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Ordinance 2003-34 ORDINANCENUMBER AN ORDINANCE of the United City of Yorkville, Kendall County, Illinois, authorizing and providing for an Installment Purchase Agreement for the purpose of paying a part of the cost of waterworks improvements, and authorizing and providing for the issue of$4,800,000 Debt Certificates, Series 2003, evidencing the rights to payment under such Agreement, prescribing the details of the Agreement and Certificates, and providing for the security for and means of payment under the Agreement of the Certificates. Adopted by the City Council of said City on the 24th day of June 2003 1495406.01.09 2108421 •KK•6/24/03 TABLE OF CONTENTS SECTION HEADING PAGE Preambles................................................................................................................................l Section1. Definitions...................................................................................................4 Section 2. Incorporation of Preambles..........................................................................7 Section 3. Determination to Authorize and Enter into Agreement and to Issue Certificates...................................................................................7 Section 4. Agreement Is a General Obligation; Annual Appropriation........................7 Section 5. Execution and Filing of the Agreement.......................................................7 Section 6. Certificate Details........................................................................................9 Section 7. Book Entry Provisions...............................................................................10 Section 8. Execution; Authentication.........................................................................12 Section 9. Optional Redemption................................................................................. 13 Section 10. Redemption Procedures.............................................................................13 Section 11. Registration of Certificates; Persons Treated as Owners ..........................17 Section 12. Form of Certificate ....................................................................................19 Section 13. Sale of Certificates; Official Statement.....................................................25 Section 14. Creation of Funds and Appropriations. .....................................................26 Section 15. Continuing Disclosure Undertaking..........................................................29 Section 16. General Tax Covenants..............................................................................30 Section 17. Certain Specific Tax Covenants................................................................31 Section 18. Pertaining to the Certificate Registrar.......................................................35 Section 19. Municipal Bond Insurance.........................................................................39 Section 20. Defeasance.................................................................................................41 Section 21. Publication of Ordinance...........................................................................42 Section 22. Superseder and Effective Date...................................................................43 [This table of contents is for the convenience of the reader and is not a part of this Ordinance.] -i- ORDINANCENUMBER -A AN ORDINANCE of the United City of Yorkville, Kendall County, Illinois, authorizing and providing for an Installment Purchase Agreement for the purpose of paying a part of the cost of waterworks improvements, and authorizing and providing for the issue of $4,800,000 Debt Certificates, Series 2003, evidencing the rights to payment under such Agreement, prescribing the details of the Agreement and Certificates, and providing for the security for and means of payment under the Agreement of the Certificates. PREAMBLES WHEREAS A. The United City of Yorkville, Kendall County, Illinois (the "City"), is a municipality and unit of local government of the State of Illinois (the "State") operating, inter alia, under and pursuant to the following laws: 1. the Illinois Municipal Code; 2. the Local Government Debt Reform Act of the State of Illinois (the "Debt Reform Act"), and in particular, the provisions of Section 17 of the Debt Reform Act (the "Installment Purchase Provisions of the Debt Reform Act"); and 3. all other Omnibus Bond Acts of the State; in each case, as supplemented and amended (collectively, "Applicable Law"). B. The City Council (the "Corporate Authorities") has considered the needs of the City and, in so doing, the Corporate Authorities have deemed and do now deem it advisable, necessary, and for the best interests of the City in order to promote and protect the public health, welfare, safety, and convenience of the residents of the City to acquire and construct the following: [Here insert more detailed description of waterworks improvements] including, in connection with said works, acquisition of all land or rights in land, mechanical, electrical, and other services necessary, useful, or advisable thereto (the "Project"), all as shown on preliminary plans and cost estimates as prepared by and on file with and approved by the Corporate Authorities. C. The Corporate Authorities have determined the total cost of the Project and expenses incidental thereto, including financial, legal, architectural, and engineering services related to such work and to the Agreement hereinafter provided for in this Ordinance (collectively "Related Expenses") to be not less than $4,800,000 plus estimated investment earnings which may be received on said sum prior to disbursement. D. Sufficient funds of the City are not available to pay the costs of the Project and Related Expenses, and it will, therefore, be necessary to borrow money in the amount of $4,800,000 for the purpose of paying such costs. E. Pursuant to the Installment Purchase Provisions of the Debt Reform Act, the City has the powers as follows: The governing body of each governmental unit may purchase or lease either real or personal property, including investments, investment agreements, or investment services, through agreements that provide that the consideration for the purchase or lease may be paid through installments made at stated intervals for a period of no more than 20 years or another period of time authorized by law, whichever is greater. Each governmental unit may issue certificates evidencing the indebtedness incurred under the lease or agreement. The governing body may provide for the treasurer, comptroller, finance officer, or other officer of the governing body charged with financial administration to act as counter-party to any such lease or agreement, as nominee lessor or seller. When the lease or agreement is executed by the officer of the governmental unit authorized by the governing body to bind the governmental unit thereon by the execution thereof and is filed with and executed by the nominee lessor or seller, the lease or agreement shall be sufficiently executed so as to permit the governmental unit to issue certificates evidencing the indebtedness incurred under the lease or agreement. The certificates shall be -2- valid whether or not an appropriation with respect thereto is included in any annual or supplemental budget adopted by the governmental unit From time to time, as the governing body - executes contracts for the purpose of acquiring and constructing the services or real or personal property that is a part of the subject of the lease or agreement, including financial, legal, architectural, and engineering services related to the lease or agreement, the governing body shall order the contracts filed with its nominee officer, and that officer shall identify the contracts to the lease or agreement; that identification shall permit the payment of the contract from the proceeds of the certificates; and the nominee officer shall duly apply or cause to be applied proceeds of the certificates to the payment of the contracts. The governing body of each governmental unit may sell, lease, convey, and reacquire either real or personal property, or any interest in real or personal property, upon any terms and conditions and in any manner, as the governing body shall determine, if the governmental unit will lease, acquire by purchase agreement, or otherwise reacquire the property, as authorized by this subsection or any other applicable law. All indebtedness incurred under this subsection, when aggregated with the existing indebtedness of the governmental unit, may not exceed the debt limits provided by applicable law. F. The Corporate Authorities find that it is desirable and in the best interests of the City to avail of the provisions of the Installment Purchase Provisions of the Debt Reform Act, as quoted, as follows: 1. To authorize an Installment Purchase Agreement (the "Agreement") more particularly as described and provided below in the text of this Ordinance; 2. To name as counter-party to the Agreement the City Treasurer (the "Treasurer"), as nominee-seller; 3. To authorize the Mayor of the City (the "Mayor") and the City Clerk (the "Clerk") to execute and attest, respectively, the Agreement on behalf of the City and to file same with the Clerk in his or her capacity as keeper of the records and files of the City; and -3- 4. To issue certificates evidencing the indebtedness incurred under the Agreement in the amount of $4,800,000, in form and having such details as set forth below in the text of this Ordinance. Now THEREFORE Be It Ordained by the City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section 1. Definitions. Words and terms used in this Ordinance shall have the meanings given them unless the context or use clearly indicates another or different meaning is intended. Words and terms defined in the singular may be used in the plural and vice-versa. Reference to any gender shall be deemed to include the other and also inanimate persons such as corporations, where applicable. A. The following words and terms are as defined in the preambles hereto. Applicable Law City Clerk Corporate Authorities Debt Reform Act Installment Purchase Provisions of the Debt Reform Act Mayor Project Related Expenses State Treasurer -4- B. The following words and terms are defined as set forth. "Agreement" means the Installment Purchase Agreement, as referred to in the preambles of this Ordinance, for the purpose of purchasing and financing the Project and Related Expenses. "Book Entry Form" means the form of the Certificates as fully registered and available in physical form only to the Depository. "Certificates" means the $4,800,000 Debt Certificates, Series 2003, authorized to be issued by this Ordinance. "Certificate Fund" means the fund established and defined in Section 14 of this Ordinance. "Certificate Moneys" means moneys on deposit in the Certificate Fund. "Certificate Register" means the books of the City kept by the Certificate Registrar to evidence the registration and transfer of the Certificates. "Certificate Registrar" means BNY Midwest Trust Company, Chicago, Illinois, in its respective capacities as certificate registrar and paying agent hereunder, or a successor thereto or a successor designated as Certificate Registrar hereunder. "Code" means the Internal Revenue Code of 1986, as amended. "Continuing Disclosure Undertaking" means the undertaking by the City as authorized in Section 15 hereof and set forth as Exhibit A. "Depository," means The Depository Trust Company, a New York limited trust company, its successors, or a successor depository qualified to clear securities under applicable state and federal laws. "Ordinance" means this Ordinance, numbered as set forth on the title page hereof, and passed by the Corporate Authorities on the 24th day of June 2003. -5- "Project Fund" means the Project Fund established and defined in Section 14 of this Ordinance. "Purchase Contract" is defined in Section 13. "Purchase Price" means the price to be paid by the Purchaser pursuant to the Purchase Contract for the Certificates, to-wit, $4,880,400. "Purchaser" means, collectively, the purchasers (underwriters) of the Certificates, namely, Bernardi Securities, Inc., Chicago, Illinois, and Griffin, Kubik, Stephens &Thompson, Inc., Chicago, Illinois. "Rebate Fund" means the Rebate Fund authorized to be established and as defined in Section 17 of this Ordinance. "Record Date" means the 1st day of the month of any regular or other interest payment date occurring on the 15th day of any month and 15 days preceding any interest payment date occasioned by the redemption of Certificates on other than the 15th day of a month. "Tar-exempt" means, with respect to the Certificates, the status of interest paid and received thereon as not includible in the gross income of the owners thereof under the Code for federal income tax purposes except to the extent that such interest is taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations. C. Definitions also appear in the preambles hereto or in specific sections, as appear below. The headings in this Ordinance are for the convenience of the reader and are not a part of this Ordinance. -6- Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that the recitals contained in the preambles to this Ordinance are true, correct, and complete and do incorporate them into this Ordinance by this reference. Section 3. Determination to Authorize and Enter into Agreement and to Issue Certificates. It is necessary and advisable for the public health, safety, welfare, and convenience of residents of the City to pay the costs of acquisition and construction of the Project, including all Related Expenses and to borrow money and, in evidence thereof and for the purpose of financing same, enter into the Agreement and, further, to provide for the issuance and delivery of the Certificates evidencing the indebtedness incurred under the Agreement. Section 4. Agreement Is a General Obligation; Annual Appropriation. The City hereby represents, warrants, and agrees that the obligation to make the payments due under the Agreement shall be a lawful direct general obligation of the City payable from the corporate funds of the City and such other sources of payment as are otherwise lawfully available. The City represents and warrants that the total amount due the Seller under the Agreement, together with all other indebtedness of the City, is within all statutory and constitutional debt limitations. The City agrees to appropriate funds of the City annually and in a timely manner so as to provide for the making of all payments when due under the terms of the Agreement. Section 5. E.recution and Filing of the Agreement. From and after the effective date of this Ordinance, the Mayor and Clerk be and they are hereby authorized and directed to execute and attest, respectively, the Agreement, in substantially the form thereof set forth below in the text of this Ordinance, and to do all things necessary and essential to effectuate the provisions of the Agreement, including the execution of any documents and certificates incidental thereto or necessary to carry out the provisions thereof. Further, as nominee-seller, the Treasurer is hereby authorized and directed to execute the Agreement. Upon full execution, the original of the -7- Agreement shall be filed with the Clerk and retained in the City records and con.stitute authority for issuance of the Certificates. Subject to such discretion of the officers signatory to the document as described in the foregoing text, the Installment Purchase Agreement shall be in substantially the form as follows: -8- INSTALLMENT PURCHASE AGREEMENT for purchase of real or personal property, or both, for the purpose of waterworks improvements, dated the I st day of July 2003, in and for the United City of Yorkville, Kendall County, Illinois. THIS INSTALLMENT PURCHASE AGREEMENT (this "Agreement") made as of the 1st day of July 2003 by and between the Treasurer of the City, as Nominee-Seller (the "Seller"), and the United City of Yorkville, Kendall, Illinois, a municipality and unit of local government of the State of Illinois (the "City"): WITNESSETH A. The City Council (the "Corporate Authorities") of the City has determined to acquire real or personal property, or both, for the purpose of waterworks improvements (the "Project"), all as previously approved by the Corporate Authorities and on file with the City Clerk (the "Clerk"). B. Pursuant to the provisions of the Illinois Municipal Code; the Local Government Debt Reform Act of the State of Illinois (the "Debt Reform Act"), and, in particular, the provisions of Section 17 of the Debt Reform Act (the "Installment Purchase Provisions of the Debt Reform Act"); and all other Omnibus Bond Acts of the State of Illinois; in each case, as supplemented and amended (collectively "Applicable Laiv"); the City has the power to purchase real or personal property through agreements that provide that the consideration for the purchase may be paid through installments made at stated intervals for a period of no more than 20 years and has the power to issue certificates evidencing indebtedness incurred under such agreements. C. On the 24th day of June 2003, the Corporate Authorities, pursuant to Applicable Law and the need to provide for the Project, adopted an ordinance (the "Ordinance"), numbered authorizing the borrowing of money for the Project, the execution and delivery of this Agreement to finance same, and the issuance of certificates evidencing the indebtedness so incurred. I-1 D. The Ordinance is (a) incorporated herein by reference; and (b) made a part hereof as if set out at this place in full; and each of the terms as defined in the Ordinance is also incorporated by reference for use in this Agreement. E. The Seller, as nominee as expressly permitted by the Installment Purchase Provisions of the Debt Reform Act, has agreed to make, construct, and acquire the Project on the terms as hereinafter provided. NOw THEREFORE in consideration of the mutual covenants and agreements hereinafter contained and other valuable consideration, it is mutually agreed between the Seller and the City as follows: 1. MAKE AND ACQUIRE PROJECT The Seller agrees to make, construct, and acquire the Project upon real estate owned or to be owned by or upon which valid easements have been obtained in favor of the City. 2. CONVEYANCE The Seller agrees to convey each part of the Project to the City and to perform all necessary work and convey all necessary equipment; and the City agrees to purchase the Project from the Seller and pay for the Project the purchase price of not to exceed $4,800,000; plus the amount of investment earnings which are earned on the amount deposited with the Treasurer from the sale of the Certificates and in no event shall the total aggregate principal purchase price to be paid pursuant to this Agreement exceed the sum of $4,800,000, plus the amount of investment earnings which are earned on the amount deposited with the Treasurer from the sale of the Certificates. I-2 3. PAYMENTS The payment of the entire sum of$4,800,000 of said purchase price shall: (a) be payable in installments due on the dates and in the amounts; (b) bear interest at the rates percent per annum which interest shall also be payable on the dates and in the amounts; (c) be payable at the place or places of payment, in the medium of payment, and upon such other terms, including prepayment (redemption); all as provided for payment of the Certificates in the Ordinance. 4. ASSIGNMENT Rights to payment of the Seller as provided in this Agreement are assigned as a matter of law, under the Installment Purchase Provisions of the Debt Reform Act, to the owners of the Certificates. This Agreement and any right, title, or interest herein, shall not be further assignable. The Certificates, evidencing the indebtedness incurred hereby, are assignable (registrable) as provided in the Ordinance. 5. TAX COVENANTS The covenants relating to the Tax-exempt status of the Certificates, as set forth in the Ordinance, insofar as may be applicable, apply to the work to be performed and the payments made under this Agreement. 6. TITLE. (a) Vesting of Title. Title in and to any part of the Project, upon delivery or as made, during all stages of the making or acquisition thereof, shall and does vest immediately in the City. (b) Damage, Destruction, and Condemnation. If, during the term of this Agreement, (i) all or any part of the Project shall be destroyed, in whole or in part, or damaged by fire or other casualty or event; or (ii) title to, or the temporary or permanent use of, all or any part of the I-3 Project shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm, or corporation acting under governmental authority; or (iii) a material defect in construction of all or any part of the Project shall become apparent; or (iv) title to or the use of all or any part of the Project shall be lost by reason of a defect in title; then the City shall continue to make payments as promised herein and in the Certificates and to take such action as it shall deem necessary or appropriate to repair and replace the Project. 7. LAWFUL.CORPORATE OBLIGATION The City hereby represents, warrants, and agrees that the obligation to make the payments due hereunder shall be a lawful direct general obligation of the City payable from the corporate funds of the City and such other sources of payment as are otherwise lawfully available. The City represents and warrants that the total amount due the Seller hereunder, together with all other indebtedness of the City, is within all statutory and constitutional debt limitations. The City agrees to appropriate funds of the City annually and in a timely manner so as to provide for the making of all payments when due under the terms of this Agreement. 8. GENERAL COVENANT AND RECITAL It is hereby certified and recited by the Seller and the City, respectively, that as to each, respectively, for itself, all conditions, acts, and things required by law to exist or to be done precedent to and in the execution of this Agreement did exist, have happened, been done and performed in regular and due form and time as required by law. 9. NO SEPARATE TAX THE SELLER AND THE CITY RECOGNIZE THAT THERE IS NO STATUTORY AUTHORITY FOR THE LEVY OF A SEPARATE TAX IN ADDITION TO OTHER TAXES OF THE CITY OR THE LEVY OF A SPECIAL TAX UNLIMITED AS TO RATE OR AMOUNT TO PAY ANY OF THE AMOUNTS DUE HEREUNDER. I-4 10. DEFAULT In the event of a default in payment hereunder by the City, the Seller or any Certificateholder may pursue any available remedy by suit at law or equity to enforce the payment of all amounts due or to become due under this Agreement, including, without limitation, an action for specific performance. IN WITNESS WHEREOF the Seller has caused this Installment Purchase Agreement to be executed and attested, and his or her signature to be attested by the Clerk, and the City has caused this Installment Purchase Agreement to be executed by its Mayor, and also attested by the Clerk, and the official seal of the City to be hereunto affixed, all as of the day and year first above written. /' // 44 SELLER: Signature: k v�Y,..- �w'// — [Here type name]: VJ6(( as Nominee-Seller and the Treasurer ATTEST: Y ttyArk [SEAL] UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS Mayor ATTEST: ity C k [SEAL] rr' i 1-5 STATE OF ILLINOIS ) ) SS COUNTY OF KENDALL ) CERTIFICATE OF INSTALLMENT PURCHASE AGREEMENT FILING I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of the United City of Yorkville, Kendall County, Illinois (the "City"), and as such officer I do hereby certify that on the 9th day of July 2003 there was filed in my office a properly certified copy of that certain document, executed by the Mayor of the City, attested by me in my capacity as City Clerk, and further executed, as Nominee-Seller, by the City Treasurer of the City, also attested by me, dated the 1st day of July 2003, and entitled "INSTALLMENT PURCHASE AGREEMENT for Purchase of real or personal property, or both, for the purpose of waterworks improvements, dated the 1st day of July 2003, in and for the United City of Yorkville, Kendall County, Illinois"; and supporting the issuance of certain Debt Certificates, Series 2003, of the City; that attached hereto is a true and i complete copy of said Agreement as so filed; and that the same has been deposited in the official files and records of my office. IN WITNESS WHEREOF I have hereunto affixed my official signature and the seal of the United City of Yorkville, Kendall County, Illinois at Yorkville, Illinois, this 9th day of July 2003. Jerk [SEAL] w, ti F-1 Section 6. Certificate Details. For the purpose of providing for acquisition and construction of the Project and Related Expenses, there shall be issued and sold the Certificates in the principal amount of $4,800,000. The Certificates shall each be designated "Debt Certificate, Series 2003"; be dated July 1, 2003 (the "Dated Date"); and shall.also bear the date of authentication thereof. The Certificates shall be in fully registered and in Book Entry Form, shall be in denominations of$5,000 or integral multiples thereof(but no single Certificate shall represent principal maturing on more than one date), and shall be numbered consecutively in such fashion as shall be determined by the Certificate Registrar. The Certificates shall become due and payable (subject to right of prior redemption) on December 15 of the years and in the amounts and bearing interest at the rates percent per annum as follows: YEAR AMOUNT($) RATE 2013 100,000 3.80 2014 100,000 3.90 2015 100,000 4.00 2016 100,000 4.15 2017 100,000 4.25 2018 300,000 4.35 2019 1,000,000 5.00 2020 1,000,000 5.00 2021 1,000,000 5.00 2022 1,000,000 5.00 Each Certificate shall bear interest from the later of its Dated Date or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of such Certificate is paid or duly provided for, such interest (computed upon the basis of a 360-day year of twelve 30-day months) being payable on June 15 and December 15 of each year, commencing on June 15, 2004. Interest on each Certificate shall be paid by check or draft of the Certificate Registrar, payable upon presentation thereof in lawful money of the United States of America, to the person in whose name such Certificate is registered at the close of business on the applicable Record Date, and mailed to the registered owner of the Certificate at -9- the address as shown in the Certificate Registrar or at such other address furnished in writing by such registered owner, or as otherwise may be agreed with the Depository for so long as the Depository or its nominee is the registered owner as of a given Record Date. The principal of or redemption price due on the Certificates shall be payable in lawful money of the United States of America upon presentation thereof at the office maintained for such purpose of the Certificate Registrar as currently maintained, as may be relocated from time to time, or at successor Certificate Registrar and locality. Section 7. Book Entry Provisions. The Certificates shall be initially issued in the form of a separate single fully registered Certificate for each of the maturities of the Certificates. Upon initial issuance, the ownership of each such Certificate shall be registered in the Certificate Register in the name of the Depository or a designee or nominee of the Depository (such depository or nominee being the `Book Entry Owner"). Except as otherwise expressly provided, all of the outstanding Certificates from time to time shall be registered in the Certificate Register in the name of the Book Entry Owner (and accordingly in Book Entry Form as such term is used in this Ordinance). Any City officer, as representative of the City, is hereby authorized, empowered, and directed to execute and deliver or to utilize a previously executed and delivered Letter of Representations or Blanket Letter of Representations (either being the "Letter of Representations") substantially in the form common in the industry, or with such changes therein as any officer executing the Letter of Representations on behalf of the City shall approve, his or her execution thereof to constitute conclusive evidence of approval of such changes, as shall be necessary to effectuate Book Entry Form. Without limiting the generality of the authority given with respect to entering into such Letter of Representations, it may contain provisions relating to (a) payment procedures, (b) transfers of the Certificates or of beneficial interests therein, (c) redemption notices and procedures unique to the Depository, (d) additional -10- notices or communications, and (e) amendment from time to time to conform with changing customs and practices with respect to securities industry transfer and payment practices. With respect to Certificates registered in the Certificate Register in the name of the Book Entry Owner, none of the City, any of its financial officers, or the Certificate Registrar shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which the Depository holds Certificates from time to time as securities depository (each such broker-dealer, bank, or other financial institution being referred to herein as a "Depository Participant") or to any person on behalf of whom such a Depository Participant holds an interest in the Certificates. Without limiting the meaning of the immediately preceding sentence, the City, any of its financial officers, and the Certificate Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the records of the Depository, the Book Entry Owner, or any Depository Participant with respect to any ownership interest in the Certificates, (b) the delivery to any Depository Participant or any other person, other than a registered owner of a Certificate as shown in the Certificate Register or as otherwise expressly provided in the Letter of Representations, of any notice with respect to the Certificates, including any notice of redemption, or (c) the payment to any Depository Participant or any other person, other than a registered owner of a Certificate as :-hown in the Certificate Register, of any amount with respect to principal of or interest on the Certificates. No person other than a registered owner of a Certificate as shown in the Certificate Register shall receive a certificate with respect to any Certificate. In the event that (a) the City determines that the Depository is incapable of discharging its responsibilities described herein and in the Letter of Representations, (b) the agreement among the City, the Certificate Registrar, and the Depository evidenced by the Letter of Representations shall be terminated for any reason, or (c) the City determines that it is in the best interests of the City or of the beneficial owners of the Certificates either that they be able to -11- obtain certificated Certificates or that another depository is preferable, the City shall notify the Depository, and the Depository shall notify the Depository Participants, of the availability of physical Certificates; and the Certificates shall no longer be restricted to being registered in the Certificate Register in the name of the Book Entry Owner. Alternatively, at such time, the City may determine that the Certificates shall be registered in the name of and deposited with a successor depository operating a system accommodating Book Entry Form, as may be acceptable to the City, or such depository's agent or designee, but if the City does not select such alternate book entry system, then the Certificates shall be registered in whatever name or names registered owners of Certificates transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. Section 8. E,vecution; Authentication. The Certificates shall be executed on behalf of the City by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, as they may determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the City. In case any such officer whose signature shall appear on any Certificate shall cease to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. All Certificates shall have thereon a certificate of authentication, substantially in the form hereinafter set forth, duly executed by the Certificate Registrar as authenticating agent of the City and showing the date of authentication. No Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless and until such certificate of authentication shall have been duly executed by the Certificate Registrar by manual signature, and such certificate of authentication upon any such Certificate shall be conclusive evidence that such Certificate has been authenticated and delivered under this Ordinance. The certificate of authentication on any -12- Certificate shall be deemed to have been executed by it if signed by an authorized officer of the Certificate Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Certificates issued hereunder. Section 9. Optional Redemption. The Certificates are subject to redemption prior to maturity at the option of the City, from any available funds, in whole or in part, on any date on or after December 15, 2011, and if in part, in any order of maturity as selected by the City, and if less than an entire maturity, in integral multiples of $5,000, selected by lot by the Certificate Registrar as hereinafter provided, at a redemption price of par plus accrued interest to the date fixed for redemption. Section 10. Redemption Procedures. The Certificates subject to redemption shall be identified, notice given, and paid and redeemed pursuant to the procedures as follows: A. Optional Redemption. The City shall, at least 45 days prior to a redemption date (unless a shorter time period shall be satisfactory to the Certificate Registrar), notify the Certificate Registrar of such redemption date and of the maturities (and, if applicable, the scheduled mandatory redemptions affected) and principal amounts of Certificates to be redeemed. B. Selection of Certificates within a Maturity. For purposes of any redemption of less than all of the Certificates of a single maturity, the particular Certificates or portions of Certificates to be redeemed shall be selected by lot by the Certificate Registrar for the Certificates of such maturity by such method of lottery as the Certificate Registrar shall deem fair and appropriate; provided, that such lottery shall provide for the selection for redemption of Certificates or portions thereof so that any $5,000 Certificate or $5,000 portion of a Certificate shall be as likely to be called for redemption as any other such $5,000 Certificate or $5,000 portion. The Certificate -13- Registrar shall make such selection upon the earlier of the irrevocable receipt of funds sufficient to pay the redemption price of the Certificates to be redeemed or the time of the giving of official notice of redemption. C. Official Notice of Redemption The Certificate Registrar shall promptly notify the City in writing of the Certificates or portions of Certificates selected for redemption and, in the case of any Certificate selected for partial redemption, the principal amount thereof to be redeemed. Unless waived by the registered owner of Certificates to be redeemed, official notice of any such redemption shall be given by the Certificate Registrar on behalf of the City by mailing the redemption notice by first class U.S. mail not less than 30 days and not more than 60 days prior to the date fixed for redemption to each registered owner of the Certificate or Certificates to be redeemed at the address shown on the Certificate Register or at such other address as is furnished in writing by such registered owner to the Certificate Registrar. All official notices of redemption shall include the name of the Certificates and at least the information as follows: (1) the redemption date; (2) the redemption price; (3) if less than all of the outstanding Certificates of a particular maturity are to be redeemed, the identification (and, in the case of partial redemption of Certificates within such maturity, the respective principal amounts) of the Certificates to be redeemed; (4) a statement that on the redemption date the redemption price will become due and payable upon each such Certificate or portion thereof called for -14- redemption and that interest thereon shall cease to accrue from and after said date; and (5) the place where such Certificates are to be surrendered for payment of the redemption price, which place of payment shall be the office maintained for the purpose by the Certificate Registrar. D. Conditional Redemption. Unless moneys sufficient to pay the redemption price of the Certificates to be redeemed shall have been received by the Certificate Registrar prior to the giving of such notice of redemption, such notice may, at the option of the City, state that said redemption shall be conditional upon the receipt of such moneys by the Certificate Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice shall be of no force and effect, the City shall not redeem such Certificates, and the Certificate Registrar shall give notice, in the same manner in which the notice of redemption shall have been given, that such moneys were not so received and that such Certificates will not be redeemed. E. Certificates Shall Become Due. Subject to the stated condition in paragraph E, official notice of redemption having been given as described, the Certificates or portions of Certificates so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall not make full payment of the redemption price) such Certificates or portions of Certificates shall cease to bear interest. Upon surrender of such Certificates for redemption in accordance with said notice, such Certificates shall be paid by the Certificate Registrar at the redemption price. The procedure for the payment of interest due as part of the redemption price shall be as herein provided for payment of interest otherwise due. -15- F. Insufficiency in Notice Not Affecting Other Certificates; Failure to Receive Notice; Waiver. Neither the failure to mail such redemption notice, nor any defect in any notice so mailed, to any particular registered owner of a Certificate, shall affect the sufficiency of such notice with respect to other registered owners. Notice having been properly given, failure of a registered owner of a Certificate to receive such notice shall not be deemed to invalidate, limit or delay the effect of the notice or redemption action described in the notice. Such notice may be waived in writing by a registered owner of a Certificate entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by registered owners shall be filed with the Certificate Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In lieu of the foregoing official notice, so long as the Certificates are held in Book Entry Form, notice may be given as provided in the Letter of Representations, and the giving of such notice shall constitute a waiver by the Depository and the Book Entry Owner, as registered owner, of the foregoing notice. G. New Certificate in Amount Not Redeemed. Upon surrender for any partial redemption of any Certificate, there shall be prepared for the registered owner a new Certificate or Certificates of like tenor, of authorized denominations, of the same maturity, and bearing the same rate of interest in the amount of the unpaid principal. H. Effect of Nonpayment upon Redemption. If any Certificate or portion of Certificate called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the redemption date at the rate borne by the Certificate or portion of Certificate so called for redemption. -16- I. Certificates to Be Cancelled; Payment to Identify= Certificates. All Certificates which have been redeemed shall be cancelled and destroyed by the Certificate Registrar and shall not be reissued. Upon the payment of the redemption price of Certificates being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Certificates being redeemed with the proceeds of such check or other transfer. J. Additional Notice. The City agrees to provide such additional notice of redemption as it may deem advisable at such time as it determines to redeem Certificates, taking into account any requirements or guidance of the Securities and Exchange Commission, the Municipal Securities Rule Making Board, the Government Accounting Standards Board, or any other federal or state agency having jurisdiction or authority in such matters; provided, however, that such additional notice shall be (1) advisory in nature, (2) solely in the discretion of the City, (3) not be a condition precedent of a valid redemption or a part of the Certificate contract, and (4) any failure or defect in such notice shall not delay or invalidate the redemption of Certificates for which proper official notice shall have been given. Reference is also made to the provisions of the Continuing Disclosure Undertaking of the City with respect to the Certificates, which may contain other provisions relating to notice of redemption of Certificates. K. Certificate Registrar to Advise City. As part of its duties hereunder, the Certificate Registrar shall prepare and forward to the City a statement as to notices given with respect to each redemption together with copies of the notices as mailed. Section 11. Registration of Certificates; Persons Treated as Owners. The City shall cause books (the "Certificate Register" as herein defined) for the registration and for the transfer of the Certificates as provided in this Ordinance to be kept at the office maintained for such -17- purpose by the Certificate Registrar, which is hereby constituted and appointed the registrar of the City for the Certificates. The City is authorized to prepare, and the Certificate Registrar or such other agent as the City may designate shall keep custody of, multiple Certificate blanks executed by the City for use in the transfer and exchange of Certificates. Subject to the provisions of this Ordinance relating to the Certificates in Book Entry Form, any Certificate may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in this Ordinance. Upon surrender for transfer or exchange of any Certificate at the office of the Certificate Registrar maintained for the purpose, duly endorsed by or accompanied by a written instrument or instruments of transfer or exchange in form satisfactory to the Certificate Registrar and duly executed by the registered owner or an attorney for such owner duly authorized in writing, the City shall execute and the Certificate Registrar shall authenticate, date, and deliver in the name of the transferee or transferees or, in the case of an exchange, the registered owner, a new fully registered Certificate or Certificates of like tenor, of the same maturity, bearing the same interest rate, of authorized denominations, for a like aggregate principal amount. The Certificate Registrar shall not be required to transfer or exchange any Certificate during the period from the close of business on the Record Date for an interest payment to the opening of business on such interest payment date or during the period of 15 days preceding the giving of notice of redemption of Certificates or to transfer or exchange any Certificate all or a portion of which has been called for redemption. The execution by the City of any fully registered Certificate shall constitute full and due authorization of such Certificate; and the Certificate Registrar shall thereby be authorized to authenticate, date, and deliver such Certificate;provided, however, the principal amount of Certificates of each maturity authenticated by the Certificate Registrar shall not at any one time exceed the authorized principal amount of Certificates for such maturity less the amount of such Certificates which -18- have been paid. The person in whose name any Certificate shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Certificate shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the sum or sums so paid. No service charge shall be made to any registered owner of Certificates for any transfer or exchange of Certificates, but the City or the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates. Section .12. Form of Certificate. The Certificates shall be in substantially the form hereinafter set forth;provided, however, that if the text of the Certificates is to be printed in its entirety on the front side of the Certificates, then the second paragraph on the front side and the legend "See Reverse Side for Additional Provisions" shall be omitted and the text of paragraphs set forth for the reverse side shall be inserted immediately after the first paragraph. -19- [FORM OF CERTIFICATE- FRONT SIDE] REGISTERED REGISTERED NO. UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTY OF KENDALL UNITED CITY OF YORKVILLE DEBT CERTIFICATE, SERIES 2003 See Reverse Side for Additional Provisions. Interest Maturity Dated Rate: Date: December 15, Date: July 1, 2003 CUSIP: Registered Owner: CEDE& CO. Principal Amount: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the United City of Yorkville, Kendall County, Illinois, a municipality and political subdivision of the State of Illinois (the "City"), hereby acknowledges itself to owe and for value received promises to pay from the source and as hereinafter provided to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above (subject to right of prior redemption), the Principal Amount identified above and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on such Principal Amount from the later of the Dated Date of this Certificate identified above or from the most recent interest payment date to which interest has been paid or duly provided for, at the Interest Rate per annum identified above, such interest to be payable on June 15 and December 15 of each year, commencing June 15, 2004, until said Principal Amount is paid or duly provided for. The principal of or redemption price on this Certificate is payable in lawful money of the United States of America upon presentation hereof at the office -20- maintained for such purpose of BNY Midwest Trust Company, Chicago, Illinois, as paying agent and registrar (the "Certificate Registrar'). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the City maintained by the Certificate Registrar at the close of business on the applicable Record Date (the "Record Date"). The Record Date shall be the 1st day of the month of any regular or other interest payment date occurring on the 15th day of any month and 15 days preceding any interest payment date occasioned by the redemption of Certificates on other than the 15th day of a month. Interest shall be paid by check or draft of the Certificate Registrar, payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books or at such other address furnished in writing by such Registered Owner to the Certificate Registrar, or as otherwise agreed by the City and the Certificate Registrar and a qualified securities clearing corporation as depository, or nominee, for so long as this Certificate shall be in Book Entry Form as provided for same. Reference is hereby made to the further provisions of this Certificate set forth on the reverse hereof, and such further provisions shall for all purposes have the same effect as if set forth at this place. It is hereby certified and recited that all conditions, acts, and things required by the Constitution and Laws of the State of Illinois to exist or to be done precedent to and in the issuance of this Certificate, including Applicable Law as defined herein, have existed and have been properly done, happened, and been performed in regular and due form and time as required by law; that the obligation to make payments due hereon are a lawful direct general obligation of the City payable from the corporate funds of the City and such other sources of payment as are otherwise lawfully available; that the total amount due under the Agreement, represented by the Certificates, together with all other indebtedness of the City, is within all statutory and -21- constitutional debt limitations; and that the City shall appropriate funds annually and in a timely manner so as to provide for the making of all payments hereon when due. THE OWNER OF THIS CERTIFICATE ACKNOWLEDGES THAT THERE IS NO STATUTORY AUTHORITY FOR THE LEVY OF A SEPARATE TAX IN ADDITION TO OTHER TAXES OF THE CITY OR THE LEVY OF A SPECIAL TAX UNLIMITED AS TO RATE OR AMOUNT TO PAY ANY OF THE AMOUNTS DUE HEREUNDER. This Certificate shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Certificate Registrar. IN WITNESS WHEREOF the United City of Yorkville,Kendall County, Illinois, by its City Council, has caused this Certificate to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above. ZMayor, United City of Yorkvil Kendall County, Illinois ATTEST: d erk, Uited Cit f Yorkville Kendall County, Illinois [SEAL] n i -22- Date of Authentication: , CERTIFICATE Certificate Registrar and Paying Agent: OF BNY Midwest Trust Company, AUTHENTICATION Chicago, Illinois This Certificate is one of the Certificates described in the with Ordinance and is one of the Debt Certificates, Series 2003, having a Dated Date of June 15, 2003, of the United City of Yorkville, Kendall County, Illinois. BNY MIDWEST TRUST COMPANY, as Certificate Registrar By Authorized Officer -23- [FORM OF CERTIFICATE- REVERSE SIDE] This Certificate is one of a series (the "Certificates") in the aggregate principal amount of$4,800,000 issued by the City for the purpose of providing funds to pay part of the cost of the Project and Related Expenses, all as described and defined in the ordinance authorizing the Certificates (the "Ordinance"), pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as supplemented and amended, and in particular as supplemented by the Local Government Debt Reform Act of the State of Illinois, as amended, and the other Omnibus Bond Acts of the State of Illinois ("Applicable Law"), and with the Ordinance, which has been duly passed by the City Council of the City on the 24th day of June 2003, and approved by the Mayor, in all respects as by law required. The Certificates issued by the City in connection with the Project have been issued in evidence of the indebtedness incurred pursuant to a certain Installment Purchase Agreement (the "Agreement"), dated as of the first day of July 2003, entered into by and between the City and its City Treasurer, as Seller- Nominee, to which reference is hereby expressly made for further definitions and terms and to all the provisions of which the holder by the acceptance of this certificate assents. This Certificate is subject to provisions relating to registration, transfer, and exchange; redemption and notice and procedure for redemption; and such other terms and provisions relating to security and payment as are set forth in the Ordinance; to which reference is hereby expressly made; and to all the terms of which the registered owner hereof is hereby notified and shall be subject. The City and the Certificate Registrar may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the City nor the Certificate Registrar shall be affected by any notice to the contrary. -24- STATEMENT OF INSURANCE Radian Asset Assurance Inc. ("Radian"), a New York corporation, has issued its policy (the "Policy") insuring the payment of principal of and interest on this Certificate on the "due date," as defined in the Policy. Reference is made to the Policy for the complete provisions thereof. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Certificate acknowledges and consents to the subrogation and transfer rights of Radian as more fully set forth in the Policy. ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto [Here insert identifying number such as TID, SSN, or other (Name and Address of Assignee) the within Certificate and does hereby irrevocably constitute and appoint as attorney to transfer the said Certificate on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Certificate in every particular, without alteration or enlargement or any change whatever. Section 13. Sale of Certificates; Official Statement. The Certificates shall be executed as in this Ordinance provided as soon after the passage hereof as may be, shall be deposited with Treasurer of the City, and shall thereupon be delivered to the Purchaser upon payment of the -25- Purchase Price, plus accrued interest to date of delivery. The contract for the sale of the Certificates to the Purchaser (the "Purchase Contract"), and as executed by the Purchaser, is hereby in all respects approved and confirmed, it being hereby declared that, to the best of the knowledge and belief of the members of the Corporate Authorities, after due inquiry, no person holding any office of the City, either by election or appointment, is in any manner financially interested, either directly in his or her own name or indirectly in the name of any other person, association, trust or corporation, in the Purchase Contract for the sale of the Certificates to the Purchaser. The "Deemed Final" Official Statement of the City, dated June 24, 2003 (the "DFOS"), relating to the Certificates, presented to the Corporate Authorities with the Ordinance, is hereby ratified and approved. The Official Statement of the City, consisting of the DFOS and an addendum to be dated within seven days of the date of adoption of this Ordinance, relating to the Certificates (the "Official Statement"), is hereby authorized, and the Purchaser is hereby authorized on behalf of the City to distribute copies of the Official Statement to the ultimate purchasers of the Certificates. Such officer or officers of the City as are indicated are hereby authorized to execute and deliver the Official Statement on behalf of the City. Section 14. Creation of Funds and Appropriations. A. There is hereby created the "Debt Certificates, Series 2003, Certificate Fund" (the "Certificate Fund"), which shall be the fund for the payment of the principal of and interest on the Certificates. Accrued interest and premium, if any, received upon delivery of the Certificates shall be deposited into the Certificate Fund and be applied to pay the first interest coming due on the Certificates. Funds lawfully available for the purpose shall be deposited into the Certificate Fund and used solely and only for the purpose of paying the principal of and interest on the Certificates. Interest income or investment profit earned in the Certificate Fund shall be retained in the Certificate Fund for payment of the principal of or interest on the Certificates on the -26- interest payment date next after such interest or profit is received or, to the extent lawful and as determined by the Corporate Authorities, transferred to such other fund as may be determined. Moneys in the Certificate Fund shall be applied to pay principal of and interest on the Certificates. B. The amount necessary from the proceeds of the Certificates shall be used either to pay expenses directly at the time of issuance of the Certificates or be deposited into a separate fund, hereby created, designated the "Expense Fund," to be used to pay expenses of issuance of the Certificates. Disbursements from such fund shall be made from time to time as necessary. Moneys not disbursed from the Expense Fund within six (6) months shall be transferred by the appropriate financial officers for deposit into the Project Fund, and any deficiencies in the Expense Fund shall be paid by disbursement from the Project Fund. C. The remaining proceeds of the Certificates shall be deposited into the Project Fund (the "Project Fund"), hereby created. Moneys in the Project Fund shall be used to pay costs of the Project in accordance with the following procedures: 1. Contracts ("Work Contracts") have been or shall be awarded, from time to time, by the Corporate Authorities for the work on the Project; and the Corporate Authorities represent and covenant that each Work Contract has been or wal be let in strict accordance with Applicable Law and the rules and procedures of the City for same. 2. By paragraph 3 of this Section of this Ordinance, as follows, or pursuant to ordinance or resolution to be duly adopted, the Corporate Authorities shall identify all or a designated portion of each Work Contract to the Agreement. This Ordinance and any such further ordinance or resolution shall be filed of record with the Clerk and the Treasurer. The adoption and filing of any such ordinance or resolution and the Work Contracts with such officers shall constitute authority for the officer or officers of the -27- City to make disbursements from the Project Fund to pay amounts due under such Work Contracts from time to time, upon such further resolutions, orders, vouchers, warrants, or other proceedings as are required under Applicable Law and the rules and procedures of the City for same. No action need be taken by or with respect to the contractors under the Work Contracts as, pursuant to the Installment Purchase Provisions of the Debt Reform Act, the Treasurer acts as Nominee-Seller of the Project for all purposes, enabling the issuance of the Certificates. Funds on deposit in the Project Fund shall be invested by the appropriate officers of the City in any lawful manner. Investment earnings shall first be reserved and transferred to such other account as and to the extent necessary to pay any "excess arbitrage profits" or "penalty in lieu of rebate" under Code Section 148 to maintain the Tax-exempt status of the Certificates, and the remainder shall be retained in the fund for costs of the Project. Within sixty (60) days after full depletion of the Project Fund, the appropriate offices of the City shall certify to the Corporate Authorities the fact of such depletion; and, upon approval of such certification by the Corporate Authorities, the Project Fund shall be closed. 3. The following Work Contracts are hereby identified to the Agreement: -28- BRIEF DESCRIPTION NAME OF CONTRACT IDENTIFIED OF WORK CONTRACT CONTRACTOR AMOUNT($) AMOUNT($) The Work Contracts so identified are attached to this Ordinance as Exhibits B-] through D. Alternatively to the creation of the funds described above, the appropriate officers may allocate the Certificate Moneys or proceeds of the Certificates to one or more related funds of the City already in existence and in accordance with good accounting practice; provided, however, that this shall not relieve such officers of the duty to account and invest the Certificate Moneys and the proceeds of the Certificates, as herein provided, as if such funds had in fact been created. Section 15. Continuing Disclosure Undertaking. The Mayor or the Clerk is hereby authorized, empowered, and directed to execute and deliver the Continuing Disclosure Undertaking (the "Continuing Disclosure Undertaking") substantially in the form attached hereto as E.ihibit A to this Ordinance, made a part hereof by this reference, and hereby approved, the officer signatory to such Continuing Disclosure Undertaking being hereby authorized and -29- directed to execute same, his or her execution to constitute conclusive proof of action in accordance with this Ordinance and approval of all completions or revisions necessary or appropriate to such undertaking. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding upon the City and the officers, employees, and agents of the City; and 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 documents as may be necessary to carry out and comply with the provisions of the Continuing Disclosure Undertaking as executed. Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of the beneficial owner of any Certificate to seek mandamus or specific performance by court order to cause the City to comply with its obligations under the Continuing Disclosure Undertaking. Section 16. General Tax Covenants. The City hereby covenants that it will not take any action, omit to take any action, or permit the taking or omission of any action, within its control (including, without limitation, making or permitting any use of the proceeds of the Certificates) if taking, permitting, or omitting to take such action would cause any of the Certificates to be an arbitrage bond or a private activity bond within the meaning of the Code or would otherwise cause the interest on the Certificates to be included in the gross income of the recipients thereof for federal income tax purposes. The City acknowledges that, in the event of an examination by the Internal Revenue Service of the exemption from Federal income taxation for interest paid on the Certificates, under present rules, the City is treated as the "taxpayer" in such examination and agrees that it will respond in a commercially reasonable manner to any inquiries from the Internal Revenue Service in connection with such an examination. In furtherance of the foregoing provisions, but without limiting their generality, the City agrees: -30- (a) through its officers, to make such further specific covenants, representations as shall be truthful, and assurances as may be necessary or advisable; (b) to comply with all representations, covenants, and assurances contained in certificates or agreements as may be prepared by counsel approving the Certificates; (c) to consult with such counsel and to comply with such advice as may be given; (d) to file such forms, statements, and supporting documents as may be required and in a timely manner; and (e) if deemed necessary or advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys, and other persons to assist the City in such compliance. Section 17. Certain Specific Twc Covenants. A. None of the Certificates shall be a "private activity bond" as defined in Section 141(a) of the Code; and the City certifies, represents, and covenants as follows: (1) Not more than 5% of the net sale proceeds of the Certificates is to be used, directly or indirectly, in any trade or business carried on by any person other than a state or local governmental unit. (2) Not more than 5% of the amounts necessary to pay the principal of and interest on the Certificates will be derived, directly or indirectly, from payments with respect to any private business use by any person other than a state or local governmental unit. (3) None of the proceeds of the Certificates is to be used, directly or indirectly, to make or finance loans to persons other than a state or local governmental unit. (4) No user of the infrastructure of the City to be improved as part of the Project, other than the City or another governmental unit, will use the same on any basis other than the same basis as the general public; and no person, other than the City or another governmental unit, will be a user of such infrastructure as a result of (i) -31- ownership or (ii) actual or beneficial use pursuant to a lease, a management or incentive payment contract other than as expressly permitted by the Code, or (iii) any other arrangement. B. The Certificates shall not be "arbitrage bonds" under Section 148 of the Code; and the City certifies, represents, and covenants as follows: (1) With respect to the Project, the City has heretofore incurred or within six months after delivery of the Certificates expects to incur substantial binding obligations to be paid for with money received from the sale of the Certificates, said binding obligations comprising binding contracts for the Project in not less than the amount of 5% of the net sale proceeds of the Certificates. (2) More than 85% of the proceeds of the Certificates will be expended on or before three years from the date hereof for the purpose of paying the costs of the Project. (3) All of the principal proceeds of the Certificates and investment earnings thereon will be used, needed, and expended for the purpose of paying the costs of the Project, including expenses incidental thereto. (4) Work on the Project is expected to proceed with due diligence to completion. (5) Except for the Certificate Fund, the City has not created or established and will not create or establish any sinking fund, reserve fund, or any other similar fund to provide for the payment of the Certificates. The Certificate Fund has been established and will be funded in a manner primarily to achieve a proper matching of revenues and debt service and will be depleted at least annually to an amount not in excess of 1/12th the particular annual debt service on the Certificates. Money deposited into the Certificate Fund will be spent within a 13-month period beginning on the date of deposit, -32- and investment earnings in the Certificate Fund will be spent or withdrawn from the Certificate Fund within a one-year period beginning on the date of receipt. (6) Amounts of money related to the Certificates required to be invested at a yield not materially higher than the yield on the Certificates, as determined pursuant to such tax certifications or agreements as the City officers may make in connection with the issuance of the Certificates, shall be so invested; and appropriate City officers are hereby authorized and directed to make such investments. (7) The City has not been notified of any disqualification or proposed disqualification of it by the Commissioner of the Internal Revenue Service as a bond issuer which may certify bond issues under Treasury Regulations permitting such certifications. (8) Unless an applicable exception to Section 148(f) of the Code, relating to the rebate of "excess arbitrage profits" to the United States Treasury (the "Rebate Requirement") is available to the City, the City will meet the Rebate Requirement. (9) Relating to applicable exceptions, any City officer charged with issuing the Certificates is hereby authorized to make such elections under the Code as such officer shall deem reasonable and in the best interest:, 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. (10) The officers of the City shall cause to be established, at such time and in such manner as they may deem necessary or appropriate hereunder, a "Debt Certificates, Series 2003 Rebate [or Penalty, if applicable] Fund" (the "Rebate Fund") for the Certificates, and such officers shall further, not less frequently than annually, cause to be transferred to the Rebate Fund the amount determined to be the accrued liability under -33- the Rebate Requirement or Penalty. Said officers shall cause to be paid to the United States Treasury, 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. (11) Interest earnings in the Project Fund and the Certificate 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 Certificates and 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. C. None of the proceeds of the Certificates will be used to pay, directly or indirectly, in whole or in part, for an expenditure that has been paid by the City prior to the date hereof except architectural or engineering costs incurred prior to commencement of any of the Project or expenditures for which an intent to reimburse has been properly declared under Treasury Regulations Section 1.103-18. This Ordinance is in itself a declaration of official intent under Treasury Regulations Section 1.103-18 as to all costs of the Project paid after 60 days prior to the date hereof and up to the issuance of the Certificates. D. The City reserves the right to use or invest moneys in connection with the Certificates in any manner, or to make changes in the Project list, or to use the City infrastructure acquired, constructed, or improved as part of the Project in any manner, notwithstanding the representations and covenants in Sections 16 and 17 herein,provided it shall first have received an opinion from an attorney or a firm of attorneys generally acceptable to purchasers of Tax- exempt bonds to the effect that use or investment of such moneys or the changes in or use of -34- such infrastructure as contemplated is authorized under Applicable Law and this Ordinance and will not result in loss or impairment of Tax-exempt status for the Certificates. Section 18. Pertaining to the Certificate Registrar. If requested by the Certificate Registrar, any officer of the City is authorized to execute a standard form of agreement between the City and the Certificate Registrar with respect to the obligations and duties of the Certificate Registrar under this Ordinance. In addition to the terms of such agreement and subject to modification thereby, the Certificate Registrar by acceptance of duties under this Ordinance agrees (a) to act as registrar, paying agent, authenticating agent, and transfer agent as provided herein; (b) to maintain a list of Certificateholders as set forth herein and to furnish such list to the City upon request, but otherwise to keep such list confidential to the extent permitted by law; (c) to cancel and/or destroy Certificates which have been paid at maturity or upon redemption or submitted for exchange or transfer; (d) to furnish the City at least annually a certificate with respect to Certificates cancelled and/or destroyed; and (e) to furnish the City at least annually an audit confirmation of Certificates paid, Certificates outstanding and payments made with respect to interest on the Certificates. The City covenants with respect to the Certificate Registrar, and the Certificate Registrar further covenants and agrees as follows: A. The City shall at all times retain a Certificate Registrar with respect to the Certificates; it will maintain at the designated office(s) of such Certificate Registrar a place or places where Certificates may be presented for payment, registration, transfer, or exchange; and it will require that the Certificate Registrar properly maintain the Certificate Register and perform the other duties and obligations imposed upon it by this Ordinance in a manner consistent with the standards,customs, and practices of the municipal securities industry. B. The Certificate Registrar shall signify its acceptance of the duties and obligations imposed upon it by this Ordinance by executing the certificate of authentication on any -35- Certificate, and by such execution the Certificate Registrar shall be deemed to have certified to the City that it has all requisite power to accept and has accepted such duties and obligations not only with respect to the Certificate so authenticated but with respect to all the Certificates. Any Certificate Registrar shall be the agent of the City and shall not be liable in connection with the performance of its duties except for its own negligence or willful wrongdoing. Any Certificate Registrar shall, however, be responsible for any representation in its certificate of authentication on Certificates. C. The City may remove the Certificate Registrar at any time. In case at any time the Certificate Registrar shall resign, shall be removed, shall become incapable of acting, or shall be adjudicated a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Certificate Registrar or of the property thereof shall be appointed, or if any public officer shall take charge or control of the Certificate Registrar or of the property or affairs thereof, the City covenants and agrees that it will thereupon appoint a successor Certificate Registrar. The City shall give notice of any such appointment made by it to each registered owner of any Certificate within twenty days after such appointment in the same manner, or as nearly the same as may be practicable, as for a redemption of Certificates. Any Certificate Registrar appointed under the provisions of this Section shall be a bank, trust company, or national banking association maintaining its principal corporate trust office in Illinois and having capital and surplus and undivided profits in excess of $100,000,000. The City Clerk is hereby directed to file a certified copy of this Ordinance with the Certificate Registrar and the Certificate Registrar. The Certificate Registrar shall not make a claim for payment on the financial guaranty insurance policy (the "Policy") issued by Radian Asset Assurance Inc., a corporation organized-- under the laws of the State of New York or any successor thereto (the `Insurer"), until any and all funds held pursuant this Ordinance have been fully drawn to pay debt service on the -36- Certificates. As long as the Policy shall be in full force and effect, the Certificate Registrar agrees to comply with the following provisions: AA. At least three (3) days prior to all interest payment dates, the Certificate Registrar will determine whether there will be sufficient funds to pay the principal of or interest on the Certificates on such interest payment date. If the Certificate Registrar determines that there will be insufficient funds, the Certificate Registrar shall so notify The Bank of New York (the 'Insurance Trustee"). Such notice shall specify the amount of the anticipated deficiency, the Certificates to which such deficiency is applicable and whether such Certificates will be deficient as to principal or interest, or both. The Insurer will make payments of principal or interest due on the Certificates on or before the first (I st) day next following the date on which the Insurance Trustee shall have received notice of nonpayment from the Certificate Registrar. BB. The Certificate Registrar shall, after giving notice to the Insurance Trustee as provided in AA above, make available to the Insurer and the Insurance Trustee the registration books of the City maintained by the Certificate Registrar and all records relating to the funds maintained under this Ordinance. CC. The Certificate Registrar shall provide the Insurer and the Insurance Trustee with a list of registered owners of Certificates entitled to receive principal or interest payments from the Insurer under the terms of the Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts or provide electronic transfers of funds to the registered owners of Certificates entitled to receive full or partial interest payments from the Insurer and (ii) to pay principal upon Certificates surrendered to the Insurance Trustee by the registered owners of Certificates entitled to receive full or partial principal payments from the Insurer. -37- DD. The Certificate Registrar shall at the time it provides notice to the Insurance Trustee pursuant to AA above, notify registered owners of Certificates entitled to receive the payment of principal or interest thereon from the Insurer (i) as to the fact of such entitlement, (ii) that the Insurer will remit to them all or part of the interest payments next coming due upon proof of owner entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee as determined by the Insurer, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Insurer, they must surrender their Certificates (along with an appropriate instrument of assignment in form satisfactory to the Insurer to permit ownership of such Certificates to be registered in the name of the Insurer) for payment to the Insurance Trustee, and not the Certificate Registrar, and (iv) that should they be entitled to receive partial payment of principal from the Insurer, they must surrender their Certificates for payment thereon first to the Certificate Registrar, who shall note on such Certificates the portion of the principal paid by the Certificate Registrar and then, along with an appropriate instrument of assignment in form satisfactory to the Insurer, to the Insurance Trustee, which will then pay the unpaid portion of principal. EE. In the event that the Certificate Registrar has notice that any payment of principal of or interest on a Certificate which has become due for payment and which is made to a registered owner by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Certificate Registrar shall, at the time the Insurance Trustee is notified pursuant to AA above, notify all registered owners that -38- in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Certificate Registrar shall furnish to the Insurance Trustee and the Insurer its records evidencing the payments of principal of and interest on the Certificates which have been made by the Certificate Registrar and subsequently recovered from registered owners and the dates on which such payments are made. FF. The Insurer shall, to the extent it makes payment of principal of or interest on Certificates, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Certificate Registrar shall note the Insurer's rights as subrogee on the registration books of the City maintained by the Certificate Registrar, upon receipt from the Insurer of proof of the payment of interest thereon to the registered owners of the Certificates and (ii) in the case of subrogation as to claims for past due principal, the Certificate Registrar shall note the Insurer's rights as subrogee on the registration books of the City maintained by the Certificate Registrar upon surrender of the Certificates by the registered owners thereof together with proof of the payment of principal thereof. Section 19. Municipal Bond Insurance. The Insurer is providing the Policy. The covenants made herein are for the benefit of the Insurer at all times in consideration of the issuance of the Policy, which will result in lower interest costs on the Certificates for the City. The City agrees as follows with the Insurer: A. In the event that the principal and/or interest due on the Certificates shall be paid by Insurer pursuant to the Policy, the Certificates shall remain outstanding for all -39- purposes, not be defeased or otherwise satisfied and not be considered paid by the City, and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of Insurer and the Insurer shall be subrogated to the rights of such registered owners. B. The City hereby covenants to provide notification to the Insurer in the event of any significant change in the financial condition of the City. So long as the Certificates are outstanding the City shall provide the Insurer with: (1) annual audited financial statements within thirty (30) days of such statements being made available to the City. (ii) a copy of any audit, budget, or other material report of the City within twenty (20) days of completion of such audit, budget or report and thereafter as updated; (iii) a copy of any notice or report required to be given to the Insurance Trustee, the Certificate Registrar, the registered owners of the Certificates or any other party to any of the Certificate documents executed in connection with the issuance of the Certificates, including, without limitation, notice of any redemption of or defeasance of Certificates, and any certificate rendered pursuant to any Certificate document relating to the security for the Certificates; and (iv) such additional information as the Insurer may reasonably request. The City will permit the Insurer and/or the Insurance Trustee to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the City. The City will permit the Insurer and/or the Insurance Trustee to have access to and make copies of all books and records relating to the Certificates, and the security therefor at any reasonable time. C. Any rating agency rating the Certificates shall receive notice of any amendment to the Certificate documents and a copy thereof at least fifteen (15) business -40- days in advance of its execution or adoption. The Insurer shall be provided with a full transcript of all proceedings relating to the execution of any such amendment. D. The City covenants to obtain the Insurer's consent before the execution and delivery of any amendment or supplement to the Certificate documents executed in connection with the issuance of the Certificates. E. Anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of a default, the Insurer, if it shall not then be in default of its payment obligation under the Policy, shall be entitled to control and direct the enforcement of all rights and remedies granted to the owners of the Certificates or any trustee appointed for the benefit of the owners as if the Insurer were the owner of the Certificates insured by it. F. if a default of its payment obligation under the Policy has occurred or is continuing with respect to the Certificates, no additional bonds, notes, certificates, contracts or any other obligations shall be issued by the City until such payment default is remedied. Section 20. Defeasance. Any Certificate or Certificates which (a) are paid and cancelled and (b) which have matured and for which sufficient sums been deposited with the Certificate Registrar to pay all principal and interest due thereon shall cease to have any lien on or right to receive or be paid from the Certificate Moneys hereunder and shall no longer have the benefits of any covenant for the registered owners of outstanding Certificates as set forth herein as such relates to lien and security of the outstanding Certificates. In addition, any Certificate or Certificates (i) for which sufficient United States of America dollars and direct United States Treasury obligations have been deposited with the Certificate Registrar or similar institution to pay, taking into account investment earnings on such obligations, all principal of and interest on -41- (and redemption premium, if any, on) such Certificate or Certificates when due at maturity or as called for redemption, pursuant to an irrevocable escrow or trust agreement, (ii) for which a verification report by a verifier acceptable to the Insurer shall be in form and substance satisfactory to the Insurer; and (iii) for which an opinion of bond counsel shall be rendered to the City to the effect that all of the requirements of the Certificates for defeasance of the Certificate have been complied with, shall also cease to have any lien on or right to receive or be paid from the Certificate Moneys hereunder and shall no longer have the benefits of any covenant for the registered owners of outstanding Certificates as set forth herein as such relates to lien and security of the outstanding Certificates. All covenants relative to the Tax-exempt status of the Certificates; and payment, registration, transfer, and exchange; are expressly continued for all Certificates whether outstanding Certificates or not. Section 21. Publication of Ordinance. Under Applicable Law, this Ordinance need not be published. -42- Section 22. Superseder and Effective Date. All ordinances, resolutions, and orders, or parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage and approval. ADOPTED by the Corporate Authorities on the 24th day of June, 2003,pursuant to a roll call vote as follows: PAUL JAMES MARTY MUNNS WANbA!omr e- � RICHARD STICKA VALERIE BURD ROSE SPEARS 74 L LARRY KOT JOSEPH BESCO APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois, the 24th day of June,2003. MAYOR PASSED by the City Council of the United City of Yorkville, Kendall County,Illinois, the 24th day of June, 2003. � Att CITY RK 4 4 -43- AN ORDINANCE of the United City of Yorkville, Kendall County, Illinois, authorizing and providing for an Installment Purchase Agreement for the purpose of paying a part of the cost of waterworks improvements, and authorizing and providing for the issue of$4,800,000 Debt Certificates, Series 2003, evidencing the rights to payment under such Agreement, prescribing the details of the Agreement and Certificates, and providing for the security for and means of payment under the Agreement of the Certificates. (the "Certificate Ordinance"). Alderman moved and Alderman k seconded the motion that the Certificate Ordinance as presented be adopted. A City Council discussion of t matter followed. During the City Council discussion, �.�/4 �;a'��4� '� City �'�-�Y�nIJv��-eT N �F gav a pu is rectal the nature of the matter, which included a complete reading of the title of the Certificate Ordinance, a complete reading of the table of contents contained therein, and a brief commentary on each entry in the table of contents. The Mayor directed that the roll be called for a vote upon the motion to adopt the Certificate Ordinance. Upon the roll being called, the following Aldermen voted AYE:...�Q------- �� ��"1 and the following Aldermen voted NAY: o P/y4r,It"'y y� L 4,4-jlf WHEREUPON the Mayor declared the motion carried and the Certificate Ordinance adopted and did direct the City Clerk to record the same in full in the records of the City Council of the United City of Yorkville, Kendall County, Illinois. Other business was duly transacted at said meeting. -2- Upon motion duly made and carried,the meeting adjourned. Cit lerk 1 i -3- STATE OF ILLINOIS ) ) SS COUNTY OF KENDALL ) CERTIFICATION OF MINUTES AND ORDINANCE I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of the United City of Yorkville, Kendall County, Illinois (the "City"), and as such official I am the keeper of the official journal of proceedings, books, records, minutes, and files of the City and of the City Council (the "Corporate Authorities") thereof. I do further certify that the foregoing is a full, true, and complete transcript of that portion of the minutes of the meeting (the "Meeting") of the Corporate Authorities held on the 24th day of June 2003 insofar as the same relates to the adoption of an ordinance, numbered , and entitled: AN ORDINANCE of the United City of Yorkville, Kendall County, Illinois, authorizing and providing for an Installment Purchase Agreement for the purpose of paying a part of the cost of waterworks improvements, and authorizing and providing for the issue of $4,800,000 Debt Certificates, Series 2003, evidencing the rights to payment under such Agreement, prescribing the details of the Agreement and Certificates, and providing for the security for and means of payment of the Certificates. (the "Ordinance") a true, correct, and complete copy of which Ordinance as adopted at the Meeting appears in the foregoing transcript of the minutes of the meeting. I do further certify that the deliberations of the Corporate Authorities on the adoption of the Ordinance were taken openly; that the vote on the adoption of the Ordinance was taken openly; that the Meeting was held at a specified time and place convenient to the public; that notice of the Meeting was duly given to all newspapers, radio or television stations, and other news media requesting such notice; that an agenda for the Meeting was posted at the location where the Meeting was held and at the principal office of the Corporate Authorities at least 48 hours in advance of the holding of the Meeting; that said agenda contained a separate specific item concerning the proposed adoption of said ordinance, a true, correct and complete copy of said agenda as so posted being attached to this certificate as Exhibit A, and that the Meeting was called and held in strict compliance with the provisions of the Open Meetings Act of the State of Illinois, as amended, and the Illinois Municipal Code, as amended, and that the Corporate Authorities have complied with all of the provisions of said Act and said Code and with all of the procedural rules of the Corporate Authorities in the adoption of the Ordinance. IN WITNESS WHEREOF I hereunto affix my official signature and the seal of the City this 24th day of June 2003. —t77 Z6 City Nerk [SEAL] i [Attach Exhibit A] n { -2- STATE OF ILLINOIS ) SS COUNTY OF KENDALL ) CERTIFICATE OF FILING We, the undersigned, do hereby certify that we are, respectively, the duly qualified and acting City Clerk and City Treasurer of the United City of Yorkville, Kendall County, Illinois (the "City"), and as such officers we do hereby certify that on the 24th day of June 2003 there was filed with each of us, respectively, and placed on deposit in our respective records, a properly certified copy of Ordinance Number 3= , passed by the City Council of the City, on the 24th day of June 2003, and approved by the Mayor, and entitled: AN ORDINANCE of the United City of Yorkville, Kendall County, Illinois, authorizing and providing for an Installment Purchase Agreement for the purpose of paying a part of the cost of waterworks improvements, and authorizing and providing for the issue of $4,800,000 Debt Certificates, Series 2003, evidencing the rights to payment under such Agreement, prescribing the details of the Agreement and Certificates, and providing for the security for and means of payment under the Agreement of the Certificates. and further, properly certified copy of each of the following "Work Contracts" as defined in the Ordinance, enumerated as follows: BRIEF DESCRIPTION NAME OF CONTRACT IDENTIFIED OF WORK CONTRACT CONTRACTOR AMOUNT($) AMOUNT($) and that the same have all been deposited in, and all as appears from, the official files and records of our respective offices. IN WITNESS WHEREOF we have hereunto affixed our official signatures and the seal of the City, at Yorkville, Illinois, this 24th day of June 2003. y Cl + [SEAL] GL/ City Treasurer i -2-