Delivery of Tendered or Purchased Bonds. On
the date of purchase, the Trustee shall register and deliver(or hold)
or cancel all Bonds purchased on any purchase date as follows: (A)
Bonds remarketed by the Remarketing Agent for which the Trustee
shall have received the Purchase Price shall be registered and made
available to the Remarketing Agent by 1:15 p.m., Chicago time, in
accordance with the instructions of the Remarketing Agent; and
(B) Bonds purchased with amounts provided by the Credit Entity
B-10
011.552614.7
under the Credit Facility shall be registered as provided in the
Indenture.
(vi) Delivery of Bonds. All Bonds to be purchased on any date shall be
required to be delivered to the Principal Office of the Trustee on
the date specified in the optional tender notice delivered pursuant
to the Indenture and with respect to a mandatory tender on the
dates specified in the Indenture. Each Bondholder of any Bonds
which are to be so tendered as described above shall be entitled to
receive the Purchase Price of such Bonds by delivery of such
Bonds to the Trustee, provided that, in order to receive payment on
the date on which such Bonds are to be purchased, such delivery
must be made at any time prior to 12:30 p.m., Chicago time, on the
date on which such Bond must be delivered. Owners of such
Bonds delivered at any time after 12:30 p.m., Chicago time, on
such date shall not be entitled to receive payment until the
Business Day next following the date of delivery of the Bonds.
(vii) Bonds Tendered After Call for Redemption_. Any Bond tendered
after a call for redemption, but before the applicable redemption
date, shall be purchased pursuant to the tender. If such Bond has
been selected for redemption and is remarketed prior to the
redemption date, the replacement Bond issued upon such
remarketing shall be redeemed on the redemption date.
(viii) Monies Uninvested. Monies held by the Trustee to pay the
Purchase Price of Bonds shall not be invested while so held.
(ix) Priority of Payment of Purchase Price. The payment of the
Purchase Price shall be in the following priority:
(A) First, remarketing proceeds; and
(B) Second, amounts drawn under the Credit Facility.
If the Registered Owner of any Bond (or portion thereof) that is subject to
purchase fails to deliver such Bond to the Trustee for purchase on the date required by the
Indenture, and if the Trustee is in receipt of Eligible Funds in an amount equal to the Purchase
Price therefor, such Bond (or portion thereof) shall nevertheless be deemed purchased on the day
fixed for purchase thereof and ownership of such Bond (or portion thereof) shall be transferred to
the purchaser thereof as provided in the Indenture. Any Registered Owner who fails to deliver
such Bond for purchase shall have no further rights thereunder except the right to receive the
Purchase Price thereof upon presentation and surrender of said Bond to the Trustee. The Trustee
shall, as to any tendered Bonds which have not been delivered to it, promptly notify the
Remarketing Agent and the Bond Registrar of such nondelivery, and the Bond Registrar shall
f such
place a stop transfer against an appropriate kof Bonds he Bonds Registrar shall la�e such
Registered Owner(s) on the Bond registration boo
B-11
011.552614.7
stop(s) commencing with the lowest serial number Bond registered st in r same of
amount h
Registered Owner(s) until stop transfers have been placed against pP rop
Bonds until the appropriate tendered Bonds are delivered e Bond Registrant Upon
Trustee shall notify the Bond Registrar, and
adjustments to the Bond registration books.
Tendered Bonds must be physically delivered by their owners properly endorsed
for transfer. Each Bond must be accompanied by an instrument of transfer satisfactory to the
Trustee executed in blank by the Registered Owner and with tuber firm ofhhe New York Stock Exchange.
Owner guaranteed by a bank, trust company or
The Trustee may refuse to accept delivery of any Bond for which a proper instrument of transfer
has not been provided.
5. Mandatory Tender.
On any Rate Conversion Date, the Bonds are subject to mandatory tender for
purchase at a purchase price equal to the principal amount thereof plus accrued interest, if any.
At least thirty (30) days prior to a Rate Conversion Date,
the Trustee shall give notice of the
tender date to the Registered Owners. The Bonds are subject to mandatory tender on the date
specified in the Credit Facility as the expiration date of said Credit Facility (the "Expiration
Date") if the City has not delivered to the Trustee by the thirty-fifth day prior to the Expiration
Date a written copy of an extension of the Expiration Date of the Credit Facility. The Bonds are
subject to mandatory tender on the effective date of the substitution of an Alternate Credit
Facility (the "Substitution Date"). Such mandatory tenders shall be at a purchase price equal to
the principal amount thereof plus accrued interest, if any. Not less than thirty (30) days prior
said Expiration Date or Substitution Date, as thWn case may
which shallbstateethe tender give a notice of payment
mandatory tender to each Registered Owner
instructions with respect to the purchase price.
Upon the written direction of the Credit Entity stating that the Bonds shall be
subject to mandatory tender because there has been an Event of Default under the Credit Facility
Agreement, the Bonds shall be subject to mandatory tender on the tender date described in the
next sentence at a purchase price equal to 100% of the nontice to,ajlRegistered
interest to such tender date. The Trustee shall immediately send
Owners that the Bonds will be subject to mandatory tender on a Business Day not more than two
(2)Business Days after the date the Trustee delivers said notice.
The failure to receive notice of a mandatory tender or any defect in that notice as
to any Bond shall not affect the validity of the proceeding for the mandatory tender for that Bond
or any other Bond.
6. Transfer and Exchange of Bonds. The Bonds may be exchanged at the
option of their Owners, for other Bonds of any Authorized Denomination or Denominations in
an aggregate principal amount equal to the unmatured and unredeemed principal amount of, and
bearing interest at the same rate or rates and maturing on the same date or dates as, the Bonds
being exchanged. The exchange shall be made upon presentation and surrender of the Bonds
being exchanged at the principal corporate trust office of the Trustee together with an assignment
B-12
011.552614.7
duly executed by the Registered Owner or its duly authorized attorney in any form which shall
be satisfactory to the Trustee. The Trustee shall not be required to issue, register or exchange
any Bond during the period beginning with the Record Date and ending on the next Interest
Payment Date, nor during the period beginning fifteen (15) days before the mailing of notice of
redemption of Bonds and ending on the redemption date, except Bonds for which a notice of
optional tender has been received by the Trustee when the Bonds bear interest at the Weekly
Rate or Monthly Rate. All Bonds issued upon any transfer or exchange of Bonds shall be the
valid, limited obligations of the City evidencing the same debt, and entitled to the same benefits
under the Indenture, as Bonds surrendered upon transfer or exchange.
7. Amendments to Indenture. Without obtaining the consent of the owners
of the Bonds, the City and the Trustee may consent to any amendment, change or modification of
the Indenture, as may be required, among other reasons, to cure any ambiguity, inconsistency or
formal defect or omission in the Indenture, to permit the Bonds to obtain or maintain a rating by
a Rating Agency based on a Credit Facility or Alternate Credit Facility, or to permit any other
change therein which is not to the prejudice of the owners of the Bonds. Other amendments to
the Indenture may be made by obtaining the consent of the Holders of not less than a majority in
aggregate principal amount of the Bonds at the time outstanding, provided that certain
amendments require the consent of all registered owners of the Bonds. Reference is made to
Article X of the Indenture for the provisions permitting amendments of the Indenture.
8. Event of Default and Enforcement of Remedies. In certain events, on the
conditions, in the manner and with the effect set forth in the Indenture, the principal of all the
Bonds issued under the Indenture and then outstanding may become or may be declared due and
payable before the stated maturity thereof, together with interest accrued thereon. The
Registered Owner of this Bond shall have no right to enforce the provisions of the Indenture or
to institute action to enforce the covenants therein, or to take any action with respect to any
Event of Default under the Indenture, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as provided in the Indenture.
9. Limited Obligation. This Bond and the obligation to pay interest thereon
and redemption premiums with respect thereto are special, limited obligations of the City,
secured as aforesaid and payable solely out of the Special Tax B, the amounts on deposit in
certain funds and accounts created under the Indenture, the Credit Facility and as otherwise
provided in the Indenture. This Bond and the obligation to pay interest hereon and redemption
premium with respect hereto shall not be a general obligation 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 this Bond.
No recourse shall be had for the payment of the principal or redemption premium,
if any, and interest on any of the Bonds or for any claim based thereon or upon any obligation,
covenant or agreement contained in the Indenture against any past, present or future member,
officer, agent or employee of the City, or any incorporator, member, officer, employee, director
or trustee of any successor corporation as such, either directly or through the City or any
successor corporation, under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability of any such
incorporator, member, officer, employee, director, agent or trustee as such is expressly waived
B-13
011.552614.7
and released as a condition of and consideration for the execution of the Indenture and the
issuance of the Bonds.
10. Governing Law. This Bond is issued with the intent that the laws of the
State of Illinois will govern for all purposes.
IN WITNESS OF THE ABOVE, the United City of Yorkville, Kendall County,
Illinois has caused this Bond to be executed in its name by the manual or facsimile signature of
its Mayor and attested by the manual or facsimile signature of its Clerk and its corporate seal to
be affixed hereon, all as of the date set forth above.
UNITED CITY OF YORKVILLE,
ILLINOIS
By:
Mayor
(SEAL)
Attest:
City Clerk
B-14
011.552614.7
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described
in the within-mentioned Indenture.
LASALLE BANK NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Signatory
B-15
011.552614.7
[FORM OF ASSIGNMENT]
The following abbreviations, when used in the inscription on the face of this
Bond, shall be construed as though they were written out in full according to applicable laws or
regulations:
UNIF GIFT MIN ACT Custodian
(Cust) (Minor)
Under Uniform Gifts to
Minors Act
(State)
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- of joint tenants with right
survivorship and not as
tenants in common.
Additional abbreviations may also be used though not in the above list.
For VALUE RECEIVED, the undersigned sells, assigns and transfers unto
- (Name and Address of Assignee)
the Special Service Area Number 2004-106 Total Grande Reserve Variable Rate Demand
Special Tax Bond Series 2004 (MPI Grande Reserve Project) (the "Bond") of the United City of
Yorkville, Kendall County, Illinois numbered , and does hereby irrevocably constitute
and appoint to transfer the Bond on the books kept for registration
thereof with full power of substitution in the premises.
Dated:
NOTICE: The signature of this Assignment
must correspond with the name as it appears
upon the face of the Bond in every
particular, without alteration or enlargement
of any change whatever.
NOTICE: Signature(s) must be
guaranteed by a member firm
of the New York Stock Exchange
or a commercial bank trust company
Taxpayer I.D. No.
011.552614.7
EXHIBIT C
This Document was (The Above Space For Recorder's Use Only)
prepared by and after
Recorded return to:
[Insert name and address of Trustee]
SATISFACTION OF LIEN
The undersigned duly elected and acting Mayor of the United City of Yorkville,
Kendall County, Illinois (the "City"), 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 Special Tax Roll approved by the Mayor and Board of Trustees
of the City pursuant to Ordinance No. (the "Establishing Ordinance") are paid and
the lien of such taxes satisfied with respect to the following lots in the City's Special Service
Area Number 2004-106 Total Grande Reserve legally described on Exhibit A attached hereto:
Lot PIN
The undersigned further certifies that pursuant to Section — of the Special Tax
Report attached to and incorporated in the Establishing Ordinance as Exhibit (the "Special
Tax Report"), upon payment of the appropriate prepayment amount as calculated pursuant to
the Special Tax Report, the Special Tax shall not be levied on the Parcel for which the
prepayment was made. Pursuant to Section ffect the Max mum Par el SpecialeTaxy shall amend
the Special Tax Roll each calendar year
Dated:
United City of Yorkville
Approved by:
Consultant
C-1
011.552614.7
The Trustee hereby acknowledges receipt of the sum of$
LA SALLE BANK NATIONAL ASSOCIATION
By:
C-2
011.552614.7
STATE OF ILLINOIS )
) SS.
COUNTY OF KENDALL )
I, a Notary Public in and for such County and State
aforesaid, do hereby certify that
, personally known to me
to be the of the United City of Yorkville, Illinois, whose name is
subscribed to the 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
Notary Public
Commission expires
C-3
011.552614.7
EXHIBIT D
DISBURSEMENT REQUEST
TO: LaSalle Bank National Association, Trustee
135 South LaSalle Street
Chicago, Illinois 60674
RE: $
United City of Yorkville
Kendall County, Illinois
Special Service Area Number 2004-106 Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project)
Amount Requested:
Total Disbursements to Date:
1. Each obligation for which a disbursement is hereby requested is described
in reasonable detail in Schedule I hereto together with the name and address of the person, firm,
or corporation to whom payment is due, which may include the Developer for reimbursement of
amounts expended, and any other payment instructions.
2. The bills, invoices, or statements of account for each obligation referenced
in Schedule I are attached hereto as Schedule II.
3. An endorsement to the Title Policy in the amount requested is attached as
Schedule III.
4. The Issuer hereby certifies that:
(a) This written requisition is for payment of costs in connection with
the issuance of the above-referenced Bonds and the specific purpose for which
this request is made is described in Schedule I.
(b) The disbursement is for payment of a Special Service.
(c) Such Special Service has been completed in accordance with the
terms of the Developer's Agreement.
(d) Payment instructions sufficient to make the requested payment are
set forth in Schedule I.
(e) No portion of the amount being requested to be disbursed was set
forth in any previous request for disbursement.
D-1
011.552614.7
5. All capitalized terms herein shall have the meanings assigned to them in
the Trust Indenture for the above-referenced Bonds by and between the United City of Yorkville,
Kendall County, Illinois and LaSalle Bank National Association, as Trustee.
By:
Authorized Officer
D-2
011.552614.7
Exhibit C
011.560726.2
BOND PURCHASE AGREEMENT
,2004
United City of Yorkville
Kendall County,Illinois
Special Service Area Number 2004-106
Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project)
United City of Yorkville MPI-2 Yorkville North LLC
800 Game Farm Road MPI-2 Yorkville Central LLC
Yorkville, Illinois 60560 MPI-2 Yorkville South I LLC
c/o Moser Enterprises, Inc.
300 East 5th Avenue, Suite 430
Naperville, Illinois 60563
Ladies and Gentlemen:
The undersigned, LaSalle Capital Markets, A Division of ABN AMRO Financial
Services, Inc. and William Blair & Company, L.L.C. (the "Original Purchasers"), offer to enter
into the following agreement (this "Contract") with the United City of Yorkville, Illinois (the
"City"), which upon acceptance by the City of this offer, and approval of this Contract by the
Developer (as hereinafter defined) will be binding upon the City, the Developer and upon the
Original Purchasers. Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Series 2004 Indenture (as hereinafter defined) and the Series 2004
Offering Statement (as hereinafter defined).
This offer is made subject to your mutual acceptance on or before 11:00 P.M., Chicago
time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Original
Purchasers upon notice delivered to the City and the Developer at the addresses set forth above at
any time prior to the acceptance hereof by the City and the Developer. This offer is also subject
to the following provisions:
1. Definitions
For purposes of this Contract, the following terms have the meanings specified in
this section, unless another meaning is plainly intended:
(A) "Act" means the Special Service Area Tax Law of the State of Illinois, 35
ILCS 200/27-5 et seq., as amended.
(B) "Ancillary Agreements" means the Series 2004 Bond Ordinance, the
Series 2004 Tax Compliance Certificate and Agreement, the Series 2004 Offering Statement, the
Developer's Agreement, the Reimbursement Agreement, the Remarketing Agreement, the
Annexation Agreement, the Series 2004 Indenture, and all other agreements and certificates
executed and delivered in connection with the issuance and sale of the Series 2004 Bonds.
(C) "Annexation Agreement" means the Annexation Agreement and Planned
Unit Development Agreement dated August 7, 2003 among the City, the Developer and MPI-2
Yorkville South II LLC.
(D) "Area" means the United City of Yorkville Special Service Area Number
2004-106 Total Grande Reserve created pursuant to the Establishing Ordinance.
(E) "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.
(F) "Closing" means the Closing as defined in Section 2(B) herein held on the
Closing Date.
(G) "Closing Date" means 2004, or such earlier or later date as
the City, the Developer and the Original Purchasers shall mutually agree upon and refers to the
date on which the transaction by which the City causes the Trustee to deliver the Series 2004
Bonds to the Original Purchasers and the Series 2004 Bonds are paid for by the Original
Purchasers pursuant to this Contract.
(H) "Code" means the Internal Revenue Code of 1986, as amended.
(1) "Contract" means this Bond Purchase Agreement.
(J) "Developer" means collectively MPI-2 Yorkville North LLC, MPI-2
Yorkville Central LLC, and MPI-2 Yorkville South I LLC, each an Illinois limited liability
company, and their respective successors and assigns.
(K) "Developer Information" means the information in the Series 2004
Offering Statement under the captions "INTRODUCTION" (except for the subsections entitled
"The Issuer" and "Book-Entry Only System"); "THE BONDS" (but only with respect to the
subsections entitled "General" and "Prepayment of Special Tax"); "PLAN OF FINANCE";
"SECURITY FOR THE SERIES 2004 BONDS"; "SUMMARY OF THE PUBLIC
��
IMPROVEMENT AGREEMENT"; SUMMARY OF THE ANNEXATION AGREEMENT";
"THE DEVELOPER"; BONDHOLDERS' RISKS"; and "NO LITIGATION—The Developer."
(L) "Developer's Agreement" means the Public Improvement Agreement and
all schedules and exhibits thereto made as of_ 2004 by and between the City
and the Developer.
2
(M) "Establishing Ordinance" means Ordinance No. , adopted by the
corporate authorities of the City on_9
2004 establishing the United City of Yorkville,
Illinois Special Service Area Number 2004-106 Total Grande Reserve.
(N) "Governmental Body" means any Federal, state, municipal, or other
governmental department, commission, board, bureau, agency or instrumentality, domestic or
foreign.
(0) Market Absorption Study" means the study entitled "The Market
Potential for Residential Development in the United City of Yorkville, Illinois" dated
2004 prepared by
(P) "Plans" means the plans and specifications pursuant to which the Project
will be constructed.
(Q) "Pledged Funds" means the Special Tax and the moneys and funds
pledged to the payment of the Series 2004 Bonds pursuant to the Series 2004 Indenture.
(R) "Proposing Ordinance" means Ordinance No. adopted by the
corporate authorities of the City on �
2004 proposing to establish the Area.
(S) "Project" means the development of detached single family homes,
attached single family homes, townhomes and duplex units proposed by the
Developer for the Area.
(T) "Reimbursement Agreement" means
Reimbursement Agreement
and LaSalle Bank National
as of July 1, 2004 by and between the City, the
Association, as amended from time to time.
as of
(U) "Remarketing Agreementnmeans
Remthe
arketing greement
successor to
July 1, 2004 among the City, the Developer and the
such agreement.
(V) "Remarketing Agent" Capital the the Remarketing
g
AMRO Financial Services, Inc., and any successor to
Agreement.
(W) "Series 2004 Bond Ordinance"2004 ela Ordinance
ting to the Series 2004 Bondsadopted by
the corporate authorities of the City on
(X) "Series 2004 Bonds" means the interest-bearing, tax exempt obligations
issued by the City pursuant to the Series 2004 Bond Ordinance and called the United City of
Yorkville, Illinois Special Service Area Number 2004-106 Total Grande Reserve Variable Rate
Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project).
(Y) "Series 2004 Indenture" thereof and supplements thereto.ity and
the Trustee dated as of July 1, 2004 and any am endment
3
(Z) "Series 2004 Offering Statement" means the Official Statement of the City
,
(including each Appendix thereto) relating to the Series 2004 Bonds dated 2004.
(AA) "Series 2004 Tax Compliance Certificate and Agreement" means the Tax
Compliance Certificate and Agreement dated the Closing Date, executed by the City and the
Trustee in connection with the Series 2004 Bonds.
(BB) "Special Services" means the construction of certain public improvements
to be constructed by the Developer and dedicated to the City 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,
bicycle paths, traffic controls, sidewalks, equestrian paths and related street improvements, and
equipment and materials necessary for the maintenance thereof, public parks, park
improvements, landscaping, wetland mitigation and tree installation, costs for land and easement
acquisitions relating to any of the foregoing required tap-on fees and related fees for water or
sanitary sewer services and other eligible costs to serve the Area, as further described in the
Series 2004 Offering Statement.
(CC) "Trustee" means LaSalle Bank National Association, Chicago, Illinois, as
Trustee under the Series 2004 Bond Ordinance.
2. Purchase and Sale of the Bonds.
(A) Sale of Bonds. Upon the terms and conditions and upon the basis of the
representations, warranties and agreements herein, the Original Purchasers hereby agree to
al
purchase from the City for a limited offering, and the City hereby agrees to aggregate the O iginal
Purchasers for such purpose, all, but not less than all, of the $__ The Original
amount of Series 2004 Bonds, at a purchase price equal to $_. 2004 Bonds
Purchasers shall be paid a fee on the Closing Date of $__
shall be issued pursuant to the Series 2004 Bond Ordinance and the Series 2004 Indenture. The
Series 2004 Bonds shall be dated, shall mature on such dates and in such amounts, shall bear
interest at such rates, shall be offered at the initial offering 2 04 prices
Offering Statement and the Series
other terms and conditions, all as described in the Series
2004 Indenture.
(B) Closing. The purchase and sale of the Series 2004 Bonds shall take place
on the Closing Date at the offices of Foley & Lardner LLP, Chicago, Illinois. At the Closing, as
defined below, the Original Purchasers will accept the delivery of the Series 2004 Bonds duly
e payment
executed by the City, together with other ate documents y thedorder f the Trustee
therefor as provided herein by immediately available funds payable to
for the account of the City.
The payment for the Series 2004 Bonds and delivery of the Series 2004 Bonds, as
herein described, is herein called the "Closing."
4
3. City's Pre-Closing Deliveries.
(A) Prior to the Closing Date, the City shall have delivered or caused to be
delivered to the Original Purchasers an executed copy of the Series 2004 Offering Statement,
executed on behalf of the City by its Mayor.
(B) Prior to the Closing Date, the City shall have delivered or caused to be
delivered to the Original Purchasers a certified copy of the Establishing Ordinance, the Series
2004 Bond Ordinance, and such other ordinances of the City which shall include the
authorization of the execution, delivery and performance of this Contract, the Series 2004 Bonds
and the other Ancillary Agreements to which the City is a party, among other things, together
with such reasonable number of copies of each of the foregoing as the Original Purchasers 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 Ser Ancillary 2004 Bond the
Ordnnanrceatand all other contained in the Series 2004 Offering Statement an
instruments, documents and agreements delivered pursuant to Section 8 of this Contract or in
connection with the transactions contemplated hereby, for use in connection with the offering
and sale of the Series 2004 Bonds. The City hereby ratifies, approves, and consents to the use
and distribution by the Original Purchasers, prior to or after the date hereof, of the Series 2004
Offering Statement in connection with the offering of the Series 2004 Bonds. The City hereby
agrees to furnish such information, execute such instruments and take such other action at the
expense of and in cooperation with the Original Purchasers as the Original Purchasers may deem
reasonably necessary in order to qualify the Series 2004 Bonds for offering and sale under the
Blue Sky or other securities laws and regulations of such states and other jurisdictions of the
United States as the Original Purchasers may designate; provided, however, that the City shall
not be required to execute a special or general consent to service of process or qualify as a
foreign corporation in connection with any such qualification in any jurisdiction.
4. Representations and Warranties of the City.
The City represents and warrants to and agrees with the Original Purchasers that:
(A) City. 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 Series 2004 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 Series 2004 Bond Ordinance, the Series
2004 Offering Statement, and the Ancillary Agreements to which the City is or is to be a party.
The adoption of each of the Series 2004 Bond Ordinance and the Establishing Ordinance and the
execution, delivery and performance by the City of this Contract, the Ancillary Agreements to
which the City is or is to be a party and the issuance of the Series 2004 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
5
provision of law, ordinance or regulation applicable to the City, or any provision of the
municipal code or other rules and procedures of the City, or any judgment, order, decree,
agreement or instrument binding on it or, except as described in the Series 2004 Offering
Statement, result in the creation of any lien or other encumbrance on any asset of the City. This
Contract and the Series 2004 Bond Ordinance each constitutes, and the Ancillary Agreements to
which the City is or is to be a party, when executed and delivered by the City and any other
parties thereto, will constitute valid and binding agreements of the City enforceable against the
City in accordance with their respective terms, except to the extent limited by bankruptcy,
reorganization, or other similar laws affecting creditors' rights generally and by the availability of
equitable remedies, and the Series 2004 Bonds, when issued and delivered by the City in
accordance with this Contract and the Series 2004 Bond Ordinance will have been duly
authorized and issued and will constitute valid and binding obligations of the City enforceable
against the City in accordance with their terms, except to the extent limited by bankruptcy,
reorganization, or other similar laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies. When delivered to and paid for by the Original
Purchasers at the Closing in accordance with the provisions of this Contract, the Series 2004
Bonds will conform in all material respects to the description thereof contained in the Series
2004 Offering Statement.
(B) Use of Proceeds. The City will not take or omit to take any action which
will in any way cause or result in the proceeds from the sale of the Series 2004 Bonds being
applied other than as provided in the Series 2004 Bond Ordinance and as described in the Series
2004 Offering Statement. Such proceeds will not be used by the City in a manner that would
cause the Series 2004 Bonds to be arbitrage bonds" within the meaning of the Code, or any
successor thereto, and the applicable regulations promulgated or proposed thereunder.
(C) Governmental Authorization. All authorizations, consents and approvals
of any Governmental Body required in connection with the execution and delivery by the City
of, or in connection with the performance by the City of its obligations under, the Series 2004
Bonds, the Series 2004 Bond Ordinance, the Establishing Ordinance, this Contract, or the
Ancillary Agreements to which the City is or is to be a party, have been obtained and are in full
force and effect, or will be obtained prior to Closing and will be in full force and effect as of the
Closing Date. To the best knowledge of the City, all authorizations, consents and approvals of
any Governmental Body required in connection ll with the construction or operation
effect as of the Closing Date.
the Project
by the City have been obtained and are n
(D) Series 2004 Offering Statement. The descriptions and information
contained in the Series 2004 Offering Statement under the captions "INTRODUCTION," other
than information under the subcaption Book-Entry Only System"; "THE BONDS" — other than
information under the subcaptions "Prepayment of Special Tax" and "Book-Entry Only System";
"PLAN OF FINANCE"; SECURITY FOR THE SERIES 2004 BONDS" other than information
under the subcaption The Credit Facility"; "SUMMARY OF THE PUBLIC IMPROVEMENT M ER'
AGREEMENT"; SUMMARY OF THE ANNEXATION AGREEMENT";
"BONDHOLDERS' RISKS"; "NO LITIGATION -- The Issuer"; and "AUTHORIZATION"
(collectively, the "City Information") are, and the
informatio the
n in the Se es12004 OOffering correct in all material respects and such descriptions and
Statement, as of its date and as of the Closing Date will not contain an untrue, incorrect or
6
misleading statement of a material fact; and such descriptions and information in the Series 2004
Offering Statement do not, as of its date and as of the Closing Date will not omit to state a
material fact necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(E) No Liens or Encumbrances. Other than as specifically set forth in the
Series 2004 Offering Statement, there are no existing liens, claims, charges or encumbrances on
or rights to any funds, revenues or interests pledged pursuant to the Series 2004 Bond Ordinance
which are senior to, or on a parity with, the claims of the holders of the Series 2004 Bonds.
Other than as specifically disclosed in the Series 2004 Offering Statement, 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
Series 2004 Bond Ordinance which would be prior to, or on a parity with, the claims of the
holders of the Series 2004 Bonds. The City is lawfully entitled to receive, pledge and assign all
amounts or revenues which have been pledged or assigned as security for the payment of the
principal of and interest on the Series 2004 Bonds.
(F) No Litigation. Except as described in the Series 2004 Offering Statement,
as of the date of this Contract and as of the Closing Date (i) there is no action, suit, proceeding or
investigation, at law or in equity, before or by any court or any governmental agency or public
board or body, pending against the City or, to the knowledge of the City, threatened against the
City, to restrain or enjoin, or threatening or seeking to restrain or enjoin, the issuance, sale or
delivery of the Series 2004 Bonds or the delivery by the City of any of the Ancillary Agreements
to which the City is a party, or the collection of Pledged Funds, or in any way contesting or
affecting the validity of the Series 2004 Bonds, or any of the Ancillary Agreements to which the
City is a party, or in any way questioning or affecting (a) the proceedings under which the Series
2004 Bonds are to be issued, (b) the validity or enforceability of any provision of the Series 2004
Bonds, the Series 2004 Bond Ordinance, the Establishing Ordinance or this Contract, (c) the
authority of the City to collect the Pledged Funds, or to perform its obligations hereunder or with
respect to the Series 2004 Bonds, or to consummate any of the transactions set forth in the
Ancillary Agreements to which it is or is to be a party as contemplated hereby or by the Series
2004 Bond Ordinance, or the Series 2004 Offering Statement, (d) the legal existence of the City,
or the title of its City Council 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 or the proposed construction or operation of the Project by the Developer pursuant to the
Developer's Agreement.
(G) Certificates. Any certificate signed by an authorized officer of the City
and delivered to the Original Purchasers and/or the Trustee shall be deemed a representation and
covenant by the City to the Original Purchasers and/or the Trustee as to the statements made
therein.
7
(H) Annexation Agreement and the Ordinances. Each of Annexation
Agreement, the Series 2004 Bond Ordinance, the Establishing Ordinance and Proposing
Ordinance is in full force and effect, and has not been amended, modified, revoked or repealed.
5. Representations and Warranties of the Developer.
The Developer represents and warrants to and agrees with the Original Purchasers
and the City that:
(A) Organization and Power. The Developer is a duly organized and validly
existing limited liability company under the laws of the State of Illinois, and has all powers and
authority and all governmental licenses, authorizations, consents and approvals required to carry
on its businesses as now conducted and to enter into and perform its obligations under this
Contract, and all Ancillary Agreements to which it is or is to be a party.
(B) Authorization of Agreements, etc. This Contract and the Ancillary
Agreements to which the Developer is or is to be a party have each been duly authorized,
executed and delivered by the Developer and constitute the legal, valid and binding agreement of
the Developer enforceable against the Developer in accordance with their respective terms;
provided that the enforceability of such Agreements may be limited by bankruptcy,
reorganization, insolvency and similar laws affecting the enforcement of creditor's rights and
remedies generally, as applied in the event of bankruptcy, reorganization or insolvency of the
Developer and to equitable remedies. The Developer has duly authorized all necessary action to
be taken by it for(i) approval of the Developer Information and (ii) the execution and delivery of
this Contract and the Ancillary Agreements to which the Developer is or is to be a party, and any
and all other agreements and documents as may be required to be executed or delivered by the
Developer in order to effectuate the transactions contemplated herein and therein.
(C) Developer's Agreement. Except for certain normal permitting issues
(including an IDOT permit for Route 34 and an outfall sewer permit from Fox Mertro) the final
platting and engineering approvals to be completed as part of the Project, any and all of the
conditions precedent to the obligations of the Developer arising under the Developer's
Agreement have been satisfied.
(D) Noncontravention. The execution, delivery and performance by the
Developer of its obligations under this Contract and the Ancillary Agreements to which
Developer is a party do not and will not contravene, or constitute a default under, any provision
of applicable law or regulation or organizational documents of the Developer or of any
agreement, judgment, injunction, order, decree or other instrument binding upon the Developer
and will not result in the creation of any lien or other encumbrance upon any asset of the
Developer except as set forth in the Series 2004 Offering Statement.
(E) No Material Change. Other than as disclosed in the Series 2004 Offering
Statement, (i) the Developer has not incurred any material liabilities or entered into any material
transactions other than in the ordinary course of business and (ii) there has been no material
adverse change in the business, financial position, prospects or results of operations of the
Developer which would affect the Developer's ability to perform its obligations pursuant to this
8
Contract or the Ancillary Agreements, to the extent to which the Developer is or is to be a party
to such agreement.
(F) Governmental or Corporate Consents. No consent or approval is required
to be obtained from, and no action need be taken by, or document filed with, any Governmental
Body or corporate entity in connection with the execution or delivery by the Developer of this
Contract or any Ancillary Agreement to which the Developer is or is to be a party, or, if any such
action is required, the same has been duly taken, is in full force and effect and constitutes valid
and sufficient consent or approval therefor, except for those which are customarily obtained
during construction of the Project. The Developer has no reason to believe any such consent or
approval will not be obtained in due course.
(G) No Litigation. Except as described in the Series 2004 Offering Statement,
there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or
any governmental agency or public board or body, pending against the Developer in which the
Developer is a party or, to the knowledge of the Developer, threatened against the Developer (i)
contesting or in any way relating to (a) the construction and development of the Project, (b) the
generation of Pledged Funds or the transactions contemplated by the issuance of the Series 2004
Bonds or as otherwise described in the Series 2004 Offering Statement or (ii) which in any way
contests the existence or power of the Developer or the validity or enforceability of the Series
2004 Bonds, the Ancillary Agreements, this Contract or the Series 2004 Offering Statement or
which if adversely determined could have a material adverse effect on the Developer.
(H) Series 2004 Offering Statement. The Developer Information contained in
the Series 2004 Offering Statement (i) is true and correct in all material respects as of the date
hereof and (ii) as of the date hereof does not contain any untrue statements of a material fact or
omit to state a material fact necessary to be stated therein in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(I) Use of Proceeds. The Developer will not take or omit to take any action
which will in any way cause or result in the proceeds of the sale of the Series 2004 Bonds being
applied in a manner other than as provided in the Series 2004 Bond Ordinance and as described
in the Series 2004 Offering Statement. Such proceeds will not be used by the Developer in a
manner that would cause the Series 2004 Bonds to be "arbitrage bonds" within the meaning of
the Code, or any successor thereto, and the applicable regulations promulgated or proposed
thereunder.
(J) No Default. No default or event of default has occurred and is continuing,
and no event has occurred and is continuing which with the lapse of time or the giving of notice,
or both, would constitute a default or an event of default on the part of the Developer under this
Contract, the Ancillary Agreements to which the Developer is a party, or any other material
agreement or material instrument to which the Developer is a party or by which the Developer is
or may be bound.
(K) Approvals. Except for certain normal permitting issues (including an
IDOT permit for Route 34 and an outfall sewer permit from Fox Mertro), the Developer has
received and is in good standing with respect to all certificates, licenses, inspections, franchises,
9
consents, immunities, permits, authorizations and approvals, governmental or otherwise,
necessary to conduct and to continue to conduct its business as heretofore conducted by it and to
own or lease and operate its properties as now owned or leased by it. Except for certain normal
permitting issues (including an IDOT permit for Route 34 and an outfall sewer permit from Fox
Mertro), the Developer has obtained all certificates, licenses, inspections, franchises, consents,
immunities, permits, authorizations and approvals, governmental or otherwise, necessary to
construct the Project, except for: final platting and engineering to be completed as part of the
Project; and those approvals the nature of which cannot be given until construction of the Special
Services themselves are sufficiently under way.
(L) Certificates. Any certificate signed by an authorized representative of the
Developer and delivered to the City or the Original Purchasers shall be deemed a representation
and warranty by the Developer to the City and the Original Purchasers as to the statements made
by Developer therein.
(M) Environmental Representation. To the best of the Developer's knowledge,
without independent investigation except as disclosed by the Phase I Environmental Site
Assessment prepared by Testing Services Corporation dated the _day of
2004, no toxic or hazardous substances, including without limitation, asbestos and the group of
organic compounds known as polychlorinated biphenyls, have been generated, treated, stored or
disposed of, or otherwise deposited in or located on the site which includes the Area and no
activity has been undertaken at the site which includes the Area, other than those activities which
are customary and usual for the development of the Project, which activities are in material
conformity with all state and Federal laws, which could:
(i) cause the Project or any part thereof to become a hazardous waste
treatment, storage or disposal facility within the meaning of, or
otherwise bring such property within the ambit of, the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et. se g.
(the "RCRA"), or any other similar state law or local ordinance;
(ii) cause a release or threatened release of hazardous materials, wastes
or substances from the site or any part thereof within the meaning
of, or otherwise bring such property or any part thereof within the
ambit of, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C., Sections
9601-9657 (the "CERCLA"), or any similar state law or ordinance
or any other environmental law;
(iii) cause the discharge of pollutants or effluents into any water source
or system, or the discharge into the air of any emissions, which
would require a permit under the Federal Water Pollution Control
Act, 33 U.S.C., Section 1251 et seq., or the Clean Air Act, 41
U.S.C., Section 7401 et se q., or any similar state law or local
ordinance; or
10
(iv) support a claim or cause of action under RCRA, CERCLA or any
other Federal, state or local environmental statutes, regulations,
ordinances or other environmental regulatory requirements.
(N) No Challenges. The Developer agrees that it will not bring any suit,
action or proceeding which challenges the establishment of the Area, the levy, extension and
collection of the Special Tax, the validity of the Series 2004 Bonds or the proceedings relating to
the Series 2004 Bonds.
(0) Annexation Agreement. Developer is not in default of any of its
obligations under the Annexation Agreement, and has no knowledge of any event or fact which,
with the passage of time, would constitute a default by Developer under the Annexation
Agreement.
6. Representations and Warranties and Agreements of the Original Purchasers.
(A) Limited Offering. The Original Purchasers agree to make a limited
offering of the Series 2004 Bonds to a limited number of institutional investors at a price or
prices (or yield or yields) not in excess of the offering price or prices (or not lower than the yield
or yields) set forth on the cover page of the Series 2004 Offering Statement.
(B) Series 2004 Offering Statement. The descriptions and information
contained in the Series 2004 Offering Statement under the caption "UNDERWRITING" are, and
as of the date of the Closing will be, true and correct in all material respects and such
descriptions and information in the Series 2004 Offering Statement, as of its date and as of the
Closing Date will not contain an untrue, incorrect or misleading statement of a material fact; and
such descriptions and information in the Series 2004 Offering Statement do not, as of its date and
as of the Closing Date will not omit to state a material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not misleading.
7. Termination of the Purchase Contract.
The Original Purchasers shall have the right to cancel their respective obligations
to purchase the Series 2004 Bonds, if, between the date hereof and the date of Closing, (i)
legislation shall be enacted, or actively considered for enactment, by the Congress or
recommended by the President of the United States to the Congress for passage, or favorably
reported for passage to either House of the Congress by any committee of such House to which
such legislation has been referred for consideration, a decision by a court of the United States or
the United States Tax Court shall be rendered, or a ruling, regulation or official statement by or
on behalf of the Treasury Department of the United States, the Internal Revenue Service or other
agency or department of the United States shall be made or proposed to be made which has the
purpose or effect, directly or indirectly, of imposing Federal income taxes upon interest on the
Series 2004 Bonds; (ii) any other action or event shall have transpired which has the purpose or
effect, directly or indirectly, of materially adversely affecting the Federal income tax
consequences of any of the transactions contemplated in connection herewith or contemplated by
the Series 2004 Offering Statement, or, in the reasonable opinion of the Original Purchasers,
such action or event pertaining to the Federal income tax consequences referenced above
11
materially adversely affects the market for the Series 2004 Bonds or the sale, at the contemplated
offering price or prices (or yield or yields), by the Original Purchasers of the Series 2004 Bonds;
(iii) legislation shall be enacted, or actively considered for enactment by the Congress, with an
effective date on or prior to the date of Closing, or a decision by a court of the United States shall
be rendered, or a ruling or regulation by the Securities and Exchange Commission or other
governmental agency having jurisdiction over the subject matter shall be made, the effect of
which is that (A) the Series 2004 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 Series 2004 Bond
Ordinance is not exempt from the registration, qualification or other requirements of the Trust
Indenture Act of 1939, as amended and as then in effect; (iv) a stop order, ruling or regulation by
the Securities and Exchange Commission shall be issued or,made, the effect of which is that the
issuance, offering or sale of the Series 2004 Bonds, as contemplated herein and in the Series
2004 Offering Statement, is in violation of any provision of the Securities Act of 1933, as
amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in
effect, or the Trust Indenture Act of 1939, as amended and as then in effect; (v) there shall occur
any event which in the reasonable judgment of the Original Purchasers either (A) makes untrue,
incorrect or misleading in any material respect any statement or information contained in the
Series 2004 Offering Statement or (B) is not reflected in the Series 2004 Offering Statement 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 Series
2004 Offering Statement to be supplemented to correct or supply such statement or information,
or the effect of the Series 2004 Offering Statement as so corrected or supplemented is such as, in
the reasonable judgment of the Original Purchasers, would materially adversely affect the market
for the Series 2004 Bonds or the sale, at the contemplated offering price or prices (or yield or
yields), by the Original Purchasers of the Series 2004 Bonds; (vi) there shall occur any outbreak
of hostilities or any regional, national or international calamity or crisis or a financial crisis and
the effect is such as, in the reasonable judgment of the Original Purchasers, would materially
adversely affect the market for or the marketability of the Series 2004 Bonds or obligations of
the general character of the Series 2004 Bonds; (vii) a general suspension of trading on the New
York Stock Exchange is in force; (viii) a general banking moratorium is declared by Federal or
state authorities; (ix) there occurs any material adverse change in the affairs, operations or
financial conditions of the City, except as set forth or contemplated in the Series 2004 Offering
Statement or in the affairs, operations or financial condition of the Developer; (x)the Series 2004
Offering Statement is not executed, approved and delivered in accordance with Section 3 above;
(xi) in the reasonable judgment of the Original Purchasers, the market price of the Series 2004
Bonds, or the market price generally of obligations of the general character of the Series 2004
Bonds, might be adversely affected because: (A) additional material restrictions not in force as
of the date hereof shall have been imposed upon trading in securities generally by any
governmental authority or by any national securities exchange, or (B) the New York Stock
Exchange or other national securities exchange, or any governmental authority, shall impose, as
to the Series 2004 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
12
effective operation of government or the financial community shall have occurred, which, in the
reasonable judgment of the Original Purchasers, materially adversely affects the market for the
Series 2004 Bonds or of obligations of the general character of the Series 2004 Bonds; (xiii) any
litigation shall be instituted, pending or threatened to restrain or enjoin the issuance, sale or
delivery of the Series 2004 Bonds or in any way protesting or affecting any authority for or the
validity of the Series 2004 Bonds, the Series 2004 Bond Ordinance, the existence or powers of
the City, or any event described or contemplated by the Series 2004 Offering Statement; (xiv)
there shall have occurred a default with respect to the debt obligations of, or the institution of
proceedings under any Federal bankruptcy laws by or against, any state of the United States or
any city or political subdivision of any state, the effect of which, in the reasonable judgment of
the Original Purchasers, would materially adversely affect the ability of the Original Purchasers
to market the Bonds.
8. Conditions of Closing.
The Original Purchasers' obligation to purchase the Series 2004 Bonds under this
Contract is subject to the performance by the City and the Developer of their respective
obligations hereunder at and prior to the Closing Date, to the accuracy in the reasonable
commercial discretion of the Original Purchasers, of the representations and warranties of the
City and the Developer contained herein as of the Closing Date, and, in the reasonable discretion
of the Original Purchasers, to the following conditions, including the delivery of such documents
as are enumerated herein in form and substance satisfactory to the Original Purchasers 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 Series 2004 Bond Ordinance, the Establishing Ordinance and the
Proposing Ordinance shall be in full force and effect, and shall not have been amended, modified
or supplemented since the date hereof, except as may have been agreed to in writing, by the
Original Purchasers, 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 Series 2004 Bonds or the Series 2004 Bond Ordinance to be performed at, simultaneously
with or prior to the Closing.
(B) Opinions of Bond Counsel. The Original Purchasers shall have received
an unqualified approving legal opinion dated the Closing Date as to the Series 2004 Bonds,
addressed to each of the Original Purchasers, Developer and the Trustee, from Foley & Lardner,
LLP, Bond Counsel, satisfactory to the Original Purchasers in its reasonable discretion.
(C) Opinion of Original Purchasers' Counsel. The Original Purchasers shall
have received a favorable opinion dated the Closing Date, addressed to each of the Original
Purchasers, from Ungaretti & Harris LLP, satisfactory to the Original Purchasers in its
reasonable discretion.
(D) Opinion of Counsel to the City. The Original Purchasers shall have
received a favorable opinion dated the Closing Date, addressed to each of the Original
13
Purchasers, Developer, Bond Counsel and the Trustee, from Daniel J. Kramer, Esq., counsel to
the City, satisfactory to the Original Purchasers in its reasonable discretion.
(E) Opinion of Counsel to the Developer. The Original Purchasers shall have
received favorable opinions dated the Closing Date, addressed to each of the Original
Purchasers, the City and Bond Counsel, from Moss and Bloomberg, Ltd. and KB Legal, counsel
to the Developer, satisfactory to the Original Purchasers in its reasonable discretion.
(F) Performance: No Default. Each of the City and the Developer shall have
performed and complied with all agreements and conditions herein required to be performed or
complied with by each of them prior to or on the Closing Date, and at the time of the Closing no
event of default or default shall have occurred and be continuing with respect to the Ancillary
Agreements or the Series 2004 Bonds.
(G) Ancillary Agreements. At the Closing Date, (i) all of the Ancillary
Agreements shall be in full force and effect, shall have been duly executed and copies delivered
to the Original Purchasers by, and shall constitute valid and binding agreements of, the parties
thereto, shall not have been amended, modified or supplemented except as may have been agreed
to in writing by the Original Purchasers and there shall be no defaults or events of default
thereunder and (ii) the proceeds of the sale of the Series 2004 Bonds shall be applied or
deposited with the Trustee for application as described in the Series 2004 Bond Ordinance and
the Series 2004 Offering Statement.
(H) Closing Certificate of President of the City. The City shall have delivered
to the Original Purchasers a certificate dated the Closing Date, addressed to each of the Original
Purchasers and the Trustee signed by the President of the City in form and substance reasonably
satisfactory to the Original Purchasers.
(I) Officer's Certificate of the Developer. The Developer shall have delivered
to the Original Purchasers a certificate dated the Closing Date, addressed to each of the Original
Purchasers signed by an authorized officer of the managing member of the Developer in form
and substance reasonably satisfactory to the Original Purchasers.
(J) The Bonds. The Series 2004 Bonds shall have been duly authorized,
executed, authenticated, delivered, and the proceeds from the sale thereof applied, in accordance
with the provisions of the Series 2004 Bond Ordinance.
(K) Trustee's Certificate. The Original Purchasers shall have received a
certificate dated the Closing Date of an authorized officer of the Trustee, addressed to the
Original Purchasers reasonably acceptable in form and substance to the Original Purchasers.
(L) Form 8038-G. The Original Purchasers shall have received a copy of the
completed Form 8038-G of the Internal Revenue Service executed by the City:
(M) Officers' Certificates. The Original Purchasers shall have received any
and all certificates required to be furnished by the provisions of any Ancillary Agreement to be
obtained or furnished by the City and the Developer at or prior to Closing.
14
(N) Specimen Bonds, The Original Purchasers shall have received specimen
Series 2004 Bonds.
(0) Certified Copies of Ordinances. The Original Purchasers shall have
received certified copies of the Series 2004 Bond Ordinance and the Establishing Ordinance.
The Series 2004 Bond Ordinance shall include authorization for execution and delivery of this
Contract.
(P) Title Insurance. The Original Purchasers shall have received copies of(i)
a title insurance policy or policies (or commitments therefore) issued by a title insurance
company with respect to the Area, and which policy, policies or commitments and company shall
be acceptable to the Original Purchasers in their reasonable discretion and (ii) any usual and
customary affidavits, certificates and documents required for the closing of the Series 2004
Bonds.
(Q) Environmental Audit. The Original Purchasers shall have received from
the Developer a copy of the Phase I Environmental Site Assessment prepared by
dated , 200_.
(R) Land Survey. The Original Purchasers shall have received from the
Developer the land survey depicting the Area.
(S) Engineer's Certificate. The Original Purchasers shall have received a
certificate from the Developer's engineer dated the Closing Date in a form and substance
satisfactory to the Original Purchasers stating that the costs reflected in the Series 2004 Offering
Statement will be sufficient to complete the Special Services, as proposed, and such other
matters as Original Purchasers shall reasonably require.
(T) Preliminary Plat of Subdivision. The Preliminary Plat of Subdivision for
the Area shall have been approved by the City.
(U) Letters of Commitment: Insurance Policies. The Developer shall have
delivered to the City any and all of the items currently due as required pursuant to the terms of
the Developer's Agreement, as requested by the City. The Developer shall have delivered
adequate evidence of insurance.
(V) Additional Opinions Certificates, etc. The Original Purchasers shall have
received such additional legal opinions, certificates, proceedings, instruments and other
documents as the Original Purchasers, the City or their respective counsel may reasonably deem
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 Original Purchasers, they are satisfactory in
form and substance.
If there shall be a failure to satisfy the conditions of the Original Purchasers'
obligations contained in this Contract or if the Original Purchasers' obligations to purchase the
15
Series 2004 Bonds shall be terminated for any reason permitted by this Contract, this Contract
shall terminate, and the Original Purchasers, the City and the Developer 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 Series 2004 Offering Statement.
At any time prior to the Closing, the City agrees to supplement or amend the
Series 2004 Offering Statement whenever requested by the Original Purchasers when, in the
reasonable judgment of the Original Purchasers and the City, such supplement or amendment is
required. No amendment or supplement to the Series 2004 Offering Statement shall be made
without the approval of the Original Purchasers. After the Closing and so long as the Original
Purchasers or any participating dealer shall be offering Series 2004 Bonds, but not later than 90
days after the date of this Contract if any event shall occur as a result of which it is necessary to
amend or supplement the Series 2004 Offering Statement in order to make the statements
therein, in light of the circumstances under which they are made, not misleading, the City will so
advise the Original Purchasers. In any such case, the City and the Developer shall cooperate in
the preparation, execution and delivery of either amendments to the Series 2004 Offering
Statement or supplemental information so that the statements in the Series 2004 Offering
Statement, 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 Series 2004 Bond Ordinance as Administrative Costs.
10. Payment of Expenses.
All reasonable fees, costs and expenses associated with the issuance of the Series
2004 Bonds, including without limitation, the reasonable fees and disbursements of the Original
Purchasers' legal counsel, shall be disbursed and paid by the Trustee from the proceeds of the
Series 2004 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.
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.
16
14. Counterparts.
This Contract may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
15. Parties and Interests.
This Contract is made solely for the benefit of the City, the Original Purchasers
and the Developer, including the successors and assigns of the Original Purchasers, and no other
person, partnership, association or corporation shall acquire or have any rights hereunder or by
virtue hereof
16. Indemnification.
(A) The City agrees to indemnify and hold harmless the Original Purchasers,
each director, trustee, member, officer, partner, employee or agent of the Original Purchasers and
each person, if any, who has the power, directly or indirectly, to direct or cause the direction of
the management and policies of the Original Purchasers, pursuant to the Original Purchasers'
regulations or Bylaws, or who controls the Original Purchasers within the meaning of Section 20
of the Exchange Act or Section 15 of the Securities Act, from and against any and all losses,
claims, damages, liabilities or expenses whatsoever caused by any untrue or misleading, or
allegedly untrue or misleading, statement of a material fact contained in that portion of the Series
2004 Offering Statement constituting the City Information, or in any amendment or supplement
thereto with regard to that portion of the Series 2004 Offering Statement, or caused by any
omission or alleged omission to state in that portion of the Series 2004 Offering Statement
constituting the City Information a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; the City shall not be
liable under this paragraph if the person asserting any such loss, claim, damage or liability
purchased Series 2004 Bonds from the Original Purchasers, if delivery to such person of the
Series 2004 Offering Statement, or any amendment or supplement thereto, would have been a
valid defense to the action from which such loss, claim, damage or liability arose and if the
Series 2004 Offering Statement, amendment of or supplement was not delivered to such person
by or on behalf of the Original Purchasers.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought pursuant to the
preceding paragraph, such person (the "indemnified party") shall promptly notify the City in
writing, and the City shall promptly assume the defense thereof, including the employment of
counsel chosen by the City and approved by the Original Purchasers and shall pay the fees and
disbursements of such counsel related to such proceeding. If any of the indemnified parties is
advised by counsel that there may be legal defenses available to such indemnified party which
are adverse to or in conflict with those available to the City or another indemnified party, the
City shall not have the right to assume the defense of such indemnified party, but the City shall
be responsible for the fees and expenses of counsel retained by such indemnified party in
assuming its own defense, and provided also that if the City shall have failed to assume the
defense of such action or to retain counsel satisfactory to the Original Purchasers within a
17
reasonable time after notice of the commencement of such action, the reasonable fees and
expenses of counsel retained by the indemnified parties shall be paid by the City.
Notwithstanding, and in addition to, any of the foregoing, any one or more of the indemnified
parties shall have the right to retain its own counsel, but the reasonable fees and expenses of such
counsel shall be at the expense of such indemnified party unless the City and the indemnified
party shall have mutually agreed to the retention of such counsel. Such firm shall be designated
in writing by the indemnified party. The City shall not be liable for any settlement of any
proceeding effected without its written consent, but, if settled with such written consent of the
City or if there shall be a final judgment for the plaintiff, the City agrees to indemnify the
indemnified party from. and against any loss, damage, cost, expense or liability by reason of
such settlement or judgment.
(B) The Developer agrees to indemnify, defend and hold harmless (a) each of
the Original Purchasers, each director, trustee, member, officer, agent or employee and each
person, if any, who has the power, directly or indirectly, to direct or cause the direction of the
management and policies of either of the Original Purchasers, pursuant to the Original
Purchasers' respective regulations or Bylaws, or who controls either of the Original Purchasers
within the meaning of Section 20 of the Exchange Act or Section 15 of the Securities Act, by
contract or otherwise and (b) the City, each director, trustee, member, officer, agent or employee
(not including Bond Counsel) and each person, if any, who has the power, directly or indirectly,
to direct or cause the direction of the management and policies of the City (collectively called the
"Section 16(b) Indemnified Parties"), from and against any and all losses, claims, damages,
liabilities or expenses to the extent caused by or arising out of any untrue statement or
misleading statement or alleged untrue statement or alleged misleading statement of a material
fact (unless such allegation is (i) made by the Original Purchasers or the City, as the case may be,
and (ii) such allegation is proven or otherwise determined to be false) contained in the Series
2004 Offering Statement in any of the Developer Information, or caused by any omission or
alleged omission to state in the Developer Information a material fact required to be stated in the
Developer Information or necessary to make the statements in the Developer Information, in the
light of the circumstances under which they were made, not misleading.
In case any claim shall be made or any action shall be brought against one or
more of the Section 16(b) Indemnified Parties desiring to seek indemnification pursuant to this
Section 16(b), the Section 16(b) Indemnified Parties seeking indemnity shall promptly notify the
Developer in writing, and the Developer shall promptly assume the defense thereof, including
the employment of counsel chosen by the Developer and approved by the Original Purchasers
and the City which approval shall not be unreasonably withheld, and the payment of all
reasonable expenses and disbursements of such counsel related to such defense. If any of the
Section 16(b) Indemnified Parties is advised by counsel that there may be legal defenses
available to it which are adverse to or in conflict with those available to the Developer or any
other Section 16(b) Indemnified Party, or that the defense of such Section 16(b) Indemnified
Party should be handled by separate counsel, the Developer shall not have the right to assume the
defense of such Section 16(b) Indemnified Party, but shall be responsible for the reasonable fees
and expenses of counsel retained by such Section 16(b) Indemnified Party in assuming its own
defense, and provided also that if the Developer shall have failed to assume the defense of such
action or to retain counsel satisfactory to the Original Purchasers and the City within a
reasonable time after notice of the commencement of such action, the reasonable fees and
18
expenses of counsel retained by the Section 16(b) Indemnified Parties shall be paid by the
Developer. Notwithstanding, and in addition to, any of the foregoing, any one or more of the
Section 16(b) Indemnified Parties shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the reasonable fees and expenses of such
counsel shall be at the expense of such Section 16(b) Indemnified Party or Parties unless the
employment of such counsel has been specifically authorized, in writing, by the Developer, or
unless such retention is specifically authorized herein. Developer shall not be liable for any
settlement of any proceeding effected without its written consent, but, if settled with such written
consent or if there shall be a final judgment for the plaintiff, Developer agrees to indemnify the
Section 16(b) Indemnified Parties from and against any loss, damage, cost, expense or liability
by reason of such settlement or judgment. The Developer shall have the right, but not the
obligation, to appeal to courts with appellate jurisdiction any such judgment taken against the
Section 16(b) Indemnified Parties, and the Section 16(b) Indemnified Parties shall join in such
appeal.
17. Further Financial Reports.
The City agrees to provide the financial reports and information described in the
Series 2004 Indenture which it has covenanted to provide to the Trustee, if any, to the Original
Purchasers and any Bondholder upon written request.
18. Amendment or Assignment.
This Contract may not be amended except through the written consent of all of the
parties hereto and is not assignable.
19. Survival of Representations Warranties Agreements and Obligations.
Each respective representation, warranty and agreement of the City, the
Developer and the Original Purchasers shall remain operative and in full force and effect,
regardless of any investigations made by or on behalf of the Original Purchasers, the Developer,
and the City and shall survive the Closing. This Section 19 and the obligations of the City under
Sections 9, 10 16 and 17 hereof and the obligations of the Original Purchasers under Section 16
hereof, the obligations of the Developer under Section 16 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.
19
Very truly yours,
LASALLE CAPITAL MARKETS, WILLIAM BLAIR & COMPANY, L.L.C.
A Division of ABN AMRO Financial
Services, Inc.
By: By:
Approved and agreed to by the undersigned
as of the date first above written.
UNITED CITY OF YORKVILLE, ILLINOIS
By:
Mayor
Accepted and agreed to by the undersigned
as of the date first above written.
MPI-2 YORKVILLE NORTH LLC, MPI-2 YORKVILLE SOUTH I LLC,
An Illinois Limited Liability Company An Illinois Limited Liability Company
By: MPI Manager, Inc., By: MPI Manager, Inc.,
Its Manager Its Manager
By: By:
Arthur C. Zwemke, President Arthur C. Zwemke, President
MPI-2 YORKVILLE CENTRAL LLC,
An Illinois Limited Liability Company
By: MPI Development Manager, Inc.,
Its Manager
By:
Arthur C. Zwemke, President
UHDOCS 626972A C/M 4781600-005
20
Exhibit D
011.560726.2
PUBLIC IMPROVEMENT AGREEMENT
THIS PUBLIC IMPROVEMENT AGREEMENT (this "Agreement") entered into this
day of , 2004 is between the UNITED CITY OF YORKVILLE,
Illinois, a municipal corporation (hereinafter referred to as the "City"), and MPI-2
YORKVILLE NORTH LLC, MPI-2 YORKVILLE CENTRAL LLC, and MPI-2
YORKVILLE SOUTH I LLC, each an Illinois limited liability company (hereinafter
collectively referred to as the "Developer"). The City and the Developer are sometimes
hereinafter referred to individually as a"Party" and collectively as the "Parties."
RECITALS
A. The Developer owns fee simple title to that certain real estate consisting of
approximately 1037 acres, more or less, all in the City and commonly known as Grande Reserve
and legally described and shown in Exhibits A and A-1 attached hereto (the�"Developer's
Property" or"Property").
B. The Developer desires to develop, and has been approved for the development of,
the Developer's Property with 2,346 dwelling units (single family, single family villas, duplex
and townhome units) in a subdivision to be known as "Grande Reserve" (hereinafter referred to
as the "Development"), subject to the contingency, as contained in the Annexation Agreement,
that if the Developer conveys the land underlying Neighborhood 5, which neighborhood consists
of 164 townhomes, to Yorkville Community School District #115, the Developer desires to
develop 2,182 dwelling units. The Development shall be constructed in accordance with the
Annexation Agreement dated August 7, 2003 and recorded September 11, 2003 in the Kendall
County real property records as Document #200300032963, hereinafter referred to as the "MPI
Agreement," including any amendments thereto that the City and Developer may approve
(collectively referred to as the "Annexation Agreement").
C. Pursuant to the Annexation Agreement, the Developer is obligated to construct or
contribute to the construction of certain improvements on the Developer's Property and dedicate
rights-of-way or easements which, upon completion thereof, would be dedicated, conveyed, or
otherwise become the property of, or subject to the maintenance and control of, the City.
D. The City has authority to enter into this Agreement upon the Special Service Tax
Law, 35 ILCS 200/27 et seq., and the Illinois Constitution, Article VII, Section 7.
E. The Public Improvements (as hereinafter defined) are unique and special services
within the meaning of 35 ILCS 200/27-5 that benefit the Developer's Property (all to be located
in either publicly dedicated rights-of-way, on public lands, or in publicly dedicated easements)
and shall generally consist of and include the costs of engineering, soil testing and appurtenant
work, excavating, paving, 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
and signalization, equestrian paths, sidewalks and related street improvements, and equipment
u 1
and materials necessary for the maintenance thereof, public parks, park improvements, bicycle
paths, 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 and sanitary sewer services, the proposed special service area's proportionate share of
public works facilities and equipment needed for providing services for the benefit of the
proposed special service area, and other eligible costs, including legal fees (collectively, the
"Public Improvements"). The Developer desires that the City issue tax-exempt bonds, the
proceeds of which will be used to finance the Public Improvements; to pay capitalized interest; to
establish a reserve fund; to pay issuance costs; to pay the Special Service Area Number 2004-106
administrative expenses; and to reimburse the City for its expenses, including but not limited to
legal fees relating to the Bonds (as defined below). The Public Improvements are described in
more detail on Exhibit B attached hereto, as well as in the Annexation Agreement, and are
intended to benefit the Development. Without limiting the foregoing, Public Improvements shall
include land which is dedicated or conveyed to the City or easements in favor of the City for
public purposes which are created by plats of subdivision, plats of dedication or otherwise
granted to the City.
F. In order to pay for the Public Improvements, the Mayor and City Council of the
City (the "Corporate Authorities") adopted Ordinance No. 2004-15 on February 24, 2004 (the
"Proposing Ordinance") initiating the process to designate the Developer's Property as "Special
Service Area Number 2004-106 Total Grande Reserve" (the "Special Service Area") pursuant to
Section 6 of Article VII of the 1970 Constitution of the State of Illinois and the Illinois Special
Service Area Tax Law, 35 ILCS 200/27-5 et seq. and to authorize the levy of special service area
taxes (the "Special Tax") upon the taxable real property within the Special Service Area. The
Corporate Authorities have adopted Ordinance No. 2004-32 on June 22, 2004 designating the
Developer's Property as a special service area and authorizing the levy of a Special Tax (the
"Establishing Ordinance").
G. On June 22, 2004, the Corporate Authorities of the City adopted Ordinance No.
2004-33, drafted by the City's Bond Counsel (the "SSA Bond Ordinance"), authorizing (i) the
issuance by the City, under a Trust Indenture dated as of July 1, 2004 (the "Trust Indenture")
between the City and LaSalle Bank National Association (the "Trustee"), of not to exceed
$16,000,000 Special Service Area Number 2004-106 Total Grande Reserve Variable Rate
Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project (the `Bonds"). The
Bonds are being issued to pay a portion of the cost for the Public Improvements and the costs and
expenses described in Paragraph E above.
H. The Developer proposes to construct the Public Improvements on behalf of the
City in accordance with the terms and provisions of this Agreement and the Annexation
Agreement. The proceeds from the sale of the Bonds shall be under the control of the City and
shall be used to pay for the Public Improvements.
I. The proceeds from the sale of the Bonds (the "Bond Proceeds") to be used by the
City to pay for the Public Improvements shall be held by the Trustee, in the "Improvement
Fund" created under the Trust Indenture.
-2-
J. The Corporate Authorities shall issue Bonds for Special Service Area No. 2004-
106 Total Grande Reserve for the Development as set forth in this Agreement and contemplate
the refunding of a portion of those Bonds by the issuance of Bonds for Special Service Area Nos.
2004-103 and 2004-105 and the use of certain proceeds therefrom, and contemplate an issuance
of Bonds for Special Service Area No. 2004-104 for the Development in 2004 and one or more
additional issuances of Bonds under Special Service Area No. 2004-104 for the Development
pursuant to the terms of the Trust Indenture, and the issuance of Bonds for Special Service Area
No. 2004-103 and Special Service Area No. 2004-105 for the Development, the proceeds of
which will be used to pay a portion of the cost for the Public Improvements, including the
financing and other costs associated with the funding of the Public Improvements. There shall
not be more than sixty million dollars ($60,000,000) in the aggregate in bonds outstanding at any
one time.
K. The Corporate Authorities have determined that the Development is in the vital
and best interest of the City and the health, safety, morals, and welfare of its residents, and the
financing of the Public Improvements by the City is in accordance with the public purposes and
provisions of applicable state and local laws.
L. This Agreement has been submitted to the Corporate Authorities for consideration
and review, and the Corporate Authorities have taken all actions required to be taken prior to the
execution of this Agreement in order to make the same binding upon the City according to the
terms hereof. The Developer has taken all actions necessary and adopted the proper resolutions to
make this Agreement binding upon the Developer according to the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as
follows:
ARTICLE ONE
Recitals Part of Agreement
The representations, covenants, and recitations set forth in the foregoing recitals are
material to this Agreement and are hereby incorporated into and made a part of this Agreement as
though they were fully set forth in this Article One.
ARTICLE TWO
Mutual Assistance
The Developer and City agree to take such actions, including the execution and delivery
of such documents, instruments, petitions, certifications (and in the City's case, the adoption of
such ordinances and resolutions), as may be necessary or appropriate from time to time to carry
out the terms, provisions, and intent of this Agreement and to aid and assist each other in
carrying out said terms, provisions, and intent.
-3-
The Developer and City recognize that a change in economic circumstances and interest
rates as they currently exist may cause the payment of special service area taxes contemplated in
this Agreement to be an undue burden upon future homeowners within the special service area. If
current interest rates change to an extent that the Developer in its sole discretion decides that the
special service area taxes would be an undue burden upon future homeowners, then the
Developer shall not be obligated to close on any bonds for the Special Service Area, and this
Agreement shall terminate. However, in such an event, the Developer shall be obligated to
reimburse the City for all out of pocket costs, including, but not limited to, fees for the trustee,
attorneys, underwriters and consultants assisting in the creation and establishment of the Special
Service Area,with such obligation to survive the termination of this Agreement.
ARTICLE THREE
Construction of the Public Improvements
3.1 Construction of Public Improvements by the Developer. Because the Public
Improvements benefit the Developer's Property and will be essential to the Development, the
Developer shall construct the Public Improvements for the benefit of and on behalf of the City as
provided in this Article Three. Construction of the Public Improvements to be financed by any
series of Bonds shall commence within six months after the sale of such series of Bonds. With
respect to the Public Improvements to be constructed with the Bond Proceeds, such proceeds
shall be fully expended on the Public Improvements within thirty-six months after the sale of the
series of Bonds from which such Bond Proceeds were derived, provided that all necessary
approvals and permits have been granted by the City. With respect to all Public Improvements,
they shall be dedicated or conveyed to the City pursuant to the Annexation Agreement as soon as
practicable after the sale of the series of Bonds financing such Public Improvements, provided
that all necessary approvals and permits have been granted by the City. The Public Improvements
shall be paid for as provided in Section 5.2 of Article Five of this Agreement and shall be
guaranteed for one (1)year by the Developer, pursuant to the Municipal Code.
3.1.1. Transfers of Ownership to City of Propelly Relating to Public Improvements.
Portions of the Public Improvements are to be constructed on property currently owned by
Developer. Such property is required to be dedicated or conveyed to the City in accordance with
this Agreement. The City agrees that Developer may convey certain necessary rights-of-way and
other public improvements such as stormwater management and detention facilities, by plat of
dedication or plat of easement, prior to the construction of the Public Improvements to be
constructed on such lands, even if these lands are referenced later in subdivision plats, provided
the Developer, as a condition of said conveyance, constructs the Public Improvements pursuant
to this Agreement. As aforesaid, such dedications or conveyances shall not relieve the Developer
of any of its obligations to construct the applicable Public Improvements on such property.
3.2 Duty of the Developer to Construct.
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(a) The Developer, on behalf of the City, shall cause the Public Improvements to be
constructed for the benefit of the Developer's Property in accordance with this Agreement (all to
be located in either publicly dedicated rights-of-way, on public lands, or in publicly dedicated
easements) and in the public right-of-way in accordance with this Agreement and the Annexation
Agreement. The City acknowledges that it does not intend to design, bid, or construct the Public
Improvements. The City agrees in as much as the Public Improvements are to be paid for in part
by special taxation that the Developer shall construct the Public Improvements using
subcontractors and materialmen selected from time to time by the Developer in the Developer's
sole discretion without advertising for bids as permitted by the provisions of Section 65 ILCS
5/8-9-1 of the Illinois Municipal Code and the Establishment Ordinance. All Public
Improvements to be constructed hereunder shall be constructed in substantial accordance with
the Annexation Agreement and all applicable laws, ordinances, rules, and regulations (as
modified by the terms of the Annexation Agreement which governs the Developer's Property)
and shall be constructed in a good workmanlike and commercially reasonable manner. The
Developer and the City agree that the Public Improvements shall be constructed in substantial
compliance with the Annexation Agreement and that the Annexation Agreement sets forth and
represents the Developer's full and complete obligations with respect to the construction of the
Public Improvements, and the City shall have no right to impose additional obligations therefor.
The Developer shall employ and/or contract with at all times adequate staff, consultants, and
contractors with the requisite experience necessary to administer and coordinate the construction
of the Public Improvements. The City agrees to accept the Public Improvements, provided the
Developer follows the provisions contained in Section 5.1 of this Agreement.
(b) The Developer shall receive payment for the construction, conveyance, dedication
or grant of easement of the Public Improvements in an amount equal to the amount or amounts
shown on the budget or budgets attached hereto as Exhibit C, which amounts include a factor for
the Developer's construction administration and supervisory expenses (the `Budgeted Amount").
The Budgeted Amount may be amended prior to the issuance of the Bonds by the Developer with
the consent of the City in accordance with the Establishing Ordinance and the Special Tax Report
(as defined below). The Developer and the City shall cooperate with each other and shall each
use their best efforts to cause the cost of constructing the Public Improvements to be no more
than the Budgeted Amount. The City shall comply with reasonable requests of Developer to
cause the cost of constructing the Public Improvements to be no more than the Budgeted
Amount. However, it is understood that if despite the parties' best efforts the cost of
constructing the Public Improvements exceeds the Budgeted Amount, then the Developer shall
be required to complete construction of the Public Improvements, and to the extent that the
amounts available from the Improvement Funds are not sufficient to pay for all costs of
constructing the Public Improvements, the difference shall be paid by the Developer. In making
such payments, however, the Developer does not waive any cause of action it may have against
the City for such cost overruns. In the event that the actual cost of constructing a particular
Public Improvement exceeds the cost budgeted for that Public Improvement, the Developer shall
be permitted to utilize funds allocated to other Public Improvements to pay such excess cost, and
such utilization of funds shall be in accordance with Paragraph IV(D) of the United City of
Yorkville Special Service Area No. 2004-106 Total Grande Reserve Special Tax Roll and
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Report(the "Special Tax Report") generated by David Taussig & Associates, Inc. dated
, 2004.
( c) Subject to Section 8.1 of this Agreement, if the Developer fails to complete the
Public Improvements within the times specified herein, or any extensions of time granted by the
City (which extension shall not be unreasonably withheld) or the Developer abandons the project
(ceases all work for a period of twelve (12) consecutive months without reasonable cause for
delay), and, if as a result, a breach of this Agreement shall have occurred (subject to the terms of
Section 8.3 of this Agreement), the City has the right, but not the obligation, to complete the
Public Improvements using the remaining Bond Proceeds on deposit in the Improvement Fund to
pay for the completion of the Public Improvements and the Developer shall be responsible for
reimbursing the City for any deficiencies. Notwithstanding the foregoing, a cessation of work
shall not be considered an abandonment if it is caused by inclement weather, material shortages,
acts of God, acts of war, insurrection or terror, or other conditions beyond Developer's control.
The City shall notify Developer in writing of any perceived abandonment, and Developer shall
have thirty (30) days thereafter to respond or cure.
(d) Both the City and the Developer agree to abide by the terms of the Annexation
Agreement.
3.3 Submission and Approval of Plans All work with respect to the construction of
the Public Improvements by the Developer shall be performed in conformity with the Annexation
Agreement and the terms of this Agreement. The Developer shall prepare and submit to the City
for approval by the City, which approval shall not be unreasonably delayed or withheld, a final
Plat or Plats of Subdivisions, Final Engineering for the Development, for each phase of the
Development (collectively, the "Construction Plans") in accordance with the Annexation
Agreement.
3.4 Public Improvements Constructed on Ci!Y's Right-of-Way and Public Lands. The
City shall grant or cause to be granted to the Developer easements and/or licenses with respect to
the City's right-of-way and public lands and private property (over which the City has acquired
easements) for which some or all of the on-site or off-site Public Improvements are required and
which are necessary to permit the Developer to construct the Public Improvements in a form and
substance acceptable to the Developer and the City. All such easements and licenses shall be duly
executed and, if necessary, recorded, prior to the commencement of construction.
Notwithstanding the foregoing, the Developer agrees that all Public Improvements shall be
constructed within publicly dedicated rights-of-way, on public lands, or in publicly dedicated
easements or in private easements granted to the City by owners of real estate, provided,
however, all such dedications shall occur on or before the earlier of (i) final platting for such
portion of the Public Improvements or (ii) disbursement from the Improvement Funds of the cost
of such portion of the Public Improvements.
3.5 Conformance to Federal State and Local Requirements. All work with respect to
the Public Improvements shall conform to all applicable federal, state, and local laws,
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regulations, codes, rules and ordinances as set forth in the Annexation Agreement; provided,
however, that the City may not enforce against the Developer any ordinances, rules, or
regulations which discriminate against the Developer or which cause the cost of the Public
Improvements to significantly increase, provided the Public Improvements to be financed by any
series of Bonds shall be completed within three years after the sale of the applicable series of
Bonds.
3.6 Insurance. Prior to commencement of construction of the Public Improvements,
the Developer shall cause to be procured and delivered to the City, at the Developer's sole cost
and expense, and shall maintain in full force and effect until construction of the Public
Improvements has been completed, a policy or policies of commercial liability insurance and,
during any period of construction, contractors' liability insurance and worker's compensation
insurance, with liability coverage under the commercial liability insurance of not less than One
Million Dollars per occurrence and Two Million Dollars in the aggregate (which may be in the
form of umbrella coverage) and limits under the other policies of insurance in accordance with
statute, and such policies to be in such form and issued by such companies as shall be reasonably
acceptable to the City, to protect the City and the Developer against any liability incidental to the
use of, or resulting form, any accident occurring on or about the Public Improvements or the
construction of an improvement thereof. Each such policy shall name the City as an additional
named insured party.
3.7 Rights of Inspection. During construction of the Public Improvements,the City or
its designee shall have the right to enter upon the Developer's Property and the Public
Improvements for the purpose of conducting such inspections as the City may deem appropriate.
In the event that the City or its designee discovers a defect or deficiency in the construction of the
Public Improvements, the City or its designee shall promptly notify the Developer in writing
thereof. Any such inspection by the City of the Public Improvements shall not be construed as a
representation by the City that there has been compliance with the Construction Plans or that the
Public Improvements will be or are free of faulty materials or workmanship, or as a waiver of any
right that the City or any other party may have against the Developer or any other party for failure
to comply with the Construction Plans or the provisions of this Agreement.
3.8 Securi . The City hereby agrees that no security shall be required for that portion
of the cost of the Public Improvements that are paid, or to be paid, from the Bond Proceeds. The
Developer shall adhere to the requirements for security instruments as set forth in the Annexation
Agreement.
3.9 Densijy. In no event shall the Annexation Agreement be amended nor shall any
subdivision plat be required to be drawn in such a way as to result in less than two thousand three
hundred forty-six (2,346) dwelling units (999 single family, 290 single family villas, 350
duplexes, and 707 townhomes) being permitted to be constructed on the Developer's Property
unless agreed in writing by the Developer and the Consultant (David Taussig & Associates, Inc.,
its successor or assigns). It is understood that, if the Developer conveys the land underlying
Neighborhood No. 5, which neighborhood consists of 164 townhomes, to Yorkville Community
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School District 115, the Developer is permitted to construct 2,182 dwelling units (999 single
family, 290 single family villas, 350 duplexes, and 543 townhomes) on the Developer's Property.
3.10 Administration of SSA. Subject to the terms of the Special Tax Report, dated
, 2004, and prepared by David Taussig & Associates and any subsequent
amendments thereto, the City shall contract with an administrator or consultant to administer the
Special Service Area , including, without limitation, calculation, levy, abatement, administration,
and collection of the special tax for said Special Service Area, on such terms as shall be
reasonably agreed to between the parties.
3.11 Additional Issuance of Bonds. The City shall issue, at the request of the
Developer or its nominee, the following additional bonds:
(a) Bonds for Special Service Area No. 2004-104 issued in 2004, in an amount not to
exceed $15,000,000;
(b) Additional Bonds (one or more issues) for Special Service Area No. 2004-104
issued pursuant to the terms of the Trust Indenture securing such bonds in an amount not
to exceed $15,000,000 upon satisfaction of the conditions set forth in Article III of the
Trust Indenture;
( c) Bonds for Special Service Area No. 2004-103, in an amount not to exceed
$15,000,000; and
(d) Bonds for Special Service Area No. 2004-105, in an amount not to exceed
$8,000,000.
These additional bonds, issued by the City, shall be exclusive of Bonds issued to refund
outstanding Bonds and variable rate Bonds. It is contemplated that a portion of the Bonds issued
pursuant to this Agreement will be refunded by the issuance of Bonds for Special Service Area
Nos. 2004-103, 2004-104, and 2004-105 and the use of certain proceeds therefrom. There shall
not be more than sixty million dollars ($60,000,000) in the aggregate in Bonds outstanding at any
one time.
3.12 The City covenants and agrees to deposit the first [$521,000] received from the
Recovery and Recapture monies due Developer under, as defined in Exhibit I (Paragraph Q and
Section 17.A of the Annexation Agreement to the Special Redemption Account, as defined and
as applied as set forth in the Indenture. The City and the Developer agree that, prior to entering
into any Recapture Agreement, they will amend the provisions of the form of such Recapture
Agreement to conform to the requirements of Section 5.2(f) of the Indenture.
ARTICLE FOUR
Developer Indemnification
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The Developer agrees to indemnify, defend, and hold the City Council and officers,
employees, and agents of the City, including attorneys, engineers, and consultants, harmless from
and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine,
penalty, punitive damage, or expense (including, without limitation, reasonable attorneys' fees),
to the extent resulting from, arising out of, or based upon: (i) any breach as defined pursuant to
Section 8.3 and as determined by a court of law on the part of the Developer in the performance
of any of its material obligations under this Agreement not resulting from the negligent conduct
of the City; or (ii) any act of negligence of the Developer or any of its agents, contractors,
servants or employees; or (iii) any violation by the Developer of any easements, law, ordinances,
or codes affecting the Developer's Property, the Development, or the Public Improvements. In
case any such claim shall be made or action brought based upon any such claim in respect of
which indemnity may be sought against the Developer, upon timely receipt of notice in writing
from the City setting forth the particulars of such claim or action, the Developer shall assume the
defense thereof including the employment of counsel subject to approval of the City, which
approval shall not be unreasonably withheld, and the payment of all judgments, costs and
expenses. The Developer shall have the right, but not the obligation, to appeal to courts with
appellate jurisdiction any such judgment taken against the City, and the City shall join in any
such appeal. The City shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the City.
ARTICLE FIVE
Payment for Public Improvements
5.1 Improvements to be Constructed.
5.1.1 Requests for Payment. The Developer may submit to the City Engineer or his
designee and send a copy to the Consultant not more frequently than once each calendar month, a
written request in the form of Exhibit D of the Trust Indenture ("Disbursement Request") for
payment of the Developer's costs of constructing those portions of the Public Improvements
which have been completed to date and/or for the payment or reimbursement of those costs that
are identified on the Construction Plans and Exhibit B, as well as enumerated in Recital D,
including the cost of the acquisition of title to, or easements with respect to, land on which Public
Improvements are located or to be located. The City shall inspect each portion of the Public
Improvements for which payment is requested and shall, within ten (10) business days after
receipt of a Disbursement Request, make its inspection and, if the City Engineer confirms that
the work for which payment is requested has been done, the Authorized Officer (as hereinafter
defined) shall, within three (3) business days of the inspection (1) execute and deliver to the
Developer a Certificate of Completion and Acceptance ("Acceptance Certificate") indicating the
City's acceptance of such work and (2) execute and deliver to the Developer and to the Trustee a
written statement ("Disbursement Request") approving the payment of funds as provided therein.
As used herein "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 Developer and the Trustee for the Bonds.
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5.1.2. Denial of Compliance. If, in the City Engineer's reasonable opinion, any portion
of the work is not in compliance with the Construction Plans, the City shall within five (5)
business days after submission of a Request for Payment notify the Developer in writing
("Noncompliance Notice") of (1) the specific improvements which it believes are not in
compliance with the Construction Plans, (2) the reasons why it believes that the work is not-in
compliance with the Construction Plans and (3) the reasons why it is not approving a portion or
all of the requested disbursement together with reasonably detailed explanations thereof.
Developer shall have five (5) business days after receipt of such Noncompliance Notice to
remedy such work, subject to the Unavoidable Delay provisions of Section 8.1 and further
provided that, in the event such work cannot be remedied within such five (5) day period, and
Developer is diligently pursuing such remedy, developer shall have a period of thirty (30) days
after receipt of such Noncompliance Notice to remedy such work. However, to the extent that
the Request for Payment relates to multiple Public Improvements and the City Engineer confirms
that some of the Public improvements addressed by the Request for Payment are complete, the
Authorized Officer shall (1) execute and deliver to the Developer an Acceptance Certificate for
that portion of the Public Improvements which are accepted by the City, and (2) execute and
deliver to the Developer, the Consultant and the Trustee a Disbursement Request for the Public
Improvements which have been completed.
5.1.3 Release of Funds. At such time as work covered by a Request for Payment is
approved by the City Engineer, subject to the provisions of the Trust Indenture and any tax
certificates delivered by the City in connection with the Bonds, the Authorized Officer shall
deliver a Disbursement Request to the Trustee directing the Trustee to disburse to the Developer
the amount of funds provided for in the Disbursement Request to the extent that funds are
available in the Improvement Fund.
5.1.4 Failure to Inspect. Should the City, upon written request by the Developer, fail
to inspect any portion of the Public Improvements within the time period designated above or to
send either an Acceptance Certificate or a Noncompliance Notice, subject to the Unavoidable
Delay provisions identified herein, at that time such portion of the Public Improvements shall be
deemed accepted by the City.
5.1.5 Conditions Precedent to Payment. The City Engineer or his designee shall
authorize the distribution of funds by the Trustee to the Developer to pay for those portions of the
Public Improvements which have been completed upon satisfaction of the following conditions:
(a) The Developer shall have submitted to the City Engineer, with a copy to the
Consultant, a Request for Payment with respect to such portions of the Public Improvements and
the City Engineer has issued, or is required to issue, a Disbursement Request to the Trustee with
respect thereto;
(b) The Developer shall have caused a title insurance company licensed to do
business in Illinois ("Title Company") to issue to the Trustee and the City Engineer a letter or
commitment whereby the Title Company insures the Trustee and the City from any and all
mechanics' lien claims with respect to work covered by the Disbursement Request. Alternatively,
the Developer may request that the City Engineer direct the Trustee to disburse the funds into a
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construction escrow account with the Title Company with directions that the Title Company shall
not release any funds to any subcontractor or materialmen unless and until appropriate lien
waivers and supporting affidavits to the satisfaction of the Title Company have been received by
the Title Company; and
(c) The Developer shall not be in default under this Agreement if the Unavoidable
Delay provisions of Section 8.1 hereof apply. Further, the Notice and Cure provisions of Section
8.3 of this Agreement are a condition precedent to the declaration of any default under this
Agreement.
5.2 Bond Proceeds.
(a) The Bond Proceeds shall be deposited, held, invested, reinvested, and disbursed as
provided in the Trust Indenture. Bond Proceeds shall be deposited in the Improvement Fund,
which, together with anticipated interest earnings, are anticipated to be sufficient to fully fund the
Budgeted Amounts set forth in Exhibit C for the Public Improvements. The Developer reserves
the right to shift costs from one line item in the Budgeted Amounts to another line item in the
event that actual costs are more or less than Budgeted Amounts, provided, the total amount
budgeted is not increased, and to the extent allowed and upon satisfaction of the conditions set
forth in the Special Tax Report. Monies in the Improvement Fund shall be withdrawn therefrom
in accordance with the provisions of the Trust Indenture and the applicable provisions of this
Agreement for payment of all or a portion of the cost of constructing the Public Improvements.
(b) As long as the City invests the Bond Proceeds pursuant to the Trust Indenture and
except in the event of fraud or gross negligence,the City shall have no responsibility whatsoever
to the Developer with respect to any investment of funds made by the Trustee under the Trust
Indenture, including any loss of all or a portion of the principal invested or any penalty for
liquidation of investment. Any such loss may diminish the amounts available in the Improvement
Funds to pay the cost of constructing the Public Improvements. The Developer further
acknowledges that the obligation of any owner of real property in the Development, including the
Developer to the extent it owns any property in the Development, to pay Special Taxes is not in
any way dependent on the availability of amounts in the Improvement Fund to pay for all or any
portion of Public Improvements. The Developer acknowledges that any lack of availability of
amounts in the Improvement Funds to pay the cost of constructing the Public Improvements shall
in no way diminish any obligation of the Developer with respect to the construction of the Public
Improvements in accordance with this Agreement or any other agreement to which the Developer
is a party.
( c) The City shall not initiate or approve any amendment to the Trust Indenture that
relates to or affects the Improvement Fund or the purposes for which the Improvement Fund may
be expended without the express written consent of Developer.
5.3 Limited Liability of City. The Developer agrees that any and all obligations of the
City arising out of or related to this Agreement are special and limited obligations of the City and
the City's obligations to make any payments under this Agreement are restricted entirely to the
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monies, if any, in and available for disbursement from the Improvement Funds and from no other
source. Except in the event of fraud or gross negligence, no member of the corporate authorities,
or any City staff member, employee or agent, including attorneys and engineers, shall incur any
liability under this Agreement to the Developer or any other party in their individual capacities
by reason of their actions under this Agreement or the execution of this Agreement.
ARTICLE SIX
Other Agreements
6.1 Continuing Disclosure. The Developer agrees to provide to the underwriter of the
Bonds and the Consultant (as defined in the Trust Indenture) certain continuing information
concerning the development of the Developer's Property until such time as 90% of the Parcels
are sold to homeowners as verified in writing by the Developer to the Underwriter of the Bonds.
This information includes (i) annual reviewed financial statements of the Developer to the
Underwriter and (ii) quarterly reports from the Developer to the Underwriter and the Consultant,
setting forth: the number of single family homes, single family villas, townhomes and duplex
sales and/or bulk property sales; the number of single family homes, single family villas,
townhomes and/or duplexes constructed on the Subject Property; a description of the type of
such homes and the range of sale prices for such homes; the number of sales of single family
homes, single family villas, townhomes and/or duplexes closed; any pending litigation which
would adversely affect the ability of the Developer to develop the Subject Property or to pay
Special Taxes; any material change in the structure or ownership of the Developer; any failure of
the Developer, or any affiliate of the Developer, to pay by the date due general ad valorem
property taxes or special taxes, or any other governmental charge on the Subject Property as and
when due; any denial or termination of credit; any denial or termination of, or default under, any
line of credit or loan or any other loss of a source of funds that Developer has reason to believe is
likely to have a material adverse effect on the ability of the Developer to cause the Subject
Property to be developed; the occurrence of any event of
Bankruptcy with respect to the Developer, or any affiliate of the
Developer; any significant amendments to land use entitlements
for the Development, if such amendments are likely to prevent or
delay the implementation of the Development; any previously
undisclosed governmentally-imposed preconditions to commencement
or continuation of development on the Subject Property, if such
preconditions are likely to prevent or delay the Development; any
previously undisclosed legislative, administrative or judicial
challenges to development of the Subject Property or the
collection of special taxes; any changes of which the Developer
is aware, if material, in the alignment, design or likelihood of
completion of significant public improvements affecting the
Development, including major thoroughfares, sewers, water
conveyance systems and similar facilities . Quarterly reports
shall be delivered within thirty (30) days after the end of each
calendar quarter. In addition, the Developer shall use its best
efforts to provide prompt notice of any of the events described
above.
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6.2 City Acceptance of Public Improvements• Donations. The City shall accept the
Public Improvements pursuant to the Annexation Agreement and this Agreement. The Developer
agrees to make donations and contributions to the appropriate school district and appropriate
park district as provided in the Annexation Agreement.
6.3 Covenant; Rider to Sales Contracts. The Developer and its successors and assigns
covenant and agree, unless the Special Tax has been prepaid, to attach the Rider or one
substantially similar to it, attached hereto as Exhibit D, to all sales contracts for the sale of
dwelling units or for the sale of all or a portion of Developer's Property. Said Rider fully
explains the responsibilities of the Owner of Developer's Property or of a Dwelling Unit for the
payment of a Special Service Area Tax, that this responsibility runs with the land, that each
subsequent owner of Developer's Property or of a Dwelling Unit shall be responsible for the
payment of said tax, and that each owner shall be responsible for disclosing same in any sales
contract.
6.4 Sale of Developer's Property. The City agrees that the Developer shall have the
right to either build on the Developer's Property or to sell developed lots to other builders, or to
convey any or all of the Developer's Property at any time after the date of this Agreement. The
Developer shall notify the Underwriter, the City and the Consultant prior to the sale of any
portion of Developer's Property other than the sale of an individual dwelling unit.
ARTICLE SEVEN
Authority
7.1 Powers. Each Party hereby represents and warrants to the other Parties that the
Party making such representation and warranty has full constitutional and lawful right, power,
and authority, under currently applicable law, to execute, and deliver, and perform the terms and
obligations of this Agreement, and all of the foregoing have been or will be duly and validly
authorized and approved by all necessary City proceedings, findings, and actions and all
necessary Developer actions. Accordingly, this Agreement constitutes the legal, valid, and
binding obligation of the City and the Developer, enforceable in accordance with its terms and
provisions and does not require the consent of any other governmental authority.
7.2 Authorized Parties. Whenever under the provisions of this Agreement and other related
documents and instruments or any supplemental agreements, any request, demand, approval,
notice, or consent of the City or the Developer is required, or the City or the Developer is
required to agree or to take some action at the request of the other party, such request, demand,
approval, notice, or consent, or agreement shall be given for the City, unless otherwise provided
herein, by the City Administrator or his or her written designee and for the Developer by its
Manager or its written designee; and either party shall be authorized to act on any, such request,
demand, approval, notice, or consent, or agreement or other action and neither party hereto shall
have any complaint against the other party as a result of any such action taken.
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ARTICLE EIGHT
General Provisions
8.1 Unavoidable Delays. The time for performance by Developer shall be extended by
a period of time equal to the time of delay caused by any of the following reasons (herein called
"Unavoidable Delays"): Acts of God, acts of the public enemy, or acts of fire, strikes, flood,
governmental orders or edicts, governmental rationing or allocation of materials, adverse weather
conditions, lockouts, riots, strikes, or any other cause beyond the reasonable control of the
Developer.
8.2 Time of Essence. Time is of the essence of this Agreement.
8.3 Breach. A party shall be in "breach of this Agreement" if it shall fail to
substantially perform any of its respective obligations under this Agreement, barring an
Unavoidable Delay. Upon breach of this Agreement, any of the parties, in a court of competent
jurisdiction, by an action or proceeding in law or in equity, may exercise any remedy available at
law or in equity.
Before any failure of any party to this Agreement to perform its obligations under this
Agreement shall be deemed to be a breach of this Agreement, the party claiming such failure
shall notify, in writing, by certified mail, return receipt requested, the party alleged to have failed
to perform, state the obligation allegedly not performed and the performance demanded and the
party failing to perform shall not have commenced performance and diligently prosecuted same
to completion within thirty (30) days after such notice.
8.4 Amendment. This Agreement, and any exhibits attached hereto, may be amended
only by the agreement of all of the Parties evidenced by a written amendment, with the adoption
of an ordinance or resolution of the City approving the written amendment.
8.5 Entire Agreement. This Agreement sets forth all agreements, understandings, and
covenants between the Parties relative to the matters herein contained, except for the Annexation
Agreement This Agreement supersedes all prior agreements, other than the Annexation
Agreement, negotiations and understandings, written and oral, and shall be deemed a full
integration of the entire agreement of the Parties.
8.6 Severability. If any provisions, covenants, agreements, or portions of this
Agreement, or its application to any person, entity, or property, is held invalid, such invalidity
shall not affect the application or validity of any other provisions, covenants, agreements, or
portions of this Agreement and, to that end, all provisions, covenants, agreements, or portions of
this Agreement are declared to be severable.
8.7 Illinois Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.
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8.8 Notice. Any notice to be given or served hereunder or under any document or
instrument executed pursuant hereto shall be in writing and shall be: (i) delivered personally,
with a receipt requested therefor; or (ii) sent by facsimile; or (iii) sent by a recognized overnight
courier service; or (iv) delivered by United States registered or certified mail, return receipt
requested, postage prepaid. All notices shall be addressed to the Parties at their respective
addresses set forth below, and the same shall be effective: (a) upon receipt or refusal if delivered
personally or by facsimile; (b) one (1) business day after depositing with such an overnight
courier service; or ( c) two (2) business days after deposit in the mails, if mailed. A Party may
change its address for receipt of notices by service of a notice of such change in accordance
herewith.
If to the City:
United City of Yorkville
800 Game Farm Road
Yorkville, Illinois 60560
Attention: City Clerk
Phone: (630) 553-4350
Fax: (630) 553-7575
with a copy to:
Law Offices of Daniel J. Kramer
1107S Bridge St.
Yorkville, Illinois 60560
Phone: (630)553-9500
Fax: (630) 553-5764
If to Developer:
MPI-2 Yorkville North LLC
MPI-2 Yorkville Central LLC
MPI-2 Yorkville South I LLC
6880 North Frontage Road, Suite 100
Burr Ridge, Illinois 60527
Attention: Anthony R. Pasquinelli
Fax: (630) 455-2591
with a copy to:
Moser Enterprises, Inc.
-15-
Fifth Avenue Station
300 East Fifth Avenue, Suite 430
Naperville, Illinois 60563
Attention: Arthur C. Zwemke
Fax: (630) 420-8930
and to:
Moss and Bloomberg, Ltd.
305 West Briarcliff Road
Bolingbrook, Illinois 60440
Attention: Barry L. Moss, Esq.
Fax: (630) 759-8504
8.9 Counterparts. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same agreement.
8. 10 Consent or Approval. Except as otherwise provided in this Agreement, whenever
consent or approval of a Party is required, such consent or approval shall not be unreasonably
withheld.
8.11 Assignment . At its sole cost and expense, the Developer may collaterally assign its
interest in the payments to be received hereunder to a third-party lender who is advancing funds
for the payment of the costs of the Public Improvements. The Developer shall notify the City of
its intent to collaterally assign its interest in the payment received and said assignment is subject
to the reasonable approval of the City. No assignment shall result in any increased costs to the
City, unless the City is reimbursed for such increased costs.
8.12 Third Party Beneficiary. Nothing contained herein, whether expressed or implied,
is intended to give or shall be construed as giving anyone other than the parties hereto (and their
respective representatives, successors and assigns) any rights under this Agreement.
-16-
8.13 Effective Date. This Agreement shall become effective upon the date first above
written by each of the parties.
UNITED CITY OF YORKVILLE
a Municipal Corporation
ATTEST: Mayor
City Clerk
MPI-2 YORKVILLE NORTH LLC
an Illinois Limited Liability Company
By: MPI Manager Inc., Its Manager
Arthur C. Zwemke, Its President
Dated:
MPI-2 YORKVILLE CENTRAL LLC
an Illinois Limited Liability Company
By: MPI Development Manager, Inc., Its
Manager
Arthur C. Zwemke, Its President
Dated:
MPI-2 YORKVILLE SOUTH I LLC
an Illinois Limited Liability Company
By: MPI Manager Inc., Its Manager
Arthur C. Zwemke, Its President
Dated:
11 9289V EV\121760wd\6115/04
-17-
EXHIBIT A
LEGAL DESCRIPTION
GRANDE RESERVE NORTH REGION
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 11, TOWNSHIP 37 NORTH,
RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER; THENCE
WESTERLY ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER 2029.92 FEET TO
THE EAST LINE OF LOT 5 OF SAID SECTION 11; THENCE SOUTHERLY ALONG SAID
EAST LINE 1469.90 FEET TO THE CENTERLINE OF MILL ROAD; THENCE
SOUTHEASTERLY ALONG SAID CENTERLINE 1039.40 FEET TO A TRACT OF LAND
CONVEYED TO COMMONWEALTH EDISON COMPANY BY TRUSTEE'S DEED RECORDED
JUNE 28,1973 AS DOCUMENT 733089; THENCE NORTHEASTERLY ALONG SAID
NORTHERLY LINE 1062.36 FEET TO THE EAST LINE OF SAID SOUTHEAST QUARTER;
THENCE NORTHERLY ALONG SAID EAST LINE 1489.22 FEET TO THE POINT OF
BEGINNING IN BRISTOL TOWNSHIP, KENDALL COUNTY, ILLINOIS.
ALSO:
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 2, PART OF THE NORTHEAST
QUARTER OF SECTION 11 AND PART OF THE NORTHWEST QUARTER OF SECTION 12,
TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID SECTION 2; THENCE
SOUTH 89 DEGREES 28 MINUTES 21 SECONDS EAST ALONG THE NORTH
LINE OF SAID SECTION 12, 99.96 FEET-THENCE SOUTH 2 DEGREES 26
MINUTES 28 SECONDS EAST 2654.27 -EET TO A POINT ON THE SOUTH
LINE OF THE NORTHWEST QUARTER OF SAID SECTION 12,236.28 FEET
EAST OF THE SOUTHWEST CORNER OF SAID NORTHWEST QUARTER;
THENCE NORTH 89 DEGREES 28 MINUTES 58 SECONDS WEST ALONG
SAID SOUTH LINE 236.28 FEET TO THE SOUTHWEST CORNER OF SAID
NORTHWEST QUARTER; THENCE NORTH 89 DEGREES 31 MINUTES 16
SECONDS WEST ALONG THE SOUTH LINE OF THE NORTHEAST
QUARTER OF SAID SECTION 11, 2028.27 FEET TO THE EXTENSION
SOUTHERLY OF THE EASTERLY LINE OF LOT 1 OF STORYBOOK
HIGHLANDS, A SUBDIVISION IN SAID SECTION 11; THENCE NORTH 1
DEGREE 06 MINUTES 53 SECONDS EAST ALONG SAID EXTENDED LINE
1030.0 FEET; THENCE SOUTH 89 DEGREES 06 MINUTES 37 SECONDS
EAST 239.40 FEET; THENCE NORTH 1 DEGREE 06 MINUTES 53 SECONDS
EAST 872.93 FEET TO THE CENTERLINE OF CANNONBALL TRAIL; THENCE
NORTH 66 DEGREES 09 MINUTES 20 SECONDS EAST ALONG SAID
CENTERLINE 898.31 FEET; THENCE NORTHEASTERLY ALONG SAID
-18-
CENTERLINE, BEING ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 2290.82
FEET, A DISTANCE OF 495.34 FEET; THENCE NORTH 53 DEGREES 46 MINUTES EAST
ALONG SAID CENTERLINE 654.29 FEET TO THE EAST LINE OF SAID SECTION 2;
THENCE SOUTH 0 DEGREES 30 MINUTES 10 SECONDS WEST ALONG SAID EAST LINE
262.54 FEET TO THE POINT OF BEGINNING, IN THE TOWNSHIP OF BRISTOL, KENDALL
COUNTY, ILLINOIS.
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION 11, TOWNSHIP 37 NORTH, RANGE 7
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT
THE SOUTHWEST CORNER OF SECTION 11; THENCE SOUTH 0 DEGREES 57 MINUTES
0 SECONDS WEST 442 FEET TO THE NORTH LINE OF THE RIGHT OF WAY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17
MINUTES 0 SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE
SOUTH LINE OF SECTION 11; THENCE SOUTH 89 DEGREES 53 MINUTES 0 SECONDS
EAST 1001.25 FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE
SOUTHEAST CORNER OF THE WEST HALF OF SAID SECTION 11; THENCE NORTH 89
DEGREES 54 MINUTES 0 SECONDS EAS T 1339.5 FEET ALONG THE SOUTH LINE OF
SAID SECTION 11 TO THE SOUTHEAST CORNER OF THE WEST HALF OF THE
SOUTHEAST QUARTER OF SAID SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES
0 SECONDS EAST 977.5 FEET TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH
74 DEGREES 15 MINUTES 0 SECONDS WEST 727.2 FEET ALONG SAID CENTERLINE;
THENCE NORTH 79 DEGREES 10 MINUTES 0 SECONDS WEST 2877.4 FEET ALONG
SAID CENTERLINE TO THE CENTERLINE OF A NORTH AND SOUTH HIGHWAY; THENCE
SOUTH 7 DEGREES 7 MINUTES 0 SECONDS EAST 364.8 FEET ALONG THE CENTER OF
SAID NORTH AND SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0
SECONDS WEST 503.33 FEET TO THE WEST LINE OF SAID SECTION 11; THENCE
SOUTH 0 DEGREES 52 MINUTES 0 SECONDS WEST ALONG SAID WEST LINE 1327.6
FEET TO THE POINT OF BEGINNING (EXCEPT THAT PART OF RIGHT OF WAY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD RUNNING THROUGH SECTION 11
AFORESAID, AND ALSO EXCEPT THAT PART LYING WESTERLY OF THE CENTERLINE
OF KENNEDY ROAD, AND ALSO EXCEPT THAT PART LYING SOUTHERLY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD RUNNING THROUGH SECTION 11
AFORESAID), IN THE TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
-19-
GRANDE RESERVE CENTRAL REGION
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 11, THAT PART OF SECTION
14, AND THAT PART OF THE NORTH HALF OF SECTION 23, TOWNSHIP 37 NORTH,
RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF KENNEDY
ROAD WITH THE SOUTHERLY LINE OF THE BURLINGTON NORTHERN
RAILROAD RIGHT-OF-WAY THROUGH SAID SECTION 14; THENCE NORTH
73 DEGREES 14 MINUTES 21 SECONDS EAST ALONG SAID SOUTHERLY
LINE 1239.61 FEET TO THE NORTH LINE OF THE NORTHWEST QUARTER
OF SAID SECTION 14; THENCE NORTH 88 DEGREES 04 MINUTES 00
SECONDS EAST, ALONG SAID NORTH LINE, 610.29 FEET TO THE.
NORTHEAST CORNER OF SAID NORTHWEST QUARTER; THENCE NORTH
87 DEGREES 54 MINUTES 03 SECONDS EAST ALONG THE SOUTH LINE OF
SAID SOUTHEAST QUARTER OF SECTION 11, A DISTANCE OF 1329.33
FEET TO THE WEST LINE OF THE SOUTHEAST QUARTER OF SAID
SOUTHEAST QUARTER; THENCE NORTH 01 DEGREES 21 MINUTES 20
SECONDS WEST ALONG SAID WEST LINE, 511.01 FEET TO SAID
SOUTHERLY LINE OF THE BURLINGTON NORTHERN RAILROAD; THENCE
NORTH 73 DEGREES 14 MINUTES 21 SECONDS EAST, ALONG SAID
SOUTHERLY LINE, 837.66 FEET TO THE CENTERLINE OF MILL ROAD;
THENCE SOUTH 74 DEGREES 18 MINUTES 13 SECONDS EAST ALONG
SAID CENTERLINE 546.02 FEET TO THE EAST LINE OF SAID SOUTHEAST
QUARTER OF SECTION 11; THENCE SOUTH 01 DEGREE 19 MINUTES 08
SECONDS EAST ALONG SAID EAST LINE, 556.17 FEET TO THE
SOUTHEAST CORNER OF SAID SOUTHEAST QUARTER; THENCE SOUTH
01 DEGREE 19 MINUTES 08 SECONDS EAST ALONG THE EAST LINE OF
THE NORTHEAST QUARTER OF SAID SECTION 14, A DISTANCE OF 1122.0
FEET; THENCE SOUTH 87 DEGREES 45 MINUTES 51 SECONDS WEST,
438.0 FEET TO THE NORTHEAST CORNER OF LYNWOOD SUBDIVISION,
EXTENSION FOUR; THENCE SOUTH 87 DEGREES 45 MINUTES 51
SECONDS WEST, ALONG THE NORTHERLY LINE OF SAID LYNWOOD
SUBDIVISION, EXTENSION FOUR, 1168.80 FEET TO THE NORTHWEST
CORNER THEREOF; THENCE SOUTH 01 DEGREE 46 MINUTES 18
SECONDS EAST, ALONG THE WESTERLY LINE OF LYNWOOD
SUBDIVISION, EXTENSIONS FOUR AND FIVE, 1173.80 FEET TO AN IRON
STAKE; THENCE SOUTH 01 DEGREE 47 MINUTES 49 SECONDS EAST,
-20-
ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION, EXTENSION FIVE, 376.25
FEET TO AN IRON STAKE; THENCE SOUTH 02 DEGREES 01 MINUTES 46 SECONDS
EAST ALONG THE WESTERLY LINES OF LYNWOOD SUBDIVISION, EXTENSIONS FIVE
AND SIX, 1950.62 FEET TO AN IRON STAKE; THENCE SOUTH 01 DEGREE 51 MINUTES
08 SECONDS EAST, ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION,
EXTENSION SIX, 879.29 FEET TO THE CENTERLINE OF U. S. ROUTE NO. 34; THENCE
SOUTH 45 DEGREES 14 MINUTES 47 SECONDS WEST ALONG SAID CENTERLINE 878.60
FEET; THENCE NORTH 37 DEGREES 07 MINUTES 26 SECONDS WEST, 2106.30 FEET;
THENCE NORTH 47 DEGREES 17 MINUTES 26 SECONDS WEST, 1500.85 FEET TO THE
CENTERLINE OF KENNEDY ROAD AND THE EASTERNMOST CORNER OF A TRACT
DESCRIBED IN A QUIT CLAIM DEED TO GEORGE AND GLENNA PATTERSON, HUSBAND
AND WIFE, RECORDED AS DOCUMENT NO. 72375 ON JANUARY 25,1972; THENCE
NORTH 25 DEGREES 56 MINUTES 49 SECONDS EAST ALONG SAID CENTERLINE 236.34
FEET; THENCE NORTHEASTERLY AND NORTHERLY, A RADIUS OF 800.0 FEET; AN ARC
DISTANCE OF 419.10 FEET; THENCE NORTH 04 DEGREES 04 MINUTES 07 SECONDS
WEST ALONG SAID CENTERLINE 531.06 FEET; THENCE NORTH 05 DEGREES 06
MINUTES 07 SECONDS WEST ALONG SAID CENTERLINE 1866.0 FEET TO THE POINT
OF BEGINNING IN BRISTOL TOWNSHIP, KENDALL COUNTY, ILLINOIS AND CONTAINING
372.223 ACRES.
ALSO:
THAT PART OF SECTIONS FOURTEEN (14), FIFTEEN (15) AND TWENTYTHREE (23), ALL
IN TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE SEVEN (7) EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE
LAKE UNIT NO. 1, (SAID POINT ALSO BEING THE INTERSECTION OF THE
CENTERLINE OF BRISTOL ROAD AND THE CENTERLINE OF KENNEDY
ROAD), AS SHOWN ON THE SUBDIVISION PLAT OF STRUKEL'S PARADISE
LAKE UNIT NO. 1 RECORDED AS DOCUMENT#71-215; THENCE NORTH 60
DEGREES 17 MINUTES 26 SECONDS EAST, 724.86 FEET ALONG THE
CENTERLINE OF KENNEDY ROAD TO THE POINT OF CURVATURE OF A
1094.72 FOOT RADIUS CURVE TO THE LEFT; THENCE NORTHEASTERLY
631.18 FEET ALONG SAID CURVE WHOSE CHORD BEARS NORTH 43
DEGREES 46 MINUTES 24 SECONDS EAST 622.47 FEET TO THE POINT OF
TANGENCY OF SAID CURVE; THENCE NORTH 27 DEGREES 15 MINUTES
21 SECONDS EAST 11.57 FEET ALONG SAID CENTERLINE TO A POINT;
THENCE SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1776.45
FEET TO A POINT; THENCE SOUTH 52 DEGREES 21 MINUTES 00
SECONDS WEST 1343.89 FEET TO A POINT IN THE CENTERLINE OF
-21-
BRISTOL ROAD; THENCE NORTH 37 DEGREES 39 MINUTES 00 SECONDS WEST 1778.85
FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING.
ALSO: THAT PART OF SECTIONS FOURTEEN (14) AND TWENTY-THREE (23), ALL IN
TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE SEVEN (7) EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE LAKE UNIT NO.
1, (SAID POINT ALSO BEING THE INTERSECTION OF THE CENTERLINE OF BRISTOL
ROAD AND THE CENTERLINE OF KENNEDY ROAD), AS SHOWN ON THE SUBDIVISION
PLAT OF STRUKEL'S PARADISE LAKE UNIT NO. 1, RECORDED AS DOCUMENT#71-215;
THENCE SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1778.85 FEET ALONG
THE CENTERLINE OF BRISTOL ROAD FOR THE POINT OF BEGINNING; THENCE NORTH
52 DEGREES 21 MINUTES 00 SECONDS EAST 1343.89 FEET TO A POINT; THENCE
SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1645.23 FEET TO A POINT IN THE
CENTERLINE OF ILLINOIS ROUTE 34; THENCE SOUTH 46 DEGREES 33 MINUTES 17
SECONDS WEST 1350.80 FEET ALONG SAID CENTERLINE OF ILLINOIS ROUTE 34 TO
THE INTERSECTION OF THE CENTERLINE OF BRISTOL ROAD; THENCE NORTH 37
DEGREES 39 MINUTES 00 SECONDS WEST 1781.63 FEET ALONG SAID CENTERLINE OF
BRISTOL ROAD TO THE POINT OF BEGINNING.
ALSO:
THAT PART OF SECTIONS FOURTEEN (14) AND TWENTY-THREE (23), ALL IN
TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE SEVEN (7) EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE LAKE UNIT NO.
1, (SAID POINT ALSO BEING THE INTERSECTION OF THE CENTERLINE OF BRISTOL
ROAD AND THE CENTERLINE OF KENNEDY ROAD), AS SHOWN ON THE SUBDIVISION
PLAT OF STRUKEL'S PARADISE LAKE UNIT NO. 1, RECORDED AS DOCUMENT#71-215;
THENCE NORTH 60 DEGREES 17 MINUTES 26 SECONDS EAST 724.86 FEET ALONG THE
CENTERLINE OF KENNEDY ROAD TO THE POINT OF CURVATURE OF A 1094.72 FOOT
RADIUS CURVE TO THE LEFT; THENCE NORTHEASTERLY 631.18 FEET ALONG SAID
CURVE WHOSE CHORD BEARS NORTH 43 DEGREES 46 MINUTES 24 SECONDS EAST
622.47 FEET TO THE POINT OF TANGENCY OF SAID CURVE; THENCE NORTH 27
DEGREES 15 MINUTES 21 SECONDS EAST 11.57 FEET ALONG SAID CENTERLINE FOR
THE POINT OF BEGINNING; THENCE CONTINUE NORTH 27 DEGREES 15 MINUTES 21
SECONDS EAST 551.92 FEET ALONG SAID CENTERLINE TO A POINT;
-22-
THENCE SOUTH 45 DEGREES 56 MINUTES 15 SECONDS EAST 1501.96 FEET ALONG AN
EXISTING FENCE LINE TO A POINT; THENCE SOUTH 35 DEGREES 48 MINUTES 56
SECONDS EAST 2104.69 FEET ALONG SAID FENCE LINE TO A POINT IN THE
CENTERLINE OF ILLINOIS ROUTE 34; THENCE SOUTH 46 DEGREES 33 MINUTES 17
SECONDS WEST 652.28 FEET ALONG SAID CENTERLINE TO A POINT; THENCE NORTH
37 DEGREES 39 MINUTES 00 SECONDS WEST 3421.68 FEET TO THE POINT OF
BEGINNING.
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION 11 AND PART OF THE NORTHWEST
QUARTER OF SECTION 14, TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST
CORNER OF SECTION 11; THENCE SOUTH 0 DEGREES 57 MINUTES 0 SECONDS WEST
442 FEET TO THE NORTH LINE OF THE RIGHT OF WAY OF THE CHICAGO,
BURLINGTON AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17 MINUTES 0
SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE SOUTH LINE OF
SECTION 11; THENCE SOUTH 89 DEGREES 53 MINUTES 0 SECONDS EAST 1001.25
FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE SOUTHEAST CORNER OF
THE WEST HALF OF SAIDSECTION 11; THENCE NORTH 89 DEGREES 54 MINUTES 0
SECONDS EAST 1339.5 FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE
SOUTHEAST CORNER OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID
SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES 0 SECONDS EAST 977.5 FEET
TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH 74 DEGREES 15 MINUTES 0
SECONDS WEST 727.2 FEET ALONG SAID CENTERLINE; THENCE NORTH 79 DEGREES
10 MINUTES 0 SECONDS WEST 2877.4 FEET ALONG SAID CENTERLINE TO THE
CENTERLINE OF A NORTH AND SOUTH HIGHWAY; THENCE SOUTH 7 DEGREES 7
MINUTES 0 SECONDS EAST 364.8 FEET ALONG THE CENTER OF SAID NORTH AND
SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0 SECONDS WEST 503.33
FEET TO THE WEST LINE OF SAID SECTION 11; THENCE SOUTH 0 DEGREES 52
MINUTES 0 SECONDS WEST ALONG SAID WEST LINE 1327.6 FEET TO THE POINT OF
BEGINNING; EXCEPT
WAY LINE OF THE CHICAGO, BURLINGTON AND QU NCCY RAILROAD AFORESAID IN THE
TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
-23-
GRANDE RESERVE SOUTH REGION
THAT PART OF SECTIONS 15,22 AND 23, TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT THE POINT
OF INTERSECTION OF THE NORTH AND SOUTH CENTERLINE OF SAID SECTION 15
WITH THE TANGENT OF THE CENTERLINE OF STATE AID ROUTE 20 AS ESTABLISHED
BY INSTRUMENT RECORDED MAY 12,1952 AS DOCUMENT 125479; THENCE WESTERLY
ALONG SAID TANGENT 185.32 FEET; THENCE SOUTH 17 DEGREES 20 MINUTES 0
SECONDS EAST TO THE CENTERLINE.
S O SECONDS EAST 1303.46 ND FEET FOR THENCE
POINT UOF
17 DEGREES 20 MINUTE
BEGINNING; THENCE NORTH 17 3.8 FEET;DEGREES 20 MINUTES 0 SEON 4 FEET;
MINUTES 0 SECONDS WEST THENCE NORTH 17 7 DEGGREES 28 THENCE MINUTES 0
SECONDS WEST 1370.9 FEET TO THE
CENTERLINE OF STATE AID ROUTE 20; THENCE NORTH 81 DEGREES 05
MINUTES 0 SECONDS WEST ALONG S ID CENTERLINE,L 254.26 FEET TO A POINT 194.7
FEET EASTERLY AS MEASURED
OF THE NORTHEAST CORNER OF ERICKSON'S SUBDIVISION; THENCE
SOUTHERLY PARALLEL WITH THE EASTERLY LINE OF SAID ERICKSON'S SUBDIVISION,
462 FEET; THENCE WESTERLY PARALLEL WITH THE
CENTERLINE OF SAID ROAD 194.7 FEET TO THE EASTERLY LINE OF SAID
SUBDIVISION; THENCE SOUTHERLY ALONG SAID EASTERLY LINE TO THE SOUTHEAST
CORNER OF SAID SUBDIVISION; THENCE
EXTENDED WESTERLY ALONG THE SOUTHERLY LINE
OF SAID SUBDIVISION AN
1785.3 FEET TO A POINT ON THE WEST LINE OF THE SOUTHWEST
QUARTER OF SAID SECTION 15; THENCE SOUTH 0 DEGREES 55 MINUTES 0 SECONDS
EAST ALONG SAID WEST LINE 904 FEET; THENCE NORTH 88 DEGREES 03 MINUTES 0
SECONDS EAST 1629 FEET;OUTH 39 DEGREES 18 SECONDS
EAST 2187 FEET; THENCE 18 MINUTES 0 SECONDS EAST 3776.7
FEET TO THE
CENTERLINE OF U. S. ROUTE 34; THENCE NORTHEASTERLY ALONG SAID CENTERLINE
1353 FEET TO THE SOUTHWEST CORNER OF UNIT THREE,
RIVER RIDGE; THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY LINE OF
SAID UNIT THREE, RIVER RIDGE AND ALONG THE
SOUTHWESTERLY LINE OF UNIT TWO
RIDGE; THENCE 2686 FEET TO THE NORTHWEST
CORNER OF SAID UNIT TW ,
NORTHEASTERLY ALONG THE NORTHWESTERLY O SAID UNIT
RIDGE AND ALONG THE NORTHWESTERLY LF
TWO, RIVE NE OF UNIT
-24-
ONE, RIVER RIDGE 824.42 FEET TO THE CENTERLINE OF STATE AID ROUTE 20;
THENCE NORTHWESTERLY ALONG SAID CENTERLINE 1886.5 FEET TO A LINE DRAWN
NORTH 69 DEGREES 10 MINUTES 0 SECONDS EAST FROM THE POINT OF BEGINNING;
THENCE SOUTH 69 DEGREES 10 MINUTES 0 SECONDS WEST 1084.7 FEET TO THE
POINT OF BEGINNING, IN THE TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
EXCEPT FROM SAID PARCEL THAT PART LYING NORTHERLY OF THE FOLLOWING
DESCRIBED LINE: COMMENCING AT THE SOUTHWEST CORNER OF STRUKEL'S
PARADISE LAKE UNIT 1; THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY
LINE OF SAID STRUKEL'S PARADISE LAKE UNIT 1, BEING THE CENTERLINE OF
BRISTOL RIDGE ROAD, ON A BEARING OF NORTH 37 DEGREES 10 MINUTES 58
SECONDS WEST WHICH IS THE BASIS OF BEARINGS FOR THE DESCRIPTION OF THIS
LINE, A DISTANCE OF 230.00 FEET; THENCE SOUTH 52 DEGREES 49 MINUTES 02
SECONDS WEST 50.00 FEET; THENCE SOUTH 67 DEGREES 14 MINUTES 17 SECONDS
WEST 361.39 FEET; THENCE NORTH 58 DEGREES 13 MINUTES 13 SECONDS WEST
139.28 FEET; THENCE SOUTH 84 DEGREES 25 MINUTES 29 SECONDS WEST 152.64
FEET; THENCE SOUTH 40 DEGREES 17 MINUTES 18 SECONDS WEST 92.20 FEET;
THENCE SOUTH 40 DEGREES 43 MINUTES 21 SECONDS WEST 71.59 FEET; THENCE
NORTH 70 DEGREES 52 MINUTES 22 SECONDS WEST 180.28 FEET; THENCE SOUTH
6&--DEGREES 04 MINUTES 20 SECONDS WEST 570.09 FEET; THENCE NORTH 83
DEGREES 13 MINUTES 28 SECONDS WEST 194.49 FEET; THENCE NORTH 80 DEGREES
06 MINUTES 46 SECONDS WEST 293.64 FEET; THENCE SOUTH 79 DEGREES 22
MINUTES 56 SECONDS WEST 178.89 FEET; THENCE SOUTHWESTERLY ALONG THE
ARC OF A CURVE CONCAVE TO THE SOUTH, HAVING A RADIUS OF 180.00 FEET,
HAVING A CHORD BEARING OF SOUTH 82 DEGREES 25 MINUTES 09 SS LESS
A DISTANCE OF 306.52 FEET, THENCE SOUTHWESTERLY 94.34 FEET, MORE
TO A POINT IN THE WESTERLY LINE OF SAID PARCEL, SAID POINT BEING 1,100.00
FEET NORTHWESTERLY OF THE CENTERLINE OF KENNEDY
FOR THE TERMINUS OF SAID ROAD AS MEASURED
ALONG SAID
-25-
EXHIBIT A-1
DIAGRAM OF PROPERTY
Variable Rate SSA
-26-
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EXHIBIT B
PUBLIC IMPROVEMENTS
EXHIBIT C
BUDGETED AMOUNTS
-28-
EXHIBIT D
RIDER TO BE ATTACHED TO ALL SALES CONTRACTS
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EXHIBIT D
SPECIAL SERVICE AREA FINANCING RIDER TO
HOME PURCHASE AGREEMENT
RE: Yorkville SSA No. 2004-106
This Rider is attached to and made a part of that Home Purchase Agreement between
and
("Seller") and
("Purchasers") for Lot in Subdivision or for the purchase of a
portion of Developer's Property (if applicable, legal description attached as Exhibit 1) (the
"Home") at Grande Reserve Yorkville, Illinois. Seller and Purchaser hereby agree as follows:
Purchaser hereby acknowledges and agrees:
(a) The Home is part of the United City of Yorkville Special Service Area No. 2004-
106 pursuant to an Establishing Ordinance" adopted by the United City of Yorkville ("City"),
Illinois. The Establishing Ordinance authorized the levy, extension and collection of a Special
Service Area Tax upon the Home, in the manner more specifically described below, in
connection with certain Public Improvements" that will confer a special benefit on the Home
(including, without limitation, cost of engineering, soil testing and appurtenant work, mass
grading and demolition, storm water management facilities, storm water drainage systems and
storm sewers, site cleaning 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
maintenance thereof, public parks, park improvements, bicycle paths, 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). In connection therewith, the City, pursuant to a certain "Bond Ordinance,"
authorized the issuance of municipal bonds to pay for the Public Improvements, including the
financing and other costs associated with the funding of the Public Improvements.
(b) The Home is subject to the obligation to pay the Special Service Area Tax, which
shall be a lien on the Home. This Special Service Area levied
Calendar Year from to and collected each Calendar Year from
to . The Maximum Annual Special Service Area Tax on the Home shall
first be p a Y able in Calendar Year in the amount of$ . The Special Service
Area Tax on the Home may increase by no more than one and one-half percent (1.5%) each year
between the first year of the levy and . The maximum Annual Special Service Area Tax
on the Home payable in Calendar Year shall be no greater than $
although it is anticipated that when the Special Service Area is substantially occupied and
qualified for rated bonds, the bonds issued pursuant to the Bond Ordinance may be refinanced
provided the interest rate for rated bonds provides a Special Service Area Tax that will be lower
than the Special Service Area Tax payable prior to such refinancing.
( c) It is anticipated that the Special Service Area Tax may be included in the regular
real estate tax bills for the Home. If the Special Service Area Tax is billed separately,then it may
be billed at different times than regular real estate taxes.
(d) That the Special Service Area Tax as may be authorized by the Establishing
Ordinance and Bond Ordinance, which accrues on a yearly basis, imposes a lien on the Home
that, if not paid as required in a timely fashion, may eventually result in the foreclosure of that
lien (similar to the consequences of becoming delinquent on mortgage payments or general real
estate taxes).
(e) The Purchaser will not object to the validity of the Establishing Ordinance, the
Bond Ordinance and the Special Service Area Tax, including any advertisements, notices,
hearings or actions provided or taken in connection with the adoption of the Establishing
Ordinance and the Bond Ordinance or otherwise, the designation of the Home as part of the
Special Service Area pursuant to the Special Service Area Tax Law, the findings in the
Establishing Ordinance and the Bond Ordinance that the Public Improvements confer a special
service benefit on the Home, the determination that the Public Improvements are of the type that
may be financed under the Special Service Area Tax Law and the determination that the formula
for apportioning the Special Service Area Tax to the Home is rational in light of the special
service benefit conferred upon the Home.
(f) That Purchaser, by taking title to the Home, hereby agrees to accept title subject to
the Special Service Area and all rights and impositions and obligations thereby imposed,
including, without limitation, the Special Service Area Tax, which obligations shall be covenants
running with the land. The Deed that Purchaser will receive pursuant to Paragraph of the Home
Purchase Agreement shall contain a recitation of such covenants, conditions and restrictions as a
permitted exception to title.
(g) That the Special Service Area tax will be levied each year to raise funds which
will be used to make payments which will become due and payable with respect to the Bonds
during the year in which the tax payment becomes due. Thus, for example, the real estate tax bill
for the Home for calendar year , which will be issued and will become payable in ,
will contain a line item for Special Service Area taxes in the amount of$ which will
be used to make payments with respect to the Bonds which will become due and payable in
. Since the Purchaser is responsible for Purchaser's share of Bond payments for the period from
and after the Closing Date, and since the taxes for the year prior to the year in which the Closing
Date occurs are levied to cover this obligation, at Closing, the Purchaser will be required to pay
to Seller a pro rata portion of the Special Service Area Tax on the Home for the year prior to the
year in which the closing occurs, prorated from the Closing Date to the end of the year. Also,
because all of the Special Service Area taxes levied with respect to the Home for the year of
closing will be levied to pay amounts attributable to, and which become payable during, the year
after the year of closing, the Purchaser will be required to pay all of the Special Service Area Tax
levied on the Home for the year of closing which are due and payable in the following year and
Seller will give no proration credit to Purchaser at Closing for any such Special Service Area
Tax.
(h) This Rider shall be incorporated into and be deemed an integral part of the Home
Purchase Agreement. In the event of any conflict between this Rider and the Home Purchase
Agreement, the terms of this Rider shall control.
(i) Any term capitalized but not otherwise defined in this Rider shall have the
meaning ascribed to it in the Home Purchase Agreement to which this Rider is attached.
Dated: 9200
PURCHASER: SELLER:
PUBLIC IMPROVEMENT AGREEMENT
THIS PUBLIC IMPROVEMENT AGREEMENT (this "Agreement") entered into this
day of , 2004 is between the UNITED CITY OF YORKVILLE,
Illinois, a municipal corporation (hereinafter referred to as the "City"), and MPI-2
YORKVILLE NORTH LLC, MPI-2 YORKVILLE CENTRAL LLC, and MPI-2
YORKVILLE SOUTH I LLC, each an Illinois limited liability company (hereinafter
collectively referred to as the "Developer"). The City and the Developer are sometimes
hereinafter referred to individually as a"Party" and collectively as the "Parties."
RECITALS
A. The Developer owns fee simple title to that certain real estate consisting of
approximately 1037 acres, more or less, all in the City and commonly known as Grande Reserve
and legally described and shown in Exhibits A and A-1 attached hereto (the "Developer's
Property" or"Property").
B. The Developer desires to develop, and has been approved for the development of,
the Developer's Property with 2,346 dwelling units (single family, single family villas, duplex
and townhome units) in a subdivision to be known as "Grande Reserve" (hereinafter referred to
as the "Development"), subject to the contingency, as contained in the Annexation Agreement,
that if the Developer conveys the land underlying Neighborhood 5, which neighborhood consists
of 164 townhomes, to Yorkville Community School District 4115, the Developer desires to
develop 2,182 dwelling units. The Development shall be constructed in accordance with the
Annexation Agreement dated August 7, 2003 and recorded September 11, 2003 in the Kendall
County real property records as Document #200300032963, hereinafter referred to as the "MPI
Agreement," including any amendments thereto that the City and Developer may approve
(collectively referred to as the "Annexation Agreement").
C. Pursuant to the Annexation Agreement, the Developer is obligated to construct or
contribute to the construction of certain improvements on the Developer's Property and dedicate
rights-of-way or easements which, upon completion thereof, would be dedicated, conveyed, or
otherwise become the property of, or subject to the maintenance and control of,the City.
D. The City has authority to enter into this Agreement upon the Special Service Tax
Law, 35 ILCS 200/27 et seq., and the Illinois Constitution, Article VII, Section 7.
E. The Public Improvements (as hereinafter defined) are unique and special services
within the meaning of 35 ILCS 200/27-5 that benefit the Developer's Property (all to be located
in either publicly dedicated rights-of-way, on public lands, or in publicly dedicated easements)
and shall generally consist of and include the costs of engineering, soil testing and appurtenant
work, excavating, paving, 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
and signalization, equestrian paths, sidewalks and related street improvements, and equipment
and materials necessary for the maintenance thereof, public parks, park improvements, bicycle
paths, 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 and sanitary sewer services, the proposed special service area's proportionate share of
public works facilities and equipment needed for providing services for the benefit of the
proposed special service area, and other eligible costs, including legal fees (collectively, the
"Public Improvements"). The Developer desires that the City issue tax-exempt bonds, the
proceeds of which will be used to finance the Public Improvements; to pay capitalized interest; to
establish a reserve fund; to pay issuance costs; to pay the Special Service Area Number 2004-106
administrative expenses; and to reimburse the City for its expenses, including but not limited to
legal fees relating to the Bonds (as defined below). The Public Improvements are described in
more detail on Exhibit B attached hereto, as well as in the Annexation Agreement, and are
intended to benefit the Development. Without limiting the foregoing,Public Improvements shall
include land which is dedicated or conveyed to the City or easements in favor of the City for
public purposes which are created by plats of subdivision, plats of dedication or otherwise
granted to the City.
F. In order to pay for the Public Improvements, the Mayor and City Council of the
City (the "Corporate Authorities") adopted Ordinance No. 2004-15 on February 24, 2004 (the
"Proposing Ordinance") initiating the process to designate the Developer's Property as "Special
Service Area Number 2004-106 Total Grande Reserve" (the "Special Service Area") pursuant to
Section 6 of Article VII of the 1970 Constitution of the State of Illinois and the Illinois Special
Service Area Tax Law, 35 ILCS 200/27-5 et seq. and to authorize the levy of special service area
taxes (the "Special Tax") upon the taxable real property within the Special Service Area. The
Corporate Authorities have adopted Ordinance No. 2004-32 on June 22, 2004 designating the
Developer's Property as a special service area and authorizing the levy of a Special Tax (the
"Establishing Ordinance").
G. On June 22, 2004, the Corporate Authorities of the City adopted Ordinance No.
2004-33, drafted by the City's Bond Counsel (the "SSA Bond Ordinance"), authorizing (i) the
issuance by the City, under a Trust Indenture dated as of July 1, 2004 (the "Trust Indenture")
between the City and LaSalle Bank National Association (the "Trustee"), of not to exceed
$16,000,000 Special Service Area Number 2004-106 Total Grande Reserve Variable Rate
Demand Special Tax Bonds, Series 2004 (MPI Grande Reserve Project (the `Bonds"). The
Bonds are being issued to pay a portion of the cost for the Public Improvements and the costs and
expenses described in Paragraph E above.
H. The Developer proposes to construct the Public Improvements on behalf of the
City in accordance with the terms and provisions of this Agreement and the Annexation
Agreement. The proceeds from the sale of the Bonds shall be under the control of the City and
shall be used to pay for the Public Improvements.
1. The proceeds from the sale of the Bonds (the "Bond Proceeds") to be used by the
City to pay for the Public Improvements shall be held by the Trustee, in the "Improvement
Fund" created under the Trust Indenture.
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J. The Corporate Authorities shall issue Bonds for Special Service Area No. 2004-
106 Total Grande Reserve for the Development as set forth in this Agreement and contemplate
the refunding of a portion of those Bonds by the issuance of Bonds for Special Service Area Nos.
2004-103 and 2004-105 and the use of certain proceeds therefrom, and contemplate an issuance
of Bonds for Special Service Area No. 2004-104 for the Development in 2004 and one or more
additional issuances of Bonds under Special Service Area No. 2004-104 for the Development
pursuant to the terms of the Trust Indenture, and the issuance of Bonds for Special Service Area
No. 2004-103 and Special Service Area No. 2004-105 for the Development, the proceeds of
which will be used to pay a portion of the cost for the Public Improvements, including the
financing and other costs associated with the funding of the Public Improvements. There shall
not be more than sixty million dollars ($60,000,000) in the aggregate in bonds outstanding at any
one time.
K. The Corporate Authorities have determined that the Development is in the vital
and best interest of the City and the health, safety, morals, and welfare of its residents, and the
financing of the Public Improvements by the City is in accordance with the public purposes and
provisions of applicable state and local laws.
L. This Agreement has been submitted to the Corporate Authorities for consideration
and review, and the Corporate Authorities have taken all actions required to be taken prior to the
execution of this Agreement in order to make the same binding upon the City according to the
terms hereof. The Developer has taken all actions necessary and adopted the proper resolutions to
make this Agreement binding upon the Developer according to the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as
follows:
ARTICLE ONE
Recitals Part of Agreement
The representations, covenants, and recitations set forth in the foregoing recitals are
material to this Agreement and are hereby incorporated into and made a part of this Agreement as
though they were fully set forth in this Article One.
ARTICLE TWO
Mutual Assistance
The Developer and City agree to take such actions, including the execution and delivery
of such documents, instruments, petitions, certifications (and in the City's case, the adoption of
such ordinances and resolutions), as may be necessary or appropriate from time to time to carry
out the terms, provisions, and intent of this Agreement and to aid and assist each other in
carrying out said terms, provisions, and intent.
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The Developer and City recognize that a change in economic circumstances and interest
rates as they currently exist may cause the payment of special service area taxes contemplated in
this Agreement to be an undue burden upon future homeowners within the special service area. If
current interest rates change to an extent that the Developer in its sole discretion decides that the
special service area taxes would be an undue burden upon future homeowners, then the
Developer shall not be obligated to close on any bonds for the Special Service Area, and this
Agreement shall terminate. However, in such an event, the Developer shall be obligated to
reimburse the City for all out of pocket costs, including, but not limited to, fees for the trustee,
attorneys, underwriters and consultants assisting in the creation and establishment of the Special
Service Area, with such obligation to survive the termination of this Agreement.
ARTICLE THREE
Construction of the Public Improvements
3.1 Construction of Public Improvements by the Developer. Because the Public
Improvements benefit the Developer's Property and will be essential to the Development, the
Developer shall construct the Public Improvements for the benefit of and on behalf of the City as
provided in this Article Three. Construction of the Public Improvements to be financed by any
series of Bonds shall commence within six months after the sale of such series of Bonds. With
respect to the Public Improvements to be constructed with the Bond Proceeds, such proceeds
shall be fully expended on the Public Improvements within thirty-six months after the sale of the
series of Bonds from which such Bond Proceeds were derived, provided that all necessary
approvals and permits have been granted by the City. With respect to all Public Improvements,
they shall be dedicated or conveyed to the City pursuant to the Annexation Agreement as soon as
practicable after the sale of the series of Bonds financing such Public Improvements, provided
that all necessary approvals and permits have been granted by the City. The Public Improvements
shall be paid for as provided in Section 5.2 of Article Five of this Agreement and shall be
guaranteed for one (1)year by the Developer, pursuant to the Municipal Code.
3.1.1. Transfers of Ownership to City of Property Relating to Public Improvements.
Portions of the Public Improvements are to be constructed on property currently owned by
Developer. Such property is required to be dedicated or conveyed to the City in accordance with
this Agreement. The City agrees that Developer may convey certain necessary rights-of-way and
other public improvements such as stormwater management and detention facilities, by plat of
dedication or plat of easement, prior to the construction of the Public Improvements to be
constructed on such lands, even if these lands are referenced later in subdivision plats, provided
the Developer, as a condition of said conveyance, constructs the Public Improvements pursuant
to this Agreement. As aforesaid, such dedications or conveyances shall not relieve the Developer
of any of its obligations to construct the applicable Public Improvements on such property.
3.2 Duty of the Developer to Construct.
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(a) The Developer, on behalf of the City, shall cause the Public Improvements to be
constructed for the benefit of the Developer's Property in accordance with this Agreement (all to
be located in either publicly dedicated rights-of-way, on public lands, or in publicly dedicated
easements) and in the public right-of-way in accordance with this Agreement and the Annexation
Agreement. The City acknowledges that it does not intend to design, bid, or construct the Public
Improvements. The City agrees in as much as the Public Improvements are to be paid for in part
by special taxation that the Developer shall construct the Public Improvements using
subcontractors and materialmen selected from time to time by the Developer in the Developer's
sole discretion without advertising for bids as permitted by the provisions of Section 65 ILCS
5/8-9-1 of the Illinois Municipal Code and the Establishment Ordinance. All Public
Improvements to be constructed hereunder shall be constructed in substantial accordance with
the Annexation Agreement and all applicable laws, ordinances, rules, and regulations (as
modified by the terms of the Annexation Agreement which governs the Developer's Property)
and shall be constructed in a good workmanlike and commercially reasonable manner. The
Developer and the City agree that the Public Improvements shall be constructed in substantial
compliance with the Annexation Agreement and that the Annexation Agreement sets forth and
represents the Developer's full and complete obligations with respect to the construction of the
Public Improvements, and the City shall have no right to impose additional obligations therefor.
The Developer shall employ and/or contract with at all times adequate staff, consultants, and
contractors with the requisite experience necessary to administer and coordinate the construction
of the Public Improvements. The City agrees to accept the Public Improvements, provided the
Developer follows the provisions contained in Section 5.1 of this Agreement.
(b) The Developer shall receive payment for the construction, conveyance, dedication
or grant of easement of the Public Improvements in an amount equal to the amount or amounts
shown on the budget or budgets attached hereto as Exhibit C, which amounts include a factor for
the Developer's construction administration and supervisory expenses (the "Budgeted Amount").
The Budgeted Amount may be amended prior to the issuance of the Bonds by the Developer with
the consent of the City in accordance with the Establishing Ordinance and the Special Tax Report
(as defined below). The Developer and the City shall cooperate with each other and shall each
use their best efforts to cause the cost of constructing the Public Improvements to be no more
than the Budgeted Amount. The City shall comply with reasonable requests of Developer to
cause the cost of constructing the Public Improvements to be no more than the Budgeted
Amount. However, it is understood that if despite the parties' best efforts the cost of
constructing the Public Improvements exceeds the Budgeted Amount, then the Developer shall
be required to complete construction of the Public Improvements, and to the extent that the
amounts available from the Improvement Funds are not sufficient to pay for all costs of
constructing the Public Improvements, the difference shall be paid by the Developer. In making
such payments, however, the Developer does not waive any cause of action it may have against
the City for such cost overruns. In the event that the actual cost of constructing a particular
Public Improvement exceeds the cost budgeted for that Public Improvement, the Developer shall
be permitted to utilize funds allocated to other Public Improvements to pay such excess cost, and
such utilization of funds shall be in accordance with Paragraph IV(D) of the United City of
Yorkville Special Service Area No. 2004-106 Total Grande Reserve Special Tax Roll and
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Report(the "Special Tax Report") generated by David Taussig & Associates, Inc. dated
, 2004.
( c) Subject to Section 8.1 of this Agreement, if the Developer fails to complete the
Public Improvements within the times specified herein, or any extensions of time granted by the
City (which extension shall not be unreasonably withheld) or the Developer abandons the project
(ceases all work for a period of twelve (12) consecutive months without reasonable cause for
delay), and, if as a result, a breach of this Agreement shall have occurred (subject to the terms of
Section 8.3 of this Agreement), the City has the right, but not the obligation, to complete the
Public Improvements using the remaining Bond Proceeds on deposit in the Improvement Fund to
pay for the completion of the Public Improvements and the Developer shall be responsible for
reimbursing the City for any deficiencies. Notwithstanding the foregoing, a cessation of work
shall not be considered an abandonment if it is caused by inclement weather, material shortages,
acts of God, acts of war, insurrection or terror, or other conditions beyond Developer's control.
The City shall notify Developer in writing of any perceived abandonment, and Developer shall
have thirty (30) days thereafter to respond or cure.
(d) Both the City and the Developer agree to abide by the terms of the Annexation
Agreement.
3.3 Submission and Approval of Plans All work with respect to the construction of
the Public Improvements by the Developer shall be performed in conformity with the Annexation
Agreement and the terms of this Agreement. The Developer shall prepare and submit to the City
for approval by the City, which approval shall not be unreasonably delayed or withheld, a final
Plat or Plats of Subdivisions, Final Engineering for the Development, for each phase of the
Development (collectively, the "Construction Plans") in accordance with the Annexation
Agreement.
3.4 Public Improvements Constructed on City's Right-of-Way and Public Lands. The
City shall grant or cause to be granted to the Developer easements and/or licenses with respect to
the City's right-of-way and public lands and private property (over which the City has acquired
easements) for which some or all of the on-site or off-site Public Improvements are required and
which are necessary to permit the Developer to construct the Public Improvements in a form and
substance acceptable to the Developer and the City. All such easements and licenses shall be duly
executed and, if necessary, recorded, prior to the commencement of construction.
Notwithstanding the foregoing, the Developer agrees that all Public Improvements shall be
constructed within publicly dedicated rights-of-way, on public lands, or in publicly dedicated
easements or in private easements granted to the City by owners of real estate, provided,
however, all such dedications shall occur on or before the earlier of (i) final platting for such
portion of the Public Improvements or (ii) disbursement from the Improvement Funds of the cost
of such portion of the Public Improvements.
3.5 Conformance to Federal. State, and Local Requirements. All work with respect to
the Public Improvements shall conform to all applicable federal, state, and local laws,
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regulations, codes, rules and ordinances as set forth in the Annexation Agreement; provided,
however, that the City may not enforce against the Developer any ordinances, rules, or
regulations which discriminate against the Developer or which cause the cost of the Public
Improvements to significantly increase, provided the Public Improvements to be financed by any
series of Bonds shall be completed within three years after the sale of the applicable series of
Bonds.
3.6 Insurance. Prior to commencement of construction of the Public Improvements,
the Developer shall cause to be procured and delivered to the City, at the Developer's sole cost
and expense, and shall maintain in full force and effect until construction of the Public
Improvements has been completed, a policy or policies of commercial liability insurance and,
during any period of construction, contractors' liability insurance and worker's compensation
insurance, with liability coverage under the commercial liability insurance of not less than One
Million Dollars per occurrence and Two Million Dollars in the aggregate (which may be in the
form of umbrella coverage) and limits under the other policies of insurance in accordance with
statute, and such policies to be in such form and issued by such companies as shall be reasonably
acceptable to the City, to protect the City and the Developer against any liability incidental to the
use of, or resulting form, any accident occurring on or about the Public Improvements or the
construction of an improvement thereof. Each such policy shall name the City as an additional
named insured party.
3.7 Rights of Inspection. During construction of the Public Improvements, the City or
its designee shall have the right to enter upon the Developer's Property and the Public
Improvements for the purpose of conducting such inspections as the City may deem appropriate.
In the event that the City or its designee discovers a defect or deficiency in the construction of the
Public Improvements, the City or its designee shall promptly notify the Developer in writing
thereof. Any such inspection by the City of the Public Improvements shall not be construed as a
representation by the City that there has been compliance with the Construction Plans or that the
Public Improvements will be or are free of faulty materials or workmanship, or as a waiver of any
right that the City or any other party may have against the Developer or any other party for failure
to comply with the Construction Plans or the provisions of this Agreement.
3.8 Securi . The City hereby agrees that no security shall be required for that portion
of the cost of the Public Improvements that are paid, or to be paid, from the Bond Proceeds. The
Developer shall adhere to the requirements for security instruments as set forth in the Annexation
Agreement.
3.9 Densily. In no event shall the Annexation Agreement be amended nor shall any
subdivision plat be required to be drawn in such a way as to result in less than two thousand three
hundred forty-six (2,346) dwelling units (999 single family, 290 single family villas, 350
duplexes, and 707 townhomes) being permitted to be constructed on the Developer's Property
unless agreed in writing by the Developer and the Consultant (David Taussig & Associates, Inc.,
its successor or assigns). It is understood that, if the Developer conveys the land underlying
Neighborhood No. 5, which neighborhood consists of 164 townhomes, to Yorkville Community
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School District 115, the Developer is permitted to construct 2,182 dwelling units (999 single
family, 290 single family villas, 350 duplexes, and 543 townhomes) on the Developer's Property.
3.10 Administration of SSA. Subject to the terms of the Special Tax Report, dated
, 2004, and prepared by David Taussig & Associates and any subsequent
amendments thereto, the City shall contract with an administrator or consultant to administer the
Special Service Area , including, without limitation, calculation, levy, abatement, administration,
and collection of the special tax for said Special Service Area, on such terms as shall be
reasonably agreed to between the parties.
3.11 Additional Issuance of Bonds. The City shall issue, at the request of the
Developer or its nominee, the following additional bonds:
(a) Bonds for Special Service Area No. 2004-104 issued in 2004, in an amount not to
exceed $15,000,000;
(b) Additional Bonds (one or more issues) for Special Service Area No. 2004-104
issued pursuant to the terms of the Trust Indenture securing such bonds in an amount not
to exceed $15,000,000 upon satisfaction of the conditions set forth in Article III of the
Trust Indenture;
(c) Bonds for Special Service Area No. 2004-103, in an amount not to exceed
$15,000,000; and
(d) Bonds for Special Service Area No. 2004-105, in an amount not to exceed
$8,000,000.
These additional bonds, issued by the City, shall be exclusive of Bonds issued to refund
outstanding Bonds and variable rate Bonds. It is contemplated that a portion of the Bonds issued
pursuant to this Agreement will be refunded by the issuance of Bonds for Special Service Area
Nos. 2004-103, 2004-104, and 2004-105 and the use of certain proceeds therefrom. There shall
not be more than sixty million dollars ($60,000,000) in the aggregate in Bonds outstanding at any
one time.
3.12 The City covenants and agrees to deposit the first [$521,000] received from the
Recovery and Recapture monies due Developer under, as defined in Exhibit I (Paragraph C) and
Section I TA of the Annexation Agreement to the Special Redemption Account, as defined and
as applied as set forth in the Indenture. The City and the Developer agree that, prior to entering
into any Recapture Agreement, they will amend the provisions of the form of such Recapture
Agreement to conform to the requirements of Section 5.2(f) of the Indenture.
ARTICLE FOUR
Developer Indemnification
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The Developer agrees to indemnify, defend, and hold the City Council and officers,
employees, and agents of the City, including attorneys, engineers, and consultants, harmless from
and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine,
penalty, punitive damage, or expense (including, without limitation, reasonable attorneys' fees),
to the extent resulting from, arising out of, or based upon: (i) any breach as defined pursuant to
Section 8.3 and as determined by a court of law on the part of the Developer in the performance
of any of its material obligations under this Agreement not resulting from the negligent conduct
of the City; or (ii) any act of negligence of the Developer or any of its agents, contractors,
servants or employees; or (iii) any violation by the Developer of any easements, law, ordinances,
or codes affecting the Developer's Property, the Development, or the Public Improvements. In
case any such claim shall be made or action brought based upon any such claim in respect of
which indemnity may be sought against the Developer, upon timely receipt of notice in writing
from the City setting forth the particulars of such claim or action, the Developer shall assume the
defense thereof including the employment of counsel subject to approval of the City, which
approval shall not be unreasonably withheld, and the payment of all judgments, costs and
expenses. The Developer shall have the right, but not the obligation, to appeal to courts with
appellate jurisdiction any such judgment taken against the City, and the City shall join in any
such appeal. The City shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the City.
ARTICLE FIVE
Payment for Public Improvements
5.1 Improvements to be Constructed.
5.1.1 Requests for Payment. The Developer may submit to the City Engineer or his
designee and send a copy to the Consultant not more frequently than once each calendar month, a
written request in the form of Exhibit D of the Trust Indenture ("Disbursement Request") for
payment of the Developer's costs of constructing those portions of the Public Improvements
which have been completed to date and/or for the payment or reimbursement of those costs that
are identified on the Construction Plans and Exhibit B, as well as enumerated in Recital D,
including the cost of the acquisition of title to, or easements with respect to, land on which Public
Improvements are located or to be located. The City shall inspect each portion of the Public
Improvements for which payment is requested and shall, within ten (10) business days after
receipt of a Disbursement Request, make its inspection and, if the City Engineer confirms that
the work for which payment is requested has been done, the Authorized Officer (as hereinafter
defined) shall, within three (3) business days of the inspection (1) execute and deliver to the
Developer a Certificate of Completion and Acceptance ("Acceptance Certificate") indicating the
City's acceptance of such work and (2) execute and deliver to the Developer and to the Trustee a
written statement ("Disbursement Request") approving the payment of funds as provided therein.
As used herein "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 Developer and the Trustee for the Bonds.
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5.1.2. Denial of Compliance. If, in the City Engineer's reasonable opinion, any portion
of the work is not in compliance with the Construction Plans, the City shall within five (5)
business days after submission of a Request for Payment notify the Developer in writing
("Noncompliance Notice") of (1) the specific improvements which it believes are not in
compliance with the Construction Plans, (2) the reasons why it believes that the work is not in
compliance with the Construction Plans and (3) the reasons why it is not approving a portion or
all of the requested disbursement together with reasonably detailed explanations thereof.
Developer shall have five (5) business days after receipt of such Noncompliance Notice to
remedy such work, subject to the Unavoidable Delay provisions of Section 8.1 and further
provided that, in the event such work cannot be remedied within such five (5) day period, and
Developer is diligently pursuing such remedy, developer shall have a period of thirty (30) days
after receipt of such Noncompliance Notice to remedy such work. However, to the extent that
the Request for Payment relates to multiple Public Improvements and the City Engineer confirms
that some of the Public improvements addressed by the Request for Payment are complete, the
Authorized Officer shall (1) execute and deliver to the Developer an Acceptance Certificate for
that portion of the Public Improvements which are accepted by the City, and (2) execute and
deliver to the Developer, the Consultant and the Trustee a Disbursement Request for the Public
Improvements which have been completed.
5.1.3 Release of Funds. At such time as work covered by a Request for Payment is
approved by the City Engineer, subject to the provisions of the Trust Indenture and any tax
certificates delivered by the City in connection with the Bonds, the Authorized Officer shall
deliver a Disbursement Request to the Trustee directing the Trustee to disburse to the Developer
the amount of funds provided for in the Disbursement Request to the extent that funds are
available in the Improvement Fund.
5.1.4 Failure to Inspect. Should the City, upon written request by the Developer, fail
to inspect any portion of the Public Improvements within the time period designated above or to
send either an Acceptance Certificate or a Noncompliance Notice, subject to the Unavoidable
Delay provisions identified herein, at that time such portion of the Public Improvements shall be
deemed accepted by the City.
5.1.5 Conditions Precedent to Payment. The City Engineer or his designee shall
authorize the distribution of funds by the Trustee to the Developer to pay for those portions of the
Public Improvements which have been completed upon satisfaction of the following conditions:
(a) The Developer shall have submitted to the City Engineer, with a copy to the
Consultant, a Request for Payment with respect to such portions of the Public Improvements and
the City Engineer has issued, or is required to issue, a Disbursement Request to the Trustee with
respect thereto;
(b) The Developer shall have caused a title insurance company licensed to do
business in Illinois ("Title Company") to issue to the Trustee and the City Engineer a letter or
commitment whereby the Title Company insures the Trustee and the City from any and all
mechanics' lien claims with respect to work covered by the Disbursement Request. Alternatively,
the Developer may request that the City Engineer direct the Trustee to disburse the funds into a
-10-
construction escrow account with the Title Company with directions that the Title Company shall
not release any funds to any subcontractor or materialmen unless and until appropriate lien
waivers and supporting affidavits to the satisfaction of the Title Company have been received by
the Title Company; and
( c) The Developer shall not be in default under this Agreement if the Unavoidable
Delay provisions of Section 8.1 hereof apply. Further, the Notice and Cure provisions of Section
8.3 of this Agreement are a condition precedent to the declaration of any default under this
Agreement.
5.2 Bond Proceeds.
(a) The Bond Proceeds shall be deposited, held, invested, reinvested, and disbursed as
provided in the Trust Indenture. Bond Proceeds shall be deposited in the Improvement Fund,
which, together with anticipated interest earnings, are anticipated to be sufficient to fully fund the
Budgeted Amounts set forth in Exhibit C for the Public Improvements. The Developer reserves
the right to shift costs from one line item in the Budgeted Amounts to another line item in the
event that actual costs are more or less than Budgeted Amounts, provided, the total amount
budgeted is not increased, and to the extent allowed and upon satisfaction of the conditions set
forth in the Special Tax Report. Monies in the Improvement Fund shall be withdrawn therefrom
in accordance with the provisions of the Trust Indenture and the applicable provisions of this
Agreement for payment of all or a portion of the cost of constructing the Public Improvements.
(b) As long as the City invests the Bond Proceeds pursuant to the Trust Indenture and
except in the event of fraud or gross negligence, the City shall have no responsibility whatsoever
to the Developer with respect to any investment of funds made by the Trustee under the Trust
Indenture, including any loss of all or a portion of the principal invested or any penalty for
liquidation of investment. Any such loss may diminish the amounts available in the Improvement
Funds to pay the cost of constructing the Public Improvements. The Developer further
acknowledges that the obligation of any owner of real property in the Development, including the
Developer to the extent it owns any property in the Development, to pay Special Taxes is not in
any way dependent on the availability of amounts in the Improvement Fund to pay for all or any
portion of Public Improvements. The Developer acknowledges that any lack of availability of
amounts in the Improvement Funds to pay the cost of constructing the Public Improvements shall
in no way diminish any obligation of the Developer with respect to the construction of the Public
Improvements in accordance with this Agreement or any other agreement to which the Developer
is a party.
( c) The City shall not initiate or approve any amendment to the Trust Indenture that
relates to or affects the Improvement Fund or the purposes for which the Improvement Fund may
be expended without the express written consent of Developer.
5.3 Limited Liability of City. The Developer agrees that any and all obligations of the
City arising out of or related to this Agreement are special and limited obligations of the City and
the City's obligations to make any payments under this Agreement are restricted entirely to the
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monies, if any, in and available for disbursement from the Improvement Funds and from no other
source. Except in the event of fraud or gross negligence,no member of the corporate authorities,
or any City staff member, employee or agent, including attorneys and engineers, shall incur any
liability under this Agreement to the Developer or any other party in their individual capacities
by reason of their actions under this Agreement or the execution of this Agreement.
ARTICLE SIX
Other Agreements
6.1 Continuing Disclosure. The Developer agrees to provide to the underwriter of the
Bonds and the Consultant (as defined in the Trust Indenture) certain continuing information
concerning the development of the Developer's Property until such time as 90% of the Parcels
are sold to homeowners as verified in writing by the Developer to the Underwriter of the Bonds.
This information includes (i) annual reviewed financial statements of the Developer to the
Underwriter and (ii) quarterly reports from the Developer to the Underwriter and the Consultant,
setting forth: the number of single family homes, single family villas, townhomes and duplex
sales and/or bulk property sales; the number of single family homes, single family villas,
townhomes and/or duplexes constructed on the Subject Property; a description of the type of
such homes and the range of sale prices for such homes; the number of sales of single family
homes, single family villas, townhomes and/or duplexes closed; any pending litigation which
would adversely affect the ability of the Developer to develop the Subject Property or to pay
Special Taxes; any material change in the structure or ownership of the Developer; any failure of
the Developer, or any affiliate of the Developer, to pay by the date due general ad valorem
property taxes or special taxes, or any other governmental charge on the Subject Property as and
when due; any denial or termination of credit; any denial or termination of, or default under, any
line of credit or loan or any other loss of a source of funds that Developer has reason to believe is
likely to have a material adverse effect on the ability of the Developer to cause the Subject
Property to be developed; the occurrence of any event of
Bankruptcy with respect to the Developer, or any affiliate of the
Developer; any significant amendments to land use entitlements
for the Development, if such amendments are likely to prevent or
delay the implementation of the Development; any previously
undisclosed governmentally-imposed preconditions to commencement
or continuation of development on the Subject Property, if such
preconditions are likely to prevent or delay the Development; any
previously undisclosed legislative, administrative or judicial
challenges to development of the Subject Property or the
collection of special taxes; any changes of which the Developer
is aware, if material, in the alignment, design or likelihood of
completion of significant public improvements affecting the
Development, including major thoroughfares, sewers, water
conveyance systems and similar facilities . Quarterly reports
shall be delivered within thirty (30) days after the end of each
calendar quarter . In addition, the Developer shall use its best
efforts to provide prompt notice of any of the events described
above .
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6.2 City Acceptance of Public Improvements, Donations. The City shall accept the
Public Improvements pursuant to the Annexation Agreement and this Agreement. The Developer
agrees to make donations and contributions to the appropriate school district and appropriate
park district as provided in the Annexation Agreement.
6.3 Covenant, Rider to Sales Contracts. The Developer and its successors and assigns
covenant and agree, unless the Special Tax has been prepaid, to attach the Rider or one
substantially similar to it, attached hereto as Exhibit D, to all sales contracts for the sale of
dwelling units or for the sale of all or a portion of Developer's Property. Said Rider fully
explains the responsibilities of the Owner of Developer's Property or of a Dwelling Unit for the
payment of a Special Service Area Tax, that this responsibility runs with the land, that each
subsequent owner of Developer's Property or of a Dwelling Unit shall be responsible for the
payment of said tax, and that each owner shall be responsible for disclosing same in any sales
contract.
6.4 Sale of Developer's Property. The City agrees that the Developer shall have the
right to either build on the Developer's Property or to sell developed lots to other builders, or to
convey any or all of the Developer's Property at any time after the date of this Agreement. The
Developer shall notify the Underwriter, the City and the Consultant prior to the sale of any
portion of Developer's Property other than the sale of an individual dwelling unit.
ARTICLE SEVEN
Authority
7.1 Powers. Each Party hereby represents and warrants to the other Parties that the
Party making such representation and warranty has full constitutional and lawful right, power,
and authority, under currently applicable law, to execute, and deliver, and perform the terms and
obligations of this Agreement, and all of the foregoing have been or will be duly and validly
authorized and approved by all necessary City proceedings, findings, and actions and all
necessary Developer actions. Accordingly, this Agreement constitutes the legal, valid, and
binding obligation of the City and the Developer, enforceable in accordance with its terms and
provisions and does not require the consent of any other governmental authority.
7.2 Authorized Parties. Whenever under the provisions of this Agreement and other related
documents and instruments or any supplemental agreements, any request, demand, approval,
notice, or consent of the City or the Developer is required, or the City or the Developer is
required to agree or to take some action at the request of the other party, such request, demand,
approval, notice, or consent, or agreement shall be given for the City, unless otherwise provided
herein, by the City Administrator or his or her written designee and for the Developer by its
Manager or its written designee; and either party shall be authorized to act on any, such request,
demand, approval, notice, or consent, or agreement or other action and neither party hereto shall
have any complaint against the other party as a result of any such action taken.
-13-
ARTICLE EIGHT
General Provisions
8.1 Unavoidable Delays. The time for performance by Developer shall be extended by
a period of time equal to the time of delay caused by any of the following reasons (herein called
"Unavoidable Delays"): Acts of God, acts of the public enemy, or acts of fire, strikes, flood,
governmental orders or edicts, governmental rationing or allocation of materials, adverse weather
conditions, lockouts, riots, strikes, or any other cause beyond the reasonable control of the
Developer.
8.2 Time of Essence. Time is of the essence of this Agreement.
8.3 Breach. A party shall be in "breach of this Agreement" if it shall fail to
substantially perform any of its respective obligations under this Agreement, barring an
Unavoidable Delay. Upon breach of this Agreement, any of the parties, in a court of competent
jurisdiction, by an action or proceeding in law or in equity, may exercise any remedy available at
law or in equity.
Before any failure of any party to this Agreement to perform its obligations under this
Agreement shall be deemed to be a breach of this Agreement, the party claiming such failure
shall notify, in writing, by certified mail, return receipt requested, the party alleged to have failed
to perform, state the obligation allegedly not performed and the performance demanded and the
party failing to perform shall not have commenced performance and diligently prosecuted same
to completion within thirty (30) days after such notice.
8.4 Amendment. This Agreement, and any exhibits attached hereto, may be amended
only by the agreement of all of the Parties evidenced by a written amendment, with the adoption
of an ordinance or resolution of the City approving the written amendment.
8.5 Entire Agreement. This Agreement sets forth all agreements, understandings, and
covenants between the Parties relative to the matters herein contained, except for the Annexation
Agreement This Agreement supersedes all prior agreements, other than the Annexation
Agreement, negotiations and understandings, written and oral, and shall be deemed a full
integration of the entire agreement of the Parties.
8.6 Severability. If any provisions, covenants, agreements, or portions of this
Agreement, or its application to any person, entity, or property, is held invalid, such invalidity
shall not affect the application or validity of any other provisions, covenants, agreements, or
portions of this Agreement and, to that end, all provisions, covenants, agreements, or portions of
this Agreement are declared to be severable.
8.7 Illinois Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.
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8.8 Notice. Any notice to be given or served hereunder or under any document or
instrument executed pursuant hereto shall be in writing and shall be: (i) delivered personally,
with a receipt requested therefor; or (ii) sent by facsimile; or (iii) sent by a recognized overnight
courier service; or (iv) delivered by United States registered or certified mail, return receipt
requested, postage prepaid. All notices shall be addressed to the Parties at their respective
addresses set forth below, and the same shall be effective: (a) upon receipt or refusal if delivered
personally or by facsimile; (b) one (1) business day after depositing with such an overnight
courier service; or ( c) two (2) business days after deposit in the mails, if mailed. A Party may
change its address for receipt of notices by service of a notice of such change in accordance
herewith.
If to the City:
United City of Yorkville
800 Game Farm Road
Yorkville, Illinois 60560
Attention: City Clerk
Phone: (630) 553-4350
Fax: (630) 553-7575
with a copy to:
Law Offices of Daniel J. Kramer
1107S Bridge St.
Yorkville, Illinois 60560
Phone: (630)553-9500
Fax: (630) 553-5764
If to Developer:
MPI-2 Yorkville North LLC
MPI-2 Yorkville Central LLC
MPI-2 Yorkville South I LLC
6880 North Frontage Road, Suite 100
Burr Ridge, Illinois 60527
Attention: Anthony R. Pasquinelli
Fax: (630) 455-2591
with a copy to:
Moser Enterprises, Inc.
-15-
Fifth Avenue Station
300 East Fifth Avenue, Suite 430
Naperville, Illinois 60563
Attention: Arthur C. Zwemke
Fax: (630) 420-8930
and to:
Moss and Bloomberg, Ltd.
305 West Briarcliff Road
Bolingbrook, Illinois 60440
Attention: Barry L. Moss, Esq.
Fax: (630) 759-8504
8.9 Counterparts. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same agreement.
8. 10 Consent or Approval. Except as otherwise provided in this Agreement, whenever
consent or approval of a Party is required, such consent or approval shall not be unreasonably
withheld.
8.11 Assignment . At its sole cost and expense, the Developer may collaterally assign its
interest in the payments to be received hereunder to a third-party lender who is advancing funds
for the payment of the costs of the Public Improvements. The Developer shall notify the City of
its intent to collaterally assign its interest in the payment received and said assignment is subject
to the reasonable approval of the City. No assignment shall result in any increased costs to the
City, unless the City is reimbursed for such increased costs.
8.12 Third Party Beneficiary. Nothing contained herein, whether expressed or implied,
is intended to give or shall be construed as giving anyone other than the parties hereto (and their
respective representatives, successors and assigns) any rights under this Agreement.
-16-
8.13 Effective Date. This Agreement shall become effective upon the date first above
written by each of the parties.
UNITED CITY OF YORKVILLE
a Municipal Corporation
ATTEST: Mayor
City Clerk
MPI-2 YORKVILLE NORTH LLC
an Illinois Limited Liability Company
By: MPI Manager Inc., Its Manager
Arthur C. Zwemke, Its President
Dated:
MPI-2 YORKVILLE CENTRAL LLC
an Illinois Limited Liability Company
By: MPI Development Manager, Inc., Its
Manager
Arthur C. Zwemke, Its President
Dated:
MPI-2 YORKVILLE SOUTH I LLC
an Illinois Limited Liability Company
By: MPI Manager Inc., Its Manager
Arthur C. Zwemke, Its President
Dated:
119289\RE V\121760wd\6/15/04
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EXHIBIT A
LEGAL DESCRIPTION
GRANDE RESERVE NORTH REGION
THAT PART OF THE SOUTHEAST THIRD DESCRIBED TOWNSHIP NORTH,
RANGE 7 EAST OF THE MERIDIAN AS FOLLOWS
BEGINNING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER; THENCE
WESTERLY ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER 2029.92 FEET TO
THE EAST LINE OF LOT 5 OF SAID SECTION 11; THENCE SOUTHERLY ALONG SAID
EAST LINE 1469.90 FEET TO THE CENTERLINE OF MILL ROAD; THENCE
SOUTHEASTERLY ALONG SAID CENTERLINE 1039.40 FEET TO A TRACT OF LAND
CONVEYED TO COMMONWEALTH EDISON COMPANY BY TRUSTEE'S DEED RECORDED
JUNE 28,1973 AS DOCUMENT 733089; THENCE NORTHEASTERLY ALONG SAID
NORTHERLY LINE 1062.36 FEET TO THE EAST LINE OF SAID SOUTHEAST QUARTER;
THENCE NORTHERLY I E E HE POINT OF
BEGINNING IN TOWNSHIP, COUNTY, ILLINOIS.
ALSO:
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 2, PART OF THE NORTHEAST
QUARTER OF SECTIONRANGE 7EAST OF THE TOHRRD PRINCIPAL MERIDIAN,
12,
TOWNSHIP 37 NORTH,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID SECTION 2; THENCE
SOUTH 89 DEGREES 28 MINUTES 21 SECONDS EAST ALONG THE NORTH
LINE OF SAID SECTION 12, 99.96 FEET- THENCE SOUTH 2 DEGREES 26
MINUTES 28 SECONDS EAST 2654.27 -EET TO A POINT ON THE SOUTH
LINE OF THE NORTHWEST QUARTER OF SAID SECTION 12,236.28 FEET
EAST OF THE SOUTHWEST CORNER OF SAID NORTHWEST QUARTER;
THENCE NORTH 89 DEGREES 28 MINUTES 58 SECONDS WEST ALONG
SAID SOUTH LINE 236.28 FEET TO THE SOUTHWEST CORNER OF SAID
NORTHWEST QUARTER; THENCE NORTH 89 DEGREES 31 MINUTES 16
SECONDS WEST ALONG THE SOUTH LINE OF THE NORTHEAST
QUARTER OF SAID SECTION 11, 2028.27 FEET TO THE EXTENSION
SOUTHERLY OF THE EASTERLY LINE OF LOT 1 OF STORYBOOK
HIGHLANDS, A SUBDIVISION IN SAID SECTION 11; THENCE NORTH 1
DEGREE 06 MINUTES 53 SECONDS EAST ALONG SAID EXTENDED LINE
1030.0 FEET; THENCE SOUTH 89 DEGREES 06 MINUTES 37 SECONDS
EAST 239.40 FEET; THENCE NORTH 1 DEGREE 06 MINUTES 53 SECONDS
EAST 872.93 FEET TO THE CENTERLINE OF CANNONBALL TRAIL; THENCE
NORTH 66 DEGREES 09 MINUTES 20 SECONDS EAST ALONG SAID
CENTERLINE 898.31 FEET; THENCE NORTHEASTERLY ALONG SAID
-18-
CENTERLINE, BEING ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 2290.82
FEET, A DISTANCE OF 495.34 FEET; THENCE NORTH 53 DEGREES 46 MINUTES EAST
ALONG SAID CENTERLINE 654.29 FEET TO THE EAST LINE OF SAID SECTION 2;
THENCE SOUTH 0 DEGREES 30 MINUTES 10 SECONDS WEST ALONG SAID EAST LINE
262.54 FEET TO THE POINT OF BEGINNING, IN THE TOWNSHIP OF BRISTOL, KENDALL
COUNTY, ILLINOIS.
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION 11, TOWNSHIP 37 NORTH, RANGE 7
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT
THE SOUTHWEST CORNER OF SECTION 11; THENCE SOUTH 0 DEGREES 57 MINUTES
0 SECONDS WEST 442 FEET TO THE NORTH LINE OF THE RIGHT OF WAY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17
MINUTES 0 SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE
SOUTH LINE OF SECTION 11; THENCE SOUTH 89 DEGREES 53 MINUTES 0 SECONDS
EAST 1001.25 FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE
SOUTHEAST CORNER OF THE WEST HALF OF SAID SECTION 11; THENCE NORTH 89
DEGREES 54 MINUTES 0 SECONDS EAS T 1339.5 FEET ALONG THE SOUTH LINE OF
SAID SECTION 11 TO THE SOUTHEAST CORNER OF THE WEST HALF OF THE
SOUTHEAST QUARTER OF SAID SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES
0 SECONDS EAST 977.5 FEET TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH
74 DEGREES 15 MINUTES 0 SECONDS WEST 727.2 FEET ALONG SAID CENTERLINE;
THENCE NORTH 79 DEGREES 10 MINUTES 0 SECONDS WEST 2877.4 FEET ALONG
SAID CENTERLINE TO THE CENTERLINE OF A NORTH AND SOUTH HIGHWAY; THENCE
SOUTH 7 DEGREES 7 MINUTES 0 SECONDS EAST 364.8 FEET ALONG THE CENTER OF
SAID NORTH AND SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0
SECONDS WEST 503.33 FEET TO THE WEST LINE OF SAID SECTION 11; THENCE
SOUTH 0 DEGREES 52 MINUTES 0 SECONDS WEST ALONG SAID WEST LINE 1327.6
FEET TO THE POINT OF BEGINNING (EXCEPT THAT PART OF RIGHT OF WAY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD RUNNING THROUGH SECTION 11
AFORESAID, AND ALSO EXCEPT THAT PART LYING WESTERLY OF THE CENTERLINE
OF KENNEDY ROAD, AND ALSO EXCEPT THAT PART LYING SOUTHERLY OF THE
CHICAGO, BURLINGTON AND QUINCY RAILROAD RUNNING THROUGH SECTION 11
AFORESAID), IN THE TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
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GRANDE RESERVE CENTRAL REGION
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 11, THAT PART OF SECTION
14, AND THAT PART OF THE NORTH HALF OF SECTION 23, TOWNSHIP 37 NORTH,
RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF KENNEDY
ROAD WITH THE SOUTHERLY LINE OF THE BURLINGTON NORTHERN
RAILROAD RIGHT-OF-WAY THROUGH SAID SECTION 14; THENCE NORTH
73 DEGREES 14 MINUTES 21 SECONDS EAST ALONG SAID SOUTHERLY
LINE 1239.61 FEET TO THE NORTH LINE OF THE NORTHWEST QUARTER
OF SAID SECTION 14; THENCE NORTH 88 DEGREES 04 MINUTES 00
SECONDS EAST, ALONG SAID NORTH LINE, 610.29 FEET TO THE.
NORTHEAST CORNER OF SAID NORTHWEST QUARTER; THENCE NORTH
87 DEGREES 54 MINUTES 03 SECONDS EAST ALONG THE SOUTH LINE OF
SAID SOUTHEAST QUARTER OF SECTION 11, A DISTANCE OF 1329.33
FEET TO THE WEST LINE OF THE SOUTHEAST QUARTER OF SAID
SOUTHEAST QUARTER; THENCE NORTH 01 DEGREES 21 MINUTES 20
SECONDS WEST ALONG SAID WEST LINE, 511.01 FEET TO SAID
SOUTHERLY LINE OF THE BURLINGTON NORTHERN RAILROAD; THENCE
NORTH 73 DEGREES 14 MINUTES 21 SECONDS EAST, ALONG SAID
SOUTHERLY LINE, 837.66 FEET TO THE CENTERLINE OF MILL ROAD;
THENCE SOUTH 74 DEGREES 18 MINUTES 13 SECONDS EAST ALONG
SAID CENTERLINE 546.02 FEET TO THE EAST LINE OF SAID SOUTHEAST
QUARTER OF SECTION 11; THENCE SOUTH 01 DEGREE 19 MINUTES 08
SECONDS EAST ALONG SAID EAST LINE, 556.17 FEET TO THE
SOUTHEAST CORNER OF SAID SOUTHEAST QUARTER; THENCE SOUTH
01 DEGREE 19 MINUTES 08 SECONDS EAST ALONG THE EAST LINE OF
THE NORTHEAST QUARTER OF SAID SECTION 14, A DISTANCE OF 1122.0
FEET; THENCE SOUTH 87 DEGREES 45 MINUTES 51 SECONDS WEST,
438.0 FEET TO THE NORTHEAST CORNER OF LYNWOOD SUBDIVISION,
EXTENSION FOUR; THENCE SOUTH 87 DEGREES 45 MINUTES 51
SECONDS WEST, ALONG THE NORTHERLY LINE OF SAID LYNWOOD
SUBDIVISION, EXTENSION FOUR, 1168.80 FEET TO THE NORTHWEST
CORNER THEREOF; THENCE SOUTH 01 DEGREE 46 MINUTES 18
SECONDS EAST, ALONG THE WESTERLY LINE OF LYNWOOD
SUBDIVISION, EXTENSIONS FOUR AND FIVE, 1173.80 FEET TO AN IRON
STAKE; THENCE SOUTH 01 DEGREE 47 MINUTES 49 SECONDS EAST,
-20-
ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION, EXTENSION FIVE, 376.25
FEET TO AN IRON STAKE; THENCE SOUTH 02 DEGREES 01 MINUTES 46 SECONDS
EAST ALONG THE WESTERLY LINES OF LYNWOOD SUBDIVISION, EXTENSIONS FIVE
AND SIX, 1950.62 FEET TO AN IRON STAKE; THENCE SOUTH 01 DEGREE 51 MINUTES
08 SECONDS EAST, ALONG THE WESTERLY LINE OF LYNWOOD SUBDIVISION,
EXTENSION SIX, 879.29 FEET TO THE CENTERLINE OF U. S. ROUTE NO. 34; THENCE
SOUTH 45 DEGREES 14 MINUTES 47 SECONDS WEST ALONG SAID CENTERLINE 878.60
FEET; THENCE NORTH 37 DEGREES 07 MINUTES 26 SECONDS WEST, 2106.30 FEET;
THENCE NORTH 47 DEGREES 17 MINUTES 26 SECONDS WEST, 1500.85 FEET TO THE
CENTERLINE OF KENNEDY ROAD AND THE EASTERNMOST CORNER OF A TRACT
DESCRIBED IN A QUIT CLAIM DEED TO GEORGE AND GLENNA PATTERSON, HUSBAND
AND WIFE, RECORDED AS DOCUMENT NO. 72375 ON JANUARY 25,1972; THENCE
NORTH 25 DEGREES 56 MINUTES 49 SECONDS EAST ALONG SAID CENTERLINE 236.34
FEET; THENCE NORTHEASTERLY AND NORTHERLY, A RADIUS OF 800.0 FEET; AN ARC
DISTANCE OF 419.10 FEET; THENCE NORTH 04 DEGREES 04 MINUTES 07 SECONDS
WEST ALONG SAID CENTERLINE 531.06 FEET; THENCE NORTH 05 DEGREES 06
MINUTES 07 SECONDS WEST ALONG SAID CENTERLINE 1866.0 FEET TO THE POINT
OF BEGINNING IN BRISTOL TOWNSHIP, KENDALL COUNTY, ILLINOIS AND CONTAINING
372.223 ACRES.
ALSO:
THAT PART OF SECTIONS FOURTEEN (14), FIFTEEN (15) AND TWENTYTHREE (23), ALL
IN TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE SEVEN (7) EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE
LAKE UNIT NO. 1, (SAID POINT ALSO BEING THE INTERSECTION OF THE
CENTERLINE OF BRISTOL ROAD AND THE CENTERLINE OF KENNEDY
ROAD), AS SHOWN ON THE SUBDIVISION PLAT OF STRUKEL'S PARADISE
LAKE UNIT NO. 1 RECORDED AS DOCUMENT#71-215; THENCE NORTH 60
DEGREES 17 MINUTES 26 SECONDS EAST, 724.86 FEET ALONG THE
CENTERLINE OF KENNEDY ROAD TO THE POINT OF CURVATURE OF A
1094.72 FOOT RADIUS CURVE TO THE LEFT; THENCE NORTHEASTERLY
631.18 FEET ALONG SAID CURVE WHOSE CHORD BEARS NORTH 43
DEGREES 46 MINUTES 24 SECONDS EAST 622.47 FEET TO THE POINT OF
TANGENCY OF SAID CURVE; THENCE NORTH 27 DEGREES 15 MINUTES
21 SECONDS EAST 11.57 FEET ALONG SAID CENTERLINE TO A POINT;
THENCE SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1776.45
FEET TO A POINT; THENCE SOUTH 52 DEGREES 21 MINUTES 00
SECONDS WEST 1343.89 FEET TO A POINT IN THE CENTERLINE OF
-21-
BRISTOL ROAD; THENCE NORTH 37 DEGREES 39 MINUTES 00 SECONDS WEST 1778.85
FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING.
ALSO: THAT PART OF SECTIONS FOURTEEN (14) AND TWENTY-THREE (23), ALL IN
TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE SEVEN (7) EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE LAKE UNIT NO.
1, (SAID POINT ALSO BEING THE INTERSECTION OF THE CENTERLINE OF BRISTOL
ROAD AND THE CENTERLINE OF KENNEDY ROAD), AS SHOWN ON THE SUBDIVISION
PLAT OF STRUKEL'S PARADISE LAKE UNIT NO. 1, RECORDED AS DOCUMENT#71-215;
THENCE SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1778.85 FEET ALONG
THE CENTERLINE OF BRISTOL ROAD FOR THE 3 B
POINT OF E A
GI NINGT
; HENCE NORTH
52 DEGREES 21 MINUTES 00 SECONDS EAST
SOUTH 37 DEGREES 39 MINUTES 00 SECONDS EAST 1645.23 FEET TO A POINT IN THE
CENTERLINE OF ILLINOIS ROUTE 34; THENCE SOUTH 46 DEGREES 33 MINUTES 17
SECONDS WEST 1350.80 FEET ALONG SAID CENTERLINE OF ILLINOIS ROUTE 34 TO
THE INTERSECTION OF THE CENTERLINE ONDS WESTO1781.3 BRISTOL
ET ALONG SA D
DEGREES 39 MINUTES 00 SEC CENTERLINE OF
BRISTOL ROAD TO THE POINT OF BEGINNING.
ALSO:
THAT PART OF
SECTIONS
FOURTEEN
NORTH, RANGE SE )
TOWNSHIP SEVEN () EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHERLY CORNER OF STRUKEL'S PARADISE LAKE UNIT NO.
1, (SAID POINT ALSO BEING THE INTERSECTION OF THE CENTERLINE OF BRISTOL
ROAD AND THE CENTERLINE OF KENNEDY ROAD), AS SHOWN ON THE SUBDIVISION
PLAT OF STRUKEL'S PARADISE LAKE UNIT NO. 1, RECORDED AS DOCUMENT#71-215;
THENCE NORTH 60 DEGREES 17 MINUTES 26 SECONDS EAST 724.86 FEET ALONG THE
CENTERLINE OF KENNEDY ROAD TO THE POINT OF CURVATURE OF A 1094.72 FOOT
RADIUS CURVE TO THE LEFT; THENCE NORTHEASTERLY 631.18 FEET ALONG SAID
CURVE WHOSE CHORD BEARS NORTH 43 DEGREES 46 MINUTES 24 SECONDS EAST
622.47 FEET TO THE POINT OF TANGENCY OF SAID CURVE; THENCE NORTH 27
DEGREES 15 MINUTES 21 SECONDS EAST 11.57 FEET ALONG SAID CENTERLINE FOR
THE POINT OF551 BEGINNING; THENCE
ALONG STAND CENTERLINE DEGREES 15 MINUTES 21
SECONDS EAST NE TO A
-22-
THENCE SOUTH 45 DEGREES 56 MINUTES 15 SECONDS EAST 1501.96 FEET ALONG AN
EXISTING FENCE LINE TO A POINT; THENCE SOUTH 35 DEGREES 48 MINUTES 56
SECONDS EAST 2104.69 FEET ALONG SAID FENCE LINE TO A POINT IN THE
CENTERLINE OF ILLINOIS ROUTE 34; THENCE SOUTH 46 DEGREES 33 MINUTES 17
SECONDS WEST 652.28 FEET ALONG SAID CENTERLINE TO A POINT; THENCE NORTH
37 DEGREES 39 MINUTES 00 SECONDS WEST 3421.68 FEET TO THE POINT OF
BEGINNING.
ALSO:
THAT PART OF THE SOUTH HALF OF SECTION 11 AND PART OF THE NORTHWEST
QUARTER OF SECTION 14, TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST
CORNER OF SECTION 11; THENCE SOUTH 0 DEGREES 57 MINUTES 0 SECONDS WEST
442 FEET TO THE NORTH LINE OF THE RIGHT OF WAY OF THE CHICAGO,
BURLINGTON AND QUINCY RAILROAD; THENCE NORTH 75 DEGREES 17 MINUTES 0
SECONDS EAST 1728 FEET ALONG SAID RIGHT OF WAY LINE TO THE SOUTH LINE OF
SECTION 11; THENCE SOUTH 89 DEGREES 53 MINUTES 0 SECONDS EAST 1001.25
FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE SOUTHEAST CORNER OF
THE WEST HALF OF SAIDSECTION 11; THENCE NORTH 89 DEGREES 54 MINUTES 0
SECONDS EAST 1339.5 FEET ALONG THE SOUTH LINE OF SAID SECTION 11 TO THE
SOUTHEAST CORNER OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID
SECTION 11; THENCE NORTH 0 DEGREES 40 MINUTES 0 SECONDS EAST 977.5 FEET
TO THE CENTERLINE OF THE HIGHWAY; THENCE NORTH 74 DEGREES 15 MINUTES 0
SECONDS WEST 727.2 FEET ALONG SAID CENTERLINE; THENCE NORTH 79 DEGREES
10 MINUTES 0 SECONDS WEST 2877.4 FEET ALONG SAID CENTERLINE TO THE
CENTERLINE OF A NORTH AND SOUTH HIGHWAY; THENCE SOUTH 7 DEGREES 7
MINUTES 0 SECONDS EAST 364.8 FEET ALONG THE CENTER OF SAID NORTH AND
SOUTH HIGHWAY; THENCE NORTH 89 DEGREES 47 MINUTES 0 SECONDS WEST 503.33
FEET TO THE WEST LINE OF SAID SECTION 11; THENCE SOUTH 0 DEGREES 52
MINUTES 0 SECONDS WEST ALONG SAID WEST LINE 1327.6 FEET TO THE POINT OF
BEGINNING; EXCEPT THAT PART LYING NORTHERLY OF THE SOUTHERLY RIGHT OF
WAY LINE OF THE CHICAGO, BURLINGTON AND QUINCY RAILROAD AFORESAID IN THE
TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
-23-
GRANDE RESERVE SOUTH REGION
THAT PART OF SECTIONS 15,22 AND 23, TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT THE POINT
OF INTERSECTION OF THE NORTH AND SOUTH CENTERLINE OF SAID SECTION 15
WITH THE TANGENT OF THE CENTERLINE OF STATE AID ROUTE 20 AS ESTABLISHED
BY INSTRUMENT RECORDED MAY 12,1952 AS DOCUMENT 125479; THENCE WESTERLY
ALONG SAID TANGENT 185.32 FEET; THENCE SOUTH 17 DEGREES 20 MINUTES 0
SECONDS EAST TO THE CENTERLINE OF SAID STATE AID ROUTE 20; THENCE SOUTH
17 DEGREES 20 MINUTES 0 SECONDS EAST 1303.46 FEET FOR THE POINT OF
BEGINNING; THENCE NORTH 17
DEGREES 20 MINUTES 0 SECONDS WEST 113.8 FEET; THENCE SOUTH 77 DEGREES 08
MINUTES 0 SECONDS WEST 428.4 FEET; THENCE NORTH 17 DEGREES 28 MINUTES 0
SECONDS WEST 1370.9 FEET TO THE
CENTERLINE OF STATE AID ROUTE 20; THENCE NORTH 81 DEGREES 05
MINUTES 0 SECONDS WEST ALONG SAID CENTERLINE 254.26 FEET TO A POINT 194.7
FEET EASTERLY AS MEASURED ALONG SAID CENTERLINE
OF THE NORTHEAST CORNER OF ERICKSON'S SUBDIVISION; THENCE
SOUTHERLY PARALLEL WITH THE EASTERLY LINE OF SAID ERICKSON'S SUBDIVISION,
462 FEET; THENCE WESTERLY PARALLEL WITH THE
CENTERLINE OF SAID ROAD 194.7 FEET TO THE EASTERLY LINE OF SAID
SUBDIVISION; THENCE SOUTHERLY ALONG SAID EASTERLY LINE TO THE SOUTHEAST
CORNER OF SAID SUBDIVISION; THENCE WESTERLY ALONG THE SOUTHERLY LINE
OF SAID SUBDIVISION AND SAID LINE EXTENDED
1785.3 FEET TO A POINT ON THE WEST LINE OF THE SOUTHWEST
QUARTER OF SAID SECTION 15; THENCE SOUTH 0 DEGREES 55 MINUTES 0 SECONDS
EAST ALONG SAID WEST LINE 904 FEET; THENCE NORTH 88 DEGREES 03 MINUTES 0
SECONDS EAST 1629 FEET; THENCE SOUTH 36 DEGREES 11 MINUTES 0 SECONDS
EAST 2187 FEET; THENCE SOUTH 39 DEGREES 18 MINUTES 0 SECONDS EAST 3776.7
FEET TO THE
CENTERLINE OF U. S. ROUTE 34; THENCE NORTHEASTERLY ALONG SAID CENTERLINE
1353 FEET TO THE SOUTHWEST CORNER OF UNIT THREE,
RIVER RIDGE; THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY LINE OF
SAID UNIT THREE, RIVER RIDGE AND ALONG THE
SOUTHWESTERLY LINE OF UNIT TWO, RIVER RIDGE 2686 FEET TO THE NORTHWEST
CORNER OF SAID UNIT TWO, RIVER RIDGE; THENCE
NORTHEASTERLY ALONG THE NORTHWESTERLY LINE OF SAID UNIT
TWO, RIVER RIDGE AND ALONG THE NORTHWESTERLY LINE OF UNIT
-24-
ONE, RIVER RIDGE 824.42 FEET TO THE CENTERLINE OF STATE AID ROUTE 20;
THENCE NORTHWESTERLY ALONG SAID CENTERLINE 1886.5 FEET TO A LINE DRAWN
NORTH 69 DEGREES 10 MINUTES 0 SECONDS EAST FROM THE POINT OF BEGINNING;
THENCE SOUTH 69 DEGREES 10 MINUTES 0 SECONDS WEST 1084.7 FEET TO THE
POINT OF BEGINNING, IN THE TOWNSHIP OF BRISTOL, KENDALL COUNTY, ILLINOIS.
EXCEPT FROM SAID PARCEL THAT PART LYING NORTHERLY OF THE FOLLOWING
DESCRIBED LINE: COMMENCING AT THE SOUTHWEST CORNER OF STRUKEL'S
PARADISE LAKE UNIT 1; THENCE NORTHWESTERLY ALONG THE SOUTHWESTERLY
LINE OF SAID STRUKEL'S PARADISE LAKE UNIT 1, BEING THE CENTERLINE OF
BRISTOL RIDGE ROAD, ON A BEARING OF NORTH 37 DEGREES 10 MINUTES 58
SECONDS WEST WHICH IS THE BASIS OF BEARINGS FOR THE DESCRIPTION OF THIS
LINE, A DISTANCE OF 230.00 FEET; THENCE SOUTH 52 DEGREES 49 MINUTES 02
SECONDS WEST 50.00 FEET; THENCE SOUTH 67 DEGREES 14 MINUTES 17 SECONDS
WEST 361.39 FEET; THENCE NORTH 58 DEGREES 13 MINUTES 13 SECONDS WEST
139.28 FEET; THENCE SOUTH 84 DEGREES 25 MINUTES 29 SECONDS WEST 152.64
FEET; THENCE SOUTH 40 DEGREES 17 MINUTES 18 SECONDS WEST 92.20 FEET;
THENCE SOUTH 40 DEGREES 43 MINUTES 21 SECONDS WEST 71.59 FEET; THENCE
NORTH 70 DEGREES 52 MINUTES 22 SECONDS WEST 180.28 FEET; THENCE SOUTH
6&--DEGREES 04 MINUTES 20 SECONDS WEST 570.09 FEET; THENCE NORTH 83
DEGREES 13 MINUTES 28 SECONDS WEST 194.49 FEET; THENCE NORTH 80 DEGREES
06 MINUTES 46 SECONDS WEST 293.64 FEET; THENCE SOUTH 79 DEGREES 22
MINUTES 56 SECONDS WEST 178.89 FEET; THENCE SOUTHWESTERLY ALONG THE
ARC OF A CURVE CONCAVE TO THE SOUTH, HAVING A RADIUS OF 180.00 FEET,
HAVING A CHORD BEARING OF SOUTH 82 DEGREES 25 MINUTES 09 SECONDS WEST,
A DISTANCE OF 306.52 FEET, THENCE SOUTHWESTERLY 94.34 FEET, MORE OR LESS,
TO A POINT IN THE WESTERLY LINE OF SAID PARCEL, SAID POINT BEING 1,100.00
FEET NORTHWESTERLY OF THE CENTERLINE OF KENNEDY ROAD AS MEASURED
ALONG SAID WESTERLY LINE, FOR THE TERMINUS OF SAID LINE.
-25-
EXHIBIT A-1
DIAGRAM OF PROPERTY
Variable Rate SSA
-26-
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EXHIBIT B
PUBLIC IMPROVEMENTS
EXHIBIT C
BUDGETED AMOUNTS
-28-
EXHIBIT D
RIDER TO BE ATTACHED TO ALL SALES CONTRACTS
-29-
EXHIBIT D
SPECIAL SERVICE AREA FINANCING RIDER TO
HOME PURCHASE AGREEMENT
RE: Yorkville SSA No. 2004-106
This Rider is attached to and made a part of that Home Purchase Agreement between
("Seller") and and
("Purchasers") for Lot in Subdivision or for the purchase of a
portion of Developer's Property (if applicable, legal description attached as Exhibit 1) (the
"Home") at Grande Reserve Yorkville,Illinois. Seller and Purchaser hereby agree as follows:
Purchaser hereby acknowledges and agrees:
(a) The Home is part of the United City of Yorkville Special Service Area No. 2004-
106 pursuant to an Establishing Ordinance" adopted by the United City of Yorkville ("City"),
Illinois. The Establishing Ordinance authorized the levy, extension and collection of a Special
Service Area Tax upon the Home, in the manner more specifically described below, in
connection with certain "Public Improvements" that will confer a special benefit on the Home
(including, without limitation, cost of engineering, soil testing and appurtenant work, mass
grading and demolition, storm water management facilities, storm water drainage systems and
storm sewers, site cleaning 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
maintenance thereof, public parks, park improvements, bicycle paths, 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). In connection therewith, the City, pursuant to a certain "Bond Ordinance,"
authorized the issuance of municipal bonds to pay for the Public Improvements, including the
financing and other costs associated with the funding of the Public Improvements.
(b) The Home is subject to the obligation to pay the Special Service Area Tax, which
shall be a lien on the Home. This Special Service Area Tax can be levied on the Home each
Calendar Year from to and collected each Calendar Year from
to . The Maximum Annual Special Service Area Tax on the Home shall
first be payable in Calendar Year in the amount of$ . The Special Service
Area Tax on the Home may increase by no more than one and one-half percent (1.5%) each year
between the first year of the levy and . The maximum Annual Special Service Area Tax
on the Home payable in Calendar Year shall be no greater than $
although it is anticipated that when the Special Service Area is substantially occupied and
qualified-for rated bonds, the bonds issued pursuant to the Bond Ordinance may be refinanced
provided the interest rate for rated bonds provides a Special Service Area Tax that will be lower
than the Special Service Area Tax payable prior to such refinancing.
(c) It is anticipated that the Special Service Area Tax may be included in the regular
real estate tax bills for the Home. If the Special Service Area Tax is billed separately,then it may
be billed at different times than regular real estate taxes.
(d) That the Special Service Area Tax as may be authorized by the Establishing
Ordinance and Bond Ordinance,timely which
fashion, may eventually result resulp
en the foreclosure of that
that, if not paid as required in a
lien (similar to the consequences of becoming delinquent on mortgage payments or general real
estate taxes).
(e) The Purchaser will not object to the validity of the Establishing Ordinance, the
Bond Ordinance and the Special Service
connection de se
hearings or actions provided or taken m wit hadopt on of the Establishing
Ordinance and the Bond Ordinance or otherwise, the designation of the Home as part of to
Special Service Area pursuant to the Special that the Public Improvements findings in the special
Establishing Ordinance and the Bond O rdnance
service benefit on the Home, the determination that the Public Improvements are of the type that
may be financed under the Special Service Area Tax Law and the determination that the formula
for apportioning the Special Service Area Tax to the Home is rational in light of the special
service benefit conferred upon the Home.
(fl That Purchaser, by taking title to the Home, hereby agrees to accept title subject to
the Special Service Area and all rights and impositions and obligations thereby imposed,
including, without limitation, the Special Service Area Tax, which obligations shall be covenants
running with the land. The Deed that Purchaser will receive pursuant to Paragraph of the Home
Purchase Agreement shall contain a recitation of such covenants, conditions and restrictions as a
permitted exception to title.
(g) That the Special Service Area tax will be levied each year to raise funds which
will be used to make payments which be becomes due. Thus, for example, the the respect
eal estate tax bill
during the year in which the tax payment
for the Home for calendar year , which will be issued and will become payable in ,
will contain a line item for Special Service Area taxes in the amount of$
which will
be used to make payments with respect to the Bonds which will become due and payable in
. Since the Purchaser is responsible for Purchaser's share of Bond payments for the period from
and after the Closing Date, and since the taxes for the year prior to the year in which the Closing
Date occurs are levied to cover this obligation, at Closing, the Purchaser will be required to pay
to Seller a pro rata portion of the Special Service Area Tax on the Home for the year prior to the
year in which the closing occurs, prorated from the Closing Date to the end of the year. Also,
because all of the Special Service Area taxes levied with respect to the Home for the year of
closing will be levied to pay amounts attributable to, and which become payable during, the year
after the year of closing, the Purchaser will be required to pay all of the Special Service Area Tax
levied on the Home for the year of closing which are due and payable in the following year and
Seller will give no proration credit to Purchaser at Closing for any such Special Service Area
Tax.
ome
(h) This Rider shall be incorporated deemed
Riderintegral
and rthe the
Purchase Agreement. In the event of y conflict between this
Agreement, the terms of this Rider shall control.
(i) Any term capitalized but not otherwise defined in this Rider shall have the
meaning ascribed to it in the Home Purchase Agreement to which this Rider is attached.
Dated: , 200
PURCHASER: SELLER:
Exhibit E
011.560726.2
REMARKETING AGREEMENT
July 1, 2004
United City of Yorkville
Kendall County, Illinois
Special Service Area Number 2004-106
Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project)
This Remarketing Agreement (this "Agreement") is made by and among LaSalle Capital
Markets, A Division of ABN AMRO Financial Services, Inc. (the "Remarketing Agent"), the
United City of Yorkville, Kendall County, Illinois (the "Issuer") and MPI-2 Yorkville North
LLC, MPI-2 Yorkville Central LLC and MPI-2 Yorkville South I LLC, each an Illinois limited
liability company (collectively, the "Developer").
The $ United City of Yorkville, Kendall County, Illinois, Special Service
Area Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds, Series
2004 (MPI Grande Reserve Project) (the "Bonds") are being issued under and pursuant to the
terms of a Trust Indenture dated as of June 1, 2004 (the "Indenture") between the Issuer and
LaSalle Bank National Association, Chicago, Illinois, as bond trustee (the "Trustee").
Concurrently with the execution of the Indenture, the Issuer, the Trustee and the Developer
delivered a Tax Compliance Certificate and Agreement dated the date of issuance of the Bonds
(the "Tax Agreement"). In addition, concurrently with the execution of the Indenture, LaSalle
Bank National Association (the "Bank") and the Developer entered into a Reimbursement and
Security Agreement dated as of July 1, 2004 (the "Reimbursement Agreement") pursuant to
which the Bank issued its irrevocable transferable direct pay Letter of Credit (the "Letter of
Credit"). The Bonds and the transactions contemplated by the foregoing documents were
described in a Preliminary Official Statement dated June _, 2004 (the "Preliminary Official
Statement ) and in the Official Statement dated July _, 2004 (together with the Preliminary
Official Statement and all appendices, exhibits, supplements and amendments thereto, the
"Official Statement").
In connection with the Bonds,the Issuer has appointed the Remarketing Agent to perform
its remarketing duties and to receive the benefits described in this Agreement. In turn, the
Remarketing Agent desires to accept its appointment. It is understood that such appointment is
subject to the applicable terms and conditions of this Agreement.
As used in this Agreement, each Tender Date (as defined in the Indenture) on which any
Bond (other than a Bond bearing interest at a Fixed Rate or a Purchased Bond, as defined in the
Indenture) is remarketed following a tender by a Bondholder described in Section 3.6 of the
is
Indenture (an "Optional Tender"), each Mandatory f purchase as provided in which
ection 3.B of Bond
remarketed pursuant to a mandatory t
Indenture (a "Mandatory Tender"), and each date on which the Bonds are transferred to a
purchaser as provided in Section 3.14 of the Indenture (a "Remarketing of Purchased Bonds") is
referred to herein as a "Subsequent Closing Date. All capitalized terms used in this Agreement
and not defined herein shall have the meanings specified in the Indenture.
Section 1. Appointment of the Remarketing Agent.
In reliance upon the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Developer and the Issuer have appointed
the Remarketing Agent, and the Remarketing Agent hereby agrees to act as exclusive
remarketing agent in connection with any subsequent offerings and sales of the Bonds as
described in Section 2(a) of this Agreement.
Section 2. Responsibilities of the Remarketing Agent.
(a) Remarketing. The Remarketing Agent shall use its best efforts to solicit
purchases, for a price of 100% of the principal amount thereof, of certain Bonds (as described in
the Indenture) from investors which customarily purchase tax exempt securities at a price not less
than par, provided, however, that Bonds will be offered for sale during the continuance of an
Event of Default under the Indenture only in the sole discretion of the Remarketing Agent.
(b) Rate Determination. The Remarketing Agent shall make the interest rate
determinations which it is required to make pursuant to the Indenture in the manner and at the
times specified in the applicable provisions of the Indenture. In addition, the Remarketing Agent
shall provide notice of the foregoing rates to the parties and at the times specified in the
applicable provisions of the Indenture. Any rates determined in the manner described in the
foregoing sections of the Indenture shall be conclusive and binding upon the Developer.
(c) Limitations on Remarketing Agent. It is understood and agreed that the
Remarketing Agent will not solicit offers to purchase any Bonds (1) except in jurisdictions where
such Bonds are qualified for sale and offering or are exempt from registration, or in transactions
in which the Bonds are exempt from registration under the securities laws of the United such
and of the jurisdiction in which offers to purchase the Bonds are solicited, or (2) here s
solicitation would violate or give rise to a violation of the securities laws of the United States or
of a jurisdiction in which offers to purchase the Bonds are solicited.
(d) Books and Records. The Remarketing Agent shall keep and maintain such
books and records as are consistent with prudent industry practice. The Remarketing Agent shall
supply, on written request of the Borrower or the Issuer, a record of rates set by the Remarketing
Agent on each rate determination Date for the Bonds and similar obligations.
2
Section 3. Representations,Warranties and Certain Covenants of the Developer.
(a) The Developer represents, warrants and covenants to and with the Remarketing
Agent and the Issuer that the representations and warranties of the Developer set forth in Section
5 of the Bond Purchase Agreement (each of which representations and warranties is incorporated
herein by reference) are true and correct as of the date of execution hereof.
(b) The Developer represents, warrants and covenants to and with the Remarketing
Agent and the Issuer that, with respect to any remarketing of the Bonds:
(1) The representations, warranties and covenants contained in Section 5 of
the Bond Purchase Agreement shall apply to such remarketing. References to the
Original Purchasers in the Bond Purchase Agreement shall be deemed to refer to the
Remarketing Agent for the purposes of this Section.
(2) The Developer will use commercially reasonable efforts to comply with,
or cause to be complied with, the conditions precedent to the obligations of the
Remarketing Agent specified in Section 6 hereof.
Section 4. Representations, Warranties and Covenants of the Remarketing
Agent.
(a) The Remarketing Agent represents and warrants that it is a national banking
association and has full power and authority to enter into this Agreement and perform its
obligations hereunder.
(b) The Remarketing Agent agrees to provide written notice to the registered owner
and to each beneficial owner of a Bond at least seven (7) days' prior to the proposed date of
delivery of any Alternate Credit Facility other than on a Substitution Date.
Section 5. Additional Covenants of the Developer.
(a) The Developer covenants and agrees with the Remarketing Agent and the Issuer
that:
(1) The Developer will pay or reimburse from any available funds, all
expenses incident to the performance of the Developer's obligations under this Agreement
and the fulfillment of the conditions imposed hereunder, including without limitation, the
reasonable fees and expenses of the Remarketing Agent.
(2) On or prior to any Subsequent Closing Date, the Developer shall provide
the Remarketing Agent with supplements to the Official Statement at any time an event
known to the Developer occurs which would cause the Official Statement to include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they were made,
3
not misleading, such supplement to correct such statement or omission. The Remarketing
Agent agrees that upon notification that such an event has occurred it will, at the
Developer's request, assist the Developer in the prompt preparation of a supplement
which will correct such statement or omission, the costs of such supplement to be borne
by the Developer.
(3) On or prior to the date hereof and on any Subsequent Closing Date, the
Developer will furnish or cause to be furnished to the Remarketing Agent copies of the
Official Statement, and all amendments and supplements thereto, in each case as soon as
available and in such quantities as the Remarketing Agent may reasonably request. The
parties hereto will advise each other promptly of the institution of any proceedings by any
governmental agency or otherwise affecting the use of the Official Statement in
connection with the offer and sale of the Bonds.
(b) In the event of a remarketing of Purchased Bonds, the Developer will provide the
Remarketing Agent with the information specified in Section 5(a)(3) at least three (3) days before
the applicable Subsequent Closing Date.
Section 6. Conditions of the Remarketing Agent's Responsibilities.
The obligations of the Remarketing Agent to solicit purchases of the Bonds, unless
waived in the sole discretion of the Developer, subject to applicable representations, warranties
and covenants on the part of the Developer contained herein, to the performance by the
Developer of the applicable obligations hereunder, and to the following additional conditions
precedent:
(a) The Indenture, this Agreement, the Reimbursement Agreement and the Letter of
Credit shall be in full force and effect and shall not have been amended, modified or
supplemented except with the prior consent of the Remarketing Agent, which consent shall not
be unreasonably withheld.
(b) The respective representations and warranties, if any, of the Issuer and the
Developer in the Indenture and the Reimbursement Agreement shall be true and accurate in all
material respects, and their respective covenants required to be satisfied by such Subsequent
Closing Date shall have been satisfied in all material respects; no default or event of default shall
exist under the terms of the Indenture or the Reimbursement Agreement, nor shall any event have
occurred and be continuing which with the lapse of time or the giving of notice, or both, would
constitute such a default or event of default under said documents.
(c) During the period in which the Remarketing Agent is soliciting purchases of the
Bonds (which period shall include the Subsequent Closing Date relating to each such
solicitation), the following provisions shall be satisfied:
(1) The marketability of the Bonds or the contemplated offering price thereof
shall not, in the opinion of the Remarketing Agent, have been materially adversely
4
affected by an amendment to the Constitution of the United States of America or the State
of Illinois or by any legislation (pending or effective) or by any decision of any court or
by any order, ruling or regulation (final, temporary or proposed) of the Treasury
Department of the United States of America, the Internal Revenue Service or other
Federal or non-Federal authority or regulatory body, affecting the status of the Issuer, the
Developer or the Remarketing Agent, or any of their property or income, securities of the
Issuer (including the Bonds); or the interest thereon, or any tax exemption with respect to
the Issuer's securities (including the Bonds) granted or authorized by the Code.
(2) No stop order, ruling, regulation or official statement by, or on behalf of,
any other governmental agency having jurisdiction shall have been issued or made to the
effect that the issuance, offering or sale of obligations of the general character of the
Bonds, or the issuance, offering or sale of the Bonds, as contemplated hereby or by the
Official Statement, is in violation or would be in violation of any provision of Federal or
state securities law.
(3) No legislation shall have been enacted by the Congress of the United
States of America, or a decision by a court of the United States of America shall have
been rendered, to the effect that obligations of the general character of the Bonds are not
exempt from registration or qualification under requirements of the Federal securities
laws.
(4) No rating of the Bonds or the Bank shall have been down-graded or
withdrawn by a national rating service the effect of which, in the opinion of the
Remarketing Agent, is to adversely affect the market price of the Bonds.
(5) The market price for the Bonds shall not, in the opinion of the
Remarketing Agent, have been adversely affected by any of the following events: (A)
any additional material restrictions not in force as of the date hereof shall have been
imposed by any governmental authority or by any national securities exchange upon
trading in securities generally; (B) the engagement by the United States of America in
hostilities which have resulted in a declaration by the United States of America of war or
national emergency, or the occurrence of any other outbreak of hostilities or national or
international calamity or crisis, financial or otherwise, materially affecting the financial
markets of the United States of America; (C) a general suspension of trading on the New
York Stock Exchange or the American Stock Exchange; (D) the establishment of limited
or minimum prices on such Exchanges; or (E) the declaration of a banking moratorium
either by Federal,New York State or State of Illinois authorities.
(d) The Remarketing Agent shall receive such certificates, proceedings, opinions,
instruments and other documents as the Remarketing Agent, its counsel or Bond Counsel may
reasonably have requested in connection with the transactions contemplated by this Agreement.
The Developer and the Issuer will use their best efforts to furnish or cause to be furnished
to the Remarketing Agent, such conformed copies of all such opinions, certificates, letters and
5
documents mentioned in this Section 6 as the Remarketing Agent shall reasonably request. If
any of the conditions specified in Section 6 of this Agreement shall not have been satisfied when
and as required by this Agreement, or if any of the certificates, letters or documents mentioned
above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory
in form and substance to the Remarketing Agent, this Agreement and all obligations of the
Remarketing Agent hereunder may be canceled by suer and the Trustee Agent. Notice of
or by telephone
cancellation shall be given to the Developer,
or telegraph confirmed in writing.
Section 7. Term of Agreement.
This Agreement may be terminated by the Remarketing Agent upon thirty (30) days'
written notice to the Developer, the Trustee and the Issuer or by the Developer upon thirty (30)
days' written notice to the Remarketing Agent,the Trustee and the Issuer.
Section 8. Payment of Fees.
(a) While the Bonds bear interest at the Weekly Rate or the Monthly Rate, the
Developer agrees to pay the Remarketing Agent as compensation for services rendered by the
Remarketing Agent hereunder a fee (the Remarketing Fee"). The initial Remarketing Fee of
$_ is payable on (the "
, 2004, and shall be for the period from
2004, to December 31, 2004. Thereafter, the Developer shall pay the Remarketing Fee in
advance on each January 1 (each a "Calculation Date"). The Remarketing Fee shall be calculated
on each Calculation Date as follows: The principal amount of the Bonds outstanding as of the
Calculation Date multiplied by 0.125%. Remarketing Fees shall be deemed fully earned upon
receipt.
(b) The Developer also agrees to pay any extraordinary legal fees and reasonable out-
of-pocket expenses of the Remarketing Agent such other fees and expenses as may be agreed upon
Bonds, as provided in this Agreement, and
from time to time by the Developer and the Remarketing Agent.
Section 9. Indemnification.
(a) The Developer agrees to indemnify, defend and hold harmless (i) the
Remarketing Agent, each director, trustee, member, officer, agent or employee and each person,
if any, who has the power, directly or indirectly, to direct or cause the direction of the
management and policies of the Remarketing Agent, pursuant to the Remarketing Agent's
regulations or Bylaws, or who controls the Remarketing Agent within the meaning of Section 20
of the Exchange Act or Section 15 of the Securities Act, by contract or otherwise and (ii) the
Issuer, each director, trustee, member, officer, agent or employee (not including Bond Counsel)
and each person, if any, who has the power, directly or indirectly, to direct or cause the direction
of the management and policies of the Issuer (collectively called the "Section 9(a) Indemnified
Parties"), from and against any and all losses, misleading liabilities
statement t or alleged untrue
extent caused by or arising out of any untrue statement or
6
statement or alleged misleading statement of a material fact (unless such allegation is (i) made by
the Remarketing Agent or the Issuer, as the case may be, and (ii) such allegation is proven or
otherwise determined to be false) contained in the Official Statement in any of the Developer
Information, or caused by any omission or alleged omission to state in the Developer Information
a material fact required to be stated in the Developer Information or necessary to make the
statements in the Developer Information, in the light of the circumstances under which they were
made, not misleading.
In case any claim shall be made or any action shall be brought against one or more of the
Section 9(a) Indemnified Parties desiring to seek indemnification pursuant to this Section 9(a),
the Section 9(a) Indemnified Parties seeking indemnity shall promptly i notify he e Developer
t
writing, and the Developer shall promptly assume the l
of counsel chosen by the Developer and approved by the Remarketing Agent and the Issuer
which approval shall not be unreasonably withheld, and the payment of all reasonable expenses
and disbursements of such counsel related to such defense. If any of the Section 9(a)
Indemnified Parties is advised by counsel that there may be legal defenses available to it which
are adverse to or in conflict with those available to the Developer or any other Section 9(a)
Indemnified Party, or that the defense of such Section ight tIndemni Indemnified
defense should Section
by separate counsel, the Developer shall not have the g
9(a) Indemnified Party, but shall be responsible for the reasonable wn defense Xaned provided also
retained by such Section 9(a) Indemnified Party in assuming
that if the Developer shall have failed to assume the defense of such action or to retain counsel
satisfactory to the Remarketing Agent and the Issuer within a reasonable time after notice of the
commencement of such action, the reasonable fees and expenses of counsel retained by the
Section 9(a) Indemnified Parties shall be paid by the Developer. Notwithstanding,n Indemnified Parties shall
addition to, any of the foregoing, any one or more of the Section 9(a)
have the right to employ separate counsel in any such action and to participate in the defense
thereof, but the reasonable fees and expenses of such counsel shall be at the expense of such
Section 9(a) Indemnified Party or Parties unless the employment of such counsel has been
specifically authorized, in writing, by the Developer, or unless such retention is specifically
authorized herein. Developer shall not be liable for any settlement
en consentooraf proceeding
be a final
without its written consent, but, if settled with such w
judgment for the plaintiff, Developer agrees to indemnify the Section 9(a) Indemnified Parties
from and against any loss, damage, cost, expense or liability by on of ssettlement or
judgment. The Developer shall have the right, but not the oblig ation appeal to
appellate jurisdiction any such judgment taken against the Section 9(a) Indemnified Parties, and
the Section 9(a) Indemnified Parties shall loin in such appeal.
(b) The Remarketing Agent agrees rt offidCerland employee of the Isssereor the
Issuer, the Developer, each director, trustee, member,
Developer and each person, if any, who has the power, directly or indirectly, to direct or cause
the direction of the management and policies of the Issuer or the Developer (collectively called
the "Section 9(b) Indemnified Parties"), from and against any and all losses, claims, damages,
liabilities or expenses, including reasonable attorney an
misleading statement of statement or
s' fees, caused by y untrue misleading statement or alleged untrue statement or
7
fact contained in the Official Statement or any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
such untrue or hmisleading
made, not misleading, but in each case only to the ext ent that
statement or alleged untrue or misleading statement or omission or alleged omission was made in
the Official Statement, or any amendment supplement
writ writing by the Remarketing Agentd. in
Developer conformity with information famished to the p
The Remarketing Agent agrees to indemnify and hold harmless the Section 9(b)
Indemnified Parties from and against any and all losses, claims, damages, liabilities or expenses,
including reasonable attorneys' fees, caused by the failure of the Remarketing Agent to comply
with any registration or qualification requirements applicable to the Bonds under any securities or
"blue sky" law of any jurisdiction in which such registration or qualification is required.
In case any claim shall be made or any action shall be brought against one or more of the
Section 9(b) Indemnified Parties based upon the preceding paragraph or based upon information
furnished to the Issuer or the Developer by the Remarketing Agent and included in the Official
Statement in respect of which indemnity is sought against the Remarketing Agent pursuant to
this Section 9(b), the Section 9(b) Indemnified Parties seeking indemnity shall promptly notify
the Remarketing Agent in writing, and the Remarketing Agent shall promptly assume the defense
thereof, including the employment of counsel lconsent to settlement.Developer,
If any of the
y satisfacty to the payment of all expenses and the right ton negotiate and
Section 9(b) Indemnified Parties is advised in an opinion of counsel that there may be legal
defenses available to it which are adverse to or the conflict with those available to the
Remarketing Agent, or that the defense of such Section
not have the Indemnified
ght to assume the defense of
by separate counsel, the Remarketing Agent shall
Section 9(b) Indemnified Party, but shall be responsible for the fees and expenses of counsel
retained by such Section 9(b) Indemnified Party in assuming its own defense, and provided also
that, if the Remarketing Agent shall have failed to assume the defense of such action or to retain
counsel reasonably satisfactory to the Developer and the Issuer within a reasonable time after
notice of the commencement of such action, the fees and expenses of counsel retained by the
Section 9(b) Indemnified Parties shall be paid by the Remarketing Agent. Notwithstanding, and
in addition to, any of the foregoing, any one or more of the Section 9(b) Indemnified Parties shall
have the right to employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Section 9(b)
Indemnified Party or Parties unless the employment
Remarketing Agent shall not be liable for
authorized, in writing, by the Remarketing Ag ent
any settlement of any such action effected without its written consent but if settled with the
written consent of the Remarketing Agent or if there be a final judgment for the plaintiff in any
such action with or without consent based on the preceding paragraph or because of information
supplied by the Remarketing Agent, the Remarketing Agent agrees to indemnify and hold
harmless the Section 9(b) Indemnified Parties from and against any loss or liability by reason of
settlement or judgment.
8
(c) The rights provided in this Section do not constitute an election of remedies if
waiver of any rights which may be available to any party other than as provided herein should the
provisions of this Section or any subsection hereof be found by a court of competent jurisdiction
to be unenforceable, void or unavailable for any reason.
Section 10. Survival of Certain Representations and Obligations.
The respective agreements, representations and other statements of the Developer, the
Issuer and the Remarketing Agent and their respective officials or officers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of the Remarketing Agent, the Issuer or
the Developer or of their officers or directors or any controlling person.
Section 11. Notice.
All communications hereunder, except those specified in Section 2, will be in writing.
Notice will be properly given if mailed to the following persons, or such other persons as may
subsequently be designated in writing by the applicable party (a) to the Remarketing Agent at
181 West Madison Street, Chicago, Illinois 60602, Attention: Public Finance Department (MPI
Grande Reserve Project), (b) to the Developer, at MPI-2 Yorkville Central LLC, 6880 North
Frontage Road, Suite 100, Burr Ridge, Illinois 60527, Attention: Anthony R. Pasquinelli and
Moser Enterprises, Inc., Fifth Avenue Station, 300 East Fifth Avenue, Suite 430, Naperville,
Illinois 60563, Attention: Arthur C. Zwemke, and (c) to the Trustee, the Issuer or the Bank at
the addresses set forth in the Indenture. Any notices referenced in Section 2 herein which are
required under the Indenture shall be provided in the manner, at the times and to the parties
specified in the applicable Sections of the Indenture referenced Section 2 hereof.
Section 12. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto their
respective successors and the officers and directors and controlling persons referred to in Section
9 above, and no other person will have any right or obligation hereunder.
Section 13. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois except to the extent subject to the federal securities laws and the securities laws
of other states.
Section 14. Counterparts.
This Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
9
IN WITNESS WHEREOF, the Remarketing Agent, the Issuer and the Developer have
caused this Agreement to be executed by their duly authorized officers as of the date first above
written.
UNITED CITY OF YORKVILLE,ILLINOIS
By:
Its: Mayor
MPI-2 YORKVILLE NORTH LLC,
An Illinois Limited Liability Company
By: MPI Manager, Inc.,
Its Manager
By:
Arthur C. Zwemke
Its: President
MPI-2 YORKVILLE CENTRAL LLC,
An Illinois Limited Liability Company
By: MPI Development Manager, Inc.,
Its Manager
By:
Arthur C. Zwemke
Its: President
MPI-2 YORKVILLE SOUTH I LLC,
An Illinois Limited Liability Company
By: MPI Manager, Inc.,
Its Manager
By:
Arthur C. Zwemke
Its: President
LASALLE CAPITAL MARKETS,A Division of
ABN AMRO Financial Services, Inc.
By:
Its:
UHDOCS 631107v4 C/M 4781600-005
10
Exhibit F
011.560726.2
REIMBURSEMENT AGREEMENT
Dated as of , 2004
United City of Yorkville, Kendall County, Illinois
800 Game Farm Road
Yorkville, Illinois 60560
MPI-2 Yorkville Central LLC
6880 North Frontage Road
Suite 100
Burr Ridge, Illinois 60527
Ladies and Gentlemen:
The Applicants (such term and each other capitalized term herein having the meaning set
forth in Article 1 hereof) desire to secure a source of funds to be devoted exclusively to the
payment by the Trustee, when and as due, of the principal of and interest on the Bonds, and the
Applicants have applied to the Bank for issuance by the Bank of the Letter of Credit in an
Original Stated Amount of $ . Further, the Bank has been requested by the
Applicants to provide a liquidity facility in the form of a Liquidity Drawing under the Letter of in
Credit. The Bank has agreed to issue the followanredermsdand conditions.h liquidity Aco Accordingly,the following manner and subject to the g
Applicants and the Bank hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement:
"Additional Property Owners"—means MPI-2 Yorkville North LLC, an Illinois limited
liability company, and MPI-2 Yorkville South-I LLC, an Illinois limited liability company.
Lender agrees not to unreasonably withhold its consent to the transfer of property by the
Additional Property Owners to other entities which are under substantially common ownership
and common control with such limited liability companies.
"Alternative Credit Facility" - shall have the meaning described in the Indenture.
"Agreement" - means this Reimbursement Agreement, as amended and supplemented.
"Applicants" - means, collectively,the Issuer and the Developer.
"Available Amount" - shall have the meaning set forth in the Letter of Credit.
"Bank" - means LaSalle Bank National Association, as issuer of the Letter of Credit, and
its successors and assigns.
246196.7 044599-33642
"Bond Purchase Agreement" - means that certain Bond Purchase Agreement relating to
the purchase of the Bonds.
"Bond Documents" - means the Indenture, the Remarketing
and the Bonds.
Agreement, the Bond
Purchase Agreement,the Bond Ordinance,the Office
"Bond Ordinance" - means the Bond Ordinance as defined in the Indenture.
"Bonds" - means the $ aggregate principal amount of the Issuer's
Special Service Area Number 2004-106 Total Grande Reserve Variable Rate Demand Special
Tax Bonds, Series 2004 (MPI Grande Reserve Project).
"Business Day" - shall have the meaning set forth in the Letter of Credit.
"Cap Rate" - shall have the meaning set forth in the Letter of Credit.
"Closing Date" - means the date on which the Letter of Credit is issued.
"Code" - means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto.
"Collateral" - means all proprieties, rights, interests and privileges from time to time
subject to the Liens and granted to the Bank by the Security Documents.
"Developer" - means MPI-2 Yorkville Central LLC, an Illinois limited liability
company, and its successors and assigns.
"Event of Default" - is defined in Section 8.1 hereof.
"GAAP" - means generally accepted accounting principles in the United States as in
effect from time to time, applied by the Developers n a bass to Article 5 hereof.e Developer's
most recent financial statements furnished to the B pursuant
"Governmental Approval" - means an authorization, consent, approval, license, or
exemption of, registration or filing with, or report to any Governmental Authority.
"Governmental Authority" - means any nation or government, any state, department,
agency or other political subdivision thereof, and any entity exercising executive, lgandtlany
judicial, regulatory or administrative functions of or pertaining to any government,
corporation or other entity owned or controlled (through stock or capital ownership or otherwise)
by any of the foregoing.
"Gross Available Amount" - means as of any date, the Available Amount without
taking into account any temporary reductions thereto in e ffect on such date
"Guarantees" - means, for any person, all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business) and other contingent obligations of such
246196.7 044599-33642 2
person to purchase, to provide funds for payment, to supply funds to invest in any other Person
or otherwise to assure a creditor of another Person against loss.
"Improvement Fund" - shall have the meaning set forth in the Indenture.
"Indebtedness" - means for any Person (without duplication) (i) all indebtedness created,
assumed or incurred in any manner by such Person representing money borrowed (including by
the issuance of debt securities), (ii) all obligations for the deferred purchase price of property or
services (other than trade accounts payable arising in the ordinary course of business), (iii) all
obligations secured by any Lien upon Property of such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness, (iv) all capitalized lease
obligations of such Person, (v) all obligations of such Person on or with respect to letters of
credit, banker's acceptances and other evidences of indebtedness representing extensions of
credit whether or not representing obligations for borrowed money, and (vi) all Guarantees;
"Indenture" - means the Trust indenture dated as of the date hereof between the Issuer
and the Trustee, relating to the Bonds, as amended and supplemented.
"Issuer" - means the United City of Yorkville, Illinois, a municipal corporation
organized and existing under the laws of the State of Illinois.
"Letter of Credit" - means the irrevocable transferable direct pay letter of credit issued
by the Bank for the account of the Applicants in favor of the Trustee, in the form of the
Appendix attached hereto with appropriate insertions, as amended.
"Lien" - means any mortgage, lien, security interest, pledge, charge or encumbrance of
any kind in respect of any Property, including the interests of a vendor or lessor under any
conditional sale, capital lease or other title retention arrangement.
"Liquidity Drawing" - means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit E to the Letter of Credit.
"Loan Agreement" - means the Amended and Restated Construction Loan Agreement
dated as of , 2004, as amended, between the Developer and the Bank.
"Manager" — means MPI Development Manager, Inc., an Illinois corporation, the
manager of Developer.
"Mortgages" - means, collectively, all of the mortgages granted by Developer and the
Additional Property Owners to the Bank, as agent, as amended and supplemented, as security for
the Loan Agreement.
"Mortgaged Property" - shall have the same meaning herein as in the Mortgages.
"Obligations" - means the fees relating to the Letter of Credit, any and all obligations of
the Applicants to reimburse the Bank for any drawings under the Letter of Credit, and all other
obligations of the Applicants to the Bank arising under or in the relation to this Agreement, or of
the Developer arising under the Security Documents or the Loan Agreement.
246196.7 044599-33642 3
"Official Statement" - means the Official Statement dated , 2004, relating
to the Bonds.
"Original Stated Amount" - is defined in Section 2.1 hereof.
"Outstanding" or "Bonds outstanding" - shall have the same meaning herein as in the
Indenture.
"Person" - means an individual, a corporation, a limited liability company, a partnership,
an association, a trust or any other entity or organization, including a government or political
subdivision or ally agency or instrumentality thereof.
"Pledge Agreement" — means any agreement between Bank and Developer pursuant to
which Developer pledges investment securities and/or cash to secure the performance of
Developer's obligations under the Loan Agreement and the loans made thereunder.
"Potential Default" - means an event or condition which, but for the lapse of time or the
of notice, or both, would constitute an Event of Default.
"Prime Rate" - means the Prime Rate as defined in the Loan Agreement.
"Property" - means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible, whether now owned or hereafter acquired.
"Related Documents" - means this Agreement, the Letter of Credit, the Bond
Documents, the Loan Agreement, a Master Letter of Credit Agreement, the Security Documents
and any other Agreement relating thereto, but Related Documents shall not include the Pledge
Agreement.
"Remarketing Agent" - means LaSalle Capital Markets, A Division of ABN-AMRO
Financial Services, Inc., as Remarketing Agent under the Indenture and the Remarketing
Agreement, and its successors and assigns pursuant thereto.
"Remarketing Agreement" - means the Remarketing Agreement dated as of the date
hereof, among the Remarketing Agent, the Issuer and the Developer, as amended and
supplemented, and any successor agreement thereto entered into by and among the Developer,
the Issuer land a successor Remarketing Agent.
"Security Documents" - collectively, the Mortgages and all other mortgages, deeds of
trust, guaranties, security agreements, assignments, financing statements and other documents as
shall from time to time secure the Obligations.
"Special Services" - shall have the meaning set for in the Indenture.
"Stated Expiration Date" - shall have the meaning set forth in the Letter of Credit.
"Termination Date" - shall have the meaning set forth in the Letter of Credit.
246196.7 044599-33642 4
"Trustee" - means LaSalle Bank National Association, as Trustee under the Indenture,
and any successor trustee thereunder.
The foregoing definitions shall be equally applicable to both the singular and plural forms
of the defined terms. Any capitalized terms used herein which are not specifically defined herein
shall have the same meanings herein as in the Indenture. All references in this Agreement to
times of day shall be references to Chicago time unless otherwise expressly provided herein.
Unless otherwise inconsistent with the terms of this Agreement, all accounting terms shall be
interpreted and all accounting determinations hereunder shall be made in accordance with
GAAP.
ARTICLE 2
LETTER OF CREDIT
Section 2.1 Issuance of Letter of Credit. Subject to the conditions and relying upon
the representations and warranties set forth in this Agreement or the Loan Agreement
incorporated herein or therein by reference, the Bank agrees to issue the Letter of Credit. The
Letter of Credit shall be stated in the original stated amount of $ (the "Original
Stated Amount"), which is the sum of (i) the principal amount of Bonds outstanding on the
Closing Date, plus (ii) interest thereon at the Cap Rate for a period of forty-five (45) days. The
Applicants may at any time without penalty provide for an Alternate Credit Facility in
accordance with Section 2.12 of the Indenture.
Section 2.2 Letter of Credit Drawings. The Trustee is authorized to make drawings
under the Letter of Credit in accordance with the terms thereof. The Applicants hereby direct the
Bank to make payments under the Letter of Credit in the manner therein provided. The
Applicants hereby irrevocably approve reductions and reinstatements of the Available Amount
as provided in the Letter of Credit.
Section 2.3 Reimbursement of Certain Liquidily Drawings Under the Letter of Credit-,
Prepayment; Interest. The Bank shall be reimbursed for the full amount of each Liquidity
Drawing made under the Letter of Credit by the Trustee in accordance with Article V of the
Indenture. In the event that there are insufficient funds for the Trustee to reimburse the Bank
pursuant to Article V, the Developer agrees to reimburse the Bank for the full amount of each
Liquidity Drawing made under the Letter of Credit on demand. If reimbursements not so
received by the Bank from the Trustee due to insufficient amounts being available under the
Indenture, the Developer promises to prepay to the Bank the full amount of each Liquidity
Drawing on the earliest of(i) the date on which any Bonds purchased with funds disbursed under
the Letter of Credit in connection with such Liquidity Drawing and held by the Bank or by the
Trustee, or its agent, for the account of the Bank, are redeemed or canceled pursuant to the
Indenture, (ii) the date on which any Bonds purchased with funds disbursed under the Letter of
Credit arc remarketed pursuant to the Indenture, (iii) the date on which the Letter of Credit is
replaced by an Alternate Credit Facility pursuant to the terms of the Indenture and (iv) the
Termination Date. Subject to Section 2.11 hereof, the Applicants also promise to pay to the
Bank interest on the unpaid amount of each unreimbursed Liquidity Drawing from the date such
Liquidity Drawing is made until it is paid in full as provided herein, at a rate per annum equal to
the Prime Rate plus three percent (3%) from time to time in effect, payable monthly in arrears
246196.7 044599-33642 5
and on the date the Liquidity Advance is payable as set forth herein, provided that the Issuer's
obligation hereunder is limited to amounts on deposit in the Funds and Accounts created under
the Indenture and pledged to the Trustee pursuant to the granting clauses of the Indenture. Any
Liquidity Advance not paid when due shall bear interest at the rate per annum specified in
Section 2.9 hereof.
Section 2.4 Reimbursement of Drawings Other Than Liquidity Drawings Under the
Letter of Credit. The Bank shall be reimbursed for the full amount of any drawing under the
Letter of Credit other than a Liquidity Drawing by the Trustee in accordance with Article V of
the Indenture. In the event that there are insufficient funds for the Trustee to reimburse the Bank
pursuant to Article V, the Developer agrees to reimburse the Bank for the full amount of any
drawing made under the Letter of credit other than a Liquidity Drawing immediately upon
payment by the Bank of each such drawing and on the date of each such payment. If the
Developer does not make such reimbursement on such date, such reimbursement obligation shall
bear interest at a rate per annum specified in Section 2.9 hereof.
Section 2.5 Fees. The Applicants hereby agree to pay, or cause to be paid, to the
Bank:
(a) on the Closing Date for the period ending on , 200_, and quarterly
in advance on the first day of each calendar quarter occurring thereafter, a non-refundable fee on
the Gross Available Amount on each such payment date at a rate per annum equal to five
sixteenths of one percent (.3125%) of the Gross Available Amount; and
(b) on the date of each drawing under the Letter of Credit, a drawing fee of One
Hundred and No/100 Dollars ($100.00).
Section 2.6 Method of Payment; Etc. Any payments to be made by the Developer
under this Agreement shall be made at the office of the Bank not later than 2:00 p.m. on the date
when due and shall be made in lawful money of the United States of America in freely
transferable and immediately available funds. Payments to be made by the Trustee shall be as
set forth in the Indenture.
Section 2.7 Computation of Interest and Fees. All computations of any interest and
fees payable by the Applicants under this Agreement shall be made on the basis of a 360-day
year and actual days elapsed. Interest shall accrue during each period during which interest is
computed from and including the first day thereof to be excluding the last day thereof.
Section 2.8 Payment Due on Non-Business Day to Be Made on Next Business Du. If
any sum becomes payable pursuant to this Agreement on a day which is not a Business Day, the
date for payment thereof shall be extended, without penalty, to the next succeeding Business
Day, and such extended time shall be included in the computation of interest and fees.
Section 2.9 Late Payments. If the principal amount of any obligation is not paid when
due, such Obligation shall bear interest until paid in full at a rate per annum equal to the Prime
Rate from time to time in effect plus three percent (3%), payable on demand.
246196.7 044599-33642 6
Section 2.10 Source of Funds. All payments made by the Bank pursuant to the Letter
of Credit shall be made from funds of the Bank, and not from the funds of any other Person. The
Bank will not require the Trustee or the Applicants to reimburse the Bank for any drawing under
the Letter of Credit prior to payment by the Bank of such drawing.
Section 2.11 Issuer's Limited Obligations. The obligations of the Issuer to the Bank
hereunder are not and shall never become general obligations of the Issuer, but are special
limited obligations payable by the Issuer solely and only from the Trust Estate (as defined in the
Indenture), including the Special Taxes and amounts on deposit in the Funds and Accounts
pledged pursuant to the Trust Estate. No recourse shall be had for the payment of the obligations
of the Issuer hereunder or for any claim based thereon against any past, present or future
member, officer, agent or employee or official of the Issuer or any independent contractor of the
Issuer. No covenant, stipulation, promise, agreement, or obligation of the Issuer contained
herein shall be deemed to be the covenant, stipulation, promise, agreement or obligation of any
present or future official, officer, agent or employee of the Issuer in his or her individual capacity
and no officers of the Issuer shall be liable personally with respect to this Agreement or be
subject to any personal liability or accountability by reason of this Agreement.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Issuance of Letter of Credit. As conditions
precedent to the obligation of the Bank to issue the Letter of Credit:
(a) the Applicants shall provide to the Bank on the Closing Date, in form and
substance satisfactory to the Bank:
(i) a written opinion of counsel to the Developer, dated the Closing Date and
addressed to the Bank;
(ii) the written opinion of Foley & Lardner, LLP, bond counsel, dated the
Closing Date and addressed to the Bank;
(iii) the written opinion of Daniel J. Kramer, Esq., counsel to the Issuer, dated
the Closing Date and addressed to the Bank;
(iv) A certificate signed by the of the Developer, dated the
Closing Date and stating that:
(A) the representations and warranties contained in Article 4 of this
Agreement are true and correct on and as of the Closing Date as though made on
such date; and
(B) no Event of Default or Potential Default has occurred and is
continuing, or would result from the issuance of the Letter of Credit or the
execution, delivery or performance of this Agreement or any Related Document
to which the Developer is a party;
246196.7 044599-33642 7
(v) evidence of the due authorization, execution and delivery by the parties
thereto of the Related Documents;
(vi) certified copies of the Articles of Organization and Operating Agreement
of the Developer;
(vii) certified copies of the Articles of Organization and Operating Agreement
of the Manager;
(viii) a certificate of existence of the Developer certified by the Illinois
Secretary of State;
(ix) a certificate of existence of the Manager certified by the Illinois Secretary
of State.
(x) a borrowing resolution of the Developer in a form reasonably acceptable
to the Bank;
(xi) a borrowing resolution of the Manager in a form reasonably acceptable to
the Bank;
(xii) true and correct copies of all Governmental Approvals, if any, necessary
for the Applicants to execute, deliver and perform the Related Documents to which they
are a party, except for final platting and engineering to be completed as part of the
development of the Special Service Area and other Governmental Approvals which
cannot be obtained at this time, to place Liens on its Property as described therein and to
authorize the Applicants to obtain the issuance of the Letter of Credit;
(xiii) evidence that the Applicants have received all consents and other
approvals from creditors, if any, necessary for the Applicants to execute, deliver and
perform the Related Documents to which they are a party, to place Liens on the
Developer's and the Additional Property Owners' Property as described therein and to
authorize the Applicants to obtain the issuance of the Letter of Credit;
(xiv) evidence that the Issuer shall have duly executed, issued and delivered the
Bonds to the Trustee and the Bond Registrar shall have duly authenticated the Bonds and
delivered the Bonds against payment;
(xv) Amended and Restated Construction Loan Agreement in form and
substance acceptable to the Bank;
(xvi) executed originals of each of the Related Documents (other than the Letter
of Credit and the Bonds) and such other documents, certificates and opinions as the Bank
may reasonably request; and
(xvii) a recognition agreement with the Issuer authorizing the Bank to perform
Developers obligations and receive distribution of Bond proceeds following an event of
246196.7 044599-33642 8
default by Developer under the Public Improvement Agreement between Developer and
the Issuer dated ,2004.
(b) no law, regulation, ruling or other action of the United States or the State of
Illinois or any political subdivision or authority therein or thereof shall be in effect or shall have
occurred, the effect of which would be to prevent the Bank from fulfilling its obligations under
this Agreement or the Letter of Credit; and
(c) all legal requirements provided the transactions contemplated execution, delivery and shall be
performance of the Related Documents an
reasonably satisfactory to the Bank.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF DEVELOPER
In order to induce the Bank to enter into this Agreement,the Developer hereby represents
and warrants to the Bank as follows:
Section 4.1 Organization and Qualification. The Developer and the Additional
Property Owners are each duly organized, each validly existing and in good standing as a limited
liability company under the laws of the state of Illinois and each has full and adequate power to
own its Property and conduct its business as now conducted. The Developer and the Additional
Property Owners each have full right and authority to enter into the Related Documents to which
it is a party, to grant to the Bank the Liens described in the Security Documents, and to perform
each and all of the matters and things therein provided for. The Related Documents to which the
Developer is a party do not, nor does the performance of observance by the Developer of any of
the matters or things therein provided for, contravene any provision of any articles of
organization or operating agreement provision of the Developer or any Additional Property
Owner or, to Developer's knowledge, any covenant, indenture or agreement of affecting the
Developer or any Additional Property Owner or any of its Property.
Section 4.2 Incorporation of Representations and Warranties by Reference. The
Developer hereby makes to the Bank the same representations and warranties as are set forth by
it in each Related Document to which it is a party, which representations and warranties, as well
as the related defined terms contained therein, are hereby incorporated herein by reference for
the benefit of the Bank with the same
ehereinsinf its entirety ey and were made as of the date
warranty and defined term were set forth
hereof. No amendment to such representations and warranties or defined terms made pursuant to
any Related Document shall be effective to amend such representations and warranties and
defined terms as incorporated by reference herein without the prior written consent of the Bank,
which consent shall not be unreasonably withheld.
ARTICLE 5
COVENANTS OF DEVELOPER
The Developer will do the following so long as any amounts may be drawn under the
Letter of Credit or any Obligations remain outstanding under this Agreement, unless the Bank
shall otherwise consent in writing (which consent shall not be unreasonably withheld):
246196.7 044599-33642 9
Section 5.1 Existence. The Developer will maintain its existence as a limited liability
company. The Developer will preserve and keep in force and effect all licenses, permits,
franchises and qualifications necessary to the proper conduct of its business.
Section 5.2 Loan Agreement. The Developer will comply with each and every of its
obligations under the Loan Agreement.
Section 5.3 Related Documents. The Developer will not amend or consent to any
Amendment of any Related Document.
Section 5.4 Optional Redemption of Bonds. The Developer will not permit an
optional redemption or purchase of Bonds under Article III of the Indenture; provided however,
that if the Developer has deposited pursuant to the Trustee an
II of the Indenture, the Bank shallconsent
amount of Bonds to be redeemed p
to such optional redemption to the extent of such amounts.
Section 5.5 Purchase of Bonds. The Developer will not permit any of its affiliates, or
any person that directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Developer, to purchase any Bonds (or any
beneficial interest therein) other than with the proceeds of a drawing under the Letter of Credit.
Section 5.6 Fixed Rate Conversions. The Developer will not convert or permit the
conversion of the interest rate on any of the Bonds to a fixed rate prior to maturity.
Section 5.7 Additional Credit Enhancement. The Developer will not 'provide or
permit to be provided credit enhancement for the Bonds other than the Letter of Credit unless the
Letter of Credit shall have been returned to the Bank for cancellation and all Obligations shall
have been paid in full.
Section 5.8 Sinking Funds. The Developer shall not enter into any agreements or
arrangements with the Bank pursuant to which it pledges cash or securities or covenants to
maintain amounts at such a level as to provide reasonable assurance that the amounts will be
available to pay any reimbursement obligation owed to the Bank hereunder or which otherwise
constitutes "replacement proceeds" as described in Treasury Regulation Section 1.148-1(c);
unless the Developer shall have delivered to the Issuer and the Bank an opinion of Bond Counsel
acceptable to the Issuer that the agreement or arrangement will not adversely affect the tax-
exempt status of interest on the Bonds.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF ISSUER
In order to induce the Bank to enter into this Agreement, the Issuer represents and
warrants to the Bank as follows:
Section 6.1 Status. The Issuer is (a) duly organized and validly existing as a
municipal corporation under the laws of the State of Illinois, (b) has all corporate powers and all
material authorizations, consents and approval as necessary to apply the proceeds of the Bonds
for the purposes described in the Indenture and the Official Statement, and (c) has and authority
246196.7 044599-33642 10
to enter into the Related Documents to which it is a party, and to adopt the Bond Ordinance and
to extend taxes as provided therein.
Section 6.2 Incorrporation of Representations and Warranties by Reference. The Issuer
hereby makes to the Bank the same representations and warranties as are set forth by it in each
Related Document to which it is a party, which representations and warranties, as well as the
related defined terms contained therein, are hereby incorporated herein by reference for the
benefit of the Bank with the same effect as if each and every such representation and warranty
and defined term were set forth herein in its entirety and were made as of the date hereof. No
amendment to such representations and warranties or defined terms made pursuant to any
Related Document shall be effective to amend such representations and warranties and defined
terms as incorporated by reference herein without the prior written consent of the Bank.
ARTICLE 7
COVENANTS OF ISSUER
The Issuer hereby makes to the Bank the same covenants as are set forth by it in Article 4
of the Indenture, which covenants, as well as the related defined terms contained therein, are
hereby incorporated herein by reference for the benefit of the Bank with the same effect as if
each and every such covenant and defined term were set forth herein in its entirety and were
made as of the date hereof. No amendment to such covenants or defined terms made pursuant to
the Indenture shall be effective to amend such representations and warranties and defined terms
as incorporated by reference herein without the prior written consent of the Bank. In addition,
the Issuer will abide by the following covenants so long as any amounts may be drawn under the
Letter of Credit or any Obligations remain outstanding under this Agreement, unless the Bank
shall otherwise consent in writing (which consent shall not be unreasonably withheld):
Section 7.1 Reports. Promptly after knowledge thereof shall have come to the
attention of the Issuer, the Issuer will furnish written notice to the Bank of the occurrence of any
Potential Default or Event of Default hereunder.
Section 7.2 Related Documents. The Issuer will not amend or consent to any
amendment of any Related Document.
Section 7.3 Optional Redemption of Bonds. The Issuer will not permit an optional
redemption or purchase of Bonds under Article III of the Indenture; provided however, that if the
Issuer or the Developer has deposited or caused to be deposited with the Bank or the Trustee an
amount equal to the Principal amount of Bonds to be redeemed pursuant to Article III of the
Indenture,the Bank shall consent to such optional redemption to the extent of such amounts.
Section 7.4 Purchase of Bonds. The Issuer will not purchase any Bonds (or any
beneficial interest therein) other than with the proceeds of a drawing under the Letter of Credit.
Section 7.5 Fixed Rate Conversions. The Issuer will not convert or permit the
conversion of the interest rate on any of the Bonds to a fixed rate prior to maturity.
Section 7.6 Additional Credit Enhancements. The Issuer will not provide or permit to
be provided credit enhancement for the Bonds other than the Letter of Credit unless the Letter of
246196.7 044599-33642 11
Credit shall have been returned to the Bank for cancellation and all Obligations shall have been
paid in full. efforts
Section 7.7 Li uidit . The Issuer shall se
e Adminisrat ve ExpenserFund, the Cost of
invest all monies held in the Bond Interest Fund, t payment
Issuance Fund, and the Improvement Fund in Investment Obligatioonnss that will p ormit h they
from such funds without breakage costs or fees top ay
have been established in accordance with the schedule of payments delivered by the Developer.
ARTICLE 8
DISBURSEMENTS FROM THE IMPROVEMENT FUND
Section 8.1
Amount and Purpose of Advances. (a) The moneys held in the ior
written
Improvement Fund will be disbursed at the direction
withheld Ueandnonly to the ext nt needed
approval of the Bank, which shall not be unreasonably
to pay or reimburse costs of acquiring, constructing, installing o utdo which lthe Bank is a party.
All such funds will be disbursed through a constructs Agreement, the Bank, at the
Subject to all the terms and conditions of this Reimbursement ro, at for
request of the Issuer, will from time to time, but
he improvement Fund to pay or reimburse e costs of
approval requisitions for disbursements from P
acquiring, constructing, installing and performing Special Services.
Fund shallp
q be furnished by the
issued by the Bank for disbursements from the Improve
Bank to the Trustee.
r any
Section 8.2 Waiver of Conditions. The pphof any one for mlore oof the
subsequent disbursement hereunder without requiring fulfillment
conditions to such disbursement provided for in this Reimbursement A rsementt shall not be
deemed a waiver of such condition with respect to any subsequent
preclude the Bank from insisting on complete and strict fulfillment of all conditions to all
subsequent disbursements.
ARTICLE 9
DEFAULTS
Section 9.1 Events of Default and Remedies. If any of the following events shall
occur, each such event shall be an"Event of Default":
(a) any material representation or warranty made by the Issuer or the Developer in
this Agreement (on incorporated herein by reference) cilal y of the or othertst temee t soDntemplat d
or in any certificate, document, instrument, opinion or financial
y of the
by or made or delivered pursuant to or in connection it this in Agreement or witted nag n any
other Related Documents, shall prove to have been incorrect,
material respect;
(b) any "event of default" shall have occurred, after all applicable cure periods, under
any of the Related Documents (as defined respectively therein), including, without limitation, the
Loan Agreement;
12
246196.7 044599-33642
(c) failure to pay to the Bank any Obligations when and as due hereunder and the
Applicants shall have failed to cure such default within five (5) days after written notice thereof;
(d) default in the due observance or performance by the Developer or the Issuer of
any of their respective covenants set forth herein and the continuance of such default for 30 days
after the earlier of Developer's knowledge thereof or notice thereof to Developer from the Bank;
provided, however,that if such default by its nature cannot reasonably be cured within thirty (30)
days, then no Event of Default shall exist hereunder if Developer diligently commences and
continue to pursue such remedy, provided that (x) such default is capable of being cured, (y)
such default could not materially adversely affect repayment of the Obligations, and (z) in no
event shall the period within which Developer may attempt to remedy such default extend
beyond ninety (90) days from the date of the notice relating thereto, or Developer's knowledge
thereof;
(e) any material provision of this Agreement or any of the Related Documents shall
cease to be valid and binding on the Applicants, or either of the Applicants shall contest any such
provision, or the Developer or the Issuer or any agent or trustee on behalf of the Developer or the
Issuer, as the case may be, shall deny that it has any or further liability under this Agreement or
any of the Related Documents.
(f) either of the Issuer and Developer shall (i) have entered involuntarily against it an
order for relief under the United States Bankruptcy Code, as amended, (ii) not pay, or admit in
writing its inability to pay, its debts generally as they become due, (iii) make an assignment for
the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of
its property, (v) institute any proceedings seeking to have entered against it an order for relief
under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets,
adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) take any action in furtherance of any
matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any
appointment or proceeding described in paragraph (g) below;
(g) a custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for either of the Issuer and Developer or any substantial part of its property, or a
proceeding described in paragraph (f)(v) above all be instituted against either of the Issuer and
Developer and such appointment continues undischarged or any such proceeding continues
undismissed or unstayed for a period of 90 or more days; or
(h) dissolution or termination of the existence of the Developer.
Section 9.2 Remedies. Upon the occurrences of any Event of Default, the Bank may
exercise any one or more of the following rights and remedies in addition to any other remedies
herein or by law provided:
246196.7 044599-33642 13
(a) by notice to the Applicants declare all Obligations to be, and such amounts shall
thereupon become, immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Applicants;
(b) give notice of the occurrence of an Event of Default to the Trustee, directing the
Trustee to accelerate or cause a mandatory tender of the Bonds, thereby causing the Letter of
Credit to expire fifteen (15) days thereafter;
(c) pursue any rights and remedies it may have under the Related Documents,
including, without limitation, the Loan Agreement (but not any rights or remedies contained in
the Pledge Agreement with respect to reimbursement for drawings under the Letter of Credit)
and the Mortgages; or
(d) pursue any other action available at law or in equity.
ARTICLE 10
MISCELLANEOUS
Section 10.1 No Deduction: Increased Costs.
(a) Except as otherwise required by law, any payment by the Applicants to the Bank
under this Agreement or any other Related Document shall be made without setoff or
counterclaim and without withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient imposed by any jurisdiction having control of such
recipient) imposed by or within the jurisdiction in which the Applicants are domiciled, any
jurisdiction from which the Applicants make any payment hereunder, or (in each case) any
political subdivision or taxing authority thereof or therein. If any such withholding is so
required, the Applicants shall make the withholding, pay the amount withheld to the appropriate
Governmental Authority before penalties attach thereto or interest accrues thereon and forthwith
pay such additional amount as may be necessary to ensure that the net amount actually received
by the Bank free and clear of such taxes (including such taxes on such additional amount) is
equal to the amount which the Balk would have received had such withholding not been made.
If the Bank pays any amount in respect of any such taxes, penalties or interest, the Developer
shall reimburse the Bank for that payment on demand in the currency in which such payment
was made. If the Developer pays any such taxes, penalties or interest, it shall deliver official tax
receipts evidencing that payment or certified copies thereof to the Bank on or before the thirtieth
day after payment.
(b) If the Code or any newly adopted law, treaty, regulation, guideline or directive, or
any change in any, law, treaty, regulation, guideline or directive or any new or modified
interpretation of any of the foregoing by any authority or agency charged with the administration
or interpretation thereof or any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank of the transactions contemplated by this Agreement (whether or not
having the force of law) shall:
(i) limit the deductibility of interest on funds obtained by the Bank to pay any
of its liabilities or subject the Bank to any tax, duty, charge, deduction or withholding on
or with respect to payments relating to the Bonds, the Letter of Credit or this Agreement,
246196.7 044599-33642 14
or any amount paid or to be paid by the Bank as the issuer of the Letter of Credit (other
than any tax measured by or based upon the overall net income of the Bank imposed by
any jurisdiction having control over the Bank);
(ii) impose, modify,require, make or deem applicable to the Bank any reserve
requirement, insurance assessment or similar requirement against any assets held by,
deposits with or for the account of, or loans, letters of credit or commitments by, an
office of the Bank;
(iii) change the basis of taxation of payments due the Bank under this
Agreement or in the Bonds (other than by a change in taxation of the overall net income
of the Bank);
(iv) cause or deem letters of credit to be assets held by the Bank and/or as
deposits on its books; or
(v) impose upon the Bank any other condition with respect to any amount
paid or payable to or by the Bank or with respect to this Agreement or any of the other
Related Documents;
and the result of any of the foregoing is to increase the cost to the Bank of making any payment
or maintaining the Letter of Credit, or to reduce the amount of any payment (whether of
principal, interest or otherwise) receivable by the Bank, or to reduce the rate of return on the
capital of the Bank or to require the Bank to make any payment on or calculated by reference to
the gross amount of any sum received by it, in each case by an amount which the Bank in its
reasonable judgment deems material, then:
(a) the Bank shall promptly notify the Applicants in writing of such event;
(b) the Bank shall promptly deliver to the Applicants a certificate stating the
change which has occurred or the reserve requirements or other costs or
conditions which have been imposed on the Bank or the request, direction
or requirement with which it has complied, together with the date thereof,
the amount of such increased cost, reduction or payment and a reasonably
detailed description of the way in which such amount has been calculated,
and the Bank's determination of such amounts, absent fraud or manifest
error, shall be conclusive; and
(c) the Developer shall pay to the Bank, from time to time as specified by the
Bank, such an amount or amounts as will compensate the Bank for such
additional cost,reduction or payment.
The protection of this Section 9.1(b) shall be available to the Bank regardless of any
possible contention of invalidity or inapplicability of the law, regulation or condition which has
been imposed; provided, however, that if it shall be later determined by the Bank that any
amount so paid by the Developer pursuant to this Section is in excess of the amount payable
under the provisions hereof, the Bank shall refund such excess amount to the Developer.
246196.7 044599-33642 15
Section 10.2 Right of Setoff.
(a) Upon the occurrence and during the continuance of an Event of Default, the Bank
is hereby authorized at any time and from time to time without notice to the Applicants (any such
notice being expressly waived by the Applicants), and to the fullest extent permitted by law, to
setoff, to exercise any banker's lien or any right of attachment and apply any and all balances,
credits, deposits (general or special, time or demand, provisions or final), accounts or monies at
any time held and other indebtedness at any time owing by the Bank to or for the account of the
Applicants other than trust accounts (irrespective of the currency in which such accounts, monies
or indebtedness may be denominated and the Bank authorized to convert such accounts, monies
and indebtedness into United States dollars) against any and all of the Obligations of the
Applicants, whether or not the Bank shall have made any demand for any amount owing to the
Bank by the Applicants.
(b) The rights of the Bank under this Section 9.2 are in addition to, in augmentation
of, and, except as specifically provided in this Section 9.2, do not derogate from or impair, other
rights and remedies (including, without limitation, other rights or setoff) which the Bank may
have.
Section 10.3 Indemnity. Subject to the provisions of Section 2.11 hereof, the
Developer and the Issuer, jointly and severally, agree to indemnify and hold the Bank and its
officers, directors and employees harmless from and against, and to pay on demand, any and all
claims, damages, losses, liabilities, costs and expenses whatsoever which the Bank and its
officers, directors and employees may incur or suffer by reason of or in connection with the
execution and delivery of this Agreement or the Letter of Credit, or any other documents which
may be delivered in connection with this Agreement or the Letter of Credit, or in connection
with any payment under the Letter of Credit, including, without limitation, the reasonable fees
and expenses of counsel for the Bank with respect thereto and with respect to advising the Bank
as to its rights and responsibilities under this Agreement and the Letter of Credit and all
reasonable fees and expenses, if any, in connection with the enforcement of defense of the rights
of the Bank in connection with this Agreement, the Letter of Credit or any of the Related
Documents, or the collection of any monies due under this Agreement or such other documents
which may be delivered in connection with this Agreement, the Letter of Credit or any of the
Related Documents; except, only if, and to the extent that any such claim, damage, loss, liability,
cost or expense shall be caused by the Bank's failure to act in good faith or to observe general
banking usage in connection with the Letter of Credit or failure to examine documents presented
under the Letter of Credit with care to determine whether they comply with the terms of the
Letter of Credit (it being understood that the Bank assumes no liability or responsibility for the
genuineness, falsification or effect of any document which appears on such examination to be
regular on its face). The obligations of the Applicants under this Section 9.3 shall survive
payment of all Obligations owed under this Agreement and the expiration of the Letter of Credit.
Section 10.4 Obligations Absolute. The obligations of the Developer and the Issuer
under this Agreement shall be absolute, unconditional and irrevocable, and shall be paid strictly
in accordance with the terms of this Agreement under all circumstances.
246196.7 044599-33642 16
Section 10.5 Liability of the Bank. Except for intentional malfeasance by the Trustee,
the Developer and the Issuer assume all risks of the acts or omissions of the Trustee, or any agent
of the Trustee, and any transferee beneficiary of the Letter of Credit with respect to its use of the
Letter of Credit. Neither the Bank or any of its officers or directors shall be liable or responsible
for: (a) the use which may be made of the Letter of Credit or for any acts or omissions of the
Trustee, any agent of the Trustee and any transferee beneficiary in connection therewith; (b) the
validity or genuineness of documents, or of any endorsements) thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged; (c) payment by the
Bank against presentation of documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make
payment under the Letter of Credit; provided, however, that the Developer and the Issuer shall
have a claim against the Bank, and the Bank shall be liable to the Developer and the Issuer, to
the extent of any direct compensatory, as opposed to consequential, damages suffered by the
Developer or the Issuer which the Developer or the Issuer proves were caused by the Bank's
failure to act in good faith or to observe general banking usage in connection with the Letter of
Credit or failure to examine documents presented under the Letter of Credit with care to
determine whether they comply with the terms of the Letter of Credit (it being understood that
the Bank assumes no liability or responsibility for the genuineness, falsification or effect of any
document which appears on such examination to be regular on its face). The Bank is hereby
expressly authorized and directed to honor any demand for payment which is made under the
Letter of Credit without regard to, and without any duty on its part to inquire into the existence
of, any disputes or controversies between or among the Developer or the Issuer, the Trustee, any
transferee beneficiary of the Letter of Credit or any other Person or the respective rights, duties
or liabilities of any of them, or whether any facts or occurrences represented in any of the
documents presented under the Letter of Credit are true and correct. Notwithstanding anything
in this Section 9.5, the obligations of the Issuer are limited to the extent set forth in Section 2.11
above.
Section 10.6 Participants. The Bank shall have the right to grant participation in the
Letter of Credit to one or more other banking institutions, and such participants shall be entitled
to the benefits of this Agreement, including,without limitation, Sections 9.1, 9.3 and 9.14 hereof,
to the same extent as if they were a direct party hereto; provided, however, that no such
participation by any such participant shall in any way affect the obligation of the Bank under the
Letter of Credit; and provided further that no such participant shall be entitled to receive
payment hereunder of any amount greater than the amount which would have been payable had
the Bank not granted a participation to such participant.
Section 10.7 Survival of the Agreement. All covenants, agreements, representations
and warranties made in this Agreement shall survive the issuance by the Bank of the Letter of
Credit and shall continue in full force and effect so long as the Letter of Credit shall be unexpired
or any obligations shall be outstanding and unpaid. The obligation of the Applicants to
reimburse the Bank pursuant to Sections 9.1, 9.3 and 9.14 hereof shall survive the payment of the
Bonds and termination of this Agreement.
Section 10.8 Modification of this Agreement. No amendment, modification or waiver
of any provision of this Agreement shall be effective unless the same shall be in writing and
246196.7 044599-33642 17
signed by the Bank, the Developer and the Issuer and no amendment, modification or waiver of
any provision of the Letter of Credit, and no consent to any departure by the Applicants
therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Bank. Any such waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Applicants in any case shall entitle the
Applicants to any other or further notice or demand in the same, similar or other circumstances.
Section 10.9 Waiver of Rights by the Bank. No course of dealing or failure or delay on
the part of the Bank in exercising any right, power or privilege hereunder or under the Letter of
Credit or this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other right or privilege. The
rights of the Bank under the Letter of Credit and the rights of the Bank under this Agreement are
cumulative and not exclusive of any rights or remedies which the Bank would otherwise have.
Section 10.10 Severability. In case any one of more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.
Section 10.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois, without giving effect to conflict of law
principles.
Section 10.12 Notices. All notice hereunder shall be given by United States certified or
registered mail or by telecommunication device capable of creating written record of such notice
and its receipt. Notices hereunder shall be effective when received and shall be addressed:
If to the Bank,to LaSalle Bank National Association
8303 West Higgins Road
Suite 600
Chicago, Illinois 60631
Attention: Michael T. McGrogan, Executive Vice President
Telephone No.: (773) 864-2014
Telecopy No.: (773) 864-2589
with a copy to: LaSalle Bank National Association
1301 East Ogden Avenue
Naperville, Illinois 60563
Attention: John Arnold
Telephone No.: (630) 983-2033
Telecopy No.: (630) 983-2035
246196.7 044599-33642 18
with a copy to Schwartz, Cooper, Greenberger& Krauss, Chtd.
180 North LaSalle Street
Suite 2700
Chicago, Illinois 60601
Attention: Scott M. Lapins
Telephone No.: (312) 845-5419
Telecopy No.: (312) 264-2450
If to the Developer,to MPI-2 Yorkville Central LLC
6880 North Frontage Road
Suite 100
Burr Ridge, Illinois 60527
Attention: Anthony Pasquinelli
Telephone No.: (630) 455-5400
Telecopy No.: (630)455-2591
with a copy to Moser Enterprises
5th Avenue Station
300 East 5th Avenue
Suite 430
Naperville, Illinois 60563
Attn: Arthur Zwemke
with a copy to Moss and Bloomberg, Ltd.
305 West Briarcliff Road
Bolingbrook, Illinois 60440
Attention: Barry L. Moss, Esq.
Telephone No.: (630) 759-0800
Telecopy No.: (630) 759-8504
if to the Trustee,to LaSalle Bank National Association
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention: Corporate Trust Department
Telephone No.: (312) 904-2000
Telecopy No.: (312) 904-2236
If to the Issuer, to United City of Yorkville
800 Game Farm Road
Yorkville, Illinois 60560
Attention: Mayor
Telephone No.: (630) 553-4350
Telecopy No.: (630) 553-7575
Section 10.13 Successors and Assigns. Whenever in this Agreement the Bank is referred
to, such reference shall be deemed to include the successors and assigns of the Bank, all
covenants, promises and agreements by or on behalf of the Applicants which are contained in
246196.7 044599-33642 19
this Agreement shall inure to the benefit of such successors dtransferred,s gns. exceptts a n duties of
the Applicants hereunder, however, may not be assign or
provided in this Agreement or with the prior written consent
notwithstanding rlan obligations ssignme t
the Applicants hereunder shall continue in full force an
by the Developer or the Issuer of any of their respective rights or bli atons under nm supplement or
Related Documents or any entering into, or consent by the Applicants
amendment to any of he Related Documents.
Section 10.14 Taxes and Expenses. Any taxes (other than any tax measured by or based
upon the overall net income of the Bank imposed by any jurisdiction having control over the
Bank) payable or ruled payable by any Governmental Authority in respect of this Agreement, to
Letter of credit or the Bonds shall be paid by the Applicants, together with interest and penalties,
if any; provided, however, that the Applicants may conduct a reasonable contest of any such for
taxes with the prior written consent of the Bank. The
incurred Applicants is te11Bei reimburse se the
connection with
any and all out of pocket expenses and charges paid
the preparation, execution, delivery, administration sCredrt requested by or on
Agreement and any amendment to this Agreement o the Letter of
behalf of Applicant, including reasonable fees and disbursements of counsel to the Bank,
provided that the Issuer's obligations under this section 9.14 are limited as set forth in Section
2.11 above.
. The captions in this Agreement are for convenience of
Section 10.15 Headings
reference only and shall not define or limit the provisions hereof.
Section 10.16 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original but all taken together to constitute one instrument.
nts
Section 10.17 Entire Agreement. This w Agreement to subject matter tDhereofeand
constitute the entire understanding of the parties respect to
any prior agreements,whether written or oral, with respect thereto are superseded hereby.
Section 10.18 Terms of Security Documents Not.
which s prohibited by the terms of
shall be deemed or construed to permit any act or omission
any Security Document, the covenants and agreements c n therS eurity Documents. to and
not in substitution for the covenants and agreements contained
to the
Section 10.19 Additional Collateral. The Cos all subject to the Liens
Obligations and alldof the
Bank pursuant to the Security Documents secure
Developer's obligations under the Loan Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE]
20
246196.7 044599-33642
Please signify your agreement and acceptance of the foregoing by executing this
Agreement in the space provided below.
Very truly yours,
LASALLE BANK NATIONAL ASSOCIATION
By:
Its:
Accepted and agreed to as of the
date first above written:
MPI.2 YORKVILLE CENTRAL LLC,
an Illinois limited liability company
By: MPI Development Manager Inc., an Illinois corporation,
its manager
By:
Its:
UNITED CITY OF YORKVILLE,
a Municipal corporation
By:
Its:
246196.7 044599-33642 21
Exhibit G
011.560726.2
APPENDIX
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT NO.
, 2004
**U.S. $
No. S570193
LaSalle Bank National Association, as trustee (the "Trustee")
under the Trust Indenture dated as of July 1, 2004
(the "Indenture") between the United City of Yorkville
Illinois (the "Issuer"), and the Trustee
135 South LaSalle Street
Suite 1960
Chicago, Illinois 60603
Attention: Corporate Trust Department
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit of the holders of the Bonds
(as hereinafter defined), our irrevocable transferable Letter of Credit No. S570193 for the
account of the Issuer and MPI-2 Yorkville Central LLC, an Illinois limited liability company,
(collectively, the "Applicants"), whereby we hereby irrevocably authorize you to draw on us
from time to time, from and after the date hereof to and including the earliest to occur of our
close of business on: (1) , 200_ (as extended from time to time, the "Stated
Expiration Date"), (ii) the earlier of(A) the date which is fifteen (15) days following the date on
which the interest rate on all of the Bonds is converted to a Fixed Rate (as defined in the
Indenture) as such date is specified in a certificate in the form of Exhibit A hereto (the
"Conversion Date") or (B) the date on which the Bank honors a drawing under the Letter of
Credit on or after the Conversion Date, (iii) the date which is fifteen (15) days following receipt
from you of a certificate in the form set forth as Exhibit B hereto, (iv) the date on which an
Acceleration Drawing (as hereinafter defined) is honored by us, and (v) the date which is fifteen
(15) days following receipt by you of a written notice from us specifying the occurrence of an
Event of Default under the Reimbursement Agreement (the "Reimbursement Agreement") dated
as of , 200_, among the Applicants and us and directing you to accelerate the
Bonds (the "Termination Date"), a maximum aggregate amount not exceeding
and _/100 United States Dollars (U.S. $ the
"Original Stated Amount") to pay principal of and accrued interest on, or the purchase price of,
the and —/100 United States Dollars (U.S.
$ ) United City of Yorkville, Illinois Special Service Area Number 2004-106
Total Grande Reserve Variable Rate Demand Special Tax Bonds, Series 2004 (MPI Grande
Reserve Project) issued by the Issuer (the "Bonds"), in accordance with the terms hereof (said
and /100 United States Dollars (U.S.
$ ) having been calculated to be equal to
and /100 United States Dollars (U.S. $ ) the original principal amount of
246196.7 044599-33642
the Bonds, plus and /100 U.S. Dollars (U.S. $
which is at least 45 days accrued interest on said principal amount of the Bonds at the rate of
nine percent (9%) per annum (the "Cap Rate"). This credit is available to you against presented
to LaSalle Bank National Association (the "Bank") as described below:
A certificate (with all blanks appropriately completed) (i) in the form attached as
Exhibit C hereto to pay accrued interest on the Bonds as provided for under
Section 6.5(a)(i) of the Indenture (an "Interest Drawing"), (ii) in the form attached
as Exhibit D hereto to pay the principal amount of and accrued interest on the
Bonds as provided for in Section 3.7 of the Indenture (a "Redemption Drawing"),
provided that in the event the date of redemption or purchase coincides with an
Interest Payment Date (as defined in the Indenture), the Redemption Drawing
shall not include an accrued interest on the Bonds (which interest is payable
pursuant to an Interest Drawing), (iii) in the form attached as Exhibit E hereto, to
allow the Trustee to pay the purchase price of Bonds tendered for purchase as
provided for in Section 3.6 or 3.1 of the Indenture which have not been
successfully remarketed or for which the purchase price has not been received by
the Trustee by 9:00 a.m., Chicago time, on the purchase date (a "Liquidity
Drawing"), (iv) in the form attached as Exhibit F hereto, to pay the principal of
and accrued interest in respect of Bonds the payment of which has been
accelerated pursuant to Section 8.1 of the Indenture (an "Acceleration Drawing")
or (v) in the form attached as Exhibit G hereto to pay the principal amount of
Bonds maturing on (a "Stated Maturity Drawing")
each certificate to state therein that it is given by your duly authorized officer and
dated the date such certificate is presented hereunder. No drawings shall be made
under this Letter of Credit for Purchased Bonds (as defined in the Indenture).
All drawings shall be made by presentation of each Payment Document at our office at
540 W. Madison, 26th Floor, Chicago, Illinois 60661, as aforesaid, or by telecopier (at telecopier
number (312) 904-6303, Attention: Global Trade Advisory, without further need of
documentation, including the original of this Letter of Credit, it being understood that each
Payment Document so submitted is to be the sole operative instrument of drawing.
We agree to honor and pay the amount of any Interest, Redemption, Liquidity,
Acceleration or Stated Maturity Drawing if presented in compliance with all of the terms of this
Letter of Credit. If such drawing, other than a Liquidity Drawing, is presented prior to 12:00
(Noon), Chicago time, on a Business Day, payment shall be made to the account number or
address designated by you of the amount specified, in immediately available funds, by 10:00
a.m., Chicago time, on the following Business Day. If any such drawing, other than a Liquidity
Drawing, is presented at or after 12:00 (Noon), Chicago time, on a Business Day, payment shall
be made to the account number or address designated by you of the amount specified in
immediately available funds by 3:00 p.m., Chicago time, on the following Business Day. If a
Liquidity Drawing is presented before 9:30 a.m., Chicago time, payment shall be made to the
account number or address designated by you of the amount specified in immediately available
funds, by 1:00 p.m., Chicago time, on the same Business Day. If a Liquidity Drawing is
presented at or after 9:30 a.m., Chicago time, payment shall be made to the account number or
address designated by you of the amount specified in immediately available funds, by 1:00 p.m.,
246196.7 044599-33642
Chicago time, on the following Business Day. Payments made hereunder shall be made by wire
transfer to you or by deposit into your account with us in accordance with the instructions
specified by the Trustee in the drawing certificate relating to a particular drawing hereunder.
"Business Day" means any day other than a Saturday or Sunday or a day on which banking
institutions in the city in which the principal corporate trust office of the Trustee or the principal
corporate trust office of the Depository (as defined in the Indenture) or the principal office of the
Remarketing Agent (as defined in the Indenture) is located, or in the City of Chicago, Illinois,
are required or authorized by law to remain closed, or other than a day on which the New York
Stock Exchange is closed.
The Available Amount (as hereinafter defined) will be reduced automatically by the
amount of any drawing hereunder; provided, however, that the amount of any Interest Drawing
hereunder, less the amount of the reduction in the Available Amount attributable to interest as
specified in a certificate in the form of Exhibit D or H hereto, shall be automatically reinstated on
the Business Day immediately preceding the (_� day following the date of payment
by us of such drawing, by an amount equal to the amount of such payment, unless you shall have
received written notice from the Bank prior to such date of the occurrence of an Event of Default
(as defined in the Reimbursement Agreement) and a direction to accelerate or cause a mandatory
tender of the Bonds. After payment by us of a Liquidity Drawing, the obligation of the Bank to
honor drawings under this Letter of Credit be automatically reduced by an amount equal to the
Original Purchase Price of any Bonds (or portions thereof) purchased pursuant to said drawing.
In addition, prior to the Conversion Date, in the event of the remarketing of the Bonds (or
portions thereof) previously purchased with the proceeds of a Liquidity Drawing, our obligations
to honor drawings hereunder will be automatically reinstated concurrently upon receipt by us, of
an amount equal to the Original Purchase Price of such Bonds (or portion thereof); the amount of
such reinstatement shall be equal to the Original Purchase Price of such Bonds (or portions
thereof). "Original Purchase Price" shall mean the principal amount of any bond purchased with
the proceeds of a Liquidity Drawing plus the amount of accrued interest on such Bond paid with
the proceeds of a Liquidity Drawing (and not pursuant to an Interest Drawing) upon such
purchase.
Upon receipt by us of a certificate of the Trustee in the form of Exhibit D or H hereto, the
Letter of Credit will automatically and permanently reduce the amount available to be drawn
hereunder by the amount specified in such certificate. Such reduction shall be effective as of the
next Business Day following the date of delivery of such certificate.
Upon any permanent reduction of the amounts available to be drawn under this Letter of
Credit, as provided herein, we may deliver to you a substitute Letter of Credit in exchange for
this Letter of Credit or an amendment to this Letter of Credit substantially in the form of Exhibit
I hereto to reflect any such reduction. If we deliver to you such a substitute Letter of Credit you
shall simultaneously surrender to us for cancellation the Letter of Credit then in your possession.
The "Available Amount" shall mean the Original Stated Amount (i) less the amount of all prior
reductions pursuant to Interest, Redemption, Liquidity, Acceleration or Stated Maturity
Drawings, (ii) less the amount of any reduction thereto pursuant to a reduction certificate in the
form of Exhibit D or H hereto to the extent such reduction is not already accounted for by a
reduction in the Available Amount pursuant to (i) above, (iii) plus the amount of all
reinstatements as above provided.
246196.7 044599-33642
Prior to the Termination Date, we may extend the Stated Expiration Date from time to
time at the request of the Applicants by delivering to you an amendment to this Letter of Credit
in the form of Exhibit K hereto designating the date to which the Stated Expiration Date is being
extended. Each such extension of the Stated Expiration Date shall become effective on the
Business Day following delivery of such notice to you and thereafter all references in this Letter
of Credit to the Stated Expiration Date shall be deemed to be reference to the date designated as
such in such notice. Any date to which the Stated Expiration Date has been extended as herein
provided may be extended in a like manner.
Upon the Termination Date, this Letter of Credit shall automatically terminate and be
delivered to the Bank for cancellation.
This Letter of Credit is transferable in whole only to your successor as Trustee. Any such
transfer (including any successive transfer) shall be effective upon receipt by us (which receipt
shall be subsequently confirmed in writing to the transferor and the transferee by the Bank) of
this original Letter of Credit and a signed copy of the instrument effecting each such transfer
signed by the transferor and by the transferee in the form of Exhibit J hereto (which shall be
conclusive evidence of such transfer) and, in such case, the transferee instead of the transferor
shall, without the necessity of further action, be entitled to all the benefits of and rights under this
Letter of Credit in the transferor's place; provided that, in such case, any certificates of the
Trustee to be provided hereunder shall be signed by one who states therein that he or she is a
duly authorized officer or agent of the transferee.
Communications with respect to this Letter of Credit shall be addresses to us at 540 W.
Madison, 26`h Floor, Chicago, Illinois 60661, Attention: Global Trade Advisory specifically
referring to the number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this Letter of Credit shall be
governed by, and construed in accordance with, the terms of the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No.
500 (the "Uniform Customs") except for Article 41 and the first sentence of Article 48(g)
thereof. As of January 1, 1999, this Letter of Credit shall be governed by the International
Standby Practices (1998) International Chamber of Commerce No. 590 (the "ISP98"). As to
matters not governed by the Uniform Customs and after January 1, 1999 by the ISP98, this Letter
of Credit shall be governed by and construed in accordance with the laws of the State of Illinois,
including without limitation the Uniform Commercial Code as in effect in the State of Illinois.
All payments made by us hereunder shall be made from our funds and not with the funds
of any other person.
246196.7 044599-33642
This Letter of Credit sets forth in full the terms of our undertaking, and such undertaking
shall not in any way be modified or amended by reference to any other document whatsoever.
LASALLE BANK NATIONAL ASSOCIATION
By:
Its:
By:
Its:
246196.7 044599-33642
EXHIBIT A
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
NOTICE OF CONVERSION DATE
LaSalle Bank National Association
540 W. Madison
26�h Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No.
S570193 dated , 2004 (the "Letter of Credit") which has been established by
you for the account of the United City of Yorkville, Illinois and MPI-2 Yorkville Central LLC, in
favor of the Trustee.
The undersigned certifies and confirms that the Conversion Date of all of the Bonds has
occurred on [Insert Date], and, accordingly, said Letter of Credit shall terminate 15 days after
such Conversion Date in accordance with its terms.
All defined terms used herein which are not otherwise defined herein shall have the same
meaning as in the Letter of Credit.
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
EXHIBIT B
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
NOTICE OF TERMINATION
LaSalle Bank National Association
540 W. Madison
26`x' Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No.
S570193 dated , 2004 (the "Letter of Credit") which has been established by
you for the account of the United City of Yorkville, Illinois and MPI-2 Yorkville Central LLC, in
favor of the Trustee.
The undersigned hereby certified and confirms that [(i) no Bonds (as defined in the Letter
of Credit) remaining Outstanding within the meaning of the Indenture, (ii) all drawings required
to be made under the Indenture and available under the Letter of Credit have been made and
honored, or (iii) a substitute letter of credit has been issued to replace the Letter of Credit
pursuant to the Indenture dated as of July 1, 2004, between the Issuer and the Trustee and,
accordingly, the Letter of Credit shall be terminated in accordance with its terms.
All defined terms used herein which are not otherwise defined herein shall have the same
meaning as in the Letter of Credit.
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
EXHIBIT C
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. 5570193
INTEREST DRAWING CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26`" Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf
of the Beneficiary as follows with respect to (i) that certain Irrevocable Transferable Letter of
Credit No. 5570193 dated , 2004 (the "Letter of Credit") issued by LaSalle
Bank National Association (the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as
defined in the Letter of Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. The Beneficiary is entitled to make this drawing in the amount of$
under the Letter of Credit pursuant to the Indenture with respect to the payment of interest due
on all Bonds outstanding on the Interest Payment Date (as defined in the Indenture) occurring on
[insert applicable date], other than Purchased Bonds (as defined in the Letter of Credit).
3. The amount of the drawing is equal to the amount required to be drawn by the
Trustee pursuant to Section 6.5 of the Indenture.
4. The amount of the drawing made by this Certificate was computed in compliance
with the terms of the Indenture and, when added to the amount of any other drawing under the
Letter of Credit made simultaneously herewith, does not exceed the Available Amount (as
defined in the Letter of Credit).
5. Payment by the Bank pursuant to the drawing shall be made to ABA Number
, Account Number , Attention:
Re:
246196.7 044599-33642
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
By Telecopy or Tested Telex
EXHIBIT D
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
REDEMPTION DRAWING AND REDUCTION CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26`" Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as follows with respect to
(i) that certain Irrevocable Transferable Letter of Credit No. S570193 dated
2004 (the "Letter of Credit") issued by LaSalle Bank National Association (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that
certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. The Beneficiary is entitled to make this drawing in the amount of
$ under the Letter of Credit pursuant to Section [3.1(a), 3.1(b), 3.1(c), 3.1(d), or
3.1(e)] * of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds to be
redeemed by the Issuer (as defined in the Letter of Credit) pursuant to Section [3.1(a), 3.1(b),
3.1(c), 3.1(d), or 3.1(e)* of the Indenture on [insert applicable date] (the "Purchase in Lieu of
Redemption Date" or the "Redemption Date") other than Purchased Bonds (as defined in the
Letter of Credit), plus (ii) interest on such Bonds accrued from the immediately preceding
Interest Payment Date (as defined in the Indenture) to the Redemption Date, provided that in the
event the Redemption Date coincides with an Interest Payment Date this drawing does not
include any accrued interest on such Bonds.
4. Of the amount stated in paragraph 2 above:
(i) $ is demanded in respect of the principal
amount of the Bonds referred to in subparagraph(a) above; and
1 Insert appropriate subsection.
246196.7 044599-33642
(ii) $ is demanded in respect of accrued interest
on such Bonds.
5. Payment by the Bank pursuant to this drawing shall be made to ABA Number
Account Number Attention:
(. The amount of the drawing Certificate
computed in
of any other
with the terms and conditions of th
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount(as defined in the Letter of Credit).
7. Upon payment of the amount draw hereunder, the Bank is hereby directed to
permanently reduce the Available Amount
ailabl[enAmounounThe Available Amount haslbeen
Amount shall thereupon equal $[insert Av ]
reduced by an amount equal to the principal of Bonds paid with this drawing and an amount
equal to 45 days' interest thereon at the Cap Rate (as defined in the Letter of Credit).
g. Of the amount of the reduction stated in paragraph 7 above:
(i) $ is attributable to the principal amount
of Bonds redeemed or purchased in lieu of redemption; and
(ii) $ is attributable to interest on such Bonds
(i.e., days' interest hereon at the Cap Interest Rate).
9. The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
10. Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (to the extent such Bonds are not Purchased
Bonds (as defined in the Letter of Credit) plus 45 days' interest thereon at the Cap Rate.
11.2 In the case of a redemption pursuant to Section [3.1(a) or 3.1(b)] of the Indenture
[or a purchase in lieu of redemption pursuant to Section 3.1(e) of the Indenture],
the trustee,Letter
[prior to giving notice of redemption t he owners
Bank the Bonds]tnthe [prior to
hasr co se tedht such
of Credit], received written evidence from
[purchase in lieu of] redemption.
2 To be included in certificate only if Section 3.1(a) or 3.1(b) is referenced in paragraph numbers
2 or 3 above.
246196.7 044599-33642
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
By Telecopy or Tested Telex
EXHIBIT E
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
LIQUIDITY DRAWING CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26'' Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as follows with respect to
(i) that certain Irrevocable Transferable Letter of Credit No. S570193 dated
2004 (the "Letter of Credit") issued by LaSalle Bank National Association (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that
certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. The Beneficiary is entitled to make this drawing in the amount of$
with respect to the payment of the purchase price of Bonds tendered for purchase in accordance
with section [3.6(a), 3.7(a), 3.7(b) or 3.7(c)]3 of the Indenture and to be purchased on [insert
applicable date] (the "Purchase Date") which Bonds have not been remarketed as provided in the
Indenture or the purchase price of which has not been received by the Tender Agent (as defined
in the Letter of Credit) by 12:00 Noon, Chicago time, on the Business day prior to said Purchase
Date.
3. (a) The amount of the drawing is equal to (i) the principal amount of Bonds to
be purchased pursuant to the Indenture on the Purchase Date other than Purchased Bonds (as
defined in the Letter of Credit), plus (ii) interest on such Bonds accrued from the immediately
preceding Interest Payment Date (as defined in the Indenture) (or if none, the date of issuance of
the Bonds) to the Purchase Date, provided that in the event the Purchase Date coincides with an
Interest Payment Date this drawing does not include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph 2) above:
(i) $ is demanded in respect of the principal portion
of the purchase price of the Bonds referred to in subparagraph (2) above; and
3 Insert appropriate subsection.
246196.7 044599-33642
(ii) $ is demanded in respect of payment of the
interest portion of the purchase price of such Bonds.
4. The amount of the drawing), made by this Certificate was computed in
compliance with the terms and conditions of the Indenture and, when added to the amount of any
other drawing under the Letter of Credit made simultaneously herewith, does not exceed the
Available Amount(as defined in the Letter of Credit).
5. The Beneficiary will register or cause to be registered in the name of the
Applicants, upon payment of the amount drawn hereunder, Bonds in the principal amount of the
Bonds being purchased with the amounts drawn hereunder and will deliver such Bonds to the
Trustee in accordance with the Indenture.
6. Payment by the Bank pursuant to this drawing shall be made to
, ABA Number Account Number, Attention:
Re:
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
By Telecopy or Tested Telex
EXHIBIT F
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. 5570193
ACCELERATION DRAWING CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26th Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as follows with respect to
(i) that certain Irrevocable Transferable Letter of Credit No. S570193 dated
2004 (the "Letter of Credit") issued by LaSalle Bank National Association (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that
certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. An Event of Default has occurred under subsection [insert subsection) of Section
8.1 of the Indenture and the Trustee has declared the principal of and accrued interest on all
Bonds then outstanding immediately due and payable. The Beneficiary is entitled to make this:
drawing in the amount of$ under the Letter of Credit pursuant to Section 6.5
of the Indenture in order to pay the principal of and interest accrued on the Bonds due to an
acceleration thereof in accordance with Section 8.1 of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds
outstanding on [insert date of acceleration] (the "Acceleration Date") other than Purchased
Bonds (as defined in the Letter of Credit), plus (ii) interest on such Bonds accrued from the
immediately preceding Interest Payment Date (as defined in the Indenture) to the Acceleration
Date.
(b) Of the amount stated in paragraph 2 above:
(i) $ is demanded in respect of the principal
portion of the Bonds referred to in subparagraph (a) above; and
(ii) $ is demanded in respect to accrued interest on
such Bonds.
246196.7 044599-33642
4. The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any drawing
under the Letter of Credit made simultaneously herewith, does not exceed the Available Amount
(as defined in the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
, ABA Number: Attention:
Re:
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
By Telecopy or Tested Telex
EXHIBIT G
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. 5570193
STATED MATURITY DRAWING CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26th Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as follows with respect to
(i) that certain Irrevocable Transferable Letter of Credit No. S570193 dated
2004 (the "Letter of Credit") issued by LaSalle Bank National Association (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that
certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. The Beneficiary is entitled to make this drawing in the amount of
$ under Section 6.5 of the Indenture.
3. The amount of this drawing is equal to the principal amount of Bonds outstanding
the maturity date thereof as specified in Section 2.2 of the Indenture, other than Purchased Bonds
(as defined in the Letter of Credit.)
4. The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount(as defined in the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
ABA Number Account Number
Attention: e:
246196.7 044599-33642
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
EXHIBIT H
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. 5570193
REDUCTION CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26''Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
The undersigned individual, a duly authorized representative of
(the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable Transferable Letter of Credit
No. 5570193 dated , 2004 (the "Letter of Credit") issued by LaSalle Bank
National Association (the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as
defined in the Letter of Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of Credit) under the
Indenture.
2. Upon receipt by the Bank of this Certificate, the Available Amount (as defined in
the Letter of Credit) shall be reduced by $ and the Available Amount shall
thereupon equal $ $ of new Available Amount is
attributable to interest.
3. The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
4. Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (other than Purchased Bonds (as defined in
the Letter of Credit)) plus 45 days' interest thereon at the Cap Rate (as defined in the Letter of
Credit).
246196.7 044599-33642
IN WITNESS WHEREOF, this Certificate has been executed this day of
as Trustee
By:
[Title of Authorized Representative]
246196.7 044599-33642
EXHIBIT I
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
NOTICE OF AMENDMENT
[TRUSTEE]
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No.
S570193 dated , 2004 (the "Letter of Credit"), established by us in your
favor as Beneficiary. We hereby notify you that, in accordance with the terms of the Letter of
Credit and the certain Reimbursement Agreement dated as of July 1, 2004 among MPI-2
Yorkville Central LLC, the United City of Yorkville, Illinois, and us, the Available Amount (as
defined in the Letter of Credit)has been reduced to $
This letter should be attached to the Letter of Credit and made a part thereof.
LASALLE BANK NATIONAL ASSOCIATION
By:
Its:
By:
Its:
246196.7 044599-33642
EXHIBIT J
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT NO. S570193
TRANSFER CERTIFICATE
LaSalle Bank National Association
540 W. Madison
26`h Floor
Chicago, Illinois 60661
Attention: Global Trade Advisory
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Transferable Letter of Credit No. 5570193
dated , 2004 (the "Letter of Credit"), which has been established by the Bank in
favor of
The undersigned, a duly authorized officer or agent of [Name of Transferor], has
transferred and assigned (and hereby confirms to you said transfer and assignment) and confirms
that [Name of Transferor] no longer has any rights under or interest in said Letter of Credit.
Transferor and Transferee have indicated on the face of said Letter of Credit that it has
been transferred and assigned to Transferee.
The undersigned, a duly authorized officer or agent of the Transferee, hereby certifies
that the Transferee is a duly authorized Transferee under the terms of said Letter of Credit and is
accordingly entitled, upon presentation of the documents called for therein, to receive payment
thereunder.
We have enclosed herewith the original of this Letter of Credit and in accordance
therewith we ask that you endorse the reverse of the Letter of Credit and forward it to the
Transferee with your customary notice of transfer.
Name of Transferor
By:
[Title of Authorized Officer or Transferor]
246196.7 044599-33642
Name of Transferee
By:
[Title of Authorized Officer or Transferor]
Signature of Transferor verified by:
By:
[Name and Title of Authorized Officer of Transferor]
246196.7 044599-33642
EXHIBIT K
TO
LASALLE BANK NATIONAL ASSOCIATION
LETTER OF CREDIT No. 5570193
NOTICE OF EXTENSION
[TRUSTEE]
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No.
S570193 dated , 2004 the ("Letter of Credit"), established by us in your favor
as Beneficiary. We hereby notify you that, in accordance with the terms of the Letter of Credit
and the certain Reimbursement Agreement dated as of July 1, 2004, among MPI-2 Yorkville
Central LLC, the United City of Yorkville, Illinois, and us, the Stated Expiration Date (as
defined in the Letter of Credit) has been extended to I
This letter should be attached to the Letter of Credit and made a part thereof.
LASALLE BANK NATIONAL ASSOCIATION
By:
Its:
By:
Its:
246196.7 044599-33642
Exhibit H
011.560726.2
PRELIMINARY OFFICIAL STATEMENT DATED JUNE_,2004
BOOK-ENTRY ONLY RATING:AA-/A-1+;SEE"RATING"HEREIN
In the opinion of Bond Counsel,based upon an analysis ofexisting laws,regulations,rulings and court decisions and,assuming,among other matters,compliance
with certain covenants,interest on the Bonds is excludedfrom gross incomefor Federal income tax purposes under Section 103 of the Internal Revenue Code of 1986,as
amended.In the opinion of Bond Counsel,interest on the Bonds is not a specificpreference item far purposes of the Federal individual or corporate alternative minimum taxes,
'is taken into account in determining the adjusted current earnings when calculatingcorporate alternative minimum taxable income. Interest on the Bonds is not exempt
t present State oflllinois income taxes. Bond Counsel expresses no opinion regardingany other tax conseguencesrelated to the ownership or disposition of or the accrual
i receipt of interest on,the Series 2004 Bonds. See the hea*"TAX EXEMPTION."
• United City of Yorkville
1 Kendall County, Illinois
` Special Service Area Number 2004-106
• Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project)
Dated: Date of Issuance Price: 100% Due: March 1,2034
The Series 2004 Bonds will be issued bearing interest at the WeeklyRate,which will be determinedweeklyby LaSalleCapital Markets,A Division of ABN AMRO
• Financial Services,Inc.as RemarketingAgent,as more fully described herein. The Bonds are subject to convers ionto a Monthly Rate,Adjustable Rate or Fixed Rate as more
b fully described herein. Interest on the Series 2004 Bonds will be payable during any Rate Period in which such Bonds bear interest at the WeeklyRate on the first day of each
month,commencing August 2,2004,and interest is payable upon the occurrence of certain other events,all as more fully described herein.
When the Series 2004 Bonds bear interest at the WeeklyRate or the MonthlyRate,the Series 2004 Bonds are subjectto optional tender for purchase upon at least
9 seven days'prior written notice,at an optional tender price equal to the principal amount of the Series2004 Bond(or authorized portion thereoD tendered plus acc ru ed interest.
o Additionaly,upon the occurrence of certain other events described herein,includingthe occurrence of a Rate Conversion Date or upon substitution of an Altemate Credit
Facility as described herein,Bonds are subject to mandatory tender for purchase at a mandatotgnder price equal to the principal amount thereof plus accrued interest.
L The Series 2004 Bonds are being initiallyoffered for sale in book-entryonlyform and will be registeredin the name of Cede&Co.,as nomineefor The Depository
Trust Company,New York,New York("DTC"). DTC will act as securities depository for the Series 2004 Bonds and purchases will be made through DTC participants.
Payments of principal of and interest on the Series 2004 Bonds and the purchase price of tendered Bonds will be made by LaSalle Bank National Association,as Trustee(the
b "Trustee"),to DTC,which in tum will remit such payments to its part icipantsfor subsequent disbursementto the beneficial owners of the Bonds.As longas Cede&Co.is the
registered owner,payments on the Series 2004 Bonds will be made to such registered owner,and disbursement of such payments to the beneficial owners will be the
g responsibility of DTC and its participants. See"THE SERIES 2004 BONDS_Book-Entry Only System."
The United City of Yorkv ille,Kendall County,I I I inois(the"Issuer")is issuing the Series 2004 Bondsto(i)financethecostofconstructing installing and performing
certain public improvements by the Developer,and to be dedicatedto the Issuer,consistingofengineering,soil testing,mass grading and demolition,stone water management
g facilities,storm drainage systems and storm sewers,site clearingand tree removal,public water facilities sanitary sewer facilities,erosion control measures,roads,streets,curbs,
tgutters,street lighting,bicycle paths,sidewalks and related street improvements,and equipment and materials necessary for the maintenance thereof,landscaping and tree
i; elating to any of the foregoing and other eligible costs,(iif nance capitalized interest on a portion of the Series 2004
installation,costs for land and easement acquisitions r
Bonds,and(iii)pay certain administrative costs and expenses incurred in connection with the issuance of the Series 2004 Bonds.
o THE SERIES 2004 BONDS ARE BEING ISSUED PURSUANT TO THE SPECIAL SERVICE AREA TAX LAW OF THE STATE OF ILLINOIS,AS
•o. AMENDED,AND,IN THE OPINION OF FOLEY&LARDNER LLP,CHICAGO,ILLINOIS,BOND COUNSEL,WILL CONSTITUTE VALID AND LEGALLY BINDING
LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY AND ONLY FROM THE SPECIAL TAX (AS DEFINED HEREIN),AMOUNTS RECEIVED
PURSUANT TO THE CREDIT FACILITY REFERRED TO BELOW AND AMOUNTS ON DEPOSIT IN CERTAIN OF THE FUNDS ESTABLISHED AND
g MAINTAINEDPURSUANT TO THE SERIES 2004 INDENTURE AND SERIES 2004 BOND ORDINANCE,ASSET FORTH HEREIN. THE SERIES 2004 BONDS ARE
NOT GENERALOBLIGATIONSOFTHEISSUERANDNEITHERTHEFULLFAITHANDCREDITNORTHEGENERALTAXINGPO NTOFTHESERESTHE
3 COUNTY OF KENDALL,THE STATE OF ILLINOIS,OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE SERIES 2004
BONDS.NO HOLDER OF ANY BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISEOF ANY TAXING POWER OF THE ISSUER THE THAN THE
" LEVY OF THE SPECIAL TAX AS DESCRIBED HEREIN)FOR PAYMENT OF THE PRINCIPAL ANDUNT OR PURCHASE PRICE OF,PREMIUM,IF ANY,OR
o INTEREST ON THE SERIES 2004 BONDS.
The Series 2004 Bonds are payablefrom the moneys assigned under the Series 2004 Indentureto secure payment ofthe Series 2004 Bonds,which include the Special
Tax and the moneys obtained by the Trustee under an irrevocable transferable direct pay letter of credit(the"Credit Facility")issued by
LASALLE BANK NATIONAL ASSOCIATION
The Credit Facilitypermits the Trustee to draw thereunderin accordancewith its terms to pay(a)the principalofthe Series 2004 Bonds when due at maturity,upon
aredemptionor acceleration,(b)the principal portion ofthe purchase price of Series 2004 Bonds tenderedfor purchase and not remarketed and(c)up to 45 days'accrued interest
5 on the Bonds at an interest rate of_%per annum(based on a year of 365 days). The Credit Facilitywill expire on 20.unless extended,and under certain
L circumstances,may be terminated on an earlier date as described herein.
The Series 2004 Bonds are subjectto optionaland mandatory redemption prior to maturity,in wholeor in part,at the redemption prices and under the circumstances
more fully described herein. See"THE SERIES 2004 BONDS Redemption of the Series 2004 Bonds".
This Official Statement contains information relating to the security for the Series2004 Bonds prior to a conversionto the Adjustable Rate or Fixed Rate.
a Owners or purchasers of the Series 2004 Bonds are not to rely on the information herein with respect to security for the Series 2004 Bonds after such conversion.
H The Series 2004 Bonds are offered,subjectto prior sale,when,as,and if issued by the Issuer and acceptedby the Underwriters,subjectto,among other things,the
rovinglegal opinionof Foley&LardnerLLP,Chicago,III inois,Bond Counsel.Certain legal matters will be passed upon for the Underwritersby Ungaretti&Harris LLP,
—iicago,Illinois;for the Developerby Moss and Bloomberg,Ltd.,Bolingbrook,Illinoisand KB Legal,Dyer,Indiana;for the Issuer by the Law Offices ofDaniel J.Kramer,
Yorkville,Illinois;and for the Credit Entity by its counsel,Schwartz,Cooper,Greenberger&Krauss,Chicago,Illinois. It is expected that the Series 2004 Bonds will be
T available for delivery to DTC in New Yrk,New York on or about July_,2004.
g WILLIAM BLAIR&COMPANY,L.L.C.
LASALLE CAPITAL MARKETS,a Division of ABN AMRO FINANCIAL
s
SERVICES,INC.
July.2004
This Official Statement is being furnished to a limited number of sophisticated institutional investors or registered investment
companiesunder the InvestmentCompany Act of 1940 solelyfor the purpose of each investor's considerationof the purchaseof the Series 2004
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 Official Statement does not constitute an offer to sell or the solicitationof an offer to buy,nor shall there be any
sale of the Series 2004 Bonds by any person,in any jurisdictionin which it is unlawful for such person to make such an offer,solicitation or sale.
Interestedinvestors are being provided the opportunityto ask such questions and examine such documents and records as they may desire,and
are advised to contact the Underwriters to secure further information concerning the Series 2004 Bonds.
This Official Statementdoes not constitutean offer to sell or the solicitationof an offer to buy nor shall there be any sale of the Series
2004 Bonds by any person in any state or other jurisdictionto any person to whom it is unlawful to make such offer,solicitationor sale in such
state or jurisdiction.No dealer,broker,salesman or otherpersonhas been authorizedto give any informationor to make any representationsin
connectionwith the offering of the Series 2004 Bonds other than those contained in this Official Statement,and,if given or made,such other
information or representations must not be relied upon.The information set forth or incorpendiby reference hereirhas been obtained from
sources believed to be reliable,but the accuracy or completenessof that information is not guaranteedby,and should not be construed as a
representation by LaSalle Capital Markets,A Division of ABN AMRO Financial Services,Inc.or William Blair&Company,L.L.C.,the
Underwriters for the Series 2004 Bonds.The information and expressionsof opinion herein are subject to change without notice,and neither the
deliveryof this Official Statementnor any sale made hereundershall under any circumstancescreate any implicationthat the information herein
is correct as of anytime subsequentto the date hereof or that there has been no change in the affairs of the United City of Yorkville or LaSalle
Bank National Association since the date hereof(or since the date of any other information dated other than the date hereof).
This Official Statement should be consideredin its entiretyand no one factor consideredless importantthan any otherby reason of its
position in this Official Statement.Where statutes,resolutions,reports or other documents are referred to herein,reference should be made to
such statutes,resolutions,reportsor other documents for more complete informationregardingthe rights and obligations of parties thereto,facts
and opinions contained therein and the subject matter thereof.
THE SERIES 2004 BONDS HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933,AS AMENDED,NOR HAS THE INDENTURE BEEN QUALIFIED UNDER
THE TRUST INDENTURE ACT OF 1939,AS AMENDED,IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS.THE
REGISTRATION OR QUALIFICATION OF THE SERIES 2004 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF
SECURITIES LAWS OF THE STATES IN WHICHT14E SERIES 2004 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE
EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A
RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS
OF THE SERIES 2004 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SERIES 2004 BONDS AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,IF COMMENCED,
MAY BE DISCONTINUED OR RECOMMENCED AT ANY TIME. THE PRICES AND OTHER TERMS RESPECTING THE
OFFERING AND SALE OF THE SERIES 2004 BONDS MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS
AFTER SUCH TIME AS THE OFFERED AND SOLD AT PRICES RELEASED D THE SERIES 2004 BONDS MAY BE
OTHER THAN THE INITIAL OFFERING PRICE
O
UNITED CITY OF YORKVILLE,ILLINOIS
MAYOR
Arthur Prochaska
CITY ALDERMEN
Paul James Richard Sticka
Valerie Burd Larry Kot
Marty Munns Wanda Ohare
Rose Spears Joe Besco
TREASURER
William Powell
CITY ADMINISTRATOR
Anton Graff
FINANCE DIRECTOR
Traci Pleckham
CITY CLERK
Jackie Milschewski
PROFESSIONAL SERVICES
APPRAISER
BOND COUNSEL
Foley&Lardner LLP Holcer&Company,Inc.
Oak Brook,Illinois
Chicago,Illinois
SPECIAL SERVICE AREA ADMINISTRATOR
AND TRUSTEE
SPECIAL TAX CONSULTANT
David Taussig&Associates,Inc. LaSalle Bank National Association
Chicago,Illinois
Newport Beach,California
CITY'S COUNSEL
Law Offices of Daniel Kramer
Yorkville,Illinois
TABLE OF CONTENTS
Page
INTRODUCTION............................................................................................................................1
Purpose of this Official Statement.......................................................................................1
............1
TheIssuer.................................................................................................................
..........2
Purpose of the Series 2004 Bonds .......................................................................................2
Security for the Series 2004 Bonds............................................................................
Interest on the Series 2004 Bonds........................................................................................3
Right to Tender the Series 2004 Bonds ...............................................................................3
Obligation to Tender the Series 2004 Bonds.......................................................................4
Remarketing ..................................................4
Book-Entry Only System.....................................................................................................4
Availability of Documents...................................................................................................4
THESERIES 2004 BONDS............................................................................................................5
General.................................................................................................................................7
Selection of Interest Rate Determination Method............................................................ 8
Weekly Rate.............................................................................................. ............9
Monthly Rate........................................................................................................................9
Adjustable Rate....................................................................................................................9
FixedRate................................................................................................................ ....9
Tenderof the Bonds.........................................................................................................
Redemption of the Series 2004 Bonds...............................................................................12
..............17
Optional Prepayment of Special Tax...................................................................
...........17
Mandatory Prepayment of Special Tax...................................................................
Transfer and Exchange of Series 2004 Bonds...................................................................17
Mutilated, Lost, Stolen or Destroyed Series 2004 Bonds..................................................18
Book-Entry Only System...................................................................................................18
22
PLANOF FINANCE.....................................................................................................................
.................................................................................................................22
General..............
..................•• •• 22
The Special Services
......................................................................
Estimated Project Sources and Uses of Funds...............................................................................23
SECURITY FOR THE SERIES 2004 BONDS.............................................................................23
General...............................................................................................................................23
TheCredit Facility.............................................................................................................24
Alternate Credit Facility.....................................................................................................26
.............26
Special Tax.........................................................................................................................27
Covenants of the Issuer.........................................................................................
PermittedInvestments........................................................................................................27
i
SUMMARY OF ANNEXATION AGREEMENT........................................................................29
SUMMARY OF THE PUBLIC IMPROVEMENT AGREEMENT.............................................30
THEDEVELOPER........................................................................................................................31
Ownership..........................................................................................................................31
PROPOSEDDEVELOPMENT.....................................................................................................31
Location.............................................................................................................................31
DevelopmentPlan and Timing..........................................................................................32
THEISSUER.................................................................................................................................32
General...............................................................................................................................32
City Government and Services ..........................................................................................32
Transportation....................................................................................................................32
CommunityLife.................................................................................................................33
Education...........................................................................................................................33
BONDHOLDERS' RISKS.............................................................................................................34
EarlyRedemption..............................................................................................................34
CreditFacility....................................................................................................................34
Certain Matters Relating to Security for the Series 2004 Bonds.......................................34
Tax Exempt Status; Continuing Legal Requirements........................................................34
Series2004 Bond Rating ...................................................................................................35
SUMMARY OF CERTAIN PROVISIONS OF THE SERIES 2004 INDENTURE....................35
Provision for the Series 2004 Bonds..................................................................................35
Defaults and Acceleration Under the Series 2004 Indenture.............................................35
Fundsand Accounts...........................................................................................................37
Provisions in the Series 2004 Indenture Relating to the Credit Facility............................40
Resignation by, or Removal of, the Trustee......................................
Enforcementof Remedies..................................................................................................41
Right of Credit Entity to Direct Proceedings.....................................................................42
Application of Moneys; Priority of Payments....................................................................42
Rights and Remedies of Holders........................................................................................44
Waiversof Events of Default.............................................................................................44
Supplemental Series 2004 Indenture Not Requiring Consent of Holders..........................45
Supplemental Series 2004 Indenture Requiring Consent of Holders.................................46
Release of the Series 2004 Indenture.................................................................................47
SUMMARY OF CERTAIN PROVISIONS OF THE CREDIT FACILITY AGREEMENT.......47
General...............................................................................................................................48
Issuance of Credit Facility; Reimbursement Obligations..................................................48
Feesand Expenses .............................................................................................................49
Certain Covenants of the Issuer and Developer.................................................................49
Events of Default and Remedies........................................................................................49
Amendment of Credit Facility Agreement.........................................................................51
ii
NOLITIGATION..........................................................................................................................51
TheIssuer...........................................................................................................................51
TheDeveloper....................................................................................................................51
UNDERWRITING.........................................................................................................................52
RATING.........................................................................................................................................52
CERTAINLEGAL MATTERS.....................................................................................................52
NOCONTINUING DISCLOSURE..............................................................................................53
TAXEXEMPTION.......................................................................................................................53
AUTHORIZATION.......................................................................................................................5 6
APPENDIX A—INFORMATION REGARDING LASALLE BANK NATIONAL ASSOCIATION
APPENDIX B—DEFINITIONS OF CERTAIN TERMS
APPENDIX C—PROPOSED FORM OF OPINION OF BOND COUNSEL
iii
OFFICIAL STATEMENT
relating to
United City of Yorkville
Kendall County,Illinois
Special Service Area Number 2004-106
Total Grande Reserve
Variable Rate Demand Special Tax Bonds, Series 2004
(MPI Grande Reserve Project)
INTRODUCTION
The descriptions and summaries of various documents hereinafter set forth do not purport to
be comprehensive or definitive,and reference is made to each document for the complete details of
all terms and conditions thereof. All statements herein regarding any such document are qualified in
their entirety by reference to such document. See APPENDIX B for the definitions of certain words
and terms used herein.
Purpose of this Official Statement
The purpose of this Official Statement,including the cover page and the Appendices hereto,
is to set forth certain information in connection with the offering of$ in aggregate
principal amount of Special Service Area Number 2004-106 Total Grande Reserve Variable Rate
Demand Special Tax Bonds, Series 2004(MPI Grande Reserve Project) (the "Series 2004 Bonds")
to be issued by the United City of Yorkville, Kendall County, Illinois (the "Issuer").
This Official Statement should not be relied upon by any Bondholder after the stated
expiration date or earlier termination of the irrevocable, transferable direct pay letter of credit(the
"Credit Facility")issued by LaSalle Bank National Association(the "Credit Entity"),which Credit
Facility has been issued for the benefit of the Series 2004 Bonds. Therefore, any prospective
purchaser of Series 2004 Bonds that may be remarketed on or after such date should not rely on the
information contained herein,but instead should review any supplemental disclosure document that
may be provided in connection with such remarketing.
The Issuer
The Issuer is a political subdivision,body politic and corporate,duly organized and existing
under the laws of the State of Illinois,and is authorized to issue the Series 2004 Bonds pursuant to its
powers under the provisions of the Illinois Constitution of 1970,the Special Service Area Tax Law
of the State of Illinois and the Illinois Local Government Debt Reform Act of the State of Illinois,
and in accordance with Ordinance No. 2004-33 adopted by the Issuer on June 22,2004(the "Series
2004 Bond Ordinance"),and pursuant to a Trust Indenture dated as of July 1,2004(the"Series 2004
Indenture")between the Issuer and LaSalle Bank National Association, as trustee (the "Trustee").
Purpose of the Series 2004 Bonds
The proceeds of the Series 2004 Bonds will be used to (i)
finance the cost of constructing,
installing and performing certain on-site and off-site public improvements to be constructed and
South I
installed by MPI-2 Yorkville North LLC,MPI-2 Yorkville C ntral Developer"), on behalf of the
LLC, each an Illinois limited liability company (collectively,
Issuer,and to be dedicated to the Issuer,consisting of engineering,facilities,storm drainage systems and storm
mass grading and demolition,storm water ublicgwatertfaac facilities, sanitary sewer facilities, erosion
sewers, site clearing and tree removal, public traffic controls,
control measures, roads, streets, curbs, gutters, street lighting, bicycle p
sidewalks,equestrian paths and related street improvements,and equipment and materials necessary
for the maintenance thereof,public parks,park improvements,landscaping,wetland mitigation and
tree installation, costs for land and easement acquisitions relating ndtotan eligible oregs inglregvery,
tap-on fees and related fees for water or sanitary sewer service
the "Special Services"), (ii) finance capitalized interest on s portion the Series 2004 Bonds and,fund
(iii) pay certain expenses incurred in connection with the
certain administrative expenses to be incurred in connection with the administration and collection of
the Special Tax (hereafter defined).
In connection with the construction and installation of
defined below), which willceonss t of
the Developer is developing the Special Service A
approximately 1037 acres of land located in the corporate ed lots or u boundaries to the detached single-family
.
proposes to develop the Special Service Area with finish p —
homes townhomes and duplex units (the "Project").
Security for the Series 2004 Bonds
All of the Series 2004 Bonds issued under the Series 2004 Indenture will be secured
the S
Special
proceeds of special taxes(the Special Tax )which have been levied on property Series the Bonds
Service Area Number 2004-106 (the "Special Service Area"). ln ad
will be payable from and secured by certain funds established pursuant to the Series 2004 Indenture.
As further security for the Series 2004 Bonds,the Issuer and the Developer will cause LaSalle Credit Facility
Bank National Association(the"Credit Entity")to issue and as of July le 2004 (the eCredit Facility
pursuant to the terms of a Reimbursement Agreement dated y
Agreement")among the Issuer,the Credit Entity and the Developer. The Credit Facility will expire
on _, 20_, unless terminated prior thereto, as described herein. See APPENDIX A
hereto for additional d id onal information concerning the Credit Entity. DURING THE WEEKLY RATE
ESCRIBED)THE
PERIOD AND THE MONTHLY RATE PERIOD(AS DHEREINAFTER ACILITYDAS THEIR SOLE
BONDHOLDERS SHOULD CONSIDER THE CRE I
SOURCE OF PAYMENT ON THE SERIES 2004 BONDS. (AND HO PURCHASERS
. PROSPECTIVE
OT TO
OF SERIES 2004 BONDS SHOULD LOOK TO THE
THE SPECIAL TAX)AS THE SECURITY FOR THE PAYMENT
ed infomationPRINCIPAL e ng the issuer,
INTEREST ON THE SERIES 2004 BONDS. Only limited
the Developer and the Special Tax will be made shou dlemake their t investment decisions
Series 2004 Bonds, and prospective purchasers
2
regarding the creditworthiness of the Series 2004 Bonds on the basis of the Credit Facility and
the financial condition of the Credit Entity, and not on the availability of other funds. This
Official Statement contains information relating to the security for the Series 2004 Bonds prior
to a conversion to the Adjustable Rate or Fixed Rate. Owners or purchasers of the Series 2004
Bonds are not to rely on the information herein with respect to security for the Series 2004
Bonds after such conversion.
Upon the terms and conditions set forth therein,the Credit Facility secures the payment of
principal of and interest on the Series 2004 Bonds when due and payable on any Interest Payment
Date, at maturity, upon acceleration or on any other mandatory or optional redemption and the
payment of the Purchase Price of the Series 2004 Bonds on an optional tender by an owner during
any period in which such Series 2004 Bonds bear interest at the Weekly Rate
hereine Monthly Rate
and upon mandatory tender of such Series 2004 Bonds as further described
The Credit Facility will be in an amount equal to the aggregate principal amount of the Series
2004 Bonds, plus an amount equal to 45 days'accrued interest thereon computed at the rate of 7%
per annum based on a 365-day year. Except as provided in the following sentence,the Trustee is
required under the Series 2004 Indenture to draw moneys under the Credit Facility to pay principal
of, and interest on, the Series 2004 Bonds when due whether on scheduled principal or interest
payment dates,upon redemption of all or part of the Series 2004 Bonds or upon acceleration of the
maturity of the Series 2004 Bonds and to pay an amount equal to 100% of the principal amount of
any Series 2004 Bond plus unpaid and accrued interest,if any(the"Purchase Price"),upon tender for
purchase under the circumstances described in the Series 2004 Indenture. The Trustee shall apply
funds on deposit in the Capitalized Interest Fund(hereafter defined),which were deposited in such
fund to pay interest on the Series 2004 Bonds during the period of construction of the Special
Services,to pay interest on the Series 2004 Bonds so long as any moneys remain in such fund. The
Credit Facility Agreement provides the terms of the repayment obligations for draws on the Credit 2004 Bonds by the Credit
Facility, including liquidity advances made with Series HE CREDIT FACILITY
Entity. See "SUMMARY OF CERTAIN P ROVISIONS OF
AGREEMENT."
Interest on the Series 2004 Bonds
From and after the date of original issuance of the Series 2004 Bonds until the earlier of the
retirement of the Series 2004 Bonds or the conversion of the interest rate borne by the Series 2004
Bonds to the Monthly Rate,the Adjustable Rate or the Fixed Rate,the Series 2004 Bonds will bear
interest at the Weekly Rate. Except as hereinafter will take
at the Weekly Rate determined on Wednesday of each week,which rate 0l take effect on Thursday,
and be in effect through and including Wednesday of the immediately succeeding week.
Right to Tender the Series 2004 Bonds
As long as the Series 2004 Bonds bear interest at the Weekly Rate or the Monthly Rate,
Holders of the Series 2004 Bonds will have the right upon at least seven calendar days'prior notice,
to tender their Series 2004 Bonds,or portions thereof in denominations of$100,000 or any integral
3
multiple of$1,000 in excess thereof, for purchase by the Trustee at a price equal to the Purchase
Price.
Obligation to Tender the Series 2004 Bonds
Series 2004 Bonds are subject to mandatory tender for purchase at the Purchase Price on the
applicable Tender Date upon(1) default by the Issuer or the Developer under the terms of the Credit
Facility Agreement (at the election of the Credit Entity) or (2) expiration of the Credit Facility
without extension of the then existing Credit Facility or (3) substitution of an Alternate Credit
ies 2004 Bonds are
Facility for the Credit Facility (the "Sub a the Purchase Price on the addition,
ppl able Tender Date upon
subject to mandatory tender for purchase
any Rate Conversion Date (as hereinafter defined).
Remarketing
In order to accomplish the remarketing of tendered Series 2004 Bonds, the Issuer has
appointed LaSalle Capital Markets, A Division of ABN AMRO Financial Services, Inc. to act as
remarketing agent for the Series 2004 Bonds (together to a Remarketing Agreement for theSenes 2004
Agent"),and the Remarketing Agent has entered
Bonds with the Issuer and the Developer dated as of July 1, 2004.
Book-Entry Only System
The Bonds will be remarketed and issued as fully registered bonds and will be registered in
the name of Cede & Co., as nominee of The Depository Trust Company,New York, New York
("DTC"). DTC will act as the book-entry depository for the Series 2004 Bonds. No physical
delivery of Series 2004 Bonds will be made to purchasers thereof. Payments of principal and interest
on and Purchase Price of the Series 2004 Bonds bSERIES 004 purchasers
BONDSDTBookEntry tpand
Indirect Participants (defined below). See THE
System."
In reading this Official Statement it should be understood that,while the Series 2004 Bonds
are in the Book-Entry Only System (defined below), references in other sections of this Official
Statement to owners or registered owners or bondholders should be read, where applicable, to
include the person for which the Participant acquires an interest in the Series 2004 Bonds,but(i) all
rights of ownership must be exercised through DTC and the Book-Entry
the Issuer,Remarking t g Ad gent or
below),and(ii) notices that are to be given to registered owners b
the Trustee will be given only to DTC.
Availability of Documents
Brief descriptions of the Series 2004 04 Bonds are issued and Special
the part ies
agreements pursuant to which the Series 0
mentioned above are included in this Official Statement. All references herein to the foregoing
agreements or any other documents and agreements are qualified in their entirety by reference to
those documents and agreements,copies of 0 is h available
LaSalle at
Streetrl Chicago�Illino trust 606f03,
of the Trustee, presently located at 1
4
Attn: Corporate Trust Department. During the initial f at the office of LaSalle rCapit0a01 Markets,
copies of documents and agreements may also be obtained
A Division of ABN AMRO Financial Services, Inc., 181 West Madison Street, Chicago, Illinois
60602, Attention: Public Finance Department.
THE SERIES 2004 BONDS
General
Limited Obligations. The Series 2004 Bonds are limited obligations of the Issuer payable
only from the sources specified in the Series 2004 Indenture. The payment of the Bond Service
Charges are secured by the pledges and assignments contained in the Series 2004 Indenture. See
"SUMMARY OF CERTAIN PROVISIONS OF THE SERIES 2004 INDENTURE." The Series
2004 Bonds are not and never shall become general obligations of the Issuer,but are special limited
obligations payable by the Issuer solely and only from the Trust Estate,including the Special Tax and
amounts on deposit in the funds and accounts pledged to the Owners for such purpose pursuant to the
granting clauses of the Series 2004 Indenture and from payments provided under the Credit Facility.
No recourse shall be had for the payments of the principal of,premium,if any,or the interest
on the Series 2004 Bonds or for any claim based thereon or any obligation,covenant or agreement in
the Series 2004 Indenture against any past,present,or future member,officer,agent or employee or
official of the Issuer or any independent contractor of the Issuer or any person executing the Series
2004 Bonds. No covenant, stipulation, promise, agreement, or obligation contained in the Series
2004 Bonds, the Series 2004 Indenture, or any other document executed in connection therewith
shall be deemed to be the covenant, stipulation,promise, agreement or obligation of any present or
future official,officer, agent or employee of the Issuer in his or her individual capacity and neither
any official of the Issuer nor any officers executing the Series 2004 Bonds shall be liable personally
on the Series 2004 Bonds or be subject to any personal liability or accountability by reason of the
issuance of the Series 2004 Bonds.
Initial Terms of the Series 2004 Bonds. The Series 2004
s Bhe onds paymentlon the Series 2004
through a book-entry only system operated by DTC. Detail on
Bonds and the book-entry only system are described below. See "THE SERIES 2004 BONDS --
Book-Entry Only System. The Series 2004 Bonds will initially be dated the date of their original
issuance,will initially bear interest at the Weekly Rate and will be subject to optional and mandatory
tender for purchase and to optional and mandatory redemption as hereinafter described. The stated
maturity date of the Bonds is March 1, 2034.
Denominations. When the Series 2004 Bonds bear interest at a Weekly Rate,Monthly Rate
or Adjustable Rate, the Series 2004 Bonds will be in denominations of$100,000 or any integral
multiple of$1,000 in excess thereof. When Series 2004 Bonds bear interest at a Fixed Rate, the
Series 2004 Bonds will be in denominations of$1,000 or any integral multiple thereof.
Interest Payment Dates. During any period in which the Weekly Rate applies to the Series
2004 Bonds(a "Weekly Rate Period") and during any period in which the Monthly Rate applies to
5
the Series 2004 Bonds(a"Monthly Rate Period"),interest on the Series 2004 Bonds will be payable
on(a)the first Business Day of each month prior to the Maturity Date,commencing August 2,2004,
(b) each Mandatory Tender Date and (c) the Maturity Date. During any period in which the
Adjustable Rate applies to the Series 2004 Bonds (an Adjustable Rate Period"), interest will be
payable on(a) each March 1 and September 1, commencing with the first such day occurring after
the Rate Conversion Date for the Adjustable Rate and(b) each Rate Conversion Date. During any
period in which the Fixed Rate applies to the Series 2004 Bonds(a"Fixed Rate Period"),interest on
the Series 2004 Bonds will be payable on each March 1 and September 1,commencing with the first
of such days occurring after the Rate Conversion Date for the Fixed Rate Period. Each day upon
which interest will be payable may be referred to herein as an"Interest Payment Date." In any case
where an Interest Payment Date is not a Business Day,interest shall be paid on the next succeeding
Business Day with accrual from the date such interest was originally due.
Computation of Interest, Interest Payable. During any Rate Period in which the
Series 2004 Bonds bear interest at the Weekly Rate or the Monthly Rate,interest on such Series 2004
Bonds will be computed on the basis of a 365-day year(366 days during any calendar year which
includes a February 29)for the actual number of days elapsed during such Rate Period. During any
Rate Period when the Series 2004 Bonds bear interest at the Adjustable Rate or during any period
when the Series 2004 Bonds bear interest at the Fixed Rate interest on such Series 2004 Bonds will
be computed on the basis of a 360-day year,consisting of twelve 30-day months. The Weekly Rate,
Monthly Rate, Adjustable Rate and Fixed Rate may not exceed the lesser of 7% or the rate per
annum specified in the then applicable Credit Facility as the maximum interest rate per annum to be
used in determining the amount of moneys available for the payment of interest on the Series 2004
Bonds(the Cap Rate"). Determinations of the applicable interest rate will be rounded to the nearest
one-thousandth of one percent (0.001%) and will be binding on the Issuer, the Trustee, the
Remarketing Agent, the Credit Entity and the Holders.
Payments in Respect of the Series 2004 Bonds. Principal of and premium, if any, on the
Series 2004 Bonds will be payable upon presentation and surrender of the Series 2004 Bonds at the
principal corporate trust office of the Trustee,presently located at 120 South LaSalle Street,Chicago,
Illinois,60603,Attention: Corporate Trust Department. Interest on the Bonds will be paid on each
Interest Payment Date by check or draft mailed by first class mail by the Trustee on that date to the
persons in whose names the Series 2004 Bonds are registered on the registration books maintained
by the Trustee as Bond Registrar at the address appearing therein at the close of business on the
Record Date. Any Holder of$1,000,000 or more in principal amount of Series 2004 Bonds may
receive interest payments by wire transfer by sending the Trustee written notice of such Holder's wire
transfer address in the continental United States at least one day prior to the Record Date.
Thereafter,interest payable to such Holder will be paid by wire transfer to the wire transfer address
provided in such notice, until such notice is revoked or modified in a writing given to the Trustee.
Any Holder of Series 2004 Bonds in an aggregate principal amount of$1,000,000 or more also has
the right to have payment of the principal of and premium,if any,on its Series 2004 Bonds made by
wire transfer under the circumstances described above;provided that such Holder is still required to
present and surrender its Series 2004 Bonds,as described above,before any payment of principal or
premium will be made.
6
Selection of Interest Rate Determination Method
By giving the Trustee,the Developer,the Credit Entity and the Remarketing Agent written
notice during any Weekly Rate Period or Monthly Rate Period, or at the conclusion of any
Adjustable Rate Period, the Issuer may, at its option with the consent of the Credit Entity and the
Developer,(a) select a new interest rate determination method for such Series 2004 Bonds QLe.,from
the Weekly Rate,Monthly Rate or Adjustable Rate to any of the other rate methods or to the Fixed
Rate)or(b)where the Series 2004 Bonds have,during the current Rate Period,been bearing interest
at the Adjustable Rate,select an Adjustable Rate with a Rate Period of the same or a different length.
If the Issuer selects the Fixed Rate,it may not thereafter select a different interest rate determination
method for such Series 2004 Bonds. To exercise its conversion option,the Issuer must give notice,
as aforesaid, at least forty-five (45) days prior to the applicable date upon which the method of
calculating interest on the Series 2004 Bonds or the Adjustable Rate or Adjustable Rate Period will
be changed(the"Rate Conversion Date )and the notice must(a) state the Issuer's intention to select
either a new interest rate determination method for such Series 2004 Bonds(specifically the choice
of the Weekly Rate, the Monthly Rate, the Adjustable Rate, or the Fixed Rate) or the Issuer's
decision that the Series 2004 Bonds should continue to bear interest at the Adjustable Rate,
(b) specify the Rate Conversion Date,(c) if the Issuer elects to convert to or continue the Adjustable
Rate,the length of the Rate Period,(d) state whether such Series 2004 Bonds will be rated,and if so,
what the rating will be, (e) describe the nature and terms of the Credit Facility,which will secure
payment of the Bond Service Charges on such Series 2004 Bonds and provide for the payment of the
Purchase Price of such Series 2004 Bonds under the proposed interest rate determination method,
including the identity of the proposed Credit Entity, and (f) if the Series 2004 Bonds are not then
held under the book-entry only system,the notice shall include the CUSIP number and Series 2004
Bond number of any Series 2004 Bond being converted. Additionally,no Rate Period may extend
past the expiration date of the applicable Credit Facility.
No conversion to an Adjustable Rate or a Fixed Rate is effective unless prior notice is
provided to the Rating Agencies and the Credit Facility has been increased to cover 194 days interest
at the Cap Rate or the Fixed Rate,as may be applicable(or such other number of days as required by
the Rating Agency if a rating is applied for).
To exercise this option, the Issuer must also furnish the Trustee, the Credit Entity, the
Developer and the Remarketing Agent,at least thirty-five (3 5) days prior to such Rate Conversion
Date, (a)the form of an opinion of Bond Counsel, addressed to the Issuer,the Trustee, the Credit
Entity and the Remarketing Agent,dated the Rate Conversion Date(together with such certificates,
opinions,resolutions or such other material as Bond Counsel determines are necessary to render such
opinion),stating that such change in the interest rate determination method is permitted by,and has
been conducted in accordance with, the Series 2004 Indenture and that such change will not
adversely affect the exclusion of the interest on the Series 2004 Bonds from the gross income of the
Holders thereof for purposes of Federal income taxation, and (b)written evidence that the Credit
Facility or any Alternate Credit Facility to expiration d to hhat isenot sooner than the earlier of as of the Rate Conversion Date a stated of the
Maturity Date or one calendar year from the Rate Conversion Date.
7
A Rate Conversion Date occurs on the date on which the interest rate determination method
for the Series 2004 Bonds actually changes,as deethoddfor the Serie 62004 Bondsduringhany Rate
elects to change the interest rate determination m
Period in which either the Weekly Rate or the Monthly Rat Issueraelects the Rate Conversion
the interest rate
shall occur on the first Business Day of a month If the
determination method for the Series 2004 Bonds during first Business
pay of a month which is
Rate applies, the Rate Conversion Date shall occur o
also the day following the final day of the Rate Period for the Adjustable Rate.
The redetermination of the method by which interest 004 Bondsb The Trustee�s0 obligated to
calculated gives rise to a mandatory tender of the Ser 1
provide each Holder of the Series 2004 Bonds with notice of any such redetermination. See the
Subsection "Tender of the Series 2004 Bonds below.
No change in the interest rate determination method at the end of a Weekly Rate Period,
Monthly Rate Period or Adjustable Rate Period is required nor will occur unless (a)the Issuer
exercises the option described in the preceding paragraphs he option c and the conditions o mandatory
method and(b)the conditions to the Issuers exercise the
tender of such Series 2004 Bonds as provided in the Series 2004 o 0 Indenture
change the �nterest before
r to
Rate Conversion Date. If the Issuer fails to exer cise P
determination method at the conclusion of any Rate Period,the Series 2004 Bonds shall continue to
bear interest at the Weekly Rate,the Monthly Rate or the Adjustable Rate, as applicable, and with
d shall
respect to Series 2004 Bonds bearing interest at the Adjustable eIftthe conditions exerate sing the
be the same as the immediately preceding Adjustable Rate eriod
Issuer's option to change the interest rate determination Conversion Date, the Serie 62004 Bondsewillbe
paragraphs are not met on or prior to the Rate
mandatorily tendered on the proposed Rate Conversion Date.
Weekly Rate
The Remarketing Agent will determine the Weekly Rate on each Rate Determination Date.
The Remarketing Agent will set the Weekly Rate at the lowest and for prevailing financ al conditions
due re
exclusive judgment of the Remarketing Agent(having g
and the yields at which comparable securities are then Agent to selst)h Series 2004 Bonds on the Rate
interest rate necessary to enable the Remarketing Age
Adjustment Date at 100% of their principal amount day. any Business Day,the1Remarket ng
Weekly Rate so determined will be effective on that y On Y Bu
Agent may increase(but not decrease)the Weekly Rate s necesa respect without tregard to ano acBcrued
if in its sole and exclusive judgment such an increase necessary
interest to enable the Remarketing Agent to remarket all or part of the Series 2004 Bonds at 100%of
their principal amount.
If the Weekly Rate cannot at any time be established as described in the preceding paragraph
or is held invalid or unenforceable by a court of law,the Weekly Rate for such Rate Period will be
equal to the Interest Index.
8
Monthly Rate
The Remarketing Agent will determine the Monthly Rate on the Rate Determination Date.
The Remarketing Agent will set the Monthly Rate at the lowest d interest
c al conditions
exclusive judgment of the Remarketing Agent(having due g for P revailing finan
and the yields at which comparable securities are then beingsold),h Series 2004 Bonds ex the Rate
interest rate necessary to enable the Remarketing Agent to sell
Adjustment Date at 100% of their principal amoundwath Onr�Bu°. any
ss Day, interest. The Remarketing
Monthly Rate so determined will be effective on that y Y
Agent may increase(but not decrease)the Monthly Rate with
he Remarketing Agent t Series
remarkea 11 or
if in its judgment such an increase is necessary to enable
part of the Series 2004 Bonds at 100% of their principal amount without regard to any accrued
interest.
If the Monthly Rate cannot at any time be establisMonthl described Ra for such Rat Period will be
or is held invalid or unenforceable by a court of law,the Y
equal to the Interest Index.
Adjustable Rate
rmine the Adjustable Rate on each Rate Determination Date
The Remarketing Agent will dete
for such Adjustable Rate Period. The Remarketing AR will set the
Agent(having due retgard for the
rate which,in the sole and exclusive judgment of the g
ble
length of the new Rate Period, prevailing financial conditions exceed) the loweesti merest rate nece s ary to
securities are then being sold), would equal (but not
enable the Remarketing Agent to sell all of the Series 2004 Bonds on the Rate Conversion Date at
100% of their principal amount without regard to any accrued interest.
Fixed Rate
The Remarketing Agent will determine the Fixed Rate on to a day not earlier the Rate Convershon Date for
Business Days prior but not later than two (2)Business y prior
such Fixed Rate Period to and including the Maturity Dof the Remarketing ng Agent
Fixed Rate at the interest rate which,in the sole and exclusive judgment Date and the
(having due regard for prevailing financial conditions, length would equal (but
not exceed)the lowest
yields at which comparable securities are then being sold),
rate necessary to enable the Remarketing Agent to sell the Series 2004 Bonds on the Rate
Conversion Date at a price equal to one hundred percent(100%) of their principal amount without
regard to accrued interest.
Tender of the Bonds
Optional Tender Upon Seven Days'Notice. During any Weekly Rate Period or Monthly Rate
Bonds (or
Period, any Registered Owner of Series 2004 Bonds may r, their Series 2004
199 Bonds may not
portions thereof in Authorized Denominations;provided,howeve
be tendered for purchase in part unless the principal amount not to be tendered for purchase is an
9
Authorized Denomination)purchased at the Purchase Price. Any such Series 2004 Bonds may be
tendered for purchase on the demand of the Registered Owner thereof at the Purchase Price payable
in immediately available funds on any Business Day upon delivery of a written notice of tender to the
Trustee at its Principal Office by not later than 4:00 p.m.,Chicago time,on a Business Day not fewer
than seven(7)days immediately preceding the Tender Date. Each written notice of optional tender
must state: (i)the principal amount of the Series 2004 Bond or Series 2004 Bonds and the Series
2004 Bond number or numbers to which the notice relates,(ii)that the Registered Owner irrevocably
demands purchase of such Series 2004 Bond or a specified portion thereof in an Authorized
Denomination(provided,however,that Series 2004 Bonds may not be tendered for purchase in part
unless the principal amount not to be tendered for purchase is an Authorized Denomination),(iii)the
date on which such Series 2004 Bond or Series 2004 Bonds or portion is to be purchased,
(iv) payment instructions with respect to the Purchase Price,and(v)that the Series 2004 Bonds will
be delivered to the Principal Office of the Trustee on the purchase date. Series 2004 Bonds to be
tendered as described above must be delivered to the Principal Office of the Trustee by 12:30 p.m.,
Chicago time, on the Tender Date.
The giving by a Holder of notice of its exercise of the option to require purchase of its Series
2004 Bonds as described in the preceding paragraphs constitutes the irrevocable offer to sell the
Series 2004 Bond or Series 2004 Bonds to which the notice relates on the Tender Date at the
Purchase Price and an acknowledgment that upon payment of such Purchase Price to the Trustee on
the Purchase Date,such Registered Owner will have no further rights with respect to the Series 2004
Bonds, and, irrespective of whether such Series 2004 Bond or Series 2004 Bonds are actually
delivered to the Trustee on the Tender Date, any such Series 2004 Bond or Series 2004 Bonds will
be deemed to have been delivered for purchase at the Purchase Price on the Tender Date and cease to
accrue interest thereafter. The determination of the Trustee as to whether a notice of tender has been
properly delivered pursuant to the Series 2004 Indenture shall be conclusive and binding upon the
owner of the Series 2004 Bond.
Mandatory Tender of Series 2004 Bonds. Series 2004 Bonds are subject to mandatory tender
in whole under the following circumstances:
(a) Upon the Issuer's election to change the interest rate determination method in regard
to the Series 2004 Bonds, all Series 2004 Bonds then outstanding must be tendered by the Holders
thereof to the Trustee by 12:30 p•m•'rovidenotice o time,
f theperms of such mandatory tender to the
Ho Holders
Conversion Date. The Trustee will p
of the Series 2004 Bonds at least thirty days prior to the Rate Conversion Date.
(b) Series 2004 Bonds are subject to mandatory tender by 12:30 p.m.,Chicago time,on
each Expiration Date of the Credit Facility if the Issuer has not delivered to the Trustee by the thirty-
fifth day prior to such Expiration Date a written copy of an extension of the Expiration Date of such
Credit Facility. Such mandatory tender shall be at the Purchase Price.
(c) Series 2004 Bonds are subject to mandatory tender upon substitution of the Credit
Facility with an Alternate Credit Facility on each Substitution Date. Such mandatory tender shall be
at the Purchase Price. No draw on an Alternate Credit Facility shall be made prior to the termination
of the Credit Facility which it is to replace.
10
(d) Upon the written direction of the Credit Entity stating that the Series 2004 Bonds
shall be subject to mandatory tender because there has been an Event of Default under the Credit
Facility Agreement, the Series 2004 Bonds will be subject to mandatory tender in whole on a date
not more than two (2)business days after the date of notice from the Trustee to the Registered
Owners.
Not less than 30 days prior to each Expiration Date and each Substitution Date,the Trustee
shall give notice of mandatory tender to each Registered Owner which shall state the Tender Date
and payment instructions.
The dates for tender described above are sometimes referred to collectively as "Mandatory
Tender Dates." Without regard to whether notice of mandatory tender is received by a Holder of the
Series 2004 Bonds, the Series 2004 Indenture provides that any Series 2004 Bond not physically
delivered to the Trustee in response to its notice of mandatory tender will be deemed to have been
delivered for purchase and to have been purchased at the Purchase Price on the Mandatory Tender
Date with the result that the Series 2004 Bonds will no longer be outstanding for purposes of the
Series 2004 Indenture and will not bear interest from and after the Mandatory Tender Date. In some
instances,such as those described in(c)and(d)above,the Mandatory Tender may occur prior to the
date a Bondholder, or beneficial owner of a Series 2004 Bond, receives notice thereof.
Failure to Receive Notice of Mandatory Tender. The failure to receive notice of a mandatory
tender or any defect in that notice as to any Series 2004 Bond shall not affect the validity of the
proceedings for the mandatory tender of that Series 2004 Bond or any other Series 2004 Bond. All
notices to Holders of a mandatory tender shall be given by Mail.
Remarketing of Tendered Series 2004 Bonds: Delively and Disposition of Purchase Price.
The Remarketing Agent is required to use its best efforts to arrange for the remarketing on each
Optional Tender Date and each Mandatory Tender Date which is a Rate Conversion Date or a
Substitution Date of the Series 2004 Bonds tendered or deemed tendered on such date. The Trustee
will deliver the Purchase Price to each Holder who has physically delivered its Series 2004 Bonds to
the Trustee from the following sources of funds and in the following order of priority:
First,proceeds of the remarketing of such Series 2004 Bonds to persons other than the Issuer;
and
Second, moneys received under the terms of the Credit Facility.
The Trustee will hold all Series 2004 Bonds delivered to it in connection with optional and
mandatory tenders in trust for the benefit of the Holders of the Series 2004 Bonds until the Purchase
Price is delivered to such Holders.
Delivery and Disposition of Bonds Purchased by Owners. On or before 1:15 p.m.,Chicago
time,on each Tender Date,the Trustee will deliver Series 2004 Bonds purchased with moneys from
the first source of funds in the preceding paragraph to the persons providing the Purchase Price
thereof as specified by the Remarketing Agent in its notice to the Trustee.
11
Purchased Bonds. Purchased Bonds are held by the Trustee,registered in the name or at the
direction of the Credit Entity,until remarketed and subject to the requirements of the Series 2004
Indenture. Proceeds of any Purchased Bonds remarketed are payable to the Credit Entity. No
moneys from the Credit Facility may be used by the Trustee to pay the Bond Service Charges
payable on Purchased Bonds. At all times, Purchased Bonds held by the Trustee are held for the
benefit of the Credit Entity.
Redemption of the Series 2004 Bonds
Optional Redemption. The Series 2004 Bonds are subject to optional redemption prior to
their stated maturity date as follows:
(a) During Weekly or Monthly Rate Periods. During any Weekly Rate Period or Monthly
Rate Period, the Series 2004 Bonds are subject to optional redemption by the Issuer,upon written
direction delivered to the Trustee, the Remarketing Agent and the Credit Entity,together with the
written consent of the Credit Entity, at least forty-five (45) days prior to the proposed redemption
date,in whole or in part on any Business Day at a redemption price of 100%of the principal amount
redeemed, plus accrued interest, if any,thereon to the redemption date.
Any optional redemption of Series 2004 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 Series 2004 Indenture and described in clause (f) below, and so as to maintain the
proportion of principal maturing in each year to the total original principal amount of the Series 2004
Bonds.
(b) During Adjustable Rate Periods or the Fixed Rate Period. During(i) any Adjustable
Rate Period having a length in excess of two years, or (ii) any Fixed Rate Period, the Series 2004
Bonds are subject to optional redemption by the Issuer, upon written direction delivered to the
Trustee,the Remarketing Agent and the Credit Entity,together with the written consent of the Credit
Entity,at least thirty-five(3 5)days prior to the proposed redemption date,in whole or in part on any
Business Day at the following redemption prices(expressed as a percentage of the principal amount),
plus accrued interest, if any, through the date of redemption as follows:
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS
UNTIL THE MATURITY DATE ON WHICH
DATE FOLLOWING REDEMPTION
CONVERSION IS ALLOWED
TO A FIXED RATE TO COMMENCE REDEMPTION PRICE
More than 15 years Tenth anniversary of 102%, declining by 1% on each
Rate Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
100%, and 100%thereafter
More than 10, but not more than Seventh anniversary of 102%, declining by 1% on each
15 years Rate Conversion Date succeeding anniversary of Rate
Conversion Date until reaching
12
LENGTH OF ADJUSTABLE
RATE PERIOD OR YEARS
UNTIL THE MATURITY DRED N WHICH
DATE FOLLOWING IS ALLOWED
CONVERSION TO COMMENCE REDEMPTION PRICE
TO A FIXED RATE
100%, and 100%thereafter
More than 7, but not more than Fifth anniversary of Rate each/2%,succeeding declining
nn b er/2%on
10 years Conversion D Rate Conversion Date until
reaching 100% and 100%
thereafter
More than 4, but not more than Third anniversary oat e 101%,
eding declining by 11/2 of Rat h
Rate Conversion D
7 years
Conversion Date until reaching
100%, and 100%thereafter
More than 2, but not more than Second anniversary to each succ° eeding ann v ersary of
4 years Rate Conversion
Rate Conversion Date until
reaching 100%, and 100%
thereafter
2 years or less Not subject to optional
redemption to the extent possible, to
Any optional redemption of Series 2004 Bonds shall bandatolry Sinking Fund redemption
reduce pro rata the amount required to be redeemed Y below, and so as to maintain the
pursuant to the Series 2004 Indenture and described in clause (f)
proportion of principal maturing in each year to the total original principal amount of the Series 2004
Bonds.
the Series
(c) During An Rate Period on Anben he Date.uer, exer During ed at the written direction
2004 Bonds are subject to optional redemption y
delivered to the Trustee, the Remarketing Agent and the Credit Entity, together with the written
consent of the Credit Entity, on any Tender Date at a redemption rice I o0% of the principal
amount redeemed, plus accrued interest, if any, thereon to the redemption
Any optional redemption of Series 2004 Bonds shall by Mandatory applied,lSinking Fund redemption
reduce pro rata the amount required to be redeemed y
pursuant to the Series 2004 Indentures and described in clause (f)below,
amount of the Series 2004
proportion of principal maturing in each year to the total original principal
Bonds.
13
(d) Mandatoly Redemption from Condemnation Proceeds or Proceeds Transferred from
the Improvement Fund. The Series 2004 Bonds are subject to mandatory redemption by the Issuer
upon written direction delivered to the Trustee, the Remarketing Agent and the Credit Entity,
together with the written consent of the Credit Entity, 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,in an amount equal to amounts on deposit in the Bond
and Interest Fund consisting of the proceeds received by the Issuer in connection with a
condemnation of any of the Special Servicep 2004 Bonds as determined by the
Issuer within the Special Service Area and a llocable to the Series
Consultant and which proceeds are not used by the Issuer to rebuild the Special Services.
The Series 2004 Bonds are subject to redemption on any Interest Payment Date,in part,at a
redemption price equal to the prinFipnd to amount to be the Bond and nt rest Fund after
transferred from the Improvement the Completion Date as
described in the 2004 Indenture.
Any mandatory redemption of the Series 2004 Bonds described above pursuant to the Series
2004 Indenture 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 Series 2004 Indenture,and so as to
maintain the proportion of principal maturing in each year to the total original principal amount of
Series 2004 Bonds.
(e) Special Mandatory Redemption from Prepayment of Special Taxes Recapture Fees
and Recoveries. The Series 2004 Bonds are subject to mandatory redemption at any time by the
Issuer,to the extent permitted by the Credit Facility Agreement,upon written direction of the Issuer
delivered to the Trustee, the Remarketing Agent and the Credit Entity, together with the written
consent of the Credit Entity and the Developer Representative, in part, in an amount equal to
amounts available for disbursement from the Special Redemption Account pursuant to the Series
2004 Indenture as follows:
(i) During any Rate Period when the Series 2004 Bonds bear interest at the
Weekly Rate or the Monthly Rate, the Series 2004 Bonds are subject to
mandatory redemption in an amount equal to prepayments,Recapture Fees
and Recoveries on deposit in the Special Redemption Account, at a
redemption price of 100%of the principal amount of the Series 2004 Bonds
to be redeemed,together with accrued interest on such Series 2004 Bonds to
the date fixed for redemption.
(ii) During any Adjustable Rate Period or any Fixed Rate Period,the Series 2004
Bonds are subject to mandatory redemption in an amount equal to
prepayments, Recapture Fees and Recoveries on deposit in the Special
Redemption Account at the redemption prices(expressed as a percentage of
the principal amount of the Series 2004 Bonds to be redeemed)plus accrued
interest, if any, to the redemption date, as provided in the Series 2004
Indenture and in accordance with the schedule set forth in paragraph (b)
under the caption "Redemption of the Series 2004 Bonds-Optional
14
Redemption", or in the event Series 2004 Bonds are redeemed during any
period they are not subject to optional redemption at a price of 103%of the
principal amount of the Series 2004 Bonds to be redeemed.
Any mandatory redemption of the Series 2004 Bonds as described above pursuant to the
Series 2004 Indenture 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 Series 2004 Indenture,and so
as to maintain the proportion of principal maturing in each year to the total original principal amount
of Series 2004 Bonds.
(f) Mandatory Sinking Fund Redemption. The Series 2004 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 $ 365,000
2015 380,000
2016 400,000
2017 420,000
2018 440,000
2019 465,000
2020 485,000
2021 510,000
2022 535,000
2023 560,000
2024 590,000
2025 620,000
2026 650,000
2027 685,000
2028 720,000
2029 755,000
2030 790,000
2031 830,000
2032 875,000
2033 915,000
2034 (maturity) 960,000
Total $12,950,000
The Issuer covenants that it will redeem the Series 2004 Bonds pursuant to the mandatory sinking
fund redemption requirements for the Series 2004 Bonds. Proper provision for mandatory
redemption having been made, the Issuer covenants that the Series 2004 Bonds so selected for
redemption shall be payable upon redemptionh 004 Bond O d Hance for such purposes.
(g)provided in the Series 2004 Indenture and in the Series
(g) Purchase In Lieu of Redemption. In lieu of redemption as provided in the Series 2004
Indenture,and provided the Credit Facility permits draws for such purpose,Series 2004 Bonds may
be purchased by the Issuer, at public or private sale as and when, and at such prices (including
15
brokerage and other charges) as the Issuer may provide,but in no event may Series 200 Bonds be
purchased at a price in excess of the principal amount of such Series 2004 Bonds, plus
accrued to the date of purchase and any premium which would otherwise be due if such Series 2004
Bonds were to be redeemed in accordance with the Series 2004 Indenture. Moneys in the Bond and
Interest Fund may be used and withdrawn by the Trustee to reimburse the Credit Entity for draws on
the Credit Facility applied to purchase Series 2004 Bonds in lieu of redemption.
Redemption Procedures. In the event any of the Series 2004 Bonds are called for redemption,
the Trustee is required to give notice of the redemption of such Series 2004 Bonds,in notice e 1 e of
the Issuer, to the Holders of the Series 2004 Bonds to be redeemed. Any redemption
(a) specify the Series 2004 Bonds(or portions thereof)to be redeemed,(b)the redemption date and
the redemption price to be paid, (c)the place or places where amounts due upon such redemption
will be payable(which shall be the Principal Office of the Trustee), (d) if less than all of the Series
2004 Bonds are to be redeemed the number of the Series 2004 Bonds and the portion t the Series the
2004 Bonds to be redeemed, (e) state any condition to such redemption and (f)
redemption date and upon satisfaction of such condition,the Series 2004 Bonds shall cease to bear
interest provided that Eligible Funds are available for such purpose on that date, and if Eligible
Funds are not available on such date,the redemption shall be canceled. Such notice may set forth
any additional information relating to such redemption. The Series 2004 Indenture requires that
redemption notices be given not less than thirty (30)nor more than sixty(60)days prior to the date
fixed for redemption by first-class mail to the Credit Entity,the Remarketing Agent,the Developer
and all Holders of Series 2004 Bonds to be redeemed. No defect in any such notice shall
notice
manner defeat the effectiveness of the call for redemption. Notwithstanding the foregoing,
requirements set forth above shall not apply to Series 2004 Bonds redeemed on their Tender Date. In
addition to the official notice of redemption,if the Series 2004 Bonds are not then held under a book-
entry only system, further notice shall be given by the Trustee in the name of the Issuer as set out
below;provided,however,that neither the failure to give any such notice nor any defect in any notice
so given shall affect the sufficiency or validity of any proceedings for the redemption of the Series
2004 Bonds. Each further notice of redemption given under the Series 2004 Indenture shall contain
the information required for an official notice of redemption plus: (i)the CUSIP number of all
Series 2004 Bonds being redeemed; (ii) the date of issue of the Series 2004 Bonds as originally
issued; (iii) the rate of interest borne by each Series 2004 Bond being redeemed; (iv)the maturity
date of each Series 2004 Bond being redeemed;and(v) any other descriptive information needed to
identify accurately the Series 2004 Bonds being redeemed. Each further notice of redemption shall
be sent at least thirty (30) days before the redemption date by certified mail or overnight delivery
service to all registered securities depositories then in the business of holding substantial amounts of
obligations of the type comprising the Series 2004 Bonds [(such depositories now being DTC and
Philadelphia Depository Trust Company of Philadelphia, Pennsylvania)] and to one or more
national information services, chosen in the discretion of the Trustee, that disseminate notice of
redemption of obligations such as the Series 2004 Bonds.
Upon surrender of such Series 2004 Bonds for redemption in accordance with said notice,
such Series 2004 Bonds shall be paid by the Trustee at the redemption price. Upon surrender for any
partial redemption of any Series 2004 Bonds,there shall be issued to the Registered Owner a new
Series 2004 Bond or Series 2004 Bonds in the amount of the unredeemed principal in an Authorized
16
Denomination. All Series 2004 Bonds which have been redeemed shall be canceled and destroyed
by the Trustee and shall not be reissued.
Series 2004 Bonds Deemed to be Redeemed Cease and
after the redemption date the Series
redemption has been given as described above, then from an
2004 Bonds and any portions thereof called for redemption will become due and payable at the
redemption price therein specified, shall cease to bear interest on the specified redemption date and
will no longer be considered outstanding under the Series 20 4
Optional Prepayment of Special Tax Tax
The manner in which Special Tax may be prepaid is described t so long t ere are no
included in this Limited Offering Memorandum in Appendix B. Generally,
delinquent Special Taxes with respect to a Parcel(as defined obligation ial T x pay the Spec al Tax
Tax may be prepaid with respect to any Parcel at any time an d the
d in
permanently satisfied by the payment of an amount equal to Re t a .port the e ormen d ter uuded in
accordance with the formula set forth in the Special Tax p
Appendix B hereto for a more complete discussion of the calculation of the amount of prepayment of
Special Tax.
Mandatory Prepayment of Special Tax
In addition to the optional prepayment as described above,he S e�ial Tax Report) such as a
total of the Maximum Parcel Special Tax (as defined P family determination by the Consultant that there is a change in t set number of single
the final plat of subdivision
or a change in the number of duplex lots below 62 a Special
approved by the Village, or any other event that reduces the total of of the the Special Maximum Tax Parcel
("hand toal
Tax, the Special Tax Report calls for a mandatory prepayment
Prepayment"). The amount of the Mandatory PrepaymeP�esa meet of the Special Tax would not
formula set forth in the Special Tax Report. A Mandatory Prepayment r described in
l Tax
reduce the Special Tax that has been levied on any Parcel hr aemore compl to discussion of
Report. See the information included in Appendix B ereto fo
Mandatory Prepayment.
Transfer and Exchange of Series 2004 Bonds
The Series 2004 Bonds may be transferred or exchanged Srie
g s 2004 Bonds of other Authorized
Office of the Trustee for a like aggregate principal amount o
Denominations. Whenever any Series 2004 Bond ent the Trustee is required toeauthenticat nand
appropriately endorsed or accompanied by an assignor
deliver a new fully registered Series 2004 Bond or Series 200 Bonds,duly
o the transferee or Holder
Authorized Denominations in the appropriate aggregate principal
in exchange therefor. The Trustee will require the be 1 aed requesting sect to the exchange
transfer transfer to pay
any tax or other governmental charge required to p
17
Neither the Issuer nor the Trustee shall be required to issue, register, transfer or exchange
Series 2004 Bonds during(a) the period beginning with the Record Date for such Series 2004 Bonds
and ending on the next Interest Payment Date for such Series 2004 Bonds or(b)the period beginning
15 days before the mailing of notice of redemption of such Series 2004 Bonds and ending on the
redemption date,except Series 2004 Bonds for which a notice of optional tender has been received
by the Trustee from a Bondholder while such Series 2004 Bonds are in a Weekly Rate Period or a
Monthly Rate Period.
Notwithstanding anything to the contrary set forth above, while the Series 2004 Bonds are
held in a book-entry only system,it shall be the duty of the Remarketing Agent to effect transfers and
exchanges of beneficial interests in the Series 2004 Bonds in accordance with the foregoing
provisions and the Series 2004 Indenture.
Mutilated,Lost, Stolen or Destroyed Series 2004 Bonds
If any Series 2004 Bond is mutilated, lost, stolen or destroyed,e date,the
interest may xecute, and
the Trustee may authenticate a new Series 2004 Bond of like
denomination to that mutilated,lost,stolen or destroyed Series 2004 Bond. Alternatively,if any such
Series 2004 Bond has matured, instead of issuing a duplicate Series 2004 Bond, the Trustee on
behalf of the Issuer may pay the same without surrender thereof making such requirements as it
deems fit for its protection including a lost instrument bond. In the case of any mutilated Series 2004
Bond, that Series 2004 Bond must first be surrendered to the Trustee, and in the case of any lost,
stolen or destroyed Series 2004 Bond, there must first be furnished to the Issuer and the Trustee
evidence satisfactory to them of the ownership of such Series 2004 Bond and of such loss,theft or
destruction,together with indemnity for the benefit of the Issuer and the Trustee, satisfactory to the
Trustee. The Trustee may require payment of its reasonable fees and expenses for each Series 2004
Bond so delivered.
Book-Entry Only System
General. DTC will act as securities depository for the Series 2004 Bonds. The Series 2004
Bonds will be issued as fully-registered securities registered in the name of Cede& Co. One fully
registered certificate will be issued for each maturity of the Series 2004 Bonds in the aggregate
principal amount of such maturity and will be deposited with DTC. When the Series 2004 Bonds are
issued, ownership interests will be available to purchasers only by or through DTC Participants
(defined below)via a book-entry system(the"Book-Entry Only System")maintained by DTC. The
following discussion will not apply to Series 2004 Bonds issued in physical form due to the
discontinuance of the Book-Entry Only System. See"Discontinuance of Book-Entry Only System,"
below.
DTC and Its Participants. DTC, the world's largest depository, is a limited-purpose trust
company organized under the New York Banking Law,a"banking organization"within the meaning
of the New York Banking Law,a member of the Federal Reserve System,a"clearing corporation"
within the meaning of the New York Uniform he Securities Exchange Act of 19348 DTC holds and
pursuant to the provisions of Section 17A of q
provides asset servicing for over two million issues of U.S. and non-U.S. equity, corporate orate and
18
municipal debt issues,and money market instruments frfacilitates m 8 count post-trade that settlement participants among
("Direct Participants ) deposit with DTC. DTC also P
Direct Participants of sales and other securities transactions in deposited securities through electronic
computerized book-entry transfer and pledges between Direct Participants'accounts. This eliminates
the need for physical movement of securities certificates. Direct Participants include securities
brokers and dealers,banks,trust companies,clearing corporations,and certain other organizations.
DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC").
DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National
Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC,
also subsidiaries of DTCC),as well as by the New York Stock Exchange,Inc.,the American Stock
Exchange LLC,and the National Association of Securities Dealers,Inc. Access to the DTC system
is also available to others such as both U.S.and non-U.S. securities brokers and dealers,banks,trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a
Direct Participant,either directly or indirectly("Indirect Participants"). DTC has Standard&Poor's
highest rating: AAA. The DTC rules applicable to can be found at file w it t e Securities and
Exchange Commission. More information about DTC
Purchase ofOwnership Interests. Purchases of the Series 2004 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, but Beneficial Owners are expected to
receive written confirmation providing details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Series 2004 Bonds are to be
accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in the
Series 2004 Bonds, except in the event that use of the book-entry system for the Series 2004
Bonds is discontinued.
To facilitate subsequent transfers,all Series 2004 Bonds deposited by Direct Participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as
may be requested by an authorized representative of DTC. The deposit of Series 2004 Bonds with
DTC and their registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Series 2004 Bonds; DTC's records reflect only the identity of the Direct Participants to whose
accounts such Series 2004 Bonds are credited, which may or may not be Beneficial Owners. The
Direct and Indirect Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Notices and Consents. As long as the book-entry system is used for the Series 2004 Bonds,
the Trustee will give any notice of redemption or any other notices required to be given to owners of
the Series 2004 Bonds only to DTC. Any failure of DTC to advise any Direct Participant,or of any
Direct Participant to notify any Indirect Participant, or of any Direct Participant or Indirect
Participant to notify any Beneficial Owner,of any such notice and its content or effect will not affect
19
the validity of the redemption of the Series 2004 Bonds called for redemption or of any other action
premised on such notice. 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 and regulatory requirements as may be in effect from time to time. Beneficial Owners may
desire to make arrangements with a Direct Participant o�Indirect
Owners that
ill be forwarded
redemption or other communications to DTC which of
in writing by such Direct Participant or Indirect Participant. If less t n of the ries 004 Direct
are being redeemed,DTC's practice is to determine by to o
Participant to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with
respect to the Series 2004 Bonds unless authorized by a Direct Participant in accordance with DTC's
Procedures. Under its usual procedures, DTC mails an "Omnibus Proxy" to the Issuer as soon as
possible after the Record Date. The "Omnibus Proxy" assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date
(identified in a listing attached to the Omnibus Proxy").
Di`'v'iia'entc of Principal and Interest. Principal and interest payments on the Series 2004
Bonds will be made to Cede & Co., or such other nominee may accounts upon DTC's receipt
representative of DTC. DTC's practice is to credit Di
of funds and corresponding detail information from Issuer or Trustee on a payment date in
accordance with their respective holdings shown on DTC's vents by records
Participant to Beneficial Owners
that it will not receive payment on a payment date y
will be governed by standing instructions and customary practices,as in 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, the Issuer, the Underwriters, the
Credit Entity, subject to any statutory or regulatory requirements as may be in effect from time to
e as may be requested
time. Payments of principal and interest to Cede&Co. such other eDisbursement ofsuch
by an authorized representative of DTC)are the responsibility of the Trustee.
payments to Direct Participants is the responsibility of DTC,and disbursements of such payments to
the Beneficial Owners is the responsibility of the Direct Participants and Indirect Participants.
Tenders. A Beneficial Owner shall give notice to elect to have its Series 2004 Bonds (or
authorized portions thereof) purchased or tendered through its Participant Direct to the e Tr st e, andrh ll
effect delivery of such Series 2004 Bonds by causing the
Participant's interest in the Series 2004 Bonds, on DTC's records,to the Trustee. The requirement
for physical delivery of Series 2004 Bonds in connection with an optional tender or a mandatory
purchase will be deemed satisfied when the ownership rights in the Series 2004 Bonds are
transferred by Direct Participants on DTC's records.
Discontinuance ofBook-Entry Only_System. DTC may discontinue providing its services as
securities depository with respect to the Series 2004 Bonds at any time by giving reasonable notice to
the Issuer or the Trustee. Under such circumstancateslarehe required to be printed and deliverelds
depository is not obtained, Series 2004 Bond certificates q
20
DTC
The Issuer may decide to discontinue use of the system f d certificates transfers
will through p rated and
or a successor securities depository. In that event,Series 2004
delivered to DTC.
THE INFORMATION PROVIDED IMMEDIATELY PROVIDED BY
DTC NO REPRESENTATION
"BOOK-ENTRY ONLY SYSTEM HAS BEEN PROV TING
IS MADE BY THE ISSUER,THE DEVELOPER,THE UNDEERW OR TERS,THE ADEQUACY S H
AGENT, THE CREDIT ENTITY AS TO THE ACCURACY
INFORMATION PROVIDED BY DTC OR AS TO THE ABSENCE THE DATE HEREOF. ADVERSE
CHANGES IN SUCH INFORMATION SUBSEQUEN T
Limier ns. For so long as the Series 2004 Bonds are registered DTC or n me ofDTC eC or its
nominee, Cede & Co.,the Issuer and the Trustee will recognize only TC
Co., as the registered owner of the Series 2004 Bonds for all purposes,including payments,notices
and voting.
Under the Series 2004 Indenture,payments by the Trustee to DTC or its nominee will satisfy
the Issuer's obligations under the Series 2004 Indenture to the extent of the payments so made.
Neither the Issuer,the Underwriters nor the Trustee will have any responsibility or obligation
with respect to (i) the accuracy of the records of DTC, its nominee or any Direct Participant or
Indirect Participant with respect to any beneficial ownership i interest in anyPerson,e her0than onowneras
delivery to any Direct Participant or Indirect Participant or y
shown in the Bond Register,of any notice with respect to�n e Series
ent which would or could give se to
limitation,any notice of redemption,tender,purchase y
a tender or purchase right or option with respect to anperson Bother Bond,
an an(o iii) the payment of any as shown in the
Direct Participant or Indirect Participant or any other , remium,if any,or interest on,or the
Bond Register,or any amount with respect to the principal of,p
purchase price of, any Series 2004 Bond, or (iv) any consent given or action taken by DTC as
registered owner.
Prior to any discontinuation of the book-entry only system v er of the Series es 2004IBondand or all
Trustee may treat DTC as,and deem DTC to be,the (i) the payment of principal of,premium,if any,
purposes whatsoever,including,without limitation,(i) p y
and interest on the Series 2004 Bonds, (ii) giving notices ith redemption o the Serves 2004 Bonds,and
respect to the Series 2004 Bonds,(iii) registering transfer
(iv)the selection of Series 2004 Bonds for redemption.
Use of Certain Terms in Other Sectionc of this Official Statement. In reading this Official
Statement it should be understood that while the Series 2004 Bonds are e in the
derBs should be Only
System,reference in other sections of this Official Statement
where applicable, to include the person for whom a ex
Direct e Participant cised through DTC and the Book-
Series 2004 Bonds,but (1) all rights of ownership must
Entry Only System and (2) notices that are to be given to Registered Owners or Holders by the
Issuer, Remarketing Agent or the Trustee will be given only to DTC, as Registered Owner.
21
PLAN OF FINANCE
General
The Special Service Area is being developed by the Developer. Other than the proceeds of
the Series 2004 Bonds, the Developer shall provide all the funds necessary to complete the public
and private improvements to develop the Special Service Area and the Project. Private
improvements include the finishing and development of each lot within the Special Service Area.
The Special Services
The Special Services consist of on-site and off-site 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, bicycle paths, traffic controls,
sidewalks,equestrian paths and related street improvements,and equipment and materials necessary
for the maintenance thereof,public parks,park improvements,landscaping,wetland mitigation and
tree installation, costs for land and easement acquisitions relating to any of the foregoing required
tap-on fees and related fees for water or sanitary sewer services and other eligible costs.
Pursuant to the Series 2004 Indenture,the amount of the proceeds needed to construct,install
and dedicate the Special Services will be placed in an Improvement Fund. The amounts held in the
Improvement Fund will be available for disbursement upon receipt by the Trustee of a Disbursement
Request from an Authorized Issuer Representative with the written consent of the Credit Entity.
22
ESTIMATED PROJECT SOURCES AND USES OF FUNDS
Sources: 950,000,
12
VRD Bond Proceeds 8,900
Capitalized Interest Fund Earnings ,000
Improvement Fund Earnings 12,93 38 8,900
Total Sources
Uses: 11,185,900
Public Improvements 1,276,000
Capitalized interest 25,000
Administrative Fund deposit 32,000
Letter of Credit fee ,000
Remarketing Fee 4 3232,000
Cost of Issuance 12 996,900
Total Uses
The Special Services not financed with proceeds of the Series 2004 Bonds will be paid for by
the Developer. During the first years following the date of issuance of the Series 2004 Bonds,
a portion of the prepayment of Special Tax not to exceed$_may,with the consent of the
Credit Entity,be used to pay the costs of additional Special Services not financed with proceeds of
the Series 2004 Bonds. See "THE PLAN OF FINANCE--Estimated Project Sources and Uses of
Funds" above. The Special Taxes will secure the payment of the Series 2004 Bonds. The Special
Tax Report permits the Special Tax to be prepaid at the time a single family detached home or
townhome or duplex unit parcel is sold to an individual single-family homebuyer. Upon receipt of
any such prepayment by the Trustee, the lien of Special Tax on any such single family detached
home parcel shall be released. Pursuant to the Series 2004 Indenture,that portion of the proceeds of
the sale of the Series 2004 Bonds to be used to design,construct and renovate the Special Services
will be placed in the Improvement Fund. The amounts held in the Improvement Fund will be
available for disbursement upon receipt by the Trustee of a Disbursement Request of an Authorized
Issuer Representative and consented to by the Credit Entity, all as described in the Series 2004
Indenture.
SECURITY FOR THE SERIES 2004 BONDS
General
This Official Statement contains information relating to the security for the Series 2004
Bonds prior to a conversion to the Adjustable Rate or Fixed Rate. Owners or purchasers of
the Bonds are not to rely on the information herein with respect to security for the Series 2004
Bonds after any such conversion.
The Series 2004 Bonds are being issued pursuant to the Special Service Area Tax Law of the
State of Illinois,as amended(the"Act"),and will be limited obligations of the Issuer payable solely
23
and only from proceeds received from the Credit Facility,the Special Tax and amounts on deposit in
certain of the funds established and maintained pursuant to the Series 2004 Indenture and Series
2004 Bond Ordinance. The Series 2004 Bonds are not general obligations of the Issuer and neither
the full faith and credit nor the general taxing power of the Issuer,the County of Kendall,the State of
Illinois,or any political subdivision thereof is pledged to the payment of the Series 2004 Bonds. No
holder of any Bond shall have the right to compel the exercise of any taxing power of the Issuer
(other than the levy of the Special Tax as described herein)for payment of the principal amount of,
premium, if any, or interest on the Series 2004 Bonds. The Series 2004 Bonds and the interest
thereon are secured and payable from a first pledge and assignment to the Trustee of the Trust Estate
which includes: all right, title and interest of the Issuer in and to the Special Tax and any moneys
held under the Series 2004 Indenture by the Trustee,including the proceeds of the Series 2004 Bonds
and the interest, profits and other income derived from the investment thereof(other than amounts
held by the Trustee in the Rebate Fund,the Administrative Expense Fund or in the Tender Fund or
elsewhere to pay the Purchase Price of Series 2004 Bonds delivered or deemed delivered for
purchase pursuant to the Series 2004 Indenture). The moneys held by the Trustee which are pledged
as security for the Series 2004 Bonds include(i)the Special Tax to be levied,extended and collected
on all the real property within the Special Service Area subject to the Special Tax,including interest
on such Special Tax and the proceeds of the redemption or sale of property sold as a result of any
foreclosure action(brought following a delinquency in the payment of the Special Tax)of the lien of
the Special Tax,(ii)any other amounts transferred to the Special Redemption Account by the Issuer
including condemnation proceeds as provided in the Series 2004 Indenture, and (iii) amounts
deposited in the Bond and Interest Fund and the Improvement Fund. Additionally,as described ount1ore
fully below in this section under "The Credit Facility, payment not
exceeding the principal amount of the Series 2004 Bonds plus 45 days'interest thereon at %per
annum is supported by the initial Credit Facility.
PROSPECTIVE BONDHOLDERS SHOUL�ITYCONSIDER
HE SERIES 004 BONDS.FACILITY
ONLY
THE SOLE SOURCE OF PAYMENT AND SEC
LIMITED INFORMATION CONCERNING THE ISSUER, THE DEVELOPER AND THE
SPECIAL TAX WILL BE MADE AVAILABLE TO PROSPECTIVE PURCHASERS OF THE
SERIES 2004 BONDS, AND PROSPECTIVE PURCHASERS SHOULD MAKE THEIR
INVESTMENT DECISIONS REGARDING THE CREDITWORTHINESS OOT ON THE AVAILABILITY LITYOF
BONDS ON THE BASIS OF THE CREDIT ENTITY,
OTHER FUNDS.
The Credit Facility
Stated Amount of and Drawings Under, the Credit Facilily. The Series 2004 Bonds are
secured initially by an irrevocable, transferable, direct-pay letter of credit issued by LaSalle Bank
National Association. The Credit Facility will be in all respects an irrevocable oblig ti n�Sf t e
Credit Entity. The Credit Facility will be issued in the amount of $_ (the
Amount"),an amount equal to the aggregate principal amount of the outstanding Series 2004 Bonds,
plus 45 days'interest on the Series 2004 Bonds at an interest rate of 7%per annum(based on a year
of 365 days)(the Cap Rate"). The Trustee,upon compliance with the terms of the Credit Facility,is
authorized and directed to draw up to(a) an amount sufficient(i) to pay principal of the Series 2004
Bonds when due,whether at maturity or upon redemption or acceleration,and(ii)to pay the portion
24
of the purchase price of the Series 2004 Bonds delivered for purchase pursuant to a demand for
purchase by the owner thereof or a mandatory tender for purchase and not remarketed(a"Liquidity
Drawing") equal to the principal amount of such Series 2004 Bonds, plus (b) an amount not to
exceed 45 days of accrued interest on such Series 2004 Bonds at the Cap Interest Rate (i)to pay
interest on the Series 2004 Bonds when due, and(ii) to pay the portion of the purchase price of the
Series 2004 Bonds delivered for purchase pursuant to a demand for purchase by the owner thereof or
a mandatory tender for purchase and not remarketed, equal to the interest accrued, if any, on such
Series 2004 Bonds. The Credit Facility will beheld lby e the
of the Series 2004 authorized to upon it
in accordance with its terms and in accordance
Reductions in the Stated Amount and Reinstatement. Each payment of a draft with respect to
the payment of interest on,or principal of,Series 2004 Bonds or the interest component or principal
component of the Purchase Price of the Series 2004 Bonds honored by the Credit Entity will reduce
pro tanto that portion of the Stated Amount available under the Credit Facility, subject to
reinstatement as described below.
A drawing on a Credit Facility upon acceleration of the Series 2004 Bonds or redemption of
the Series 2004 Bonds or maturity of the Series 2004 Bonds will reduce the Stated Amount of the
Credit Facility by the amount of such drawing and such Stated Amount will not subsequently be
increased by reason of any repayment of such draw.
Following the honoring of a drawing under a Credit Facility to pay interest on the Series 2004
Bonds(other than interest in connection with an acceleration,redemption, or at the maturity of the
Series 2004 Bonds or interest included in the Purchase Price of the Series 2004 Bonds),in an amount
set forth in a conforming certificate, the Credit Entity's obligation under the Credit Facility with
respect to the payment of interest on the Series 2004 Bonds will be reinstated five(5) calendar days
after such drawing,unless the Trustee receives a written notice from the Bank within such five(5)-
day period stating that it elects not to reinstate such payment because an Event of Default under the
Credit Facility Agreement has occurred and is continuing.
With respect to a Liquidity Drawing,the amount available under the Credit Facility will be
reinstated in an amount equal to the principal amount of the Series 2004 Bonds purchased with the
proceeds of such Liquidity Drawing, plus the amount of accrued interest thereon paid with the
proceeds of such Liquidity Drawing when the Bank is reimbursed for honoring such Liquidity
Drawing.
Expiration of the Credit Facility. The Credit Facility will terminate on the earliest of the
Credit Entity's close of business on (a) the stated termination date of
20_ (unless
extended); (b)the date which is 15 days following receipt by the Credit Entity from the Trustee of a
certificate to the effect that: (i)no Series 2004 Bonds remain Outstanding,(ii)all drawings required
to be made under the Indenture and available under the Credit Facility have been made and honored
or (iii) an Alternate Credit Facility has been issued to replace the Credit Facility pursuant to the
Indenture; (c) the date on which a drawing under the Credit Facility to pay the principal of and
interest on the Series 2004 Bonds upon acceleration is honored by the Credit Entity;and(d)the date
which is 15 days following receipt by the l under the Credit Facility Agreement Credit Entity directing
specifying the occurrence of an Event of Default
25
the Trustee to accelerate the Series 2004 Bonds or cause a mandatory tender of the Series 2004
Bonds.
Alternate Credit Facility
The Issuer may deliver an Alternate Credit Facility m a replace
mandatory tender of all the Se
es
The substitution of any Alternate Credit Facility will result
2004 Bonds.
Any Alternate Credit Facility delivered to the Trustee must such Alternate Credit Facility is
of Bond Counsel selected by the Issuer stating that delivery
e and complies with
authorized under the Series 2004 Indentur that such Alternate Credit Faccilil
t ty is a
the issuer or provider of such Alternate Credit Facility stating or
ts
legal, valid, binding and enforceable obligation of such issuer nd similar meatters),(�i) an opinionlof
terms(subject only to usual exceptions relating to bankruptcy
Bond Counsel to the effect that the delivery of the Alternate Credit oses of interest on the Series adversely affect 2004
the exclusion from gross income for Federal income tax p rp counsel in
Bonds and(iv) only if required by a Rating Agency,an eplthe Raon
ng Agency and the Trus to to the
matters of Federal bankruptcy law, selected by the Issu ,
effect that payments from the Alternate Credit Facility do note onstituI voidable preferences in the
case of a bankruptcy by the Issuer, any insider of the issuer, or
Special Tax
ed by,among other things,a pledge of Special Tax incl
The Series 2004 Bonds are secur of the
all scheduled payments of Special Tax received b the issuer,
foreclosure of the lien of proceeds of Special Tax. Pursuant to
redemption or sale of property sold as a result
the Series 2004 Ordinance there has been levied by the issuer discharge el the principal o l taxable the Ser al
property within the Special Service Area sufficient to pay a g
on the Series
2004 Bonds at maturity or mandatory sinking fund redemption covenanted in the Se es 2004 Indenture,
2004 Bonds for each year at the Cap Rate. The Issuer has
2032, to
annually on or before the last Tuesday of December for each ced S tecial years 2005 Tax Requhrement for the
calculate or cause the Consultant to calculate the prod P
immediately succeeding year and to adopt an ordinance approving the am the Consultant shad
Special Tax Requirement for the immediately succeeding y ear
adjust the projected Special Tax Requirement to reflect actual deb service
from property oriel 20 4
Bonds. The Special Tax shall be levied and billed directly to and the Issuer through the Consultant on a monthly basis to coincide t nded and colleted in acco dan�e
the Series 2004 Bonds. The Special Tax shall be computed, ex
with the Special Tax Report and the Special Tax Roll, and divided
olf the Establishing Ordinance and the
within the Special Service Area in accordance with th
by the
Special Tax Report. The Special Tax levied by the Series 2004 Ordi procedures for s l ecti place for
County Clerk of Kendall County shall be abated each year
the Issuer to levy,bill and collect the Special Tax directly or through the Consultant. The Issuer has
ion
covenanted to take all actions which shall be necessary to provide oincluding enforcement lle such
and application of the taxes levied by the Series 2004 Ordinance,
26
taxes by institution of Foreclosure Procedures as provided by law. Pursuant to the Special Tax
Report,the Special Tax Requirement for each year will be an amount sufficient to cover debt service
on the Series 2004 Bonds and to pay Administrative Expenses (as defined in the Series 2004
Indenture).
Covenants of the Issuer
Pursuant to the Series 2004 Indenture,the Issuer has covenanted for the benefit of the owners
of the Series 2004 Bonds (the "Bondowners") that the Issuer will:
(a) take all actions, if any, which shall be necessary,in order to provide for the
levy, extension, collection and application of the Special Tax;
(b) not take any action which would adversely affect the levy, extension,
collection and application of the Special Tax levied pursuant to the Series 2004 Bond
Ordinance and Series 2004 Indenture,except to abate Special Tax to the extent permitted by
the Series 2004 Indenture and the Series 2004 Ordinance;
(c) comply with all requirements of the Act,the Series 2004 Bond Ordinance and
other applicable present and future laws concerning the levy,extension and collection of the
Special Tax levied pursuant to the Series 2004 Bond Ordinance and Series 2004 Indenture,in
each case so that the Issuer shall be able to pay the principal of and interest on the Series
2004 Bonds as they come due 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 Tax by the commencement and maintenance of an action to foreclose the
lien of any delinquent Special Taxes in the manner provided by law;
(d) not encumber,pledge or place any charge or lien upon any of the Special Tax
or other amounts pledged to the Series 2004 Bonds superior to or on a parity with or junior to
the pledge and lien created in the Series 2004 Indenture n, the Series e2004 Indenture; and
Bonds, except as permitted by, or specifically
(d) 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 Series 2004 Bonds will not be or
become included in gross income for Federal income tax purposes under existing law.
Permitted Investments
"Permitted Investments" means, to the extent permitted by 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,
27
banks for cooperative,Federal farm credit banks or any other entity authorize Federal home
obligations under the Farm Credit Act of 1971 (12 U.S.C.2001 et se .),(ii)the
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, aha bank, f such obligations at
in the name of the Issuer or held under a custodial agreement
the time of purchase are in one of the two highest general
bonds of states and their political
rating service of nationally recognized expertise g
subdivisions;
(d) interest bearing certificates of deposit, interest bearing savings account,
interest bearing time deposits, or other investments hose constituting direct
insured bytthe Federal
bank as defined by the Illinois Banking Ac p
Deposit Insurance Corporation;
(e) repurchase agreements of governmrennmtent securities, unlesss the
regist redor
Government Securities Act of 1986. The go
inscribed in the name of the Issuer, shall be purchased through banks or trust companies
authorized to do business in the State of Illinois;
( repurchase agreements meeting the following requirements:
(1) The securities,unless registered or inscribed in the name of the Issuer,
are purchased through banks or trust companies authorized to do business in the State
of Illinois.
(2) An Authorized Issuer Representative after ascertaining which firm
will give the most favorable rate of interest,directs the custodial bank to"purchase"
specified securities from a designated institution. The"custodial bank"is the bank or
tion with
trust company,or agency of government,which acts
by the Issuer. State
repurchase agreements involving the inve stment of
Treasurer may act as custodial bank for the Issuer.
(3) A custodial bank i h member banks. bAll transfers eof book-entry
System or maintain accounts
securities must be accomplished on a Reserve Bank's t s �
member bank of the Federal Reserve System. These securities must becredt d to
the Issuer on the records of the custodial bank and the transaction must be confirmed
in writing to the Issuer by the custodial bank.
(4) Trading partners shall be limited to
primsary�ep rt ng
authorized to do business in the State o Illinois or to reg
dealers.
(5) The security interest must be perfected.
28
(6) The Issuer must enter into a written master repurchase agreement
which outlines the basic responsibilities and liabilities of both buyer and seller.
(7) The repurchase agreement shall be for periods of 330 days or less.
(8) The Issuer must inform the custodial bank in writing of the maturity
details of the repurchase agreement.
(9) The custodial bank must take delivery of and maintain the securities in
its custody for the account of the Issuer and confirm the transaction in writing to the
Issuer. The Custodial Undertaking shall provide that the custodian takes possession
of the securities exclusively for the Issuer;
that the securities are free of any claims
against the trading partner; and any claims by the custodian are subordinate to the
Issuer's claims to rights to those securities.
(10) The obligations purchased by the Issuer 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 Issuer or Authorized Issuer
Representative.
(11) The custodial bank shall be liable to the Issuer for any monetary loss
suffered by the Issuer 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
Issuer's funds are invested in short-term obligations of suvered to corporation as
Trustee;
by a
certificate from an Authorized Issuer Rep
(h) money market mutual funds registered under the Investment Company Act of
1940,as amended,invested solely in obligations listed in paragraphs(a)and(b)above and in
agreements to repurchase such obligations; and
(i) any other investment as shall be lawful for the investment of Issuer funds and
as shall be approved by the Credit Entity.
SUMMARY OF ANNEXATION AGREEMENT
The Area is subject to an Annexation Agreement between the City and the Developer dated
August 7,2003,and recorded in the Kendall County Real e°�exationrAgreement,therArea Owas
as Document Number 2003 000 32963. Pursuant
annexed into the Village and approved for residential
villas, duplex(including and development
its
dwelling units consisting of single family, single family
29
foregoing description is not and does not purport to be comprehensive or definitive and is qualified
in its entirety by reference to the complete form of the Annexation Agreement.
SUMMARY OF THE PUBLIC IMPROVEMENT AGREEMENT
Set forth below is a brief description of the Public Improvement Agreement. Such
description does not purport to be comprehensive or definitive, and it is subject to all the terms and
provisions of the Public Improvement Agreement,to which reference is hereby made.
Agreement to Construct Special Improvements. The Issuer and the Developer have entered
into the Public Improvement Agreement. Pursuant to the Public Improvement Agreement,all Public
Improvements ("Public Improvements" as defined in the Public Improvement Agreement are the
same as the Special Services as defined in this Official Statement)shall be designed and constructed
by or at the direction of the Developer, on behalf of the Issuer, in accordance with the Annexation
Agreement(as described in the Public Improvement Agreement)and all applicable laws,ordinances,
rules and regulations. The Developer is obligated to construct and convey to the Issuer the Public
Improvements, and use its own funds to pay all costs in excess of the Budgeted Amount defined in
the Public Improvement Agreement and if the completion is performed by the Issuer,the cost of the
completion in excess of the Budgeted Amount shall be paid by the Developer.
Payment Procedures. The Developer may submit to the Issuer,not more often than once in
any calendar month, a Request for Payment for the Budgeted Amount related to the portion of the
Public Improvements that has been completed. The Issuer will inspect the Public Improvements or
portion thereof to determine if they are in compliance with the Construction Plans(as defined in the
Public Improvement Agreement). For all Public Improvements or portions thereof in compliance,
the Issuer will, within three business days, execute and deliver to the Trustee a Disbursement
Request (as defined in the Public Improvement Agreement) which shall entitle the Developer to
receive a disbursement from the Bond Proceeds of the Series 2004 Bonds for the Budgeted Amount
(as defined in the Public Improvement Agreement) for the completed portion of the Public
Improvements. If,in the Issuer's reasonable opinion,the Public Improvements or portion thereof are
not in compliance with the Construction Plans,the Issuer,within five business days of the Request
for Payment, will notify the Developer in writing of the reasons that the Public Improvements or
portion thereof are not in compliance with the Construction Plans. Such notice will contain a
reasonably detailed explanation of the reasons the Public Improvements or portion thereof are not in
compliance. The Developer shall proceed to cure any defect,and shall then resubmit the Request for
Payment pursuant to the procedure described above. The Developer is entitled to receive payment
for the actual costs incurred up to the total Budgeted Amount for the Public Improvements.
Deposit to Special Redemption Account. The City has agreed to deposit the first[$521,000]
received from Recovery and Recapture monies due the Developer pursuant to the Annexation
Agreement to the Special Redemption Account of the Bond and Interest Fund created pursuant to the
Indenture.
30
Security. Pursuant to Section 3.8 of the Public Improvement Agreement,no security shall be
required for that portion of the cost of the Public Improvements that are paid,or to be paid,from the
proceeds from the sale of the Series 2004 Bonds.
THE DEVELOPER
Ownership
Three(3)separate LLC's have been established to acquire 1,036 acres in Kendall County as
follows:
LLCs Acres
MPI-2 Yorkville North LLC 311
MPI-2 Yorkville Central LLC 550
MPI-2 Yorkville South I LLC 175
1.036
Each LLC is equally owned by Moser Enterprises,Inc.(Moser),Pasquinelli Futures I,LLC
(Pasquinelli) and Melvin Isenstein (Isenstein).
PROPOSED DEVELOPMENT
The information in this section has been provided by the Developer and has not been
independently verified or relied upon by the United City of Yorkville. The United City of Yorkville
makes no representation as to its accuracy or completeness.
The Developer intends to develop a park, residential and commercial structures as well as
other improvements on the Site (the "Development"). No assurance can be given that the
Development will occur as described below or that it will occur in a timely manner or in the
configuration described herein. The Bonds and the Special Tax are not personal obligations of the
Developer. The Bonds are secured solely by the Special Tax and certain other amounts on deposit
with the Trustee. See SECURITY FOR THE SERIES 2004 BONDS."
Location
The Site has regional visibility from well traveled east/west roads,including Galena Road to
the north and Route 34 to the south. The Site is bisected by Kennedy Road,Bristol Ridge Road and
Mill Road,which provides local visibility.
The Site is one-mile west of Orchard Road and forms the municipal boundary between the
United City of Yorkville and the Village of Oswego to the east. Also,the Site borders the Village of
Montgomery to the north of Galena Road. Blackberry Oaks Golf Club is located on Kennedy Road
across from the Site.
31
Development Plan and Timing
The Development has three (3)primary areas as follows:
Dwelling
•d Units Ac�
North N/1 -N/5 1,125 311
Central N/6 -N/16 1,245 590
South N17 &N/18 276 175
2.646 1 036
THE ISSUER
General
The United City of Yorkville was established in 1836 and originally consisted of two towns
north and south of the Fox River with separate governments. In 1957,the two towns were combined
and one government was formed. The government is a Mayor/City Council structure with the Mayor
and eight Aldermen each elected to four-year terms.
The Issuer is located on the Fox River approximately 45 miles southwest of downtown
Chicago. It is located near Interstate 88,which provides access to Chicago,and can also be reached
via Interstate 55. The Issuer is the county seat in Kendall County, Illinois and is comprised of
approximately 6,100 citizens. The major employers include: Amurol Confections,Caterpillar,and
Waubonsee Community College SD No. 516.
City Government and Services
The Mayor,Aldermen, City Clerk and City Treasurer are each elected to a four-year term.
The City Council consists of the Mayor and eight Alderman. Two Alderman are elected from each
of the Issuer's four wards.
The Issuer is served by the Bristol/Kendall Fire Protection District which carries a Protection
Class 6 and maintains a 24 hour paramedic unit. The Police Department has eighteen full-time
officers(including 1 chief, l lieutenant,and 4 sergeants),and emergency medical service is available
24 hours a day.
Transportation
The Issuer is close to many highways. The three Interstate highways are Interstate 55 (1-55),
Interstate 80 (I-80) and Interstate 88 (I-88). The Issuer is intersected by Illinois Routes 47 and 34.
32
O'Hare and Midway Airports are approximately 40 miles northeast from the Issuer. The
closest airport, Aurora Municipal Airport, is approximately ten miles north in Sugar Grove. Their
longest runway is 5,100 feet. The runway is lighted. Additionally,the airport has aircraft tiedowns,
hangar,power plant repair, air frame repair and navigator aids. They also have freight,charter and
helicopter services.
The nearest railroad that serves the Issuer is the Burlington Northern Santa Fe, part of the
Metra commuter line, located in nearby Aurora.
Community Life
The Issuer contains approximately 500 acres of parks with amenities like picnic areas, a
gazebo,recreational fields,golf and forest preserves. 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.
Yorkville Public Library has over 22,000 volumes and is one of the 40 members of the
Heritage Trail Library System. They provide recreational reading and information requests. The
library has recently improved its ability to research current topics through the addition of a CD-ROM
full-text magazine index, with more than 10,000 articles of interest published over the past three
years.
Two hospitals and several clinics in Aurora serve the Issuer. The two hospitals,Rush/Copley
Medical Center and Sandwich Community Hospital,are approximately 15 miles away. There are a
total of 25 doctors and 3 dentists in the community.
Education
The educational facilities in the area include a community unit school district comprising two
elementary schools, one junior high school, one high school; one community college; and one
university. Yorkville High School has a staff of some 48 teachers and some 675 students. There is a
two-year junior college in Sugar Grove (Waubonsee Community College District Number 516), a
four-year university in Aurora(Aurora University)and a four-year university in DeKalb (Northern
Illinois University).
Waubonsee Community College District Number 516(the"College")offers a wide variety of
transfer,vocational,continuing and community education,children's and corporate development and
training classes. It also offers a comprehensive educational program designed to serve all college
district residents at a modest cost. In addition to 24 programs designed to transfer to senior
institutions,the college offers occupational-oriented programs ranging in length from one semester
to two years. The College has recently opened a state-of-the-art academic computing center that
houses eight classrooms and a 120 personal computer work station open lab. The open lab is
available for use by community members for a small user fee.
Community Unit School District Number 115 has just implemented a new computer
curriculum,innovative interdisciplinary projects and advanced team building and support programs
for students and staff.
33
BONDHOLDERS' RISKS
The risk factors discussed below should be considered by potential investors in evaluating an
investment in the Bonds. The discussion of risk factors is not,and is not intended to be,exhaustive.
Early Redemption
Pursuant to the terms of the Series 2004 Indenture and the Credit Facility Agreement, the
Series 2004 Bonds are subject to redemption prior to maturity. See"THE SERIES 2004 BONDS --
Redemption of the Series 2004 Bonds."
Credit Facility
There can be no assurance that the credit of LaSalle Bank National Association,which has
issued the initial Credit Facility, will continue at its current level. A decline in the credit rating of
LaSalle Bank National Association could result in a decline in the rating assigned to the Series 2004
Bonds. See
Bonds at the time of their issuance as well as in the
RDmarket
LASALLE Series
BANK04NATIONAL
"APPENDIX A -- INFORMATION REG A
ASSOCIATION."
Certain Matters Relating to Security for the Series 2004 Bonds
Enforceability of the Credit Facility. The United States District Court for the District of
Arizona, in W sko Investment Co.v. Great American Bank,
131 B.R. 146 (1991) (the "Opinion"),
affirmed a bankruptcy court's earlier order enjoining the payment of a letter of credit based on the
equitable powers granted to the bankruptcy court under Section 105 of the United States Bankruptcy
Code. The Opinion and other court decisions discussing the enforceability of letters of credit
indicate that it is possible that a court could enjoin a drawing by the Trustee under the Credit Facility
or the payment by the Trustee to Holders of Series 2004 Bonds of amounts drawn under a Credit
Facility under various circumstances, including the bankruptcy, insolvency or similar event with
respect to the Borrower.
Amendments to the Series 2004 Indenture. Certain amendments to the Series 2004 Indenture
may be made with the consent of the Holders of more than 50%of the aggregate principal amount of
the Series 2004 Bonds then outstanding,with the prior written
ers of the Series e Cr dit Entity. Such
amendments may adversely affect the security of the H
Tax Exempt Status; Continuing Legal Requirements
As described more fully in the Section herein interest ton the Series 2004 BoOnds,to failure
ecome
comply with certain legal requirements may cause
subject to Federal income taxation, either fr the date of the happening of certain events or
retroactive to the date of issuance of the Series
Series 2004 Bond Rating
There is no assurance that the rating, if any, assigned to 004 Bo ds will no be
lowered or withdrawn at any time, which could adversely affect the
marketability of,the Series 2004 Bonds. Additionally,the ratings assigned to the Series 2004 Bonds
are only in effect during such time as the Series 2004 Bonds are bearing interest at the Weekly Rate
or the Monthly Rate. If the Issuer elects to convert to an Adjustable Rate or Fixed Rate,the Issuer
must obtain a letter from a Rating Agency setting forth the short-term and long-term ratings on the
Series 2004 Bonds. The ratings assigned to heth Bonds urrent rating on the Series 2004
Rate or Adjustable Rate may or may not be the same as
Bonds.
SUMMARY OF CERTAIN PROVISIONS OF THE SERIES 2004 INDENTURE
The following is a summary of certain provisions of the Series 2004 Indenture. This
summary does not purport to be comprehensive or definitive, and it is subject to all the terms and
provisions of the Series 2004 Indenture, to which reference is hereby made. Certain provisions of
the Series 2004 Indenture have been summarized elsewhere in this Official Statement,including in
the Section entitled "THE SERIES 2004 BONDS."
Provision for the Series 2004 Bonds
The Series 2004 Indenture provides 2004 s 004 Bonhdsras described and tender and other terms pertaining to the rights of Holders of the Sere
in the Section entitled "THE SERIES 2004 BONDS" above.
Defaults and Acceleration Under the Series 2004 Indenture
The occurrence of any of the following events is a default (an "Event of Default") with
respect to the Series 2004 Bonds under the terms of the Series 2004 Indenture:
(1) Default in the due and punctual payment of the interest on any of the Series 2004
Bonds;
(2) Default in the due and punctual payment of the principal of or premium on any of the
Series 2004 Bonds, whether at maturity or otherwise;
(3) Default in the payment of the Purchase Price of any Series 2004 Bonds tendered or
deemed tendered for purchase by the owner thereof in accordance with the Series 2004 Indenture;
(4) Default in performance or observance of any other of the covenants, promises,
stipulations,agreements or conditions on the part of the Issuer contained in the Series 2004 Indenture
for the benefit of the Series 2004 Bonds, and written consent of the Credit Entity, and the
continuation thereof for 30 days after receipt of such notice,unless such default cannot be corrected
within such period,in which event,it shall not be considered an Event of Default if corrective action
35
is instituted by the Issuer within the applicable period and delinquency period until the default is
corrected;
(5) Receipt by the Trustee of written notice from the Credit Entity of an Event of Default
under the Credit Facility Agreement and directing the Trustee to accelerate the Series 2004 Bonds;
and
(6) Receipt by the Trustee of written notice from the Credit Entity resulting in the failure
of the Credit Facility to be reinstated following an interest draw and directing the Trustee to
accelerate the Series 2004 Bonds.
If an Event of Default with respect to any Series 2004 Bonds at the time outstanding occurs
and is continuing,then and in each and every such case, unless the principal of all the Series 2004
Bonds shall have already become due and payable, either the Trustee or the Holders of more than
fifty percent (50%) in aggregate principal amount of the Series 2004 Bonds then outstanding, by
notice in writing to the Issuer(and to the Trustee and the Issuer if given by Holders),but only with
the prior written approval of the Credit Entity(upon the occurrence of an Event of Default under(4)
above),or the Trustee,at the direction of such Credit Entity,shall declare the principal amount of all
the Series 2004 Bonds to be due and payable immediately,and upon any such declaration the same
shall become and shall be immediately due and payable, anything in the Series 2004 Indenture, a
supplemental indenture or in the Series 2004 Bonds contained to the contrary notwithstanding.
Anything to the contrary notwithstanding,without the prior consent of the Credit Entity or any other
party,the Trustee shall immediately,and in all events prior to the expiration of the Credit Facility,
declare the principal amount of all the Series 2004 Bonds to be due and payable immediately if the
Event of Default occurs under(1),(2),(3),(5),or(6)above. Immediately upon such declaration,the
Trustee shall draw on the Credit Facility pursuant to its terms and upon such declaration,interest on
the Series 2004 Bonds shall cease to accrue. The foregoing provisions are,however, subject to the
condition that if,at any time after the principal amount of the Series 2004 Bonds shall have been so
declared due and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided,the Issuer shall pay or shall deposit with
the Trustee, but only from the sources herein described, a sum sufficient to pay all matured
installments of interest upon the Series 2004 Bonds and the principal of and premium,if any,on any
and all Series 2004 Bonds which shall have become due otherwise than by acceleration(with interest
on overdue installments of interest,to the extent that payment of such interest is enforceable under
applicable law, and on such principal and premium,if any,at the rate of interest borne by the Series
2004 Bonds, to the date of such payment or deposit) and the reasonable expenses of the Trustee
(including reasonable attorneys' fees), and any and all Events of Default under the Series 2004
Indenture or the supplemental indenture, other than the nonpayment of principal of or premium, if
any, or accrued interest on Series 2004 Bonds which shall have become due by acceleration, shall
have been remedied, then and in every such case the Holders of more than fifty percent (50%) in
aggregate principal amount of the Series 2004 Bonds then outstanding,by written notice to the Issuer
and to the Trustee, may waive all Events of Default with respect to the Series 2004 Bonds and
rescind and annul such declaration and its consequences,provided the Credit Entity has consented in
writing to such rescission and annulment (and a notice sent pursuant to (5) or (6) above has been
rescinded) and the Credit Facility is in full force and effect and has been reinstated in full, but no
36
such waivers or rescissions and annulments shall extend to or shall affect any subsequent Event of
Default, or shall impair any right consequent thereon.
Funds and Accounts
Bond and Interest Fund. There is created and established pursuant to the Series 2004
Indenture a"Special Service Area Number 2004-106 Total Grande Reserve Variable Rate Demand
Special Tax Bond and Interest Fund (the Bond and Interest Fund"), which shall be held by the
Trustee and which shall be used for the purpose of paying the principal and redemption price of and
interest on the Series 2004 Bonds and of retiring such Series 2004 Bonds at or prior to maturity at the
times and in the manner provided therein and to provide moneys to reimburse the Credit Entity to the
extent principal of, and interest and redemption premium on the Series 2004 Bonds is paid with
amounts made available under the Credit Facility.
There is created and established in the Bond and Interest Fund four accounts called the
"Credit Account," the "General Account," the "Capitalized Interest Account" and the "Special
Redemption Account." There shall be deposited into the respective accounts of the Bond and
Interest Fund:
(i) To the Capitalized Interest Account, Series 2004 Bond proceeds in the
amount specified in the Series 2004 Indenture(amounts estimated to provide
for the payment of interest on the Series 2004 Bonds through March 1,2007);
(ii) To the Credit Account, all payments received pursuant to a draw on the
Credit Facility to pay principal of,premium,if any(if premium is covered by
the Credit Facility), or interest on the Series 2004 Bonds;
(iii) To the General Account,the Special Tax collected by the Issuer and any other
amounts received by the Trustee for the payment of principal of,premium,if
any,and interest on the Series 2004 Bonds(other than amounts deposited to
the Special Redemption Account);
(iv) To the Special Redemption Account, the prepayments of Special Tax as
specified in the Series 2004 Indenture and described below.
(v) To the Special Redemption Account,the Recapture Fees and Recoveries as
specified in the Series 2004 Indenture and described below.
General Account. When collected,the Special Tax and the Foreclosure Proceeds,including
any interest and penalties collected in connection with such Special Tax or Foreclosure Proceeds,
shall be placed in the General Account of the Bond and Interest Fund. In addition,proceeds received
by the Issuer in connection with a condemnation of any of the Special Services or any other property
owned by,or dedicated to,the Issuer within the Special Service Area and allocable to the Series 2004
Bonds as determined by the Consultant shall be deposited in the Bond and Interest Fund to the extent
not used by the Issuer to rebuild the Special Services. Moneys deposited in the General Account of
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 Issuer. All interest and other investment
37
earnings on the Bond and Interest Fund shall become,when received,a part of the Bond and Interest
Fund,but this paragraph shall not prevent the Issuer from utilizing amounts in the Bond and Interest
Fund for any purpose related to the Special Service Area(other than amounts on deposit in the Credit
Account which shall be used solely to pay principal of and interest and redemption premium on the
Series 2004 Bonds),as long as doing so shall not result in the amounts in the General Account of the
Bond and Interest Fund being insufficient to pay principal of and interest and redemption premium
on the Series 2004 Bonds as they come due or to reimburse the Credit Entity for such payments.
When the amount of condemnation proceeds deposited to the General Account of the Bond and
Interest Fund equals$1,000 or more,Series 2004 Bonds in a principal amount equal to such amount
shall be redeemed pursuant to the Series 2004 Indenture on the next Interest Payment Date but only
upon the written direction of the Issuer with the written consent of the Credit Entity.
Amounts deposited in the Bond and Interest Fund (other than amounts on deposit in the
Credit Account,which shall be used solely to pay principal of and interest and redemption premium
on the Series 2004 Bonds)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 Series 2004
Bonds or to reimburse the Credit Entity for such purpose, or for any other purpose related to the
Special Service Area, as set forth in the Series 2004 Indenture,but may be used for purposes other
than the payment of the principal of and interest and redemption premium on the Series 2004 Bonds
only with the written consent of the dIndenturexandt described in theeimmediat immediately su E eednng
Fund as set forth in the Series 2004
paragraph.
On the first Business Day of each month, after the Trustee has determined that sufficient
amounts are on deposit in the General Account of the Bond and Interest Fund to pay Bond Service
Charges for the current month or to reimburse the Credit Entity for such payment,the Trustee,at the
written direction of the Issuer, shall transfer an amount from the General Account of the Bond and
Interest Fund to the Administrative Expense Fund which the Issuer 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 current
month.
Special Redemption Account. All prepayments of Special Tax made in accordance with the
Special Tax Report and the first $ of Recapture Fees and Recoveries collected by the
Issuer or the Developer shall be deposited in the Special Redemption Account of the Bond and
Interest Fund. Prepayments of Special Tax, all Recapture Fees and Recoveries deposited in the
Special Redemption Account shall be used exclusively to redeem Series 2004 Bonds pursuant to the
Series 2004 Indenture or to reimburse the Credit Entity for payment of the redemption price of Series
2004 Bonds from amounts made available under the Credit Facility except as described in the last
sentence of this paragraph. Any amounts contained in the Special Redemption Account on the final
maturity date of the Series 2004 Bonds shall be used to pay outstanding debt service on the Series
2004 Bonds or to reimburse the Credit Entity for such payment. After payment of all Series 2004
Bonds outstanding and payment of all amounts owed to the Credit Entity under the Credit Facility
Agreement,any amounts on deposit in the Special Redemption Account shall be rebated to the last
taxpayer of record. Investment earnings on amounts on deposit in the Special Redemption Account
shall be transferred monthly to the General Account. The foregoing notwithstanding,any amounts
38
up to $_of the moneys deposited into the Special Redemption Account may, upon the
Trustee's receipt of consent of the Credit Entity,be transferred to the Improvement Fund and used to
pay the cost of Special Services.
Priority of Payments from the Bond and Interest Fund. Payments from the Bond and Interest
Fund shall be made as follows:to the extent of interest due on any Interest Payment Date,for so long
as any moneys remain therein, first from the Capitalized Interest Account; and as to principal,
premium(if provided for under the terms of the Credit Facility)and,to the extent moneys on deposit
in the Capitalized Interest Fund are not sufficient to pay interest then due on the Series 2004 Bonds,
from the Credit Account. No moneys from any source other than the proceeds of a draw on a Credit
Facility will be deposited into the Credit Account. The Issuer shall not have any interest in the
Credit Account, the General Account, the Capitalized Interest Account, the Special Redemption
Account or the moneys and Permitted Investments therein, all of which shall be held in trust by the
Trustee for the sole benefit of the Holders,except as otherwise expressly set forth in the Series 2004
Indenture. Moneys set aside from time to time with the Trustee and Paying Agent for the payment of
such principal,redemption price and interest shall be held in trust for the Holders of the Series 2004
Bonds in respect of which the same shall have been so set aside. Until so set aside for the payment
of principal,redemption price or interest as aforesaid,all moneys in the Bond and Interest Fund shall
be held in trust for the benefit of the Holders of all Series 2004 Bonds at the time outstanding equally
and ratably and without any preference or distinction as between Series 2004 Bonds.
Capitalized Interest Account. In addition to the disbursements from the Capitalized Interest
Account described in the preceding paragraph, upon the receipt by the Trustee of a Disbursement
Request,the Trustee is also authorized to apply moneys from the Capitalized Interest Account to the
payment of fees of the Credit Entity. Any moneys remaining in the Capitalized Interest Account
after 1, 20_shall be transferred to the Bond and Interest Fund or upon receipt of the
prior written consent of the Credit Entity and the Issuer, to the Improvement Fund to be used to
acquire, construct, install and perform additional Special Services.
Improvement Fund. There is created and established under the Series 2004 Indenture a
separate and special fund of the Issuer designated as "The Special Service Area Number 2004-106
Total Grande Reserve Variable Rate Demand Special Tax Bonds, Improvement Fund" (the
"Improvement Fund"). Moneys in the Improvement Fund shall be disbursed solely for the payment
of the cost of constructing,installing and performing the Special Services. Disbursements from the
Improvement Fund shall be made by the Trustee upon receipt of a request of the Issuer
"Disbursement Request")which shall(i)set for the amount required to be disbursed,the purpose for
which the disbursement is to be made,that such Special Services have been completed in accordance
with the terms of the Public Improvement Agreement,that the disbursement is for a Special Service,
and payment instructions to the Trustee for the amount to be disbursed; 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 on which an Authorized Issuer Representative files with the Trustee a
certificate stating the Special Services have been completed (the "Completion Date"),the Trustee
shall transfer all amounts remaining in the Improvement Fund to the General Account of the Bond
and Interest Fund to be applied to the redemption of the Series 2004 Bonds pursuant to the Series
2004 Indenture;provided,however,that any amounts so transferred which do not equal$1,000 or an
integral multiple of$1,000 may be applied to pay interest owing on the Series 2004 Bonds on the
39
next succeeding Interest Payment Date, and provided further that upon the written direction of an
Authorized Issuer Representative, the Trustee shall transfer to the Capitalized Interest Account an
amount specified by the Issuer upon the delivery to the Trustee of an opinion of Bond Counsel to the
effect that the transfer of such amounts will not adversely affect the exclusion from gross income of
interest on the Series 2004 Bonds for Federal income tax purposes and is permitted by Illinois law.
Any moneys transferred to the Improvement Fund from the Special Redemption Account as
described under the subcaption"Special Redemption Account"above remaining in the Improvement
Fund on_ 1, 20_shall be transferred to the Special Redemption Account of the Bond
and Interest Fund and used to redeem Bonds as described under such subcaption. Notwithstanding
the provisions summarized elsewhere, earnings Bond and Interest Fund, quarterly oratsuch other
Improvement Fund shall be transferred to
regular interval chosen by the Trustee, and shall not be attributed to the Improvement Fund.
Cost of Issuance Fund. There is created and established with the Trustee a separate and
special fund of the Issuer which is designated"The Special Service AreaNumber 2004-106 Variable
Rate Demand Special Tax Bonds, Cost of Issuance Fund" (the "Cost of Issuance Fund"). The net
proceeds received by the Issuer from the sale of the Series 2004 Bonds not otherwise deposited to the
Improvement Fund, the Administrative Expense Fund or the Bond and Interest Fund shall be
deposited with the Trustee in the Cost of Issuance Fund. Amounts in the Cost of Issuance Fund shall
be used to pay issuance costs on the Issuance Date as set forth in a schedule provided by the Issuer
on the Issuance Date or upon filing with the Trustee a written requisition of the Authorized Issuer
Representative. Any moneys remaining shall be tra sanferred date which is six
t Funds
after the date of issuance of the Series 2 004 Bonds
Administrative Expense Fund. There is created and established pursuant to Series 2004
Indenture with the Trustee a separate and special fund of the Issuer designated as "The Special
Service Area Number 2004-106 Total Grande Reserve Variable Rate Demand Special Tax Bonds,
Administrative Expense Fund" (the "Administrative Expense Fund"). Amounts in the
Administrative Expense Fund shall be withdrawn by the Trustee and paid to the Issuer or its order
upon receipt by the Trustee of a request 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. On or
before December 15 of each year,but only upon request of the Issuer,the Trustee shall withdraw any
amounts then remaining in the Administrative Expense Fund that have not been allocated to pay
Administrative Expenses incurred but not yet paid, and which are not otherwise encumbered, and
transfer such amounts to the General Account of the Bond and Interest Fund. Amounts on deposit in
the Administrative Expense Fund are not part of the Trust Estate and are not pledged to the payment
of the Series 2004 Bonds.
Provisions in the Series 2004 Indenture Relating to the Credit Facility
While the Series 2004 Bonds are secured by a Credit Facility,the payment of the Series 2004
Bond Service Charges on,and the Purchase Price of,the Series 2004 Bonds will be secured by such
Credit Facility.
Drawing on a Credit Facility to Pay Bond Service Charges. Except as provided in the
following sentence,whenever the Series 2004 Bonds are secured by a Credit Facility,the Trustee is
40
required to draw on such Credit Facility in the amounts necessary to pay Bond Service Charges
therefor not later than 12:00 noon, Chicago time, on the Business Day preceding the day on which
payment of such amounts are required to be made to Series 2004 Bondholders under the Series 2004
Indenture. The Trustee shall apply funds on deposit in the Capitalized Interest Account,which were
deposited in such account to pay interest on the Series 2004 Bonds during the period of construction
of the Special Services, to pay interest on the Series 2004 Bonds so long as any moneys remain in
such account.
Drawing on a Credit Facility to Pay Purchase Price. At or before 9:30 A.M., Chicago time,
on the date fixed for purchase of Series 2004 Bonds,the Trustee is required to draw under the Credit
Facility for an amount equal to the difference between the total principal amount of Series 2004
Bonds tendered on such date and the amount of remarketing proceeds received from the Remarketing
Agent on the purchase date, plus an amount corresponding to accrued and unpaid interest for such
Series 2004 Bonds that have not been remarketed. By 1:30 P.M., Chicago time, on the date set for
purchase of tendered Series 2004 Bonds and upon receipt by the Trustee of 100% of the aggregate
Purchase Price of such tendered Series 2004 Bonds, the Trustee shall pay the Purchase Price. If
sufficient funds are not available for the purchase of all tendered Series 2004 Bonds, no purchase
will be consummated.
Resignation by, or Removal of, the Trustee
The Trustee may resign at any time from the trusts created under the Series 2004 Indenture by
giving thirty (30) days' written notice of its resignation to the Issuer, the Remarketing Agent, the
Credit Entity,and all Holders of Series 2004 Bonds. Such resignation shall not take effect until the
appointment of a successor Trustee.
The Trustee may be removed at any time by an instrument or concurrent instruments in
writing delivered to the Trustee, the Issuer, and the Credit Entity and signed by the owners of a
majority in aggregate principal amount of the Series 2004 Bonds then outstanding. The Issuer may
remove the Trustee at any time with the consent of the Credit Entity,except during the existence of
an Event of Default. Any removal shall not take effect until the appointment of a successor Trustee.
Enforcement of Remedies
Upon the happening and continuance of any Event of Default, the Trustee may proceed to
protect and enforce its rights and any rights of the Issuer by such suits, actions or proceedings in
equity or at law, either for the specific performance of any covenant or contract contained in the
Series 2004 Indenture or in aid or execution of any power granted in the Series 2004 Indenture or for
the foreclosure on the security held for the benefit of the Series 2004 Bonds under the Series 2004
Indenture, or for any proper, legal or equitable remedy as the Trustee shall deem most effectual to
protect and enforce the rights aforesaid.
If an Event of Default shall have occurred with respect to the Series 2004 Bonds, and if
requested in writing so to do by the Holders of more than fifty percent(50%)in aggregate principal
amount of the Series 2004 Bonds then outstanding,the Trustee shall be obligated to exercise one or
41
more of the rights and powers conferred by the Series 2004 Indenture,as the Trustee,being advised
by counsel, shall deem most expedient in the interests of the Holders of the Series 2004 Bonds.
Notwithstanding the foregoing provisions, if a Credit Facility shall then be in effect with
respect to the Series 2004 Bonds, the Trustee shall not, without the prior written consent of the
Credit Entity,exercise any right or remedy under the Series 2004 Indenture with respect to the Series
2004 Bonds to accelerate the indebtedness thereunder so long as(i)the Credit Entity obligated under
the Credit Facility then in effect with respect to the Series 2004 Bonds is not in default thereunder
and will be making the required payments with respect to principal of and interest on the Bonds and
Purchase Price payments in accordance with such Credit Facility; or (ii) such Credit Entity is the
owner of all the affected Series 2004 Bonds or all such Series 2004 Bonds are Purchased Bonds,
provided that this restriction shall in no way limit the right of the Trustee to apply moneys on deposit
under the Series 2004 Indenture to the payment of principal of,premium,if any,and interest on,the
Series 2004 Bonds or the right of the Trustee or any Series 2004 Bondholder to make a claim for
payment under a Credit Facility or take any other action to enforce the payment and performance of
the Issuer's obligations under the Series 2004 Indenture.
Right of Credit Entity to Direct Proceedings
Under the Series 2004 Indenture, the Credit Entity shall have the right, at any time, by an
instrument or instruments in writing executed and delivered to the Trustee to direct the method and
place of conducting all proceedings to be taken in connection with the enforcement of the terms and
conditions of the Series 2004 Indenture with respect to an Event of Default,or for the appointment of
a receiver or any other proceedings thereunder, provided that such direction will not be otherwise
than in accordance with the provisions of law and of the Series 2004 Indenture;provided,that if the
Credit Entity has failed to honor a properly presented and conforming draw under the Credit Facility,
the owners of the majority in aggregate principal amount of the Series 2004 Bonds then outstanding,
will have the rights, subject to the conditions, described above.
Application of Moneys; Priority of Payments
All moneys received from draws on the Credit Facility shall be applied exclusively to the
payment of principal of, premium (if the Credit Facility provides for the payment of such), if any,
interest on the Series 2004 Bonds (other than Purchased Bonds) and the Purchase Price. All other
moneys received by the Trustee will be applied by the Trustee after payment of the costs and
expenses of the proceedings resulting in the collection of such moneys (including reasonable
attorneys' fees) and of the charges, expenses and liabilities incurred and advances made by the
Trustee, as follows:
(1) Unless the principal of all the Series 2004 Bonds shall have become or been declared
due and payable:
FIRST: To the payment of the persons entitled thereto of all installments of
interest then due on the Series 2004 Bonds in the order of the maturity of such
installments, other than Issuer Bonds which are not Purchased Bonds, and, if the
amount available shall not be sufficient to pay in full any installment, then to the
42
payment thereof, ratably, according to the amounts due on such installment, to the
persons entitled thereof,without any discrimination or preference;
SECOND: To the payment to the persons entitled thereto of the unpaid
principal of any of the Series 2004 Bonds which shall have become due(other than
Series 2004 Bonds matured for the payment of which moneys are held pursuant to the
provisions of the Series 2004 Indenture and other than Issuer Bonds which are not
Purchased Bonds) and Purchase Price, and in the order of their due dates, if the
amount available shall not be sufficient to pay in full Series 2004 Bonds due on any
particular date, then to the payment thereof ratably, according to the amount of
principal due on such date,to the persons entitled thereto without any discrimination
or privilege;
THIRD: To be held for the payment to the persons entitled thereto as the
same shall become due of the principal of and interest on the Series 2004 Bonds
(other than Issuer Bonds which are not Purchased Bonds) which may thereafter
become due at maturity and, if the amount available shall not be sufficient to pay in
full such Series 2004 Bonds due on any particular date, together with interest then
due and owing thereon, payment on the Series 2004 Bonds shall be made ratably
according to the amount of principal due on such date to the persons entitled thereto
without any discrimination or privilege;
FOURTH: To the payment on behalf of the Issuer of all of its obligations
under the Credit Facility Agreement as shall be certified in writing by the Credit
Entity to the Trustee;
FIFTH: To be held for the payment of principal and interest on Issuer Bonds
which are not Purchased Bonds; and
SIXTH: Any balance remaining,to be paid to the Issuer.
(2) If the principal of all Series 2004 Bonds shall have become or been declared due and
payable then, first,to the payment of the principal and interest then due and unpaid
upon the Series 2004 Bonds (other than Issuer Bonds which are not Purchased
Bonds)and Purchase Price without preference or priority of principal over interest or
of interest over principal,or of any installment of interest over any other installment,
or of any such Series 2004 Bond over any other such Series 2004 Bond, ratably,
according to the amounts due respectively for principal and interest,to the persons
entitled thereto without any discrimination or preference, and thereafter to the
payment on behalf of the Issuer of all of its obligations under the Credit Facility
Agreement, and thereafter to the payment of Issuer Bonds which are not Purchased
Bonds, with any balance remaining to the Issuer.
(3) If the principal of all the Series 2004 Bonds shall have been declared due and
payable, and if such declarations shall thereafter have been rescinded and annulled
under the Series 2004 Indenture then, subject to the provisions of(1) above, in the
43
event that the principal of all the Series 2004 Bonds shall later become due or be
declared due and payable, the moneys shall be applied in accordance with the
provisions of(2) above.
Whenever moneys are to be applied as described above pursuant to the provisions of the Series 2004
Indenture, such moneys shall be applied at such times, and from time to time, as the Trustee shall
determine, having due regard to the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the future. Whenever the
Trustee shall apply such funds,it shall fix the date(which shall be an Interest Payment Date unless it
shall deem another date more suitable) upon which such application is to be made and upon such
date interest on the amounts of principal to be paid on such dates shall cease to accrue;provided that
if the Trustee has declared the principal amount of all Series 2004 Bonds to be due and payable
immediately pursuant to the Indenture, then interest shall cease to accrue on the date of such
declaration. The Trustee shall give such notice as it may deem appropriate of the deposit with it of
any such moneys and of the fixing of any such date,and shall not be required to make payment to the
owner of any Series 2004 Bond until such Series 2004 Bond shall be presented to the Trustee for
appropriate endorsement or for cancellation if fully paid.
Rights and Remedies of Holders
No owner of any Series 2004 Bond shall have any right to institute any suit, action or
proceeding at law or in equity for the enforcement of the Series 2004 Indenture or for the execution
of any trust thereunder or for the appointment of a receiver or any other remedy thereunder,unless
(i) an Event of Default with respect to the Series 2004 Bonds held by such Owner has occurred of
which the Trustee has been notified as provided in the Series 2004 Indenture, or of which it is
deemed to have notice, (ii)the owners of not less than twenty-five (25%) percent in aggregate
principal amount of Series 2004 Bonds then outstanding shall have made written notice to the
Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers
granted under the Series 2004 Indenture or to institute such action, suit or proceeding in their own
name or names, (iii) they have offered to the Trustee indemnity as provided in the Series 2004
Indenture,and(iv) the Trustee shall thereafter fail or refuse to exercise the powers granted under the
Series 2004 Indenture, or to institute such action, suit or proceeding in its own name.
Waivers of Events of Default
The Trustee may at its discretion waive any Event of Default under the Series 2004 Indenture
and its consequences, and shall do so upon the written request of the owners of(i) more than two-
thirds in aggregate principal amount of all the Series 2004 Bonds then outstanding in respect to
which default in the payment of principal or interest,or both,exists,or(ii) more than fifty percent in
aggregate principal amount of all the Series 2004 Bonds then outstanding in the case of any other
Event of Default,provided, however,that there shall not be waived (i) any Event of Default in the
payment of the principal of any outstanding Series 2004 Bonds at the date of maturity, or (ii) any
default in the payment when due of the interest on any such Series 2004 Bonds unless,prior to such
waiver or rescission,all arrears of interest or all arrears of payments of principal or both,when due,
as the case may be,with interest on overdue principal at the rate borne by the Series 2004 Bonds,and
all expenses of the Trustee in connection with such default shall have been paid or provided for,and
44
in case of any such waiver or rescission,or in case any proceedings taken by the Trustee on account
of any such Event of Default shall have been discontinued or abandoned or determined adversely,
then and in every such case the Issuer,the Trustee and the owners of such Series 2004 Bonds shall be
restored to their former positions and rights, respectively, but no such waiver or rescission shall
extend to any subsequent or other default,or impair any right consequent thereon. If there is a Credit
Facility in effect with respect to the Series 2004 Bonds, the Trustee shall not waive any Event of
Default with respect to the Series 2004 Bonds without the prior written consent of the Credit Entity
provided that the Credit Facility provides payment of all principal and interest on the Series 2004
Bonds and the Purchase Price in a timely manner and the Credit Facility is reinstated in full (as
confirmed in writing to the Trustee). With respect to an Event of Default described in clauses (5)or
(6) above under the caption "Defaults and Acceleration Under the Series 2004 Indenture" above
(relating to a direction of acceleration),written notice of reinstatement of the Credit Facility in the
amount of all principal and interest on the outstanding Series 2004 Bonds and the purchase price
must be provided to the Trustee by the Credit Entity and written notice of the rescission by the Credit
Entity of the default under clauses (5)or(6)under said caption must be provided by the Credit Entity
to the Trustee.
Supplemental Series 2004 Indenture Not Requiring Consent of Holders
The Issuer and the Trustee may, with the prior written consent of the Credit Entity but
without consent of, or notice to, any of the Registered Owners of the Series 2004 Bonds,enter into
an indenture or indentures supplemental to the Series 2004 Indenture which shall not be inconsistent
with the terms and provisions of the Series 2004 Indenture for any one or more of the following
purposes:
(1) To cure any ambiguity or formal defect or omission in the Series 2004 Indenture;
(2) To grant to or confer upon the Trustee for the benefit of the Registered Owners of the
Series 2004 Bonds any additional rights,remedies,powers or authority that may lawfully be granted
to or conferred upon the Registered Owners of the Series 2004 Bonds or the Trustee,or to make any
change which,in the judgment of the Trustee,is not to the prejudice of the Registered Owners of the
Series 2004 Bonds;
(3) To subject to the Series 2004 Indenture additional taxes, revenues, properties or
collateral;
(4) To modify, amend or supplement the Series 2004 Indenture or any supplemental
indenture in such manner as to permit its qualification under the Trust Indenture Act of 1939, as
amended, or any similar Federal statute in effect or to permit the qualification of the Series 2004
Bonds for sale under the securities laws of any of the states of the United States of America, and,if
they so determine, to add to the Series 2004 Indenture or any supplemental indenture such other
terms, conditions and provisions as may be permitted by said laws;
(5) To evidence the appointment of a separate Trustee or a Co-Trustee or the succession
of a new Trustee, Remarketing Agent or Paying Agent;
45
(6) To modify, amend or supplement the Series 2004 Indenture or any supplemental
indenture to provide for any modifications on any Mandatory Tender Date; or
(7) To modify,amend or supplement the Series 2004 Indenture with regard to obtaining
or maintaining a rating on the Series 2004 Bonds based on a Credit Facility or Alternate Credit
Facility;provided,however,that such modification,amendment or supplement is not adverse to the
rights of the Registered Owners of the Series 2004 Bonds then outstanding.
(8) To modify,amend or supplement the Series 2004 Indenture in any other manner that
does not materially impair the rights of the Owners of the Series 2004 Bonds or the Trustee upon the
written direction of,or with the prior written consent of the Credit Entity,provided the Credit Entity
is not in default in its obligations under the Credit Facility.
Supplemental Series 2004 Indenture Requiring Consent of Holders
Exclusive of supplemental indentures described above,with the prior written consent of the
Credit Entity,the owners of not less than a majority in aggregate principal amount of the Series 2004
Bonds then outstanding shall have the right,from time to time,anything contained in the Series 2004
Indenture to the contrary notwithstanding,to consent to and approve the execution by the Issuer and
Trustee of such other indenture or supplemental indentures as shall be deemed necessary and
desirable by the Issuer for the purpose of modifying,altering,amending,adding to or rescinding,in
any particular, any of the terms or provisions contained in the Series 2004 Indenture or in any
supplemental indenture;provided,however,that nothing in the Series 2004 Indenture shall permit,or
be construed as permitting, without the consent of the owners of all Series 2004 Bonds then
outstanding (i) a reduction in the principal amount of any Series 2004 Bond or the rate of interest
thereon, or(ii) a privilege or priority of any Series 2004 Bond or Series 2004 Bonds over any other
such Series 2004 Bond or Series 2004 Bonds,or(iii) a reduction in the aggregate principal amount of
the Series 2004 Bonds required for consent to such supplemental indentures, or(iv) the creation of
any lien ranking prior to or on a parity with the lien of the Series 2004 Indenture on the Trust Estate
or any part thereof, or(v) deprivation of the owner of any Series 2004 Bond then outstanding of the
lien created on the Trust Estate, or(vi) an extension of the maturity of the Series 2004 Bonds.
If at any time the Issuer requests the Trustee to enter into any such supplemental indenture,
the Trustee shall,upon being satisfactorily indemnified with respect to expenses,cause notice of the
proposed execution of such supplemental indenture to be given by first-class mail to the owner of
each Bond affected. Such notices shall briefly set forth the nature of the proposed supplemental
indenture and shall state that copies thereof are on file at the principal office of the Trustee for
inspection by all Bondholders. If,within sixty(60)days or such longer period as shall be prescribed
by the Issuer following such notices, the owners of not less than a majority in aggregate principal
amount of the Series 2004 Bonds outstanding at the time of the execution of any such supplemental
indenture shall have consented to and approved its execution, no owner of any Series 2004 Bond
shall have any right to object to any of the terms and provisions contained therein, or the operation
thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain
the Trustee or the Issuer from executing the same or from taking any action pursuant to the
provisions thereof.
46
Release of the Series 2004 Indenture
If the Issuer pays or causes to be paid, or there is otherwise paid or provision for payment
made, to the owners of the Series 2004 Bonds, the principal and interest due or to become due
thereon at the times and in the manner stipulated in the Series 2004 Indenture,and if the Issuer pays
or causes to be paid to the Trustee all sums of money due or to become due according to the
provisions of the Series 2004 Indenture,the Issuer pays or causes to be paid to the Credit Entity all
sums of money due or to become due according to the provisions of the Credit Facility Agreement,
then the estate and rights granted by the Series 2004 Indenture shall cease, determine and be void,
whereupon the Trustee shall cancel and discharge the lien of the Series 2004 Indenture,and execute
and deliver to the Issuer such instruments in writing as shall be required to release such lien and
deliver to the Issuer all of the Trust Estate,except cash or Federal Obligations held by the Trustee for
the payment of the principal of,and premium,if any,and interest on the Series 2004 Bonds and shall
return the Credit Facility to the Credit Entity.
Any Series 2004 Bond shall be deemed to be paid within the meaning of the Series 2004
Indenture when(a)payment of the principal of and premium,if any,on such Series 2004 Bond,plus
interest thereon to the due date thereof, either (i) shall have been made or caused to be made in
accordance with the terms thereof,or(ii) shall have been provided for by irrevocably depositing with
the Trustee,or held by a Depository on behalf of the Trustee pursuant to an investment agreement,in
trust and irrevocably set aside exclusively for such payment, (1)Eligible Funds sufficient to make
such payment without investment and/or(2) Federal Obligations,not subject to redemption prior to
maturity,purchased with Eligible Funds,which Federal Obligations are payable as to principal and
interest in such amounts and at such times as will ensure the availability of sufficient moneys to
make such payment and pay any Purchase Price to the owners of the Bonds, without reinvestment
and (b) all necessary and proper fees, compensation and expenses of the Trustee and the Issuer
pertaining to the Series 2004 Bonds with respect to which such deposit is made shall have been paid
or the payment thereof provided for to the satisfaction of the Trustee. At such times as a Series 2004
Bond shall be deemed to be paid, it shall no longer be secured by or entitled to the benefits of the
Series 2004 Indenture, except for the purposes of any such payment from such moneys or Federal
Obligations.
The Issuer has covenanted that it will make no deposit under the Series 2004 Indenture and
make no use of any such deposit which would cause the Series 2004 Bonds to be treated as arbitrage
bonds within the meaning of the Code. Before accepting or using any deposit, the Trustee may
request the opinion of Bond Counsel as to whether such use or acceptance would cause the Series
2004 Bonds to be so treated and may conclusively rely on such opinion with regard thereto.
SUMMARY OF CERTAIN PROVISIONS OF THE
CREDIT FACILITY AGREEMENT
The following, in addition to information provided elsewhere in this Official Statement,
summarizes certain provisions of the Credit Facility Agreement,to which document,in its entirety,
reference is made for the complete provisions thereof. Any capitalized terms used under this heading
"SUMMARY OF CERTAIN PROVISIONS OF THE CREDIT FACILITY AGREEMENT"and not
47
otherwise defined herein shall have the meaning given to such terms in the Credit Facility
Agreement.
[to be updated]
General
The Issuer and the Developer will enter into the Credit Facility Agreement with the Credit
Entity providing for the issuance of the Credit Facility and the reimbursement of the Credit Entity for
draws upon the Credit Facility. The Credit Facility Agreement also sets forth the various other
conditions, obligations,representations,covenants,events of default and miscellaneous provisions
applicable to the Credit Entity,the Issuer and the Developer. The summary contained herein under
the caption "SUMMARY OF CERTAIN PROVISIONS OF THE CREDIT FACILITY
AGREEMENT" summarizes only certain provisions of the Credit Facility Agreement. See the
information presented under the caption SECURITY FOR THE SERIES 2004 BONDS --Alternate
Credit Facility"for further information concerning the right of the Issuer to cause an Alternate Credit
Facility to be provided in substitution of the Credit Facility(which substitution would result in a new
Credit Facility Agreement with the new Credit Entity and a mandatory tender of the Series 2004
Bonds). Notice of mandatory tender is required to be given to the Holders of the Series 2004 Bonds
at least 30 days prior to such substitution.
Issuance of Credit Facility; Reimbursement Obligations
Under the Credit Facility Agreement,the Credit Entity will issue the Credit Facility to the
Trustee on the date of issuance of the Series 2004 Bonds. The issuance of the Credit Facility is
subject to the satisfaction of certain conditions set forth in the Credit Facility,including the receipt
by the Credit Entity of various certifications,documents and opinions from or on behalf of the Issuer
and the Developer.
Under the Credit Facility Agreement,the Trustee will reimburse the Credit Entity,on the date
of any demand for payment under the Credit Facility,for all amounts that are demanded under the
Credit Facility to pay the principal of,premium,if any,or interest on the Series 2004 Bonds. In the
event that there are insufficient funds for the Trustee to reimburse the Credit Entity,the Developer
agrees to reimburse the Credit Entity for all amounts that are demanded under the Credit Facility
immediately upon payment by the Credit Entity of any demand on the date of such payment. If the
Developer does not make such reimbursement on such date, such reimbursement obligation shall
bear interest at the rate specified in the Credit Facility Agreement.
For demands for payment on the Credit Facility to pay the purchase price of Series 2004
Bonds optionally or mandatorily tendered and assuming,at the time of such demand for payment,no
event of default under the Credit Facility has occurred and is then continuing, the Issuer and the
Developer is required to reimburse the Credit Entity for the amount paid under the Credit Facility
(the"Liquidity Drawing"). Upon the occurrence of certain events,Liquidity Drawings are subject to
earlier payment, in whole or in part, as provided in the Credit Facility Agreement. The Credit
Facility Agreement provides that interest will accrue on outstanding Liquidity Drawings at the rates
specified in the Credit Facility Agreement and will be payable monthly by the Issuer and on any date
48
that the Issuer prepays or is required to pay all or part of a Liquidity Advance, provided that the
Issuer's obligation is limited to amounts pledged to the Trustee pursuant to the Series 2004 Indenture.
If the Issuer fails to reimburse the Credit Entity for an outstanding Liquidity Drawing, due to
insufficient amounts being available under the Series 2004 Indenture, the Developer agrees to
reimburse the Credit Entity the full amount of each Liquidity Drawing made under the Credit Facility
and promises to prepay the Credit Entity the full amount of each Liquidity Drawing upon the earlier
occurrence of the events specified in the Credit Facility Agreement. The failure to pay the Credit
Entity by the Issuer and the Developer could result in an acceleration of the maturity or a mandatory
tender of all of the outstanding Series 2004 Bonds.
Fees and Expenses
Under the Credit Facility Agreement,the Issuer and Developer will pay to the Credit Entity
certain fees for the issuance of the Credit Facility and certain fees,charges and expenses of the Credit
Entity incurred relative to the maintenance,transfer,amendment,drawing upon or other actions with
respect to the Credit Facility or under the Credit Facility Agreement. If the Issuer and Developer fail
to pay these fees,charges and expenses,that failure could result in an acceleration of the maturity or
a mandatory tender of all of the outstanding Series 2004 Bonds.
Certain Covenants of the Issuer and Developer
The Credit Facility Agreement contains certain additional covenants and agreements of
the Issuer and Developer which are summarized herein. The breach of any of these additional
covenants and agreements could constitute an Event of Default under the Credit Facility
Agreement and result in the acceleration of the maturity or a mandatory tender of all of the
outstanding Bonds. The covenants and agreements contained in the Credit Facility Agreement
run only to the Credit Entity and may be waived at any time in the sole discretion of the Credit
Entity or amended at any time upon the agreement of the Developer,the Issuer and the Credit
Entity. Bondholders are not entitled to and should not rely upon any of the covenants and
agreements in the Credit Facility Agreement.
Events of Default and Remedies
If an "Event of Default" under the Credit Facility Agreement occurs and is continuing, the
Credit Entity may, among other things, (i) declare all amounts due under the Credit Facility
Agreement by the Developer immediately due and payable, (ii) give notice of the occurrence of an
event of default to the Trustee directing the Trustee to accelerate the maturity of the Series 2004
Bonds or to cause the Series 2004 Bonds to be mandatorily tendered, thereby causing the Credit
Facility to terminate fifteen days after receipt by the Trustee of such notice, (iii)invoke the right of
set-off in accordance with the Credit Facility Agreement, or(iv) pursue any other action available
under the Credit Facility Agreement,the Series 2004 Indenture,or otherwise available at law or in
equity.
49
"Events of Default" under the Credit Facility Agreement include, among other things, the
following:
(a) any material representation or warranty made by the Issuer or the Developer in the
Credit Facility Agreement (or incorporated herein by reference) or in any of the other Related
Documents(as defined in the Credit Facility Agreement)or in any certificate,document,instrument,
opinion or financial or other statement contemplated by or made or delivered pursuant to or in
connection with the Credit Facility Agreement or with any of the other Related Documents, shall
prove to have been incorrect, incomplete or misleading in any material respect;
(b) any"event of default" shall have occurred,after all applicable cure periods,under any
of the Related Documents or under any of documents entered into between the Developer(or any
affiliate) and LaSalle Bank N.A. as Agent pertaining to the Development Loans (as defined
respectively therein);
(c) failure to pay to the Credit Entity any obligations when and as due hereunder and the
Issuer and Developer shall have failed to cure such default within ten(10)days after written notice
thereof,
(d) default in the due observance or performance by the Developer or the Issuer of any of
their respective covenants set forth herein and the continuance of such default for 30 days after the
earlier of Developer's knowledge thereof or notice thereof to Developer from the Bank; provided,
however,that if such default by its nature cannot reasonably be cured within thirty(3 0)days,then no
Event of Default shall exist hereunder if Developer diligently commences and continue to pursue
such remedy, provided that (x) such default is capable of being cured, (y) such default could not
materially adversely affect repayment of the Obligations,and(z)in no event shall the period within
which Developer may attempt to remedy such default extend beyond ninety(90)days from the date
of the notice relating thereto, or Developer's knowledge thereof;
(e) any material provision of the Credit Facility Agreement or any of the Related
Documents shall cease to be valid and binding, or either of the Issuer and Developer shall contest
any such provision,or the Developer or the Issuer or any agent or trustee on behalf of the Developer
or the Issuer, as the case may be, shall deny that it has any or further liability under the Credit
Facility Agreement or any of the Related Documents;
(f) either of the Issuer and Developer shall (i) have entered involuntarily against it an
order for relief under the United States Bankruptcy Code, as amended, (ii) not pay, or admit in
writing its inability to pay,its debts generally as they become due, (iii)make an assignment for the
benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian,trustee,examiner,liquidator or similar official for it or any substantial part of its property,
(v) institute any proceedings seeking to have entered against it an order for relief under the United
States Bankruptcy Code, as amended,to adjudicate it insolvent,or seeking dissolution,winding up,
liquidation,reorganization,arrangement,marshalling of assets,adjustment or composition of it or its
debts under any law relating to bankruptcy,insolvency or reorganization or relief of debtors or fail to
file an answer or other pleading denying the material allegations of any such proceeding filed against
50
it, (vi)take any action in furtherance of any matter described in parts(i)through(v)above, or(vii)
fail to contest in good faith any appointment or proceeding described in paragraph(g)below;
(g) a custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for either of the Issuer and Developer or any substantial part of its property, or a
proceeding described in paragraph (f)(v) above shall be instituted against either of the Issuer and
Developer and such appointment continues undischarged or any such proceeding continues
undismissed or unstayed for a period of 90 or more days; or
(h) dissolution or termination of the existence of the Developer.
Amendment of Credit Facility Agreement
The Credit Entity,the Issuer and the Developer may amend the Credit Facility Agreement
from time to time without notice to or the consent of the Bondholders. Any such amendment could
affect the circumstances or the likelihood of the Series 2004 Bonds being called for acceleration or
being mandatorily tendered due to the occurrence of an event of default under the Credit Facility
Agreement.
NO LITIGATION
The Issuer
At the time of delivery of and payment for the Series 2004 Bonds,the Issuer 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 Issuer has been
served with process or is otherwise aware,or,to the knowledge of the officer of the Issuer executing
such certificate,threatened against the Issuer affecting the existence of the Issuer,the Special Service
Area or the titles of its officers to their respective offices or seeking to restrain or to enjoin the sale or
delivery of the Series 2004 Bonds, the application of the proceeds thereof in accordance with the
Series 2004 Bond Ordinance and/or the Series 2004 Indenture,or the collection or application of any
revenues provided for the payment of the Series 2004 Bonds, or in any way contesting or affecting
the validity or enforceability of the Series 2004 Bonds,the Series 2004 Bond Ordinance,the Series
2004 Indenture, the Public Improvement Agreement, the Annexation Agreements, the Recapture
Agreement or any action of the Issuer contemplated by any of the said documents,or the collection
or application of any revenues provided for the payment of the Series 2004 Bonds, or in any way
contesting the completeness or accuracy of the Series 2004 Bond Ordinance, the Series 2004
Indenture or any amendments or supplements hereto, or contesting the powers of the Issuer
contemplated by any of said documents,nor,to the knowledge of the officer of the Issuer executing
such certificate, is there any basis therefor.
The Developer
At the time of delivery of and payment for the Series 2004 Bonds,the Developer will certify
that there is no action,suit,proceeding,inquiry or investigation,at law or in equity,before or by any
court,government agency,public board or body,pending or threatened by or against the Developer:
51
(i) in any way questioning the due formation and valid existence of the Developer; (ii) in any way
questioning or affecting the validity of the Public Improvement Agreement, the Recapture
Agreement or the consummation of the transactions contemplated thereby; (iii) in any way
questioning or contesting the validity of any governmental approval of the Project or any aspect
thereof; or (iv) which would have a material adverse effect upon the financial condition of the
Developer or the ability of the Developer to develop the Project.
UNDERWRITING
LaSalle Capital Markets, A Division of ABN AMRO Financial Services, Inc. and William
Blair&Company,L.L.C.(the"Underwriters")have agreed,subject to certain customary conditions
precedent to closing,to purchase the Bonds from the Issuer at a purchase price equal to$
(representing an underwriting discount of$ ). The Underwriters will be obligated to
purchase all the Series 2004 Bonds if any Series 2004 Bonds are purchased. The Series 2004 Bonds
may be offered and sold to certain dealers and others at prices lower than the public offering price,
and such public offering price may be changed, from time to time, without notice by the
Underwriters. The Developer has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Federal securities laws.
RATING
Standard&Poor's Ratings Group("S&P")has assigned the Series 2004 Bonds,while interest
on the Series 2004 Bonds is determined by the Weekly Rate or Monthly Rate,a rating of AA-/A-1+.
No application will be made to any other rating agency for the purpose of obtaining an additional
rating on the Series 2004 Bonds. A rating reflects only the view of the rating agency assigning such
rating, and an explanation of the significance of such rating may be obtained from S&P. The
Developer,the Issuer and the Credit Entity have furnished to S&P information and materials in order
to secure a rating for the Series 2004 Bonds,including certain information and materials which have
not been included in this Official Statement. Once assigned, there is no assurance that any rating
will continue for a given period of time, or that it will not be revised downward or withdrawn
entirely by the issuing rating agency if, in its judgment, circumstances so warrant. Any downward
revision or withdrawal of a rating assigned to the Series 2004 Bonds may have an adverse effect on
the market price of the Series 2004 Bonds.
CERTAIN LEGAL MATTERS
All legal matters related to the authorization, issuance, sale and delivery of the Series 2004
Bonds are subject to the approval of Foley & Lardner LLP, Chicago, Illinois, Bond Counsel. See
APPENDIX C hereto for the proposed form of opinion of Bond Counsel. Certain legal matters will
be passed upon for the Developer by its counsel,Moss and Bloomberg,Ltd.,Bolingbrook,Illinois,
and KB Legal, Dyer, Indiana; for the Issuer by its counsel, the Law Offices of Daniel J. Kramer,
Yorkville, Illinois; for the Credit Entity by its counsel, Schwartz, Cooper, Greenberger& Krauss,
Chicago, Illinois; and for the Underwriters by their counsel, Ungaretti & Harris LLP, Chicago,
Illinois.
52
The various legal opinions to be delivered concurrently with the delivery of the Series 2004
Bonds will be qualified as to the enforceability of the various legal instruments by limitations
imposed by the valid exercise of the constitutional powers of the State of Illinois and the United
States of America and bankruptcy, reorganization, insolvency, or other similar laws affecting the
rights of creditors generally, and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
The remedies available to the bondholders upon a default under the Series 2004 Indenture are
in many respects dependent upon judicial actions which are often subject to discretion and delay.
Under existing constitutional and statutory law and judicial decisions,including specifically Title 11
of the United States Code(the Federal bankruptcy code),the remedies provided in the Series 2004
Indenture may not be readily available or may be limited.
The various legal opinions to be delivered concurrently with the delivery of the Series 2004
Bonds express the professional judgment of the attorneys rendering the opinions on the legal issues
explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an
insurer or guarantor of that expression of professional judgment,of the transaction opined upon,or
of the future performance of parties to such transaction. Nor does the rendering of an opinion
guarantee the outcome of any legal dispute that may arise out of the transaction.
NO CONTINUING DISCLOSURE
The Series 2004 Bonds are being issued in authorized denominations of $100,000 and
integral multiples of$1,000 in excess thereof and since the Underwriters intends to offer the Series
2004 Bonds to 35 or fewer sophisticated investors,the offering and sale of the Series 2004 Bonds is
exempt from the provisions of Rule 15c2-12, in effect as of the date of this Official Statement,
promulgated by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended.
TAX EXEMPTION
In the opinion of Foley& Lardner LLP,Bond Counsel, based upon an analysis of existing
laws,regulations,rulings and court decisions,and assuming,among other matters,compliance with
certain covenants, interest on the Series 2004 Bonds is excluded from gross income for Federal
income tax purposes under the Internal Revenue Code of 1986,as amended(the"Code")and is not a
specific preference item for purposes of the Federal individual or corporate alternative minimum
taxes. Bond Counsel observes that interest on the Series 2004 Bonds is included in adjusted current
earnings in calculating Federal corporate alternative minimum taxable income. Interest on the Series
2004 Bonds is not exempt from State of Illinois income taxes. A complete copy of the form of
opinion of Bond Counsel is attached hereto as Appendix C.
Series 2004 Bonds purchased, whether at original issuance or otherwise, for an amount
greater than their principal amount payable at maturity(or, in some cases, at their earlier call date)
("Premium Bonds")will be treated as having amortizable bond premium. No deduction is allowable
for the amortizable bond premium in the case of Bonds, like the Premium Bonds, the interest on
53
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. Beneficial Owners of Premium
Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond
premium in their particular circumstances.
To the extent the issue price of any maturity of the Series 2004 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 Bondowner, is treated as interest on the
Series 2004 Bonds which is excluded from gross income for Federal income tax purposes. For this
purpose,the issue price of a particular maturity of the Series 2004 Bonds is the first price at which a
substantial amount of such maturity of the Series 2004 Bonds is sold to the public(excluding bond
houses,brokers,or persons or organizations acting in the capacity of underwriters,placement agents
or wholesalers). The original issue discount with respect to any maturity of the Series 2004 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 Series 2004 Bonds should consult their own tax advisors with respect to the tax
consequences of ownership of Series 2004 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.
The Code imposes various restrictions, conditions and requirements relating to exclusion
from gross income for Federal income tax purposes of interest on obligations such as the Series 2004
Bonds. The Issuer has covenanted to comply with certain restrictions designed to insure that interest
on the Series 2004 Bonds will not be included in Federal gross income. Failure to comply with these
covenants may result in interest on the Series 2004 Bonds being included in gross income for Federal
income tax purposes,possibly from the original issue date of the Series 2004 Bonds. The opinion of
Foley & Lardner LLP assumes compliance with these covenants. Foley & Lardner LLP has not
undertaken to determine(or to inform any person)whether any actions taken(or not taken)or events
occurring(or not occurring)after the date of issuance of the Series 2004 Bonds may adversely affect
the value of or the tax-exempt status of interest on the Series 2004 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
Series 2004 Bonds. Beneficial Owners are encouraged to consult their own tax advisors with respect
to proposals to restructure the Federal income tax.
Certain requirements and procedures contained or referred to in the Trust Indenture and other
relevant documents may be changed and certain actions(including,without limitation,defeasance of
the Series 2004 Bonds) may be taken or omitted under the circumstances subject to the terms and
conditions set forth in such documents. Foley&Lardner LLP expresses no opinion as to any Series
2004 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.
54
Although Foley& Lardner LLP is of the opinion that interest on the Series 2004 Bonds is
excluded from gross income for Federal income tax purposes,the ownership or disposition of,or the
accrual or receipt of interest on the Series 2004 Bonds may otherwise affect a Beneficial Owner's
Federal or state tax liability. The nature and extent of these other tax consequences will depend upon
the particular tax status of the Beneficial Owner or the Beneficial Owner's other items of income or
deduction. Foley&Lardner LLP expresses no opinion regarding any such other tax consequences.
No assurance can be given that any future legislation or clarifications or amendments to the
Code,if enacted into law,will not cause the interest on the Series 2004 Bonds to be subject,directly
or indirectly, to Federal or state income taxation, or otherwise prevent the Bondholders from
realizing the full current benefit of the tax status of the interest thereon. Further,no assurance can be
given that any such future legislation, or any actions of the IRS, including, but not limited to,
selection of the Series 2004 Bonds for audit examination,or the course or result of any examination
of the Series 2004 Bonds,or other bonds which present similar tax issues,will not affect the market
price for the Series 2004 Bonds.
55
AUTHORIZATION
Any statements in this Official Statement involving matters of opinion, whether or not
expressly so stated, are intended as such and not as representations of fact. The Issuer and the
Developer have authorized the distribution and execution of this Official Statement.
UNITED CITY OF YORKVILLE,ILLINOIS
By:
Mayor
Accepted and agreed to by the undersigned
as of the date first above written.
MPI-2 YORKVILLE NORTH LLC,
An Illinois Limited Liability Company
By: MPI Manager, Inc., Its Manager
By:
Arthur C. Zwemke, President
MPI-2 YORKVILLE CENTRAL LLC,
An Illinois Limited Liability Company
By: MPI Development Manager,Inc.,Its Manager
By:
Arthur C. Zwemke, President
MPI-2 YORKVILLE SOUTH I LLC,
An Illinois Limited Liability Company
By: MPI Manager, Inc., Its Manager
By:
Arthur C. Zwemke, President
56
APPENDIX A
INFORMATION REGARDING LASALLE BANK NATIONAL ASSOCIATION
The information contained in this APPENDIX A to this Official Statement relates to and has
been supplied by LaSalle Bank National Association. The delivery of this Official Statement does
not create any implication that there has been no change in the affairs of LaSalle Bank National
Association since the date hereof, or that the information contained or referred to in this
APPENDIX A is correct as of any time subsequent to its date. Neither the Issuer, the Underwriters,
the Developer nor the Remarketing Agent makes any representation or warranty as to the accuracy
or completeness of the information contained in this APPENDIXA.
[to come]
A-1
APPENDIX B
DEFINITIONS OF CERTAIN TERMS
"Act of Bankruptcy"means the filing of a voluntary or involuntary petition in bankruptcy(or
the other commencement of bankruptcy or similar proceedings) by or against the Issuer under any
applicable bankruptcy,insolvency,reorganization or similar law,as now or hereafter in effect,unless
such petition or proceeding shall have been dismissed and such dismissal shall be final and not
subject to appeal.
"Adjustable Rate"means the interest rate per annum applicable during each Rate Period and
determined as provided in the Series 2004 Indenture.
"Administrative Expense Fund" means the fund by that name established pursuant to the
Series 2004 Indenture.
"Administrative Expenses" means the following actual or reasonably estimated costs
permitted in accordance with the Special Service Area Act and directly related to the administration
of the Special Service Area,as determined by the Issuer or the Consultant on its behalf. the costs of
computing the Special Tax and of preparing the annual Special Tax collection schedules and
amended Special Tax Roll;the costs of collecting the Special Tax(whether by the Issuer,the County
or otherwise),the costs of remitting the Special Tax 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 the Series
2004 Indenture or any fiscal agent agreement; the costs of obtaining or maintaining ratings on the
Bonds;any termination payments owed by the Issuer in connection with any guaranteed investment
contract, forward purchase agreement or other investment of funds held under the Series 2004
Indenture; the costs of the Rebate Consultant; the costs of the Issuer or its designee of providing
disclosure information to investors and the public including public inquiries regarding the Special
Tax;costs of converting the interest rate on the Bonds;Remarketing Agent fees;the costs associated
with the release of funds from any escrow account or fund held under the Series 2004 Indenture;and
amounts advanced by the Issuer for any other administrative purposes of the Special Service Area,
including the costs of prepayment of annual Special Tax, recordings related to the prepayment,
discharge or satisfaction of Special Tax; and the costs of commencing foreclosure and pursuing
collection of delinquent Special Tax and the reasonable fees of legal counsel to the Issuer relating to
the foregoing.
"Alternate Credit Facility"means any Credit Facility delivered to the Trustee in accordance
with the Series 2004 Indenture to replace the Credit Facility then in effect.
"Authorized Denominations" means $100,000 principal amount or any integral multiple of
$1,000 in excess thereof when the Series 2004 Bonds bear interest at the Weekly Rate,Monthly Rate
or Adjustable Rate and $1,000 principal amount or any integral multiple thereof when the Series
2004 Bonds bear interest at the Fixed Rate.
"Authorized Issuer Representative" means such person or persons duly designated by the
Issuer to act on its behalf including initially either the Mayor or the City Administrator or any other
B-1
officers designated as such pursuant to a Certificate of the Issuer executed by the Mayor and
delivered to the Trustee.
"Bankruptcy Code" means Title 11 of the United States Code, as amended.
"Bond and Interest Fund" means the Bond and Interest Fund established and created by the
Series 2004 Indenture.
"Bond Counsel"means a firm of attorneys of nationally recognized expertise with respect to
the tax-exempt obligations of political subdivisions,selected by the Issuer and reasonably acceptable
to the Trustee.
"Bond Registrar"means the Trustee or any successor or successors to such position under the
Series 2004 Indenture.
"Bond Service Charges" means (a) during any period of time, principal of and interest and
any premium due on the Series 2004 Bonds for that period or payable at that time, as the case may
be, and (b) with respect to the Credit Facility,the principal of and interest on and any premium on
the Series 2004 Bonds to the extent payable under and in accordance with the terms of the Credit
Facility.
"Bondholder" or "Holder" or "Owner of the Series 2004 Bonds" or "Registered Owner"
means the registered owner of any Series 2004 Bond.
"Bonds" means the Series 2004 Bonds.
"Business Day" means any day other than a Saturday or Sunday or a day on which banking
institutions in the city in which the principal corporate trust office of the Trustee or the principal trust
office of the Depository or the principal office of the Credit Entity or the Remarketing Agent is
located, or in the City of Chicago, Illinois, are required or authorized by law to remain closed, or
other than a day on which the New York Stock Exchange is closed.
"Cap Rate"means with respect to the Series 2004 Bonds other than Purchased Bonds,the rate
per annum equal to the lesser of(a) 7%or(b) the maximum rate,if any,at the time then specified in
the Credit Facility for computing the interest component thereof.
"Capitalized Interest Account"means the account by that name in the Bond and Interest Fund
as created by the Series 2004 Indenture so designated within the Bond Fund established and created
under the Series 2004 Indenture.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the
Regulations thereunder.
"Consultant"means David Taussig&Associates,Inc.and its successors and assigns,or any
other firm selected by the Issuer to assist it in administering the Special Service Area and the
extension and collection of Special Taxes pursuant to the Special Tax Report.
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"Cost of Issuance Fund" means the Cost of Issuance Fund established and created by the
Series 2004 Indenture.
"County" means Kendall County, Illinois.
"Credit Account" means the account so designated within the Bond and Interest Fund
established and created by the Series 2004 Indenture.
"Credit Entity"means LaSalle Bank National Association and the provider of any Alternative
Credit Facility.
"Credit Facility" means the irrevocable, transferable direct pay letter of credit issued by
LaSalle Bank National Association in connection with the Series 2004 Bonds, as extended or
renewed, pursuant to the Credit Facility Agreement or any letters of credit, lines of credit or any
other instruments,such as a policy of bond insurance,collateral agreement,surety bond or guarantee
issued by a financial institution, which provide security for payment of principal of, interest and
Purchase Price on the Series 2004 Bonds when due or upon redemption or acceleration and which
constitutes an Alternate Credit Facility under the Indenture.
"Credit Facility Agreement"means,initially,the Reimbursement Agreement dated as of July
1,2004 by and among the Issuer,the Developer and the Credit Entity,as amended from time to time,
pursuant to which the Issuer and the Developer have agreed to reimburse the Credit Entity for
honoring draws under the Credit Facility and in the event an Alternate Credit Facility is provided is
the agreement between the Issuer,the Developer and the Credit Entity pursuant to which the Credit
Entity provides such Alternate Credit Facility or Credit Facility.
"Credit Facility Substitution Date"means the effective date of the substitution of an Alternate
Credit Facility pursuant to the Series 2004 Indenture.
"Depository"means any bank,trust company,savings and loan association or other financial
institution selected by the Trustee as a depository of moneys and securities held under the provisions
of the Series 2004 Indenture, and may include the Trustee.
"Developer"means collectively MPI-2 Yorkville North LLC,MPI-2 Yorkville Central LLC,
MPI-2 Yorkville South I LLC, each an Illinois limited liability company, and their respective
successors and assigns.
"Developer Representative" means any one of Tom Small General Manager MPI Projects,
Arthur C. Zwemke or Tony Pasquinelli or any other person designated in a written certificate from
the Developer addressed to the City and the Trustee.
"Developer's Agreement" or "Public Improvement Agreement" means the Public
Improvement Agreement dated July 1, 2004 between the Developer and the Issuer.
"DTC" means The Depository Trust Company,New York,New York.
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"DTC Participant" means those broker-dealers, banks and other financial institutions
reflected on the books of DTC.
"Eligible Funds"means amounts held by the Trustee which are(A) amounts drawn under the
Credit Facility (and the proceeds of the investment thereof); (B)the proceeds of the Series 2004
Bonds; (C) the proceeds of any bonds issued to refund the Series 2004 Bonds (and the proceeds of
the investment thereof) if an opinion of nationally recognized counsel experienced in Federal
bankruptcy matters(selected by the Issuer and the Trustee)has been obtained to the effect that such
proceeds shall not constitute a voidable preference under Section 547 of the Bankruptcy Code in a
case commenced by or against the Issuer or any"insider"of the Issuer;(D) moneys which have been
on deposit in the Bond and Interest Fund, other than those moneys mentioned in (A), (B) or (C)
above, with the Trustee (and the proceeds of the investment thereof) for a continuous period of at
least 124 consecutive days (or such shorter period as may be approved in a written opinion of
counsel (selected by the Issuer and the Trustee) with nationally recognized expertise in matters of
Federal bankruptcy law to the effect that payment of the Bond Service Charges with such moneys
shall not result in a voidable preference under Section 547 of the Bankruptcy Code)during which no
Act of Bankruptcy by or against the Issuer,or any"insider" (within the meaning of the Bankruptcy
Code) of the Issuer shall have occurred; (E) the proceeds of remarketing of the Series 2004 Bonds
(except to the Issuer or any "insider" of the Issuer or any"insider"thereof within the meaning of the
Bankruptcy Code);and(F) any other moneys for which an opinion of nationally recognized counsel
(selected by the Issuer and the Trustee)experienced in Federal bankruptcy matters has been obtained
to the effect that payment of the Bond Service Charges with such moneys shall not constitute a
voidable preference under Section 547 of the Bankruptcy Code in a case commenced by or against
the Issuer or any "insider" of the Issuer.
"Establishing Ordinance" means Ordinance Number 2004-32 adopted on June 22, 2004 by
the Corporate Authorities.
"Event of Default"means any occurrence or event specified and defined in,or pursuant to the
Series 2004 Indenture.
"Expiration Date"means the date specified in the Credit Facility as the expiration date of said
Credit Facility,including any date to which the expiration or termination of said Credit Facility may
be extended from time to time and each date on which the Credit Facility may terminate prior to its
stated expiration date for any reason.
"Federal Obligations"means obligations of or unconditionally guaranteed as to principal and
interest by the United States of America but excludes obligations which are mortgage-backed
securities or which are rated "r" by S&P.
"Fiduciary" means the Trustee and any Paying Agent for the Series 2004 Bonds.
"Fixed Rate" means the fixed interest rate per annum applicable until the maturity or earlier
redemption of the Series 2004 Bonds and determined as provided in the Series 2004 Indenture.
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"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 Tax.
"General Account" means the account so designated within the Bond and Interest Fund
established and created by the Series 2004 Indenture.
"Improvement Fund" means the Improvement Fund established and created by the Series
2004 Indenture.
"Independent Counsel" means an attorney duly admitted to practice law before the highest
court of the State who is not a full-time employee of the Issuer,the Developer,the Credit Entity or
the Trustee.
"Interest Index" means the indication of the lowest rate appropriate for securities similar to
the Series 2004 Bonds in terms of security, creditworthiness, term, tax-exempt status and tender
privilege which would permit the Series 2004 Bonds to be sold at a purchase price equal to their
principal amount, plus accrued interest, if any. The Interest Index shall be determined, first, by
referring to the best available data base in the reasonable opinion of the Remarketing Agent in a
publication of national recognition selected by the Remarketing Agent containing a recent
calculation of such an interest rate for comparable securities and multiplying such interest rate by one
hundred and ten percent (110%) and, second, if that is not possible, by multiplying the last
determined Weekly Rate or Monthly Rate,as applicable,by one hundred and fifteen percent(115%).
"Interest Payment Date" means (i) in the case of Series 2004 Bonds bearing interest at the
Weekly Rate and the Monthly Rate, (A)the first Business Day of each month prior to the Maturity
Date,commencing August 2,2004,(B)each Mandatory Tender Date,and(C)the Maturity Date,and
(ii) in the case of Series 2004 Bonds bearing interest at the Adjustable Rate or the Fixed Rate, each
March 1 and September 1 commencing with the first such March 1 or September 1,occurring after
the Rate Conversion Date for the Adjustable Rate or Fixed Rate and each Rate Conversion Date.
"Investment Obligations"or"Permitted Investments"means any of the following which at the
time are legal investments for the Issuer under applicable State laws and which are not prohibited
investments under the Code,for the moneys held under the Series 2004 Indenture then proposed to
be invested therein:
(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;
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(c) interest bearing obligations of any county, township, city, village,
incorporated town,municipal corporation or school district,which obligations are registered
in the name of the Issuer or held under a custodial agreement at a bank,if such obligations at
the time of purchase are in one of the two highest general classifications established by a
rating service of nationally recognized expertise in rating bonds of states and their political
subdivisions;
(d) interest bearing certificates of deposit, interest bearing savings account,
interest bearing time deposits, or other investments constituting direct obligations of any
bank as defined by the Illinois Banking Act whose deposits 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 Issuer, shall be purchased through banks or trust companies
authorized to do business in the State of Illinois;
(f) repurchase agreements meeting the following requirements:
(1) The securities,unless registered or inscribed in the name of the Issuer,
are purchased through banks or trust companies authorized to do business in the State
of Illinois.
(2) An Authorized Issuer Representative after ascertaining which firm
will give the most favorable rate of interest,directs the custodial bank to "purchase"
specified securities from a designated institution. The"custodial bank"is the bank or
trust company,or agency of government,which acts for the Issuer in connection with
repurchase agreements involving the investment of funds by the Issuer. The State
Treasurer may act as custodial bank for the Issuer.
(3) 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 Issuer on the records of the custodial bank and the transaction must be confirmed
in writing to the Issuer by the custodial bank.
(4) 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.
(5) The security interest must be perfected.
(6) The Issuer must enter into a written master repurchase agreement
which outlines the basic responsibilities and liabilities of both buyer and seller.
(7) The repurchase agreement shall be for periods of 330 days or less.
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(8) The Issuer must inform the custodial bank in writing of the maturity
details of the repurchase agreement.
(9) The custodial bank must take delivery of and maintain the securities in
its custody for the account of the Issuer and confirm the transaction in writing to the
Issuer. The Custodial Undertaking shall provide that the custodian takes possession
of the securities exclusively for the Issuer; that the securities are free of any claims
against the trading partner; and any claims by the custodian are subordinate to the
Issuer's claims to rights to those securities.
(10) The obligations purchased by the Issuer 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 Issuer or Authorized Issuer
Representative.
(11) The custodial bank shall be liable to the Issuer for any monetary loss
suffered by the Issuer 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
Issuer's funds are invested in short-term obligations of such corporation as evidenced by a
certificate from an Authorized Issuer Representative delivered to the Trustee;
(h) money market mutual funds registered under the Investment Company Act of
1940,as amended,invested solely in obligations listed in paragraphs(a)and(b)above and in
agreements to repurchase such obligations; and
(i) any other investment as shall be lawful for the investment of the Issuer's funds
and shall be approved by the Credit Entity.
"Issuance Date" means July _, 2004, the date of the initial issuance and delivery of the
Series 2004 Bonds.
"Issuer"means the United City of Yorkville,Kendall County,Illinois,and its successors and
assigns.
"Issuer Bonds" means Series 2004 Bonds owned or held by the Issuer,or by the Trustee or
the agent of the Trustee for the account of the Issuer or with respect to which the Issuer has notified
the Trustee,were purchased by another person for the account of the Issuer or by a person directly or
indirectly controlled by or under direct or indirect common control with the Issuer,including but not
limited to Purchased Bonds.
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"Local Government Debt Reform Act" means the Local Government Debt Reform Act 30
ILCS §350/1 et Le ., as amended.
"Mandatory Tender Date" means any date on which Series 2004 Bonds shall be subject to
mandatory tender pursuant to the Series 2004 Indenture.
"Maturity Date" means March 1, 2034.
"Monthly Rate" means the interest rate per annum applicable during each Rate Period and
determined and redetermined on a monthly basis as provided in the Series 2004 Indenture.
"Moody's"means Moody's Investors Service,Inc.,a corporation duly organized and validly
existing under the laws of the State of Delaware, and its successors and assigns.
"Notice by Mail" or "notice" of any action or condition "by Mail" (except as otherwise
expressly provided in the Series 2004 Indenture) shall mean a written notice meeting the
requirements of the Series 2004 Indenture mailed by first-class mail to the Registered Owners at the
addresses shown in the registration books maintained pursuant to the Series 2004 Indenture;
provided, however, that if, because of temporary or permanent suspension of mail service, it is
impossible or impracticable to mail notices in the manner described in the Series 2004 Indenture,
then such notification in lieu thereof as shall be made with the approval of the Trustee(or,if there be
no trustee under the Series 2004 Indenture, the Issuer) shall constitute a sufficient giving of such
notice.
"Outstanding" or"Series 2004 Bonds outstanding" mean all Series 2004 Bonds which have
been authenticated and delivered by the Trustee under the Series 2004 Indenture, except:
(1) Series 2004 Bonds canceled after purchase in the open market or because of payment
at or redemption prior to maturity;
(2) Series 2004 Bonds for the payment of which cash or Federal Obligations shall have
been theretofore deposited with the Trustee (whether upon or prior to the maturity or redemption
date of any such Series 2004 Bonds)and which are deemed paid within the meaning of Article VII of
the Series 2004 Indenture;
(3) Series 2004 Bonds in lieu of which others have been authenticated under provisions
of the Series 2004 Indenture relating to mutilated, lost, stolen or destroyed Bonds, the transfer or
exchange of Bonds and the delivery of definitive Bonds in lieu of temporary Bonds; and
(4) Untendered Series 2004 Bonds.
"Parcel" shall have the meaning given that term in the Special Tax Report.
"Paying Agent"means those institutions designated as such in or pursuant to the Series 2004
Indenture.
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"Principal Office",when used with respect to a Fiduciary,means the principal,or corporate
trust,or head or principal trust,office of such Fiduciary situated in the city in which such Fiduciary is
described as being located.
"Purchase Price" means an amount equal to one hundred percent of the principal amount of
any Series 2004 Bond tendered or deemed to have been tendered for purchase, plus unpaid and
accrued interest, if any, to the date of purchase.
"Purchased Bond Rate" means the rate or rates of interest established in any Credit Facility
Agreement as the rate or rates of interest Purchased Bonds [bear not to exceed the Cap Rate.]
"Purchased Bonds" means Series 2004 Bonds purchased pursuant to any Credit Facility
Agreement from and including the date they are registered in the name of the Credit Entity or its
designee, nominee or agent, to, but not including, the earliest of (i)their payment at maturity,
(ii)their payment at redemption, (iii)their remarketing by the Remarketing Agent pursuant to the
Remarketing Agreement, (iv) their sale by the Credit Entity,its designee,nominee or agent,on the
open market, or(v) their satisfaction and discharge otherwise.
"Rate Adjustment Date" means the date from and after which a particular Weekly Rate,
Monthly Rate or Adjustable Rate as applicable, shall be effective. In the case of the Weekly Rate,
the Rate Adjustment Date for each Rate Period shall be(i) in the case of a conversion from another
interest rate determination method to the Weekly Rate,the Rate Conversion Date and(ii)otherwise,
the later of Thursday of each week or such other day as shall be necessary as provided in the last
sentence of the first paragraph under the caption "THE SERIES 2004 BONDS --Weekly Rate." In
the case of the Monthly Rate,the Rate Adjustment Date for each Rate Period shall be(i) in the case
of a conversion from another interest rate determination method to the Monthly Rate, the Rate
Conversion Date and(ii) otherwise, the later of the first Business Day of each month or such other
day as shall be necessary as provided in the last sentence of the first paragraph under the caption
"THE SERIES 2004 BONDS -- Monthly Rate." In the case of the Adjustable Rate, the Rate
Adjustment Date for each Rate Period shall be the day which is the Rate Conversion Date.
"Rate Conversion Date" means the date on which the interest rate determination method for
the Series 2004 Bonds is changed as provided in the Series 2004 Indenture. In the case of a
conversion from the Weekly Rate to the Monthly Rate,from the Monthly Rate to the Weekly Rate or
from the Weekly Rate or the Monthly Rate to the Adjustable Rate or the Fixed Rate, the Rate
Conversion Date shall be the first Business Day of a month. In the case of a conversion from the
Adjustable Rate to another Adjustable Rate,the Weekly Rate,the Monthly Rate or the Fixed Rate,
the Rate Conversion Date shall be the first Business Day of a month and the day which follows by
one day the final day of the Rate Period for the Adjustable Rate.
"Rate Determination Date" means the day on which the Remarketing Agent determines the
Weekly Rate,the Monthly Rate or the Adjustable Rate, as applicable, for the next Rate Period. In
the case of the Weekly Rate and the Monthly Rate,the Rate Determination Date for each Rate Period
shall be the Rate Adjustment Date. In the case of the Adjustable Rate,the Rate Determination Date
for each Rate Period shall be the Business Day selected by the Remarketing Agent(and concurred to
by the Issuer) and occurring not earlier than ten (10) Business Days and not later than two
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(2) Business Days prior to the Rate Conversion Date. If any Rate Determination Date would not be a
Business Day, such Rate Determination Date shall be the immediately preceding Business Day.
"Rate Period" means the period during which a particular Weekly Rate, Monthly Rate or
Adjustable Rate,as applicable,determined on a particular Rate Determination Date,is effective. The
initial Rate Period is effective from and including the Issuance Date to and including ,
2004. Thereafter, each subsequent Rate Period shall become effective on and including the
applicable Rate Adjustment Date and remain in effect until and including,the day next preceding the
earlier of(i)the next following Rate Adjustment Date,(ii)the next following Rate Conversion Date
or (iii)the Maturity Date. In the case of the Weekly Rate, with the exception of any Rate Period
whose last day is a Rate Conversion Date or the Maturity Date,each Rate Period shall commence on
Thursday and end on the next following Wednesday. In the case of the Monthly Rate, with the
exception of the Rate Period whose last day is the Maturity Date,each Rate Period shall commence
on the first Business Day of a month and end on the day next preceding the first Business Day of the
next following month. The Rate Period shall not be deemed to have been changed in the case of a
Weekly Rate or Monthly Rate which is changed pursuant to the last sentence of the first paragraph
under the caption"THE SERIES 2004-Weekly Rate"or the last sentence of the first paragraph under
the caption "THE SERIES 2004-Monthly Rate." In the case of the Adjustable Rate, with the
exception of the Rate Period which ends on the Maturity Date,each Rate Period shall commence on
the Rate Conversion Date,and end on the day next preceding the first Business Day of a month and
be at least six (6) months or an integral multiple of six (6) months in length.
"Rating Agency"means S&P,Moody's or any nationally recognized securities rating agency
which has been requested to and has assigned a rating to the Series 2004 Bonds.
"Rating Category"or"Rating Categories"means one or more of the generic rating categories
of a nationally recognized securities rating agency,without regard to any refinement or gradation of
such rating category or categories by a numerical modifier or otherwise.
"Rebate Fund"means the Rebate Fund established and created by the Series 2004 Indenture.
"Recapture Agreement"means the Recapture Agreement substantially in the form attached as
Exhibit K to the Annexation Agreement approved as of August 17, 2003 among the Issuer,MPI-2
Yorkville South II LLC and the Developer,with such changes therein as are approved by the Issuer
and the Developer to reflect the requirements of the Series 2004 Indenture.
"Recapture Fees" means "Recapture Costs" as such term is defined in the Recapture
Agreement.
"Recoveries"means the water tap fees charged by the Issuer for properties located along U.S.
Route 34 in the City as further described in , collected by the City
"Record Date"or"Regular Record Date"means(i)with respect to any Interest Payment Date
when the Weekly Rate or the Monthly Rate is in effect,the Business Day next preceding that Interest
Payment Date and (ii) with respect to any Interest Payment Date when the Adjustable Rate or the
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Fixed Rate is in effect, the fifteenth day of the month next preceding the month of that Interest
Payment Date.
"Remarketing Agent"means LaSalle Capital Markets,A Division of ABN AMRO Financial
Services, Inc. and any successor to such position under the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated as of July 1, 2004
among the Issuer,the Developer and the Remarketing Agent and any successor to such agreement.
"Representation Letter" shall mean the Blanket Issuer Letter of Representations by and
between the Issuer and DTC.
"Series 2004 Indenture"means the Trust Indenture between the Issuer and the Trustee dated
as of July 1, 2004 and any amendments thereof and supplements thereto.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and its
successors and assigns.
"Special Record Date" means the date and time established by the Trustee for determination
of which Registered Owners shall be entitled to receive overdue interest on the Series 2004 Bonds
pursuant to the Series 2004 Indenture.
"Special Redemption Account"
"Special Service Area" means United City of Yorkville Special Service Area Number
2004-106 Total Grande Reserve, described more fully in Exhibit A to the Series 2004 Indenture.
"Special Service Area Act"means the Special Service Area Tax Law,35 ILCS§200/27-5 et
seq., as amended.
"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, public parks, park
improvements,bicycle paths,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 Improvement Agreement.
"Special Tax Report" means the United City of Yorkville Special Service Area Number
2004-106 Total Grande Reserve Special Tax Roll and Report prepared by the Consultant.
"Special Tax Requirement" means the "Special Tax Requirement" as defined in the Special
Tax Report provided that credit may be given for any amounts on deposit in the funds and accounts
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created by the Indenture and available to pay the Special Tax Requirement other than amounts on
deposit in the Credit Account of the Bond and Interest Fund.
"Special Tax Roll" means the special tax roll for the payment of the Series 2004 Bonds
established and amended from time to time pursuant to the Special Tax Report.
"Special Taxes" means the taxes levied by the Issuer on all taxable real property within the
Special Service Area pursuant to the Special Tax Roll and the Series 2004 Indenture.
"State" means the State of Illinois.
"Substitution Date" means the effective date of the substitution of an Alternate Credit Facility
pursuant to the provisions of the Series 2004 Indenture.
"Tender Date" means (i) in the case of Series 2004 Bonds tendered at the option of their
Holders pursuant to the Series 2004 Indenture,the date specified by the Holder,in the written notice
delivered to the Trustee, as the purchase date of the Series 2004 Bonds,which must be a Business
Day occurring not prior to the seventh day after receipt by the Trustee of the written notice of tender,
(ii) in the case of Series 2004 Bonds tendered as a result of a Rate Conversion Date, the Rate
Conversion Date or(iii) in the case of Bonds tendered pursuant to the provisions of the Series 2004
Indenture summarized under clauses (b), (c) and (d) under the caption "THE SERIES 2004 --
Mandatory Tender of Bonds," the date designated pursuant to such applicable provision.
"Tender Fund" means the fund by that name created pursuant to the Series 2004 Indenture.
"Trust Estate" means the property conveyed to the Trustee pursuant to the Granting Clauses
of the Series 2004 Indenture.
"Trustee" means LaSalle Bank National Association, and any qualified entity at the time
serving as successor trustee under the Series 2004 Indenture.
"Underwriters" means LaSalle Capital Markets, A Division of ABN AMRO Financial
Services, Inc. and William Blair& Company, L.L.C.
"Untendered Bonds" shall have the meaning given to that term in the Series 2004 Indenture.
"Weekly Rate" means the interest rate per annum applicable during each Rate Period and
determined and redetermined on a weekly basis as provided in the Series 2004 Indenture.
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APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL
UHDOCS 624049v5 C/M 4781600006 C-1
Exhibit I
011.560726.2
AGREEMENT FOR ADMINISTRATIVE SERVICES
THIS AGREEMENT is made and entered into this day of ,2004 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 1301 Dove Street, Suite 600,
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
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 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.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 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. Client acknowledges and agrees that
Consultant has the right to use the reports and analyses that it 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 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 2.3 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 2.4 Nothing in this Agreement shall give the Consultant possession of authority
with respect to any Client decision beyond the rendition of information,advice,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.
Section 3.2 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.
Section 3.3 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.
Section 3.4 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,
except as may arise from Consultant's willful misconduct or gross negligence, shall in no event
exceed the amounts received by Consultant 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
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve June 15,2004
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,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 Client.
ARTICLE V
OTHER OBLIGATIONS OF CLIENT
Section 5.1 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.
Section 5.2 Neither this Agreement nor any duties or obligations under this Agreement
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 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$250 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 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
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve June 15,2004
any default following receipt of notice of same.
Section 6.3 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.
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 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 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
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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.
IN WITNESS WHEREOF, this Agreement has been executed on the date and year first above
written.
CLIENT: United City of Yorkville
By:
Date:
CONSULTANT: David Taussig& Associates,Inc.
By:
David Taussig, President
Date:
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United City of Yorkville SSA No.2004-106 Total Grande Reserve
Exhibit A - Scope of Work
The Scope of Work statement for the administration of Special Service Area No. 2004-106 Total
Grande Reserve(hereinafter called"SSA")is comprised of those services associated with the review
of bond funds and accounts,responses to taxpayer inquiries(i.e.,phone calls,prepayment requests,
builder education/coordination),determination of arbitrage/rebate liability,the reporting of certain
information as set forth in the Indenture, and as needed the monthly calculation and billing of the
special taxes, as follows:
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:
1.1 Subdivision Research: Coordinate with Yorkville and MPI Yorkville (the
"Builder") 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 County to determine valid Permanent
Index Numbers("PIN") for the coming year and obtain new cadastral maps.
1.3 Classification of Property: Assign each parcel to the appropriate special tax
classification in accordance with the SSA Special Tax Roll and Report.
1.4 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• Special 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 Expenses: Identify the SSA's expenses including debt 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, capitalized interest
and other credits that may be applied toward the abatement of the special tax.
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve
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 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,Tax Sale, and Foreclosure Status
• Bond Fund and Account Balance Summary
• Actual monthly Special Tax Requirement for the immediately preceding year
• Projected Special Tax Requirement for the current year
The contents of the annual report will satisfy the reporting requirements set forth in Section 4.8.b of
the 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 Prepare and Mail SSA Special Tax Bill: Consultant will prepare the form of the
Special Tax bill. Following the expenditure of capitalized interest,Consultant will
determine the special taxes to be abated and transmit a special tax bill each month to
MPI Yorkville for payment via wire transfer.
4.2 Special Tax Roll: 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.
4.3 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.
4.4 Coordination with Assessor: As requested, Consultant will assist the applicable
Township Assessor in determining the average public improvements allocable to
properties in the SSA.
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:
5.1 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
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve June 15,2004
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 to
the property owners that remain delinquent in the payment of special taxes after the
County has conducted its tax sale (as of such 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.
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.
5.4 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
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:
6.1 Prepayment Calculation:DTA will assist in drafting the form of the satisfaction of
lien (the "lien release") to be executed prior to the sale of each home in the SSA.
DTA will maintain a database showing the PINS for which a lien release has been
executed and recorded. DTA will also review the trustee account statements to
corroborate the appropriate prepayment amount was received at closing.
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 telephone calls from prospective or current property owners or
other interested parties who have questions regarding the SSA. This task includes brief written
responses to property owners as necessary. In order to efficiently and effectively handle these
property owner's requests, Consultant has a toll-free number for property owners who have
questions.
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Task 8• Arbitrage/Rebate Calculation
This task encompasses those activities associated with computing the rebate liability of the bonds
sold on behalf of the SSA.
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve June 15,2004
Exhibit B — Fee Schedule
PROFESSIONAL FEES
Consultant's annual compensation for Tasks 1 through 7 of the Scope of Work statement is a fixed
fee of$15,000. Consultant's compensation for Task 8 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. 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 that are not paid within 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
President $175/Hour
Vice President $165/Hour
Director $15 5/Hour
Manager $145/Hour
Senior Associate $130/Hour
Associate $110/Hour
Analyst $ 95/Hour
Research Assistant $ 70/Hour
Such additional tasks may include, but are not be limited to, the following:
• 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;
• Preparation and dissemination of continuing disclosure reports in accordance with Security
and Exchange Commission Rule 15c2-12; and
• Assumption of dissemination agent responsibilities for developer continuing disclosure
reports, if any.
The preceding lump sum professional fees and hourly rates apply for a 24 month period from
execution of the Agreement and are subject to a cost-of-living and/or other appropriate increase
every 12 months thereafter. Consultant generally reviews its professional fees and hourly rates
annually and,if appropriate,adjusts them to reflect increases in seniority,experience,cost-of-living,
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United City of Yorkville SSA No. 2004-106 Total Grande Reserve
and other relevant factors. Consultant shall notify Client in advance of any such increase.
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35 ,
CITY'S CONSENT AGREEMENT
THIS CONSENT AGREEMENT is entered into as of the day of July, 2004 by United
City of Yorkville, to and for the benefit of LaSalle Bank National Association, a national banking
association, as Administrative Agent for itself and the "Banks" (as defined in that certain Construction
Loan Agreement of even date herewith), its successors and assigns.
RECITALS
A. Concurrently herewith, Banks have agreed to make a revolving loan ("Revolving Loan")
in the amount not to exceed the principal sum of$45,000,000.00 and issue standby letters of credit in the
amount of up to $12,000,000.00 an issue a direct pay letter of credit in the amount of$12,310,331.00 in
connection with the issuance of special service area bonds benefiting the Property to MPI-2 Yorkville
Central LLC, an Illinois limited liability company ("Borrower") pursuant to the terms of the Amended
and Restated Construction Loan Agreement of even date herewith(the"Loan Agreement").
B. The Loan Agreement is joined by MPI-2 Yorkville North LLC, an Illinois limited
liability company and MPI-2 Yorkville South-I LLC, an Illinois limited liability company (the
"Additional Property Owners").
C. Borrower and the Additional Property Owners(the"Developer")own fee simple title to a
certain real estate and improvements (collectively, "Property") located in Yorkville, Kendall County,
Illinois and legally described on Exhibit A attached hereto. Developer has entered into a certain Public
Improvement Agreement with the United City of Yorkville (hereinafter referred to as the "City") in
connection with the development of the Property(the"Public Improvement Agreement").
D. Developer has entered into a Collateral Assignment of Developer's Rights of even date
herewith assigning to Banks all of the rights and privileges of Developer under the Public Improvement
Agreement.
E. The City will benefit if the Loan is made to Borrower.
NOW,THEREFORE, in consideration of the foregoing and other good and valuable
consideration,the receipt and sufficiency of which are hereby acknowledged,the City hereby agrees as
follows:
1. The City hereby consents to the terms of the Assignment.
2. The City agrees that there will be no amendments to the Public Improvement Agreement
without the express written consent of the Banks' except for non-material routine field order or
engineering changes necessitated by field conditions.
3. The City agrees that in the event that the Banks exercises its rights under the Assignment
and performs the Developer's rights thereunder,that the City will make available the funds which were to
be made available to Developer upon compliance by Agent with the terms of the Public Improvement
Agreement including "Bond Proceeds" (as that term is defined in the Public Improvement Agreement),
Recovery and Recapture monies(as that term is defined in the Public Improvement Agreement.
4. The City agrees that any and all notices provided to the Developer under the Public
Improvement Agreement shall be provided to Agent and Agent shall have the right but not the obligation
to remedy or cure such breach for a period of thirty (30) days after receipt of written notice thereof,
264467.2 044599-33642
provided, however that if such breach can not reasonably remedy or cure within such thirty (30) day
period, Agent shall have such additional reasonable period of time as Banks requires to effect a remedy or
cure so long as Banks commences remedy within the aforesaid thirty (30) day period and diligently
pursue such remedy or cure thereafter including any time reasonably required by Agent to take legal
action to enable it or a receiver to perform Developer's obligations thereunder.
5. For purposes of this Agreement, all notices, demands or documents required or permitted
to be given to either party shall been given a hand-delivered, or if mailed by United States certified mail,
postage prepaid,return receipt requested,addressed to said party as follows:
To Bank: LaSalle Bank National Association
8303 West Higgins Road
4th Floor
Chicago,Illinois
Attn: Michael McGrogan
With a copy to: LaSalle Bank National Association
14'h Floor
135 South LaSalle Street
Chicago,Illinois 60603
Attn: Commercial Real Estate Syndications
and Schwartz,Cooper,Greenberger&Krauss
180 North LaSalle Street
Suite 2700
Chicago,Illinois 60601
Attn: Scott M. Lapins,Esq.
To City: United City of Yorkville
800 Game Farm Road
Yorkville,Illinois 60560
Attn: City Clerk
With a copy to: Daniel J.Kramer,Esq.
1107 S.Bridge St.
Yorkville,Illinois 60560
UNITED CITY OF YORKVILLE
Bid
Its:
264467.2 044599-33642 2