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O-84-65EXECUTION COPY ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION VARIABLE RATE DEMAND BONDS OF THE VILLAGE OF DEERFIELD, ILLINOIS ADOPTED: December 17, 1984 TABLE OF CONTENTS Page ARTICLE I Determinations, Definitions and Interpretation Section 101. Short Title . . . . . . . . . . . . . . . 1 Section 102. Authority for 1984 Variable Rate Bond Authorization of Additional Bonds . . . . 9 Ordinance. . . . . . . . . . . . . . . . 1 Section 103. Bond Ordinance to Constitute Contract . . 1 Section 104. General Obligations . . . . . . . . . . . 1 Section 105. Definitions and Interpretations . . . . . 2 Section 106. Captions and Index. . . . . . . . . . . . 7 Section 107. Parties Interested Herein . . . . . 7 Section 108. Severability of Invalid Provision . . . . 7 Section 109. Payment Dates . . . . . . . . . . . . . . 7 Additional Bonds . . . . . . . . . . . . 10 ARTICLE II Series A Bonds Section 201. Authorization and Purpose of the Series A Bonds . . . . . . . . . . . . . . . . . 8 Section 202. Sale of Series A Bonds. . . . . . . . . . 8 Section 203. Delivery of Series A Bonds. . . . . . 8 Section 204. Application of Proceeds.of Series A Bonds. . . . . . . . . . . . . . . . . . 8 ARTICLE III Additional Bonds Section 301. Authorized Purpose of Additional Bonds. . 9 Section 302. Authorization of Additional Bonds . . . . 9 Section 303. Execution and Delivery of Additional 11 Section 404. Bonds . . . . . . . . . . . 9 Section 304. Application of Proceeds ofAdditional 13 Section 406. Bonds. . . . . . . . . . . . . . . . 10 Section 305. Conditions Precedent to Delivery of any Additional Bonds . . . . . . . . . . . . 10 ARTICLE IV General Provisions of Bonds Section 401. General Terms of Bonds . . . . . . . . . 11 Section 402. Interest Rate . . . . . . . . . . . . . . 11 Section 403. Redemption Provisions . . . . . . . . . . 11 Section 404. Tender Provisions . . . . . . . . . . . . 12 Section 405. Execution . . . .. . . . . . . . . . . . . 13 Section 406. Authentication . . . . . . . . . . . . . . 13 Section 407. Mutilated, Lost, Stolen or Destroyed Bonds . . . . . . . . . . . . . . . . . . 14 (i) •• r Page Section 408. Transfer, Exchange and Registry . . . . . 14 Section 409. Regulations With Respect to Exchanges and Transfers . . . . . . . . . . . . . 15 Section 410. Conditions Precedent to the Delivery of Any Bonds . . . . . . . . . . . . . . . . 15 ARTICLE V Tax Receipts and Credit Agreement Section 501. Pledge of Funds . . . . . . . . 16 Section 502. Establishment of Bond Service Fund. . . . 16 Section 503. Credit Agreement. . . . . . . . . . . 16 Section 504. Levy and Extension of Taxes . . . . . 17 Section 505. Application of Bond Service Fund. . . . . 18 Section 506. Alternate Credit Agreement. . . . . . . . 19 ARTICLE VI Particular Covenants Section 601. General . . . . . . . . . . . . . . 21 Section 602. Payment of Bonds and Charges. . . . . . . 21 Section 603. Maintenance of Credit Agreement . . . . . 21 Section 604. Indebtedness and Liens. . . . . . . . . . 21 Section 605. Further Assurances. . . . . . . . . . . . 21 Section 606. Offices for Servicing Bonds . . . . . . . 22 Section 607. Arbitrage . . . . . . . . . . . . . . . . 22 Section 608. Conditions Precedent. . . . . . . . . . . 22 Section 609. Waiver of Rights . . . . . . . . . . . . . 22 ARTICLE VII Redemption of Bonds Section 701. Privileges of Redemption and Redemption ARTICLE VIII Supplemental Bond Ordinances Section 801. Supplemental Bond Ordinances Effective Upon Consent of Bank . . . . . . . . . . 25 Section 802. Supplemental Bond Ordinances Effective Upon Consent of Bank and Trustee . . . . 25 Section 803. Supplemental Bond Ordinances Effective With Consent of Bondholders. . . . . . . 26 Section 804. Restriction on Amendments . . . . . . . . 26 (ii) Prices . . . . . . . . . . . . . . . . . 23 Section 702. Notice of Redemption. . . . . . . . . 23 Section 703. Village's Election to Redeem. . . . . . . 23 Section 704. Payment of Redeemed Bonds . . . . . * 23 Section 705. Selection of Bonds to be Redeemed by 24 ARTICLE VIII Supplemental Bond Ordinances Section 801. Supplemental Bond Ordinances Effective Upon Consent of Bank . . . . . . . . . . 25 Section 802. Supplemental Bond Ordinances Effective Upon Consent of Bank and Trustee . . . . 25 Section 803. Supplemental Bond Ordinances Effective With Consent of Bondholders. . . . . . . 26 Section 804. Restriction on Amendments . . . . . . . . 26 (ii) Page Section 805. Adoption and Filing of Supplemental Bond Ordinances... . . . . . . . . . . . . . 26 Section 806. Authorization to Trustee. . . . . . . . . 27 ARTICLE IX Amendments Section 901. Mailing . . . . . . . . . . . . . . . . . 28 Section 902. Powers of Amendment . . . . . . . . . . . 28 Section 903. Consent of Bondholders. . . . . . . . . . 28 Section 904. Amendments by Unanimous Action. . . . . . 29 Section 905. Exclusion of Bonds. . . . . . . . . . . . 29 Section 906. Notation on Bonds . . . . . . . . . . . . 30 ARTICLE X Remedies on Default Section 1001. Powers of Trustee . . . . . . . . . . . . 31 Section 1002. Events of Default . . . . . . . . . . . . 31 Section 1003. Enforcement by Trustee. . . . . . . . 32 Section 1004. Representation of Bondholders by Trustee. 32 Section 1005. Limitation on Powers of Trustee . . . . . 33 Section 1006. Action by Trustee . . . . . . . . . . . . 33 Section 1007. Accounting and Examination of Records 39 Section 1108. After Default. . . . . . . . . . . 34 Section 1008. Limitation on Rights of Bondholders 34 Section 1009. Priority of Payments After Default. . . . 34 Section 1010. Remedies Not Exclusive. . . . . . . . . . 35 Section 1011. Control of Proceedings. . . . . . . . 35 Section 1012. Effect of Waiver and Other Circumstances. 36 Section 1013. Notice of Default . . . . . . . . . . . . 36 ARTICLE XI The Fiduciaries Section 1101. Trustee . . . . . . . . . . . . . . . . . 37 Section 1102. Paying Agent. . . . . . . . . . . . . 37 Section 1103. Responsibilities of Fiduciaries . . . . . 37 Section 1104. Funds Held in Trust . . . . . . . . 38 Section 1105. Evidence on Which Fiduciaries May Act . 38 Section 1106. Compensation and Expenses . . . . . . . . 38 Section 1107. Resignation of Fiduciary. . . . . . . . . 39 Section 1108. Removal . . . . . . . . . . . . . . . . . 39 Section 1109. Appointment of Successor. . . . . . . . . 39 Section 1110. Transfer of Rights and Property to Successor. . . . . . . . . °. . . . . . . 40' Section 1111. Merger or Consolidation . . . . . . . . . 40 Section 1112. Adoption of Authentication. . . . . . . . 40 Section 1113. Certain Permitted Acts. . . . . . . . . . _ 40 (iii) �• r (iv) Page ARTICLE XII Miscellaneous Section 1201. Defeasance and Payment of Bonds . . . . . 42 Section 1202. Evidence of Signatures of Bondholders and Ownership of Bonds . . . . . . . . . 43 Section 1203. Moneys Field for Particular Bonds. 43 Section 1204. General Regulations as to Moneys and Funds. . . . . . . . . . . . . . . . . . 43 Section 1205. Cancellation of Bonds . . . . . . 44 Section 1206. Preservation and Inspection of Documents. 44 Section 1207. Form of Bonds . . . . . . . . . '45 Section 1208. No Personal Liability on Bonds. . . . . . 53 Section 1209. Appointment of Remarketing Agent. . . . . 53 Section 1210. Approval of Documents . . . . . . . . . . 53 Section 1211. Publication and Notice. . . . . . . . . . 54 Section 1212. Effective Date . . . . . . . . . . . . . . 54 (iv) ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION VARIABLE RATE DEMAND BONDS OF THE VILLAGE OF DEERFIELD, ILLINOIS BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF DEERFIELD, ILLINOIS AS FOLLOWS: ARTICLE I Determinations, Definitions and Interpretation Section 101. Short Title. This Bond Ordinance may hereafter belted as, and si hereinafter sometimes referred to, as the 111984 Variable Rate Bond Ordinance." Section 102. Authority for 1984 Variable Rate Bond Ordinance. The Bond Ordinance is adopted by vr ue of the home rule powers of the Village as set forth in Section 6 of Article VII of the Illinois Constitution of 1970. The Village has ascer- tained and hereby determines that each and every act, matter, thing or course of conduct as to which provision is made herein is necessary in order to carry out powers herein exercised and to secure or further secure the payment of the principal of and interest on the Bonds. The Bond Ordinance shall constitute full authority for the issuance of the Bonds and to the extent that the provisions of the Bond Ordinance conflict with the provisions of any other ordinance or resolution of the Village, the provisions of the Bond Ordinance shall control. Section 103. Bond Ordinance to Constitute Contract. In considerat n -of the purchase and acceptance of any o— r alI of the Bonds by those who shall hold the same from time to time, the provisions of the Bond Ordinance shall be a part of the contract of the Village with the Holders of Bonds and shall be deemed to be and shall constitute contracts among the Village, the Trustee and the Holders from time to time of said Bonds. The pledge made in the Bond Ordinance and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Village shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds. All of the Bonds, regard- less of the time or times of their issuance or maturity, shall be of equal rank.without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to the Bond Ordinance. Section 104. General Obligations. The full faith and credit of the Village are hereby irrevocably pledged to the punctual payment of the principal of and interest on the Bonds, the Unpaid Drawings and the interest thereon. The Bonds and the Village's obligation to reimburse the Bank for Unpaid Drawings shall be direct and general obligations of the Village. Unless paid from other sources, the Village shall be obligated to levy ad valorem taxes upon all the taxable property in the Village for the payment of the Bonds, the interest thereon, all Unpaid Drawings and the interest thereon, without limitation as to rate or amount. Section 105. Definitions and Interpretations. In the Bond Ordinance, unless a different meaning clearly appears from the context: "Additional Bonds" means any of the bonds of the Village authenticated and delivered under and pursuant to Article III; "Alternate Credit Agreement" means a credit agreement between the Village and the Bank entered into pursuant to the provisions of Section 506; "Agent" or "Remarketing Agent" means John Nuveen & Co. Incorporated as Remarketing Agent under the Remarketing Agreement and its successor or successors appointed pursuant to Section 1209; Articles and Sections mentioned by number only are the respective Articles and Sections of the Bond Ordinance so num- bered; "Bank" means (i) National Westminster Bank PLC, Chicago Branch, an English corporation acting through its Chicago branch and its sucessors and assigns or (ii) at any time after the termination of the initial Credit Agreement, the bank which has entered into the Alternate Credit Agreement then in effect; "Board of Trustees" means the President and Board of Trustees of the Village, the governing body of the Village; ' "Bond" means any of the bonds of the Village authenticated and delivered under and pursuant to the Bond Ordinance including the Series A Bonds and any Additional Bonds; "Bond Ordinance" means this 1984 Variable Rate Bond Ordinance as the same may from time to time be amended, modified or supplemented by one or more Supplemental Bond Ordinances; "Bondholder" or the term "Holder" or "holder" or any similar term, when used with reference to a Bond or Bonds, means any person who shall be the registered owner of any Outstanding Bond or Bonds; "Bond Service Fund" means the Fund so designated which is established and created by Section 502; "Business Day" means any day excluding Saturday and Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Illinois or dealers located in the City of New York who are members of the National -2- Association of Securities Dealers, Inc. are obligated by law or administrative order to close; "Clerk" means the Village Clerk of the Village; "Commitment" means, at the time any determination thereof is to be made, $4,245,630, reduced by the amount of any permanent reductions in such amount made pursuant to Section 3.1 of the Credit Agreement; "Counsel's Opinion" means an opinion signed by any attorney or firm of attorneys (who may be counsel of or counsel to the Village or an attorney or firm of attorneys retained by it for other purposes) licensed to practice in the state in which he or it maintains an office, selected by the Village and accepted by the Trustee and of recognized standing in said state; "Credit Agreement" means (i) the Credit Agreement, dated as of December 1, 1984, between the Village and the Bank or (ii) at any time after the termination of the initial Credit Agreement referred to in (i) above, the Alternate Credit Agreement then in effect; "Fiduciary" means the Trustee or any Paying Agent; "Final Payment Date" means with respec, tendered for payment, the date designated by the purchase of such tendered Bond, which date shall Day not prior to the seventh day next succeeding or telephonic notice of tender is first received Agent pursuant to Section 404; t to a Bond Holder for the be a Business the date written by the Remarketing The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, refer to the Bond Ordinance; the term "heretofore" means before the date of adoption of the Bond Ordinance; and the term "hereafter" means after the date of adop- tion of the Bond Ordinance; "Interest Payment Date" means, with respect to each Bond, the first day of January, April, July and October, beginning with April 1, 1985; "Investment Obligations" means and includes any of the following: (a) direct obligations of or obligations insured or guaranteed by the United States of America or agencies or instrumentalities of the United States of America with a remaining term to maturity of 12 months or less; -and (b) interest - bearing time deposits or certificates of deposit with a maturity of 12 months or less of a bank (including the Trustee) or trust company continuously se- cured and collateralized by obligations of the type des- cribed in paragraph (a) hereof, or by general obligations of -3- -the State having a market value at least equal at all times to the amount of such deposit or certificate, to the extent such deposit or certificate is not insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or any successors thereto; "Manager" means the Manager of the Village; "Maximum Bond Amount" means, with respect to any date or period of computation, the principal amount of Bonds for the year on which such date occurs or with respect to which such computation is made as shown in the following table, reduced by the principal amount of Bonds previously redeemed at the option of the Village pursuant to Section 403(B): Year Principal Amount 1984 $4,100,000 1985 4,100,000 1986 4,100,000 1987 4,000,000 1988 3,900,000 1989 3,800,000 1990 3,700,000 1991 3,600,000 1992 3,500,000 1993 3,300,000 1994 3,100,000 1995 2,900,000 1996 2,700,000 1997 2,500,000 1998 2,200,000 1999 1,900,000 2000 1,600,000 2001' 1,200,000 2002 800,000 2003 400,000 "New York Agent" means J. Henry Schroder Bank & Trust Company, acting as the agent for the Trustee, or any successor appointed by the Trustee; "Notice and Demand" means the filing by a Bondholder with the Trustee and the Remarketing Agent of a written election to tender Bonds for payment pursuant to Section 404; "Officer's.Certificate" as to the Village means a certificate signed by a Village Officer; "Outstanding, "when used with reference to Bonds and as of any particular date, describes all Bonds theretofore and thereupon being authenticated and delivered except (a) any Bond cancelled by the Trustee, or proven to the satisfaction of the Trustee to have been cancelled by the Village or by any other Fiduciary, at or before said date, (b) any Bond for the payment -4- or redemption of which moneys, equal to the principal amount or Redemption Price thereof, as the case may be, with interest to the date of maturity or redemption date shall have theretofore been deposited with one or more of the Fiduciaries in trust (whether upon or prior to maturity or the redemption date of such Bond) and, except in the case of a Bond to be paid at maturity, of which notice of redemption shall have been given or provided for in accordance with Article VII; and (c) any Bond in lieu of or in substitution for which another Bond shall have been authen- ticated and delivered pursuant to the Bond Ordinance; "Paying Agent" means the paying agent for Bonds appointed by or pursuant to Section 1102, and its successor or successors and any other corporation or association which may at any time be substituted in its place pursuant to the Bond Ordinance; "Principal Office," when used with respect to a Fiduci -' ary means the principal, or corporate trust, or head, or principal trust office of such Fiduciary situated in the city in which such Fiduciary is described as being located; "Project" means the capital improvement program described at the public hearing held by the Board of Trustees on October 29, 1984 including the construction of storm sewer and sanitary sewer improvements; the rehabilitation and resurfacing of existing streets, walkways, and related traffic control and safety improve- ments and the construction of Access Avenue from Hazel Avenue to Osterman Avenues; all in accordance with plans on file in the office of the Clerk and such other capital improvements as shall be approved by resolution of the Board of Trustees; "Redemption Price," when used with respect to a Bond means the principal amount of such Bond plus the applicable premium, if any, payable upon redemption thereof in the manner contemplated in accordance with its terms pursuant to the Bond Ordinance; "Remarketing Agreement" means the Indexing and Remarketing Agreement, dated as of December 1, 1984, by and between the Village and the Agent; "Revolving Credit Note" issued pursuant to Section 2.4 of a Revolving Loan; means any note of the Village the Credit Agreement to evidence "Revolving Loan" means any loan made by the Bank to the Village pursuant to Section 2.1 of the Credit Agreement; "Series," when used with respect to less than all of the Bonds, means and refers to all of the Bonds authenticated and delivered on original issuance in a simultaneous transaction, regardless of variations in maturity, interest rate or other pro- visions; and any Bond thereafter authenticated and delivered in lieu of or substitution for any of such Bonds; -5- "Series A Bond" means any of the bonds of the Village authorized by Section 201 and authenticated and delivered under and pursuant to Article II; "State" means the State of Illinois; "Supplemental Bond Ordinance" means any ordinance of the Village amending or supplementing the Bond Ordinance adopted and becoming effective in accordance with the terms of Article VIII; "Tax Receipts" means the ad valorem property tax receipts derived from the tax levy authorized by Section 504; "Trustee" means the trustee appointed by or pursuant to Section 1101, and its successor or successors and any other corporation-or association which may at-any time be substituted in its place pursuant to the Bond Ordinance; "Unpaid Drawings" shall mean the aggregate amount of each Revolving Loan made by the Bank under the Credit Agreement, to the extent not theretofore repaid by the Village; "Unused Commitment" means, as of the time any determina- tion thereof is to be made, the excess, if any, of (i) the Commit- ment minus (ii) the aggregate outstanding principal amount of all Revolving Loans; "Variable Rate" shall mean the interest rate per annum (not exceeding 13 %) as determined from time to time by the Remar- keting Agent and designed to permit the initial marketing of the Bonds at a price of par or the remarketing of the Bonds tendered at a price of'par plus accrued interest, and shall be as representa- tive as possible of the current market interest rate for securi- ties comparable in security, liquidity and creditworthiness to the Bonds; "Village" means the Village of Deerfield, a municipal corporation and a home rule unit of the State; "Village Officer" means the Village President, the Village Treasurer or the Manager of the Village, and, when used with reference to an act or document, also means any other person authorized by law or by resolution or ordinance of the Village to perform such act or sign such document; Village; "Village President" means the Village President of the "Village Treasurer" means the Treasurer of the Village; Words importing the masculine gender include every other gender; Words importing the maturity or payment of a Bond do not include or connote the becoming due of such Bond upon'redemp- tion thereof prior to maturity pursuant to the Bond Ordinance or the payment of the Redemption Price thereof; words importing the payment of any Bond include the payment of a portion of such Bond; Words importing persons include firms, associations and corporations; Words importing the redemption or redeeming or calling for redemption of a Bond do not include or connote the payment of such Bond at its stated maturity or the purchase of such Bond; and Words importing the singular number include the plural number, and vice versa. Section 106. Captions and Index. Any captions, titles or headings preceding the text of any i Article or Section herein and any table of contents or index attached to the Bond Ordinance or a copy thereof are solely for convenience of reference and shall not constitute a part of the Bond Ordinance or affect its meaning, construction or effect. Section 107. Parties Interested Herein. Nothing in the Bond Ordrd niTance expressed or implied is intended or shall be construed to confer upon, or to give to, any person, other than the Village, the Bank, the Fiduciaries and the Holders of the Bonds, any right, remedy or claim under or by reason of the Bond Ordinance or any covenant, stipulation, obligation, agreement or condition therein. All the covenants, stipulations, obligations, promises and agreements in the Bond Ordinance contained by and on behalf of the Village, shall be for the sole and exclusive benefit of the Village, the Bank, the Fiduciaries and the Holders of.the Bonds. Section 108. Severability of Invalid Provision. If any one or more of the provisions, covenants or agreements in the Bond Ordinance on the part of the Village or any Fiduciary to be performed should be contrary to law, then such provision or provisions, covenant or covenants, agreement or agreements, shall in no way affect the validity of the other provisions of the Bond Ordinance or of the Bonds. Section 109. Payment Dates. In any case where an Interest Payment Date or the maturity date of the Bonds or the date fixed for the redemption of any Bonds shall be other than a Business Day, then payment of interest, principal or Redemption Price need not be made on such date but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date, and no interest on such payment shall accrue for the period after such due date if payment is made on such next succeeding Business Day. -7- ARTICLE II Series A Bonds Section 201. Authorization and Purpose of the Series A Bonds. Thee Village hereby determines to acquire and construct the Project and to finance the costs of the Project including $260,000 of capitalized interest on the Series A Bonds, and costs of issuance of the Series A Bonds. To meet part of such costs, there is hereby appropriated the sum of $4,100,000. Subject to and pursuant to the provisions of the Bond Ordinance, general obligation bonds of the Village, each constituting a Series A Bond as mentioned and described in the Bond Ordinance, are hereby authorized to be issued in the aggregate principal amount of $4,100,000 for the purpose of financing said appropriation. The Series A Bonds shall be designated "General Obligation Variable Rate Demand Bonds, Series A." Section 202. Sale of Series A Bonds. The Series A Bonds are hereby sold at a price o 4,059,000 to John,Nuveen & Co. Incorporated. Each of the Village Officers is hereby authorized and directed to do each and every thing necessary to provide for the issuance and delivery of the Series A Bonds. Section 203. Delivery of Series A Bonds. The Series A Bonds shall be executed by or on behalf of the Village in accordance with Section 405 and be delivered to the Trustee for authenti- cation and thereupon shall be authenticated by the Trustee and, upon fulfillment of the conditions set forth in Section 410, delivered by the Trustee to or upon the order of the Village. Section 204. Application of Proceeds of Series A_ Bonds. Of the proceeds of sale of the Serfs AA Bonds, the following amounts shall, on the date of the delivery of the Series A Bonds by the Trustee, be paid or deposited as follows: (1) to the Bond Service Fund, the sum of $260,000; (2) to the Village, the remaining proceeds of sale of the Series A Bonds. WIM ARTICLE III Additional Bonds Section 301. Authorized Purpose of Additional Bonds. General oblig on bonds of the Village, each constituting an Additional Bond as mentioned and described in the Bond Ordinance, may be authenticated and delivered from time to time in accordance with the provisions of this Article for the purpose of refunding Unpaid Drawings. The Additional Bonds shall be designated "General Obligation Variable Rate Demand Bonds, Series A " and shall bear such additional designation as may be requested by the Trustee to distinguish a Series of Additional Bonds. Section 302. Authorization of Additional Bonds. (A) Additional Bonds may be issued only after their allthoror —Ttion in accordance with the Bond Ordinance by a written order of a Village Officer which shall specify and determine that such Additional Bonds are to be issued for the purpose of refunding all or less than all of the Unpaid Drawings. (B) Additional Bonds shall be issued only if immediately following the issuance thereof: (1) The principal amount of Outstanding Bonds is equal to or less than the then applicable Maximum Bond Amount. In computing the principal amount of Outstanding Bonds for the purpose of this subparagraph, the principal amount of any Bond called for redemption and purchased pursuant to Section 404(C) shall be deemed to remain Outstanding until its redemption date; and (2) The principal amount of Outstanding Bonds plus 100 days accrued interest on such principal amount of Outstanding Bonds (computed on the assumption that the interest rate on the Bonds is 13% per annum) is equal to or less than the Unused Commitment. (C) The issuance of Additional Bonds shall not be subject to, or in any manner limited by, the provisions of Resolution No. R -83 -13 adopted by the Board of Trustees on December S, 1983 and entitled: "Resolution Amending Policy on the Use of Home Rule General Bonded Indebtedness Powers." Section 303. Execution and Delivery of Additional Bonds. A Ser— ie of Additional Bonds shall from time to time be executed by or on behalf of the Village in accordance with Section 405 and be delivered to the Trustee for authentication and there- upon shall be authenticated by the Trustee and, upon fulfillment of the conditions set forth or referred to in Section 305, de- livered by the Trustee to the Village or upon its order. Section 304. Application of Proceeds of Additional Bonds. The proceeds of sale of Additional Bonds of any Series, shall, on the date of delivery of such Additional Bonds by the Trustee, be applied to the payment of Unpaid Drawings in accordance with the written order of the Village signed by a Village Officer as provided in Section 410. Section 305. Conditions Precedent to Delivery of any Additional Bonds. The Trustee shall not deliver Additional Bonds of any Series upon original issuance unless theretofore or simul- taneously therewith the conditions set forth in Section 410 shall have been fulfilled, and there shall have been delivered to the Trustee: (1) A'certificate of a Village Officer stating that the Village is not in default with respect to any of the covenants, agreements or provisions of the Bond Ordinance, the Remarketing Agreement or the Credit Agreement; (2') A certificate of an authorized'officer of the Bank stating that such Series of Additional Bonds is entitled to the benefits of the Credit Agreement; and (3) A Counsel's Opinion stating that such Series of Bonds are authorized by the Bond Ordinance and are to be is- sued for the primary purpose of refunding Unpaid Drawings in conformity with the provisions and limitations of the Bond Ordinance. -10- f f ARTICLE IV General Provisions of Bonds Section 401. General Terms of Bonds. (A) Bonds shall mature on January 1, 2004 and shall be payable, with respect to principal, interest and Redemption Price, in legal tender of the United States of America. Each Bond of each Series shall be dated as of the later of (i) the date of original issuance of the Bonds of such Series, and (ii) the date to which interest has been paid in full on said Bond. Each Bond shall bear interest. from its date payable on each Interest Payment Date at the Variable Rate computed as provided in Section 402. (B) The principal of and premium, if any, on Bonds shall be payable at the Principal Office of the Trustee or the Principal Office of any Paying Agent. Interest on Bonds shall_be paid by the Trustee by check or_ draft mailed to the registered owners of record as of the close of business on the Business Day preceding the applicable Interest Payment Date at the addresses of such owners appearing on the registration books maintained by the Village for such purpose at the Principal Office of the Trustee. Notwithstanding the foregoing provisions of this para- graph, payment of the interest on any Bond of a principal amount of at least $1,000,000 shall be made by depositing immediately available funds in a bank account specified by the registered owner of record of such Bond in written instructions delivered to the Trustee prior to the close.of business on the Business Day preceding the applicable Interest Payment Date. (C) The Bonds shall be negotiable instruments and may be issued only in the form of fully registered Bonds in denomina- tions of $100,000 or any integral multiple thereof. (D) Bonds of each Series shall be numbered from 1 upwards in order of their issuance -and may bear such identifying numbers or letters as the Trustee may determine to be useful with respect to the registration, transfer and exchange of Bonds. Section 402. Interest Rate. (A) The Bonds shall bear interest at a variable rate per annum, except as otherwise provided in this Section, equal to the Variable Rate in effect from time to time. Interest shall be computed on the basis of a year of 365 days or 366 days, if appropriate, for the number of days actually elapsed. The Remarketing Agent shall establish the Variable Rate prior to the original issuance of the Series 1984 Bonds and may change the Variable Rate at anytime by giving no- tice thereof to the Trustee. Any change in the Variable Rate shall take effect on the Business Day immediately following the date such change is made. Section 403. Redemption Provisions. (A) The Bonds shall be subject to mandatory and optional redemption prior to -11- maturity at a Redemption Price equal to the principal amount thereof to be redeemed together with interest accrued thereon to the date fixed for such redemption upon the terms and conditions specified in this Section and in Article VII. (B) The Bonds shall be'subject to redemption at the option of the Village at anytime, as a whole, or in part by lot. (C) The Bonds shall be subject to mandatory redemption prior to maturity, in part by lot, on January 1, 1987 and on each January 1 thereafter in the following amounts each of which shall constitute a sinking fund installment for the retirement of the Bonds: Year Amount 1987 $100,000 1988 100,000 1989 100,000 1990 100,000 1991 100,000 1992 100,000 1993 200,000 1994 200,000 1995 200,000 1996 200,000 1997 200,000 1998 300,000 1999 300,000 2000 300,000 2001 400,000 2002 400,000 2003 400,000 (D) The Bonds shall be subject to mandatory redemption prior to maturity upon the filing with the Trustee by the Village or the Bank of notice of the termination of the Credit Agreement, unless a fully executed counterpart of an Alternate Credit Agreement meeting the requirements of Section 506 has been filed with the Trustee at least 35 days prior to the termination date of the Credit Agreement. The date fixed for such redemption shall not be later than the latest possible redemption date immediately prior to the termination date stated in such notice of termination. Section 404. Tender Provisions. (A) Any Bond may be tendered for payment prior to maturity by the Holder thereof by (i) filing with the Agent and the Trustee a Notice and Demand substantially in the form set forth in Section 1207, or by giving irrevocable telephonic notice to the Agent confirmed in writing by telex, telecopier, letter or telegram received by the Agent and the Trustee by the close of business on the next Business Day and (ii) delivering to the Trustee at its Principal Office or to the New York Agent, at its principal office in the Borough of Manhattan, City and State of New York, at least two Business Days -12- CP prior to the Final Payment Date, the tendered Bond, with an appropriate endorsement for transfer or accompanied by a bond power endorsed in blank. The filing of the Notice and Demand by the Holder or the giving of telephonic notice of tender by the Holder shall constitute an irrevocable demand for payment of the principal of and accrued interest on such tendered Bond to the Final Payment Date. Notice of each tender shall be given by the Trustee to the Bank and the Village. (B) The Agent is hereby appointed to arrange for the placement of a tendered Bond at a purchase price of not less than the principal amount thereof plus accrued interest to the Final Payment Date. Upon receipt from the Agent of notice of the placement of a tendered Bond, the Trustee, or the New York Agent acting on behalf of the Trustee, shall deliver the tendered Bond, with an appropriate endorsement for transfer, to or upon the order of the Remarketing Agent and the Holder of the tendered Bond shall be paid on the Final Payment Date an amount equal to the purchase price from the proceeds of such remarketing. (C) If the Agent is unable to arrange a placement of a tendered Bond by 3:00 P.M., New York time, on the Business Day next preceding the Final Payment Date, or if the proceeds from the remarketing of the tendered Bond have not been received by the Trustee by'11:00 A.M., New York time, on the Final Payment Date, then the Trustee shall, on the Final Payment Date, purchase the tendered. Bond at a purchase price equal to the principal amount thereof plus accrued interest to the Final Payment Date. To pay the purchase price of a tendered Bond which has not been remarketed, the Trustee shall borrow moneys pursuant to the Credit Agreement in an amount equal to the purchase price of the tendered Bond including the interest accrued on such tendered Bond to the Final Payment Date. Section 405. Execution. The Bonds shall be executed in the name of the Village by the manual or facsimile signature of the Village President, and its corporate seal or a facsimile thereof shall be impressed, imprinted, engraved or otherwise reproduced thereon and attested by the manual or facsimile signa- ture of the Village Clerk. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before such Bonds shall have been authenticated and delivered, such Bonds may, nevertheless, be authenticated and delivered as if the persons who signed or sealed such Bonds had not ceased to hold office. Any Bond may be signed and sealed on behalf of the Village by such persons as at the time of the execution of such Bond shall be duly authorized or hold the proper office in the Village, although at the date of such Bond such persons may not have been so authorized or have held such office. Section 406. Authentication. Only such Bonds as shall have endorsed thereon the certificate of authentication substan- tially in the form set forth in Section 1207, duly executed by -13- the Trustee, shall be entitled to any right or benefit under the Bond Ordinance. No Bonds shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee; and such executed certifi- cate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under the Bond Ordinance. Section 407. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen or de- stroyed, the Village may execute and the Trustee may authenticate a new Bond, of like date, series, maturity and denomination as the Bond so mutilated, lost, stolen or destroyed. In the case of any lost, stolen or destroyed Bond, there shall first be furnished to the Trustee evidence of such loss, theft or destruction satis- factory to the Trustee together with indemnity satisfactory to it. The Trustee shall charge the Holder of such Bond reasonable fees and expenses incurred in connection with the delivery of such new Bond. Section 408. Transfer, Exchange and Registry. (A) The transfer of each Bond shall be registrable only upon the registration books maintained by the Village for that purpose at the Principal Office of the Trustee, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Trustee and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for registration of transfer of any Bond, the Village shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds registered in the name of the transferee of the same aggregate principal amount, series, maturity and interest rate as the surrendered Bond. (B) Bonds, upon surrender thereof at the Principal Office of the Trustee, with a written instrument satisfactory to the Trustee and duly executed by the registered owner or his duly authorized attorney, may be exchanged for an equal aggregate principal amount of Bonds of the same aggregate principal amount, series, maturity and interest rate as the surrendered Bond and of any authorized denominations. (C) The Village and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the registration books maintained by the Village at the Principal Office of the Trustee as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment'of, or on account of, the principal of, premium, if any, or interest thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Village nor any Fiduciary shall be affected by any notice to the contrary. -14- t Section 409. Regulations With Respect to Exchanges and Transfers. (A) In all cases in-which the privilege of exchanging Bonds or registering the transfer of Bonds is exercised, the Village shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of the Bond Ordinance. All Bonds surrendered for exchange or registration of transfer shall forthwith be cancelled by the Trustee. For every such exchange or registration of transfer of Bonds, the Village or the Trustee may, as a condition precedent to the privilege of making such exchange or registration of transfer, make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or registration of transfer. (B) The Trustee shall not be required to transfer or exchange any Bond after notice of the redemption of all or a por- tion thereof has been given. The Trustee shall not be required to transfer or exchange any Bond during a period of five days next preceding the mailing of a notice of redemption which could designate for redemption all or a portion of such Bond. The provisions of this paragraph shall not apply to Bonds tendered pursuant to Section 404. Section 410. Conditions Precedent to the Delivery of Any Bonds. The Trustee shall not deliver any of the Bonds of any Series upon original issuance unless (a) simultaneously therewith all of the Bonds of such Series shall be so delivered, and (b) theretofore or simultaneously therewith there shall have been filed with or delivered to the Trustee: (1) A copy of the Bond Ordinance, certified by the Clerk; (2) A copy of _every Supplemental Bond Ordinance there- tofore adopted by the Village, certified by the Clerk; (3) A certificate of a Village Officer or the Clerk stating that the Bond Ordinance has not been repealed and that a copy of every Supplemental Bond Ordinance theretofore adopted by the Village has been delivered to the Trustee; (4) The written order of the Village as to the delivery of the Bonds of such Series, signed by a•Village Officer; (5) A fully executed counterpart of the Credit Agree- ment; and (6) A fully executed counterpart of the Remarketing Agreement. -15- ARTICLE V Tax Receipts and Credit Agreement Section 501. Pledge of Funds. A pledge of all Tax Receipts and all moneys, securities and funds, held or set aside or to be held or set aside pursuant to the Bond Ordinance by any Fiduciary or in any Fund created by the Bond Ordinance is hereby made, and the pledge hereby made shall be valid and binding from and after the time of delivery by the Trustee of the first Bond authenticated and delivered under the Bond Ordinance. Such Tax Receipts, moneys, securities and funds so pledged and then or thereafter received by the Village shall immediately be subject to the lien of such pledge without any physical delivery or further act, and the lien of such pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the Village with respect thereto. The pledge made pursuant to this Section shall be valid and binding as against all parties having claims of any kind in tort, contzact or otherwise against the Village. The Trustee may file notice of such pledge as provided in the Uniform Commercial Code of the State. Section 502. Establishment of Bond Service Fund. The Village hereby establishes and creates the Bond Service Fund, which shall be a special fund held by the Trustee. All moneys-- required to be deposited with or paid to the Trustee under any provision of the Bond Ordinance shall be held by the Trustee in trust and applied only in accordance with the provisions of the Bond Ordinance and shall be a trust fund for the purposes of the Bond Ordinance. Section 503. Credit Agreement. (A) The Village hereby appoints the Trustee as its agent to borrow under the terms of the Credit Agreement. The Trustee shall borrow moneys under the Credit Agreement in accordance with the terms thereof to make timely payment of the purchase price of tendered Bonds purchased by the Trustee on the Final Payment Date pursuant to Section 404(C). (B) If the Trustee has not received written notice from the Agent prior to 3:00 P.M., New York time, on the last Business Day immediately preceding the Final Payment Date that a remarketing of a tendered Bond has been made, or if the proceeds from the remarketing of such tendered Bond have not been received by the Trustee by 11:00 A.M., New York time, on the Final Payment Date; then the Trustee,shall notify the Bank that a loan is to be made under the Credit Agreement on the Final Payment Date in an amount equal to the purchase price (including accrued interest to the Final Payment Date) of the tendered Bond. (C) The Trustee shall apply the proceeds of borrowings under the Credit Agreement to the payment of the purchase price of tendered Bonds pursuant to Section 404(C); provided, however, 12S-M if a borrowing is made under the Credit Agreement and all or a portion of such borrowing is not required to provide such purchase price, the Trustee shall pay to the Bank to reimburse it for the Unpaid Drawings resulting from such borrowings, the remaining amount thereof in excess of such purchase price. Section 504. Levy and Extension of Taxes. (A) For the purpose of providing the funds required to pay the principal or Redemption Price of and interest on the Bonds as the same become due and payable, there is hereby levied upon all the taxable property in the Village, a direct annual tax in addition to all other taxes, as follows: Tax Levy Year A Tax Sufficient to Produce 1984 $232,911 1985 424,000 1986 416,000 1987 408,000 1988 400,000 1989 392,000 1990 384,000 1991 472,000 1992 456,000 1993 440,000 1994 424,000 1995 408,000 1996 488,000 1997 464,000 1998 440,000 1999 512,000 2000 480,000 2001 448,000 2002 416,000 (B) As soon as the Bond Ordinance becomes effective, a copy thereof certified by the Village Clerk, which certificate shall recite that the Bond Ordinance has been passed by the Board of Trustees, shall be filed with the County Clerk of Cook County, Illinois, and the County Clerk of Lake County, Illinois, who are each hereby directed to ascertain the rate percent required to produce the aggregate tax hereinbefore provided to be levied in the years 1984 to 2002, inclusive, and to extend the same for collection on the tax books in connection with other taxes levied in said years, in and by the Village for general corporate purposes of the Village, and in said years such annual tax shall be levied and collected in like manner as taxes for general corporate pur- poses for said years are levied and collected and, when collect- ed, such taxes shall constitute Tax Receipts. All of the proceeds of sale of tax anticipation notes or warrants issued in anticipa- tion of the collection of taxes levied pursuant to this Section shall constitute Tax Receipts. -17- (C) Two Business Days prior to each Interest Payment Date, the Village shall promptly pay all Tax Receipts to the Trustee for deposit in the Bond Service Fund. Pending the collec- tion of the taxes levied pursuant to this Section or in the event that the amount of Tax Receipts is not sufficient to pay and promptly discharge the obligations of the Village under the Bond Ordinance, the Village Treasurer is hereby authorized to make such payments from any other moneys, income, revenues or funds of the Village that are legally available for that purpose. (D) On or after September 1 of any year, the Board of Trustees may adopt an ordinance or resolution providing for the abatement of the taxes levied pursuant to the Bond Ordinance and next to be extended, in an amount equal to the moneys then held in the Bond Service Fund less an amount equal to the principal or Redemption Price of and interest on the Bonds to become due on or prior to the next succeeding July 1. For the purpose of comput- ing the amount of interest to become due on the Bonds prior to such July 1, interest shall be deemed to accrue from the date such calculation is made to such July 1 at the rate of 13% per annum and the principal amount of Bonds Outstanding on each date on or prior to the next succeeding July 1 shall be deemed to be equal to the Maximum Bond Amount for such date. No such abatement of taxes shall be made during any period in which Unpaid Drawings remain unpaid. Section 505. Application of Bond Service Fund. (A) The Trustee shall withdraw from the Bond Servic Fund the amounts required to pay (i) the interest due on the Bonds on each Interest Payment Date; (ii) the principal of the Bonds due on the maturity date thereof; and (iii) the Redemption Price of and accrued interest on Bonds called for redemption pursuant to Section 403 on the applicable redemption dates. (B) Whenever the amount held in the Bond Service Fund exceeds the sum of the principal or Redemption Price of and the interest on the Bonds to become due within the next 366 days, then the amount of such excess shall be paid to the Village free from the lien of the Bond Ordinance. In computing the amount of interest to become due during such 366 day period, interest shall be deemed to accrue from the date such calculation is made at the rate of 13% per annum and the principal amount of Bonds Outstanding on each date during such 366 -day period shall be deemed to be equal to the Maximum Bond Amount for such date. Amounts withdrawn from the Bond Service Fund pursuant to the provisions of this paragraph shall be applied first to the repayment of Unpaid Drawings. (C) If a Bond called for redemption is purchased pur- suant to Section 404(C) prior to the redemption date of such Bond, then an amount not exceeding the Redemption Price of such Bond (or portion thereof called for redemption) shall be withdrawn from the Bond Service Fund and paid to the Bank to the extent necessary to reimburse it for any Unpaid Drawings. Ck= (D) The amount accumulated in the Bond Service Fund for the payment of each sinking fund installment specified in Section 403(C), if so directed by a Village Officer, shall be applied by the Trustee prior to the 30th day preceding the due date of such sinking fund installment to the payment of the principal of Revolving Credit Notes. Each such payment shall be made in amounts equal to $100,000 or any integral multiple of $100,000. An amount equal to the principal amount of the Revolving Credit Notes so paid shall be credited toward the next sinking fund installment. As soon as practicable after the 30th day preceding the due date of any such sinking fund installment, the Trustee shall proceed to call for redemption pursuant to Article VII, on such due date, Bonds in a principal amount equal to the amount specified in Section 403(C) for such due date less the principal amount of Revolving Credit Notes paid and credited as provided in this paragraph. (E) If there are any Unpaid Drawings after the payment of all Bonds issued under the Bond Ordinance and the termination date of the Commitment; then any amounts remaining in the Bond Service Fund shall be applied to the payment of such Unpaid Drawings and the accrued and unpaid interest thereon. A pledge of the Bond Service Fund and all Tax Receipts and all moneys, securities and funds, held or set aside or to be set aside pursuant to the Bond Ordinance by any Fiduciary or in any Fund created by the Bond Ordinance is hereby made in favor of the holders and owners from time to time of the Revolving Credit Notes. Such , pledge shall be junior and subordinate to the pledge provided for in Section 501 for the benefit and security of the Bondholders. Section 506. Alternate Credit Agreement. (A) The Village may from time to time enter into one or more Alternate Credit Agreements with commercial banks the terms of which shall be the same as the then current Credit Agreement in all material respects. As of the effective date of any Alternate Credit Agreement, the Unused Commitment thereunder shall equal not less than the then current Maximum Bond Amount plus 100 days' accrued interest on such Maximum Bond Amount-(computed on the assumption that the interest, rate on the Bonds is 13% per annum). Each Alternate Credit Agreement shall become effective not later than the termination date of the then current Credit Agreement and shall not expire earlier than six months following its effective date. (B) An executed counterpart of each proposed Alternate Credit Agreement shall be filed with the Trustee at least 35 days prior to the termination date of the then current Credit Agreement. On or prior to the filing of such Alternate Credit Agreement, the Village shall deliver to the Trustee the following: (1) A-Counsel's Opinion stating that the delivery of such an Alternate Credit Agreement is authorized under the terms of the Bond Ordinance and complies with the terms of this Section; and -19- (2) Written evidence from Moody's Investors Service, Inc., if the Bonds are then rated by such rating agency, and from Standard & Poor's Corporation, if the Bonds are then rated by such rating agency, in each case to the effect that such rating agency has reviewed the proposed Alternate Credit Agreement and that the substitution of the proposed Alternate Credit Agreement for the then current Credit Agreement will not; by itself, result in a withdrawal or reduction in the then current rating of the Bonds. (C) Upon satisfaction of the conditions specified in this Section the Trustee shall accept the Alternate Credit Agree- ment and shall file notice thereof with the Village. A copy of such notice shall be mailed to the Remarketing Agent, the New York Agent, to each Paying Agent and to each Holder of Bonds at the address of such Holder appearing upon the registration books of the Village kept for that purpose at the Principal Office of the Trustee. -20- ARTICLE VI Particular Covenants Section 601. General. The Village hereby covenants and agrees with the Trustee and with the Holders of the Bonds and makes provisions which shall be a part of its contract with such Holders, to the effect and with the purpose set forth in the following provisions and Sections of this Article. The provisions of this Article shall be effective from and after the time of the delivery by the Trustee of the first Bond authenticated and delivered under the Bond Ordinance. The Village shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Village under the provisions of law or the Bond Ordinance in accordance with the terms of such provisions. Section 602. Payment of Bonds and Charges. (A) The Village shall duly and punct�ly pay or cause to be paid the principal or Redemption Price of every Bond and the interest thereon, at the dates and places and in the manner mentioned in the Bonds, according to the true intent and meaning thereof.. (B) The Village shall duly and punctually pay or cause to be paid all Unpaid Drawings and the interest thereon, all fees, expenses and other valid charges of any Fiduciary, of the Bank as specified in the Credit Agreement and of the Agent as specified in the Remarketing Agreement. Section 603. Maintenance of Credit Agreement. The Village shall maintain the Unused Commitment in an amount suffi- cient to make timely payment of the purchase price of Bonds tendered for payment. The Village shall faithfully perform at all times any and all covenants, agreements and provisions relating to the Village and contained in the Credit Agreement. Section 604. Indebtedness and Liens. The Village shall not issue any bonds, notes, or other evidences of indebted- ness, other than the Bonds (including Additional Bonds) the Revolving Credit Notes secured by a pledge or other lien or charge on Tax Receipts or on any amounts held by any Fiduciary, under the Bond Ordinance. Nothing contained herein shall limit or impair the power of the Village to issue general obligation debt. Section 605. Further Assurances. At any and all times the Village shall, so far as t may be authorized by law, pass, make, do, execute, acknowledge and deliver all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, moneys and other funds hereby pledged, -21- or intended so to be, or which the Village may hereafter become bound to pledge, or as may be reasonable and required to carry out the purpose of the Bond Ordinance. The Village shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of Tax Receipts and other funds pledged here- under, its rights under the Credit Agreement and all the rights of the Bondholders hereunder against all claims and demands of all persons whomsoever. Section 606. Offices for Servicing Bonds. The Village shall at all es maintain an office or agency the City of Chicago, Illinois or the Borough of Manhattan, City and State of New York where Bonds may be presented for transfer or exchange, and an office or agency, where Bonds may be presented for payment, tender or redemption. The Village hereby irrevocably appoints the Trustee as its agent to maintain such office or agency for the transfer or exchange of Bonds. The Village shall appoint one or more Paying Agents as its agent to maintain such office or agency for the payment, tender or redemption.of Bonds. If the Trustee does not maintain an office in the Borough of Manhattan, City and State of New York to facilitate the tender, exchange, transfer and payment of Bonds, then the Trustee shall enter into an agreement with the New York Agent providing for the deposit of Bonds at an office in said Borough of Manhattan for transmission to the Trustee for such purposes. Section 607. Arbitrage. Moneys on deposit in any fund in connectio' n with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner which will cause any Bond to be an "arbitrage bond" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and any lawful regulations promulgated or heretofore proposed thereunder. Section 608. Conditions Precedent. Upon the date of issuance of any of the Bonds, all conditions, acts and things required by the Constitution or statutes of the State or the Bond Ordinance to exist, to have happened or to have been performed precedent to or in the issuance of such Bonds shall exist, have happened and have been performed and such Bonds, together with all other obligations of the Village, shall be within every debt and other limit prescribed by said Constitution or statutes. Section 609. Waiver of Rights. at any time nsi t upon or plead in any m, claim or take benefit or advantage of any law now or at any time hereafter in force covenants and agreements contained in the the Bonds and all benefit or advantage of hereby expressly waived by'the Village. -22- The Village shall not inner whatsoever, or stay or extension of which may affect the Bond Ordinance or in any such law or laws is ARTICLE VII Redemption of Bonds Section 701. Privileges' of Redemption and Redemption Prices. Bonds which are redeemable prior to maturity at the option of the Village shall be subject to redemption by or on behalf of the Village, prior to maturity and upon notice as provided in this Article, to such extent, through application of such moneys, at such time or times, in such order, and on such other terms and conditions as shall be provided by the Bond Ordinance or a Supplemental Bond Ordinance and referred to in said Bonds, and in all cases at a price equal to the principal amount of each Bond to be redeemed plus such redemption premium or differing redemption premiums, (if any), expressed as a percent- age of such principal amount, as shall be set forth in said Bonds and applicable upon such redemption, together with interest accrued to the redemption date. Section 702. Notice of Redemption. When the Trustee shall be required or authorized, or shall receive notice from the Village of its election to redeem Bonds, the Trustee shall, in accordance with the terms and provisions of the Bonds and the Bond Ordinance, select the Bonds to be redeemed and shall give notice of redemption which shall state the redemption date and identify the Bonds (or portions thereof) to be redeemed. Such notice shall further state that on such redemption date there shall become due and payable upon each such Bond or portion thereof so to be redeemed the Redemption Price thereof, together with interest accrued to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable to the Holder. Such notice shall be given by mailing a copy of such notice, not less than 15 days nor more than 30 days before such redemption.date, to each Paying Agent and to each Holder of Bonds at his address appearing upon the registration books of the Village kept for that purpose at the Principal Office of the Trustee. Section 703. Village's Election to Redeem. The Village shall give wrir"Eten notice to the Trustee of its election to re- deem Bonds and of the redemption date thereof, which notice shall be given at least 30 days prior to the redemption date or at such later date as shall be acceptable to the Trustee. Section 704. Payment of Redeemed Bonds. The Bonds or portions thereof called for redemption shall become due and payable on the redemption date stated in the notice of redemption at the Redemption Price applicable on said date plus interest ac- crued and unpaid to the redemption date, and, upon presentation and surrender thereof, with a written instrument of transfer duly executed by the Holder or his duly authorized attorney, such Bonds or portions thereof shall be paid at the said Redemption Price. -If there shall be drawn for redemption less than all of a &WE r• I qh , Bond, the Village shall execute and the Trustee shall authenticate and deliver, upon the surrender of such Bond, without charge to the Holder thereof, for the unredeemed balance of the principal amount of the Bond so surrendered, Bonds in any of the authorized denominations. If, on the redemption date, moneys for the redemp- tion of all the Bonds or portions thereof to be redeemed, together with interest accrued and unpaid to the redemption date, shall be held by or on behalf of the Trustee so as to be available therefor on said date and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any Holder), then from and after the redemption date the Bonds or portions thereof so called for re- demption shall cease to bear interest and said Bonds shall no longer be considered as Outstanding. Except as provided in Sec- tion 505(C), all moneys held by or on behalf of the Trustee for the redemption of particular Bonds shall be held in trust for the account of the Holders of the Bonds so to be redeemed. Section 705. Selection of Bonds to be Redeemed b Lot. In the event of the redemption of Tess than alb e Outstanting Bonds, the Trustee shall assign to each such Outstanding Bond a distinctive number for each $100,000 of the principal amount of such Bond and shall select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to such Bonds as many numbers as, at $100,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected, but only so much of the prin- cipal amount of each such Bond of a denomination of more than $100,000 shall be redeemed as shall equal $100,000 for each number assigned to it and so selected. For the purpose of this Section, Bonds which have heretofore been selected by lot for redemption shall not be deemed to be Outstanding Bonds. -24- ARTICLE VIII Supplemental Bond Ordinances Section 801. Supplemental Bond Ordinances Effective Upon Consent of Bank. For any one or more of the following purposes and at any time or from time to time, an ordinance of the Village supplementing the Bond Ordinance may be adopted by the Board of Trustees, which ordinance, upon the filing (a) with the Trustee of a copy thereof certified by the Clerk and (b) with the Trustee and the Village of an instrument in writing made by the Bank consenting to such ordinance, shall be fully effective in accordance with its terms: (1) To close the Bond Ordinance against, or provide limitations and restrictions in- addition to the limitations and restrictions contained'in the Bond Ordinance on, the issuance in the future of Additional Bonds, or of other notes, bonds, obligations or evidences of indebtedness; (2) To add to the covenants or agreements contained in the Bond Ordinance other covenants or agreements to be observed by the Village which are not contrary to or inconsis- tent with the Bond Ordinance as theretofore in effect; (3) To add to the limitations or restrictions contained in the Bond Ordinance other limitations or restrictions to be observed by the Village which are not contrary to or inconsistent with the Bond Ordinance as theretofore in effect; (4) To surrender any right, power or privilege reserved to or conferred upon the Village by the Bond Ordinance; (5) To confirm, as further assurance, any pledge under, and the subjection to any lien or pledge created or to be created by, the Bond Ordinance of Tax Receipts, or'of any other moneys, securities or funds; and (6) To specify, determine or authorize any and all matters and things relative to the Bonds or the proceeds thereof which are not contrary to or inconsistent with the Bond Ordinance as theretofore in effect. Section 802. Supplemental Bond Ordinances Effective Upon Consent of Bank and Truce. For any one or more of the following purposes and at any time or from time to time, an ordi- nance of the Village amending or supplementing the Bond Ordinance may be adopted by the Board of Trustees, which ordinance, upon the filing (a) with the Trustee of a copy thereof certified by the Clerk and (b) with the Trustee and the Village of instruments in writing made by the Trustee and the Bank consenting to such ordinance, shall be fully effective in accordance with its terms: -25- (1) To cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in the Bond Ordinance; and (2) To insert such provisions clarifying matters or questions arising under the Bond Ordinance as are necessary or desirable and are not contrary to or inconsistent with the Bond Ordinance as theretofore in effect. Section 803. Supplemental Bond Ordinances Effective with Consent of Bondholders. (A) At any time or from time to time, an ordinance of the Village amending or supplementing the Bond Ordinance may be adopted by the Board of Trustees modifying any of the provisions of the Bond Ordinance or releasing the Village from any of the obligations, covenants, agreements, limitations, conditions or restrictions therein contained, but no such ordinance shall be effective until after the filing (a) with the Trustee of a copy thereof certified by the Clerk and (b) with the Trustee and the Village of an instrument in writing made by the Bank consenting to such ordinance; and unless (1) no Bonds authenticated and delivered by the Trustee prior to the adoption of such ordinance remain Outstanding at the time it becomes effective, or (2) such ordinance is consented to, by or on behalf of the Bondholders in accordance with and subject to the provisions of Article IX. (B) The provisions of Paragraph (A) of this Section shall not be applicable to ordinances of the Village adopted and becoming effective in accordance with the provisions of Section 801 or Section 802. Section 804. Restriction on Amendments. The Bond Or- dinance shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article and - Article IX. The provisions of Paragraph (A) of Section 803 are in all respects subject and subordinate to the provisions, restrictions, exceptions and limitations set forth in Article IX. Nothing in this Article or Article IX contained shall affect or limit the right or obligation of the Village to pass, make, do, execute, acknowledge or deliver any resolution, act, deed, conveyance, assignment, transfer or assurance pursuant to the provisions of Section 605 or the right or obligation of the Village to execute and deliver to any Fiduciary an instrument which elsewhere in the Bond Ordinance it is provided shall be delivered to said Fiduciary. Section 805. Adoption and Filing of Supplemental Bond Ordinances. Any ordinance of the Village referred to and permitted to be authorized by Sections 801, 802 or 803 may be adopted by the Board of Trustees of the Village without the vote or consent of any of the Bondholders, but shall become effective only on the conditions, to the extent and at the time provided in said Sections, respectively. Every such ordinance so becoming effective shall thereupon form a part of the Bond Ordinance. The copy of every -26- such ordinance when filed with the Trustee shall be accompanied by a Counsel's Opinion to the effect that such ordinance has been duly and lawfully adopted by the Board of Trustees in accordance with the provisions of the Bond Ordinance, is authorized or permitted by the provisions of the Bond Ordinance, and, when effective, will be valid and binding upon the Village and enforce- able in accordance with its terms. Section 806. Authorization to Trustee. The Trustee is hereby authorized to accept the delivery of a certified copy of any ordinance of the Village referred to and permitted or authorized by Sections 801, 802 or 803 and to consent to such ordinance and to make all further agreements and stipulations which may be therein contained, and the Trustee, in taking such action, shall be fully protected in relying on an opinion of counsel (which may be a Counsel's Opinion) that such ordinance is authorized or permitted by the provisions of the Bond Ordinance or contains no provisions which are contrary to or inconsistent with the Bond Ordinance as theretofore in effect. The Trustee is hereby autho- rized and directed to give written notice of each amendment of the Bond Ordinance to the Bank and to the Remarketing Agent. -27- "MV0NCM W Amendments Section 901. Mailing. Any provision in this Article for the mailing of —a notice or other paper to Bondholders shall be fully complied with if it is mailed or delivered only to each Bondholder at the address of such Bondholder appearing upon the registration books of the Village kept at the Principal Office of the Trustee, and to each Fiduciary. Section 902. Powers of Amendment. Any amendment of the Bond Ordi— nce may be made by a Supplemental Bond Ordinance with the written consent given as provided in Section 903 of the Holders of at least a majority in aggregate principal amount of the Bonds Outstanding. No such amendment shall effect a change in the maturity or terms of redemption of the principal of any Outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or Redemption Price thereof or in the rate of interest thereon without the consent of the Holder of such Bond, or shall create a preference or priority of any Bond over any other Bond without the consent of the Holder of the Bond adversely affected, or shall change or modify any of the rights or obligations of any Fiduciary without the filing with the Trustee of its written assent thereto, or shall reduce the percentages or otherwise affect the description of Bonds the consent of the Holders of which is required to effect any such amendment. Section 903. Consent of Bondholders. (A) The Board of Trustees of the Village may at any time adopt an ordinance authorizing an amendment of the Bond Ordinance permitted by the provisions of Section 902, to take effect when and as provided in this Section. A copy of such amendment (or summary thereof or reference thereto in form approved by the Trustee) together with a request to Bondholders for their consent thereto in form satis- factory to the Trustee, shall be mailed by the Village to Bondhold- ers, but failure to mail such copy and request shall not affect the validity of such amendment when consented to as in this Section provided. Such amendment shall not be effective unless and until, and shall take effect in accordance with its terms when (a) there shall have been filed with the Trustee (i) the written consents of the Holders of at least a majority in aggregate principal amount of Outstanding Bonds, and (ii) a Counsel's Opinion stating that such amendment has been duly authorized by the Village in accordance with the provisions of the Bond Ordinance, is permitted by the Bond Ordinance and, when effective, will be valid and binding upon the Village, the Bondholders and the Trustee, and (b) a notice shall have been mailed as hereinafter in this Section provided. Any such consent shall be effective only if accompanied by proof of the ownership, at the date of such consent, of the Bonds with respect to which such consent is given. A certificate or certificates by the Trustee filed with -28- the Trustee that it has examined such proof and that such proof is sufficient under the provisions of Section 1202 shall be conclusive that consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Holder of the Bonds giving such consent and.upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor whether or not such subsequent Holder has notice thereof; provided, however, that any consent may be revoked by any Holder of such Bonds by filing with the Trustee, prior to the time when the Trustee's written statement hereafter in this Section referred to is filed, a written revoca- tion, with proof that such Bonds are owned by the signer of such revocation. The fact that a consent has not been revoked may be proved by a certificate of .the Trustee to the effect that no re- vocation thereof is on file with it. Any - consent, or revocation thereof, may be delivered or filed prior to any mailing required by this Article and shall not be deemed ineffective by reason of such prior delivery or filing. (B) Whenever the consents on file with the Trustee and not theretofore revoked shall be sufficient under this Section, the Trustee shall make and file with the Village and the Trustee a written statement that the consents of the Holders of the re- quired percentage of Outstanding Bonds have been filed with it. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the amendment has been consented to by the Holders of the required percentage of Outstanding Bonds and will be ef- fective as provided in this Section, shall be given by mailing to Bondholders at least once within sixty days after such statement of the Trustee has been so filed. A record, consisting of the papers required or permitted by this Section to be filed by or with the Trustee, shall be proof of the matters therein stated. Section 904. Amendments �y Unanimous Action. The Bond Ordinance may be amended in any respect upon the consents of the Holders of all the Bonds then Outstanding, each such consent to be accompanied by proof of the ownership at the date of such consent of the Bonds with respect to which such consent is given. Such amendment shall take effect upon the filing (a) with the Trustee of (i) a copy of the ordinance authorizing such amendment, certified as provided in Section 801, (ii) such consents and accompanying proofs and (iii) the Counsel's Opinion referred to in Section 903 and (b) with the Village and the Trustee of (i) the Trustee's written statement that the consents of the Holders of all Outstanding Bonds have been filed with it and (ii) of an instrument in writing made by the Bank consenting to such ordi- nance. No such amendment shall change or modify any of the rights or obligations of any Fiduciary without the filing with the Trustee of its written assent thereto. Section 905. Exclusion of Bonds. Bonds owned or held by or for the account of the Village shall be excluded and shall not be deemed Outstanding for the purpose of any calculation of -29- Outstanding Bonds provided for in any consent or other action under furnish the Trustee an Officer's Trustee may rely, describing all this Article. At the time of this Article, the Village shall Certificate, upon which the Bonds so to be excluded. Section 906. Notation on Bonds. Bonds authenticated and delivered after the effect a date of any action taken as in Article VIII or this Article provided may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the Village and the Trustee as to such action and in that case upon demand of the Holder of any Bond Outstanding at such effective date and presentation of such Bond for the purpose at the Principal Office of the Trustee suitable notation shall be made on such Bond by the Trustee as to any such action.. If the Village or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Village to con- form to such action shall be prepared, authenticated and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same Series, designation, maturity and interest rate then Outstand- ing, upon surrender of such Bonds. -30- ARTICLE X Remedies on Default Section 1001. Powers of Trustee. The Village hereby determines that there shall be, and there hereby are, vested in the Trustee, in addition to all its property, rights, powers and duties mentioned or referred to in any other provision of the Bond Ordinance, the rights, powers and duties in this Article provided in trust for the Bondholders. Section 1002. Events of Default. (A) Each of the following shall constitute an event of default under the Bond Ordinance and is hereby called "Event of Default ": (1) interest on any of the Bonds shall become due on any date and shall not be paid on said date, or principal or the Redemption Price of any of the Bonds shall become due on any date, whether at maturity or upon call for redemption, and shall not be paid on said date; or (2) the purchase price, including accrued interest, on a Bond tendered for payment on the Final Payment Date pursuant to Section 404(C) shall not be paid on such Final Payment Date; or (3) a default shall be made in the observance or per- formance of any covenant, contract or other provision in the Bonds or Bond Ordinance contained and such default shall continue for a period of thirty days after written notice to the Village from the'Trustee specifying such default and requiring the same to be remedied. (B) Upon-the happening of any Event of Default specified in paragraph (A) of this Section, and in each and every such case, so long as such Event of Default shall not have been remedied, either the Trustee (by notice in writing to the Village and the Bank), or the Holders of not less than 25% in principal amount of the Bonds Outstanding (by notice in writing to the Village, the Bank and the Trustee), may declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and be immediately due and payable. The right of the Trustee or of the Holders of not less than 25% in principal amount of the Bonds to make any such declaration, however, shall be subject to the condition that if, at any time after such declaration, but before the Bonds shall have matured by their terms, all overdue installments of interest upon the Bonds, together with interest on such overdue installments of interest to the extent permitted by law and the reasonable and proper charges, expenses and liabilities of the Trustee, and all other sums then payable by the Village under the Bond Ordinance shall either be paid by or for the account of the Village or provision -31- satisfactory to the Trustee shall be made for such payment, and all defaults under the Bonds or under the Bond Ordinance (other than the payment of principal and interest due and payable solely by reason of such declaration) shall be made good or be secured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall be made therefor, then and in every such case the Holders of a majority in principal amount of the Bonds Outstanding, by written notice to the Village, the Bank and to the Trustee, may rescind such declaration and annul such default in its entirety, or, if the Trustee shall have acted itself, and if there shall not have been theretofore delivered to the Trustee written direction to the contrary by the Holders of a majority in principal amount of the Bonds then Outstanding, then any such declaration shall ipso facto be deemed to be rescinded and any such default and its consequences shall ipso facto be deemed to be annulled, but no such rescission and annulment shall extend to or affect any subsequent default or impair or exhaust any resulting right or power. Section 1003. Enforcement �y Trustee. Upon the happening and continuance of an Event of Default or an event which upon sufficient notice may become an Event of Default described in Section 1002, the Trustee in its own name and as trustee of an express trust, on behalf and for the benefit and protection of the Holders of all Bonds, may proceed, and upon the written request of the,Holders of not less than twenty -five per cent (25 %) in aggregate principal amount of the Bonds then Outstanding shall proceed, subject to the provisions of Section 1103, to pro- tect and enforce its rights and, to the full extent that the Holders of such Bonds themselves might do, the rights of such Bondholders under the laws of the State or under the Bond Ordinance by such suits, actions or proceedings in equity or at law, either for the specific performance of any covenant or contract contained herein or in aid or execution of any power herein granted or for any legal or equitable remedy as the Trustee shall deem most effectual to protect and enforce the rights aforesaid. Section 1004. Representation of Bondholders by Trustee. The Trustee ins hereby irrevocably appointed (and the Bondholders, by accepting and holding the same, shall be conclusively deemed to have so appointed the Trustee and to have mutually covenanted and agreed, each with the other, not to revoke such appointment) as true and lawful attorney -in -fact of the Bondholders with power and authority, at any time in its discretion: (1) Pursuant to the Bond Ordinance or any law, after the happening of an Event of Default, (a) by action in mandamus or by other suit, action or proceeding in equity or at law, to enforce all rights of the Bondholders including the right to require the Village and the officers thereof to fulfill any covenant or agreement with the Bondholders and to perform its and their duties under the Bond Ordinance, (b) to bring suit upon the Bonds, (c) by action or suit in equity, to require the Village to account as if it were a -32- trustee of an express trust for the Bondholders, or (d) by action or suit in equity, to enjoin any acts or things which may be lawful or in violation of the rights of the Bondholders; and (2) To make and file in any proceeding for the adjust- ment of the debts of the Village either in the respective names of the Bondholders or on behalf of all the Bondholders as a class, any proof of debt, amendment of proof of debt, petition or other document, to receive payment of any sums becoming distributable to the Bondholders, and to execute any other papers and documents and do and perform any and all such acts and things as may be necessary or advisable in the opinion of the Trustee in order to have the respective claims of the Bondholders against the Village allowed in any such proceeding. Section 1005. Limitation on Powers of Trustee. Nothing in the Bond Ord nance contained shall be deemed to give power to the Trustee either as such or as attorney in fact of the Bondholders to vote the claims of the Bondholders in any bankruptcy proceeding or to accept or consent to any plan or reorganization, readjustment, arrangement or composition or other like plan, or by other action of any character to waiver or change any right of any Bondholder to any modification or amendment of the Bond Ordinance requiring such consent or to any ordinance requiring such consent pursuant to the provisions of Article VIII or Article IX. Section 1006. Action � Trustee. (A) All rights of action under the Bond Ordinance or upon any of the Bonds, enforce- able by the Trustee, may be enforced by the Trustee without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceeding instituted by the Trustee may be brought in its name for the ratable benefit of the Holders of said Bonds, subject to the provisions of the Bond Ordinance. (B) In the enforcement of any rights under the Bond Ordinance, the Trustee shall be entitled to sue for, enforce pay- ment of and to receive any and all amounts then or during any default becoming, and at any time remaining, due for principal, interest or otherwise under any of the provisions of the Bond Ordinance or of the Bonds and unpaid, with interest on overdue payments, together with any and all costs and expenses of collec- tion and of all proceedings hereunder and under such Bonds, with- out prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce judgment or decree against the Village for any portion of such amounts remaining un- paid, with interest costs and expenses as aforesaid, and to col- lect in any manner provided by law, the moneys adjudged or decreed to be payable. -33- Section 1007. Accounting and Examination of Records After Default. The Village covenants with the Trustee that, if an Event of Default shall have happened and shall not have been remedied, (1) the books of record and account of the Village and all records relating to the Tax Receipts shall at all times be subject to the inspection and use of the Trustee and of its agents and attorneys, and (2) the Village, whenever the Trustee shall demand, will account, as if it were the trustee of an express trust, for all Tax Receipts, and other moneys, securities and funds pledged or held under the Bond Ordinance for such period as shall be stated in such demand. Section 1008. Limitation on Rights of Bondholders. (A) No Holder of any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, for the protection or enforcement of any right under the Bond Ordinance or any right under law unless (a) such Holder shall have given to the Trustee written notice of the Event of Default or breach of duty on account of which such suit, action or proceeding is to be taken, (b) the Holders-of not less than twenty -five percent (25 %) in aggregate principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or to in- stitute such action, suit or proceeding in its name, (c) there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be in- curred therein or thereby and (d) the Trustee shall have refused or neglected to comply with such request within a reasonable time. Nothing in this Article contained shall affect or impair the right of any Bondholder to enforce the payment of the princi- pal or Redemption Price of and interest on his Bonds, or the obligation of the Village to pay the principal or Redemption Price of and interest on each Bond to the Holder thereof at the time and place in said Bond expressed. (B) No Holder of any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law against the Bank for the enforcement of the Credit Agreement. Section 1009. Priority of Payments After Default. (A) In the event that upon the happening and continuance of any Event of Default, the funds held by the Fiduciaries shall be insufficient for the payment of principal or Redemption Price and interest then due on the Bonds, such funds and any other moneys received or collected by the Trustee, after making provision for the pay- ment of any expenses necessary to protect the interests of the Holders of the Bonds and for the payment of the charges and ex- penses and liabilities incurred and advances made by the Fiduci- aries in the performance of their respective duties under the Bond.Ordinance, shall be applied as follows: -34- (1) Unless the principal of all the Bonds shall have become or have been declared due and payable, FIRST: To the payment to the persons entitled thereto of all installments of interest then due in the order of the due dates of such installments, and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such install- ment, to the persons entitled thereto, without any discrimination or preference, and SECOND: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference. (2) if the principal of all the Bonds shall have be- come or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority of principal over in- terest or of interest-over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference. (B) Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section, interest on the amounts of principal to be paid on such date of application shall cease to accrue. The Trustee shall give such notice as it may deem appropriate for the fixing of any such date. The Trustee shall not be required to make payment to the Holder of any unpaid Bond unless such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 1010. Remedies Not Exclusive. No remedy by the terms of the Bond Ordinal nce conferred upon or reserved to the Trustee (or to Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder now or hereafter existing at law or in equity or by statute, except as provided in Paragraph (A) of Section 1006 and in Section 1008. Section 1011. Control of Proceedings. In the case of an Event of Default described n Section 1002, the Holders of a majority in aggregate principal amount of the-Bonds then Outstanding -35- shall have the right, subject to the provisions of Section 1008, by an instrument in writing executed and delivered to the'Trustee, to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee; provided, however, that the Trustee shall have the right to decline to follow any such direc- tion if the Trustee shall be advised by counsel that the action or proceeding so directed may not lawfully be taken, or if the Trustee in good faith shall determine that the action or proceed- ing so directed would involve the Trustee in personal liability or be unjustly prejudicial to Bondholders not parties to such direction. Section 1012. Effect of Waiver and Other Circumstances. No delay or om ssion of the Trustee or any Holders of Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or acquiescence therein, and every right, power and remedy given by the Bond Ordinance to them or any of them may be exercised from time to time and as often as may be deemed expedient by the Trustee or, in an appropriate case, by the Bondholders. In case the Trustee shall have pro- ceeded to enforce any right under the Bond Ordinance, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Village, the Bondholders and the Trustee will be restored to their former positions and rights hereunder with respect to all rights, remedies and powers of the Trustee and the Bondholders, which shall continue as if no such proceedings had been taken. Section 1013. Notice of Default. The Trustee shall give to the Bondholders, the Bank and the Remarketing Agent notice of each Event of Default hereunder, unless such Event of Default shall have been remedied or cured or necessary amounts provided before the giving of such notice; but, except in the case of default in the payment of the principal or Redemption Price of or interest on any of the Bonds, the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the interests of the Bondholders. Each such notice shall be given by the Trustee by mailing written notice to the Bank, to the Remarketing Agent and to each Holder of Bonds at his address, appearing upon the registration books. -36- ARTICLE XI The Fiduciaries Section 1101. Trustee. LaSalle National Bank, having its Principal Office in the�ty of Chicago, Illinois, is hereby appointed as .trustee hereunder, and the property, rights, powers and duties of the Trustee under the Bond Ordinance are hereby vested in said trustee in trust for the Bondholders. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by the Bond Ordinance by executing the certificate of authentication endorsed upon the Bonds, and, by executing such certificate upon any Bond, the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the Bond so authenticated, but with respect to all the Bonds there- after to-be issued, but only, however, upon the terms and condi- tions set forth in the Bond Ordinance. Section 1102. Paying Agent.. The Trustee is hereby appointed Paying —Agent hereunder. The Village may at any time or from time to time by Supplemental Bond Ordinance appoint one or more other Paying Agents. Each Paying Agent shall be a bank, trust company or national banking association, with its principal office located in the State of Illinois or the Borough of Manhattan, City and State of New York, having trust powers and having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000), if there be such a bank or trust company or national banking association willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by the Bond Ordinance. Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by the Bond Ordinance by executing and delivering to the Village and the Trustee a written acceptance thereof, provided,-however that the Trustee appointed pursuant to Section 1101 shall signify its acceptance of its duties as Paying Agent in the same manner that it shall signify its acceptance of its duties as Trustee as specified in Section 1101 hereof. Section 1103. Responsibilities of Fiduciaries. (A) The recitals of fact herein and in the Bonds contained all be taken as the statements of the Village and no Fiduciary assumes any responsibility for the correctness of the same. No Fiduciary makes any representations as to the validity or sufficiency of the Bond Ordinance or of any Bonds issued thereunder or in respect of the security afforded by the Bond Ordinance, and no Fiduciary shall incur any responsibility in respect thereof. The Trustee shall, however, be responsible for its representation contained in its certificate of authentication on the Bonds. No Fiduciary shall be under any responsibility or duty with respect to the issuance of the Bonds for value or the application of the proceeds thereof, except the Trustee to the extent such proceeds are paid to the Trustee in its capacity as Trustee, or the application of any moneys paid to the Village or others in accordance with the -37- Bond Ordinance. No Fiduciary shall be under any responsibility or duty with respect to the application of any moneys paid to any other Fiduciary. No Fiduciary shall be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any action or suit in respect of the Bond Ordinance or Bonds, or to advance any of its own moneys, unless properly indemnified. No Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence or default. (B) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have-occurred, undertakes to perform such duties and only such duties as are specifically set forth in the Bond Ordinance. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by the Bond Ordinance, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. Section 1104. Funds Held in Trust. All moneys held by any Fiduciary, as such, at any time pursuant to the terms of the Bond Ordinance shall be and hereby are assigned, transferred and set over unto such Fiduciary in trust.for the purposes and under the terms and conditions of the Bond Ordinance. Within 30 days following each Interest Payment Date, the Trustee shall file with the Village a statement of the activity and assets held in the Bond Service Fund. Section 1105. Evidence on Which Fiduciaries Ma Act. Each Fiducia ry shall be protected in acting upon any notice, ordinance, resolution, request, consent, order, certificate, opinion, bond, or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. Each Fiduciary may consult with and rely on the advice or opinion of accountants with respect to any appropriate matter, including verification of any mathematical computation required to be made. Whenever any Fiduciary shall deem it neces- sary or desirable that a fact or matter be proved or established prior to taking or suffering any action hereunder, such fact or matter, unless other evidence in respect thereof be herein speci- fically prescribed, may be deemed to be conclusively proved and established by an Officer's Certificate stating the same, but in its discretion the Fiduciary may in lieu thereof accept other evidence of such fact or matter. Section 1106. Compensation and Expenses. Unless otherwise pro ded by contract with the Fiduciary, the Village shall pay to each Fiduciary from time to time reasonable compensa- tion in accordance with existing fee schedules, for all services rendered by it hereunder, and also reimbursement for all its reasonable expenses, charges, legal, accounting and engineering fees and other disbursements and those of its attorneys, agents -38- „, and employees, incurred in and about the performance of its powers and duties hereunder. The Village shall indemnify and save each Fiduciary harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder and which are not due to its negligence or default. Section 1107. Resignation of Fiduciary. A Fiduciary may at any ti— me resig and be discharged of its duties and obliga- tions by giving not less than sixty days' written notice to the Village and mailing notice thereof to each Bondholder within twenty days after the giving of such written notice. Such resig- nation shall take effect when a successor shall have been appointed by the Village or Bondholders as herein provided. Section 1108. Removal. The Village may remove any Fiduciary at any time exce— paring the existence of an Event of Default, for such cause as shall be determined in the sole discre- tion of the Village by filing with each Fiduciary an instrument signed by a Village Officer. A Fiduciary may be removed at any time by the Holders of a majority in principal amount of the Bonds then Outstanding, excluding any Bonds held by or for the account of the Village, by an instrument or concurrent instruments in writing signed and duly acknowledged by such Bondholders or by their attorneys duly authorized in writing and delivered to the Village. Copies of each such instrument shall be delivered by the Village to each Fiduciary. Section 1109. Appointment of Successor. In case at any time a F iary shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of such Fiduciary or of its property shall be appointed, or if any public officer or court shall take charge or control of such Fiduciary or of its property or affairs, a successor may be appointed by the Holders of a majority in principal amount of the Bonds then Outstanding, excluding any Bonds held by or for the account of the Village, by an instrument or concurrent instruments in writing signed by such Bondholders or their attorneys duly authorized in writing and delivered to such successor Fiduciary, notification thereof being given to the Village, the predecessor Fiduciary and any other Fiduciaries. Pending such appointment, the Village agrees to forthwith appoint a Fiduciary to fill such vacancy until a successor Fiduciary shall be appointed by Bondholders. The Village shall mail notice of any such appointment to each Bondholder within twenty days after such appointment. Any succes- sor Fiduciary appointed by the Village shall, immediately and without further act, be superseded by a Fiduciary appointed by Bondholders. If in a proper case no appointment of a successor Fiduciary shall be made pursuant to the foregoing provisions of this Section within forty -five days after the Fiduciary shall have given to the Village written notice of resignation as provided in Section 11.07 or after the occurrence of any other event requir- ing or authorizing such appointment, any other Fiduciary or any Bondholder may apply to any court of competent jurisdiction to MGME appoint a successor: Any Fiduciary appointed under the provisions of this Section shall be a bank, trust company or national banking association, having the qualifications prescribed by Section 1102 for Paying Agents and authorized to perform all the duties imposed upon it by the Bond Ordinance. Section 1110. Transfer of Rights and Property to Successor. Any successor Fid ary appointed hereunder shall execute, acknowledge and deliver to its predecessor Fiduciary, and also to the Village, an instrument accepting such appointment, and thereupon such successor Fiduciary, without any further act, deed or conveyance, shall become fully vested with all moneys, estates, properties, rights, powers, duties and obligations of such predecessor Fiduciary, but the Fiduciary ceasing to act shall nevertheless, on the written request of the Village or of the successor Fiduciary, execute, acknowledge and deliver such instruments of conveyance and further assurance as may be required to vest and confirm in such successor Fiduciary all rights, title and interest of the predecessor Fiduciary in and to any property held by it, and shall pay over, assign and deliver to such suc- cessor Fiduciary any moneys or other property subject to the trusts and conditions herein set forth. The Village hereby agrees to deliver, or cause to be delivered, any deed, conveyance or instrument required by such successor Fiduciary for more fully and certainly vesting in and confirming to such successor Fidu- ciary any such moneys, estates, properties, rights, powers and duties. Section 1111. Merger or Consolidation. Any company into which aFiduciary y may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which such Fiduciary or any public officer or court may sell or transfer all or substantially all of its corporate trust business, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act; provided, however, that such company shall be a bank, trust company or national banking association which is qualified to be a successor to such Fiduciary under Section 1109. Section 1112. Adoption of Authentication. In case any of the Bonds contemplated to be issued under the Bond Ordinance shall have been authenticated but not delivered, any successor Trustee may adopt the certificate of authentication of any pre- decessor Trustee so authenticating such Bonds and deliver such Bonds so authenticated, and in case any of the said Bonds shall not have been authenticated, any successor Trustee may authenti- cate such Bonds in the name of the predecessor Trustee or in the name of the successor Trustee. Section 1113. Certain Permitted Acts. Any Fiduciary may become the owner of or may deal in Bonds as fully and with the same rights it would have if it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as depositary for, MITSIM and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or effect or aid in any readjustment of debts growing out of the enforcement of the Bonds or the Bond Ordinance, whether or not any such committee shall represent the Holders of a majority in aggregate principal amount of the Bonds Outstanding. -41- t ARTICLE XII Miscellaneous Section 1201. Defeasance and Payment of Bonds. (A) If the Village shall pay or cause to be paid to the Holders of the Bonds, the principal or Redemption Price, if applicable, and interest due or to become due thereon, at the times and in the manner stipulated therein and in the Bond Ordinance, then, at the option of the Village expressed in an Officer's Certificate to the Trustee, the pledge of moneys, securities and funds hereby pledged and the covenants, agreements and other obligations of the Village to the Bondholders hereunder shall be discharged and satisfied. In -such event, the Fiduciaries shall pay over or deliver to the Village all moneys, securities and assets held by them pursuant to the Bond Ordinance which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (B) Any Bonds, whether at or prior to the maturity or the redemption date of such Bonds, shall be deemed to have been paid within the meaning of this Section if (1) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision satisfactory to the Trustee shall have been made for the giving of such notice, and (2) there shall have been deposited with the Trustee for such purpose moneys in an amount which shall be sufficient to pay when due the principal or Redemp- tion Price of and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof. The moneys deposited with the Trustee pursuant to this Section shall be held in trust for the payment of the principal or Redemption Price of and interest on said Bonds. (C) Anything in the Bond Ordinance to the contrary notwithstanding, any moneys held by a Fiduciary in trust for the payment and discharge of any of the Bonds which remain unclaimed for six years after the date when such Bonds became due and payable, either at maturity or by call for redemption, if such moneys were held by the Fiduciary at said date, or for six years after the date of deposit of such moneys if deposited with the Fiduciary after the said date.when such Bonds became due and payable, shall be paid by the Fiduciary to the Village as its absolute property and free from trust, and the Fiduciary shall thereupon be released and discharged with respect thereto. (D) Sixty days following the date upon which such Bonds shall have become due and payable, any moneys held by a Fiduciary for the payment or discharge of such Bonds shall be deposited in an interest bearing account and the interest earned thereon shall be annually paid by the Fiduciary to the Village. -42- Section 1202. Evidence of Signatures of Bondholders and Ownership of Bonds. Any instrument which the Bond Ordinance may require or permit be signed and executed by Bondholders may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys duly authorized in writing. Any request, consent or other instrument executed by the Holder of any Bond shall bind all future Holders of such Bond in respect of anything done or suffered to be done hereunder by the Village or any Fiduciary in accordance therewith. Proof of (i) the execution of any such instrument, or of an instrument appointing or authorizing any such attorney, or (ii) the ownership by any person of any Bonds, shall be sufficient for any purpose of the Bond Ordinance if made in the following manner, or in any other manner satisfactory to the Trustee which may, nevertheless in its discretion require further or other proof in cases where it deems the same desirable: (1) The fact and date of the execution by any Bond- holder or his attorney of any such instrument may be proved by the certificate of a notary public or-other officer authorized to take acknowledgments of deeds to be recorded in the jurisdiction in which he purports to act that the person signing such instrument acknowledged to him the execution thereof, or by the affidavit of a witness of such execution, duly sworn to before such a notary public or other officer. (2) The authority of a person or persons to execute any such instrument on behalf of a corporate Bondholder may be established without further proof if such instrument is signed by a person purporting to be an officer of such corporation with a corporate seal affixed, and is attested by a person purporting to be its secretary or an assistant secretary. (3) The ownership of Bonds, the amount, numbers and other identification thereof, and the dates of owning the same, shall be proved by the registry books. Section 1203. Moneys Held for Particular Bonds. The amounts held by an Fiduciary for the payment of the interest, principal or Redemption Price due on any date with respect to particular Bonds shall, pending such payment, be set aside and held in trust by it for the Holders of the Bonds entitled thereto, and for the purposes of the Bond Ordinance such interest, princi- pal or Redemption Price, after the due date thereof, shall no longer be considered to be unpaid. Section 1204. General Regulations as to Moneys and Funds. (A) Moneys the Bond Service Fund, on-instructions signed by a Village Officer, shall by the Fiduciary holding the same be invested in Investment Obligations or be deposited in time or other accounts, maturing in the amounts and at the times necessary to provide funds to make the payments to which such -43- moneys are applicable as determined by the Trustee. Obligations so purchased shall be deemed at all times to be a part of'said Fund and the interest thereon and any profit arising on the sale thereof shall be credited to said Fund, and any loss resulting on the sale thereof shall be charged to said Fund. Obligations so purchased as an investment of moneys shall be sold at the best price obtainable whenever it shall be necessary so to do in order to provide moneys to make any transfer, withdrawal, payment or disbursement from the Bond Service Fund. No Fiduciary shall be liable or responsible for any loss resulting from any investment made in accordance with the Bond Ordinance. In computing for any purpose hereunder the amount in the Bond Service Fund on any date, obligations so purchased, if due within one year after such date, shall be valued at the face value exclusive of accrued interest, or,.if not due within one year after such date, shall be valued at the lower of cost or face value exclusive of accrued interest and may be so valued as of any time within four days, prior to such date. (B) All moneys (not including securities) held by any Fiduciary may be deposited by it, on demand or time deposit, in its banking department or with such other banks or trust companies which are lawful depositaries as may be designated by the Village and approved by the Trustee. No such moneys shall be deposited with any bank or trust company, in an amount exceeding fifty per centum (50 %) of the.amount which an officer of such bank or trust company shall certify to the Trustee as the combined capital and surplus of such bank or trust company. No such moneys shall be deposited or remain on deposit with any bank or trust company in excess of the amount guaranteed or insured by the Federal Deposit Insurance Corporation or other Federal agency, unless such bank or trust company shall have lodged with the trust department of the Trustee, Investment Obligations having a market value (exclu- sive of accrued interest) at least equal to the amount of such moneys. Every Fiduciary shall allow and credit interest on any such moneys held by it at such rate as it customarily allows upon similar funds of similar size and under similar conditions or as required by law. Section 1205. Cancellation of Bonds. All Bonds pur- chased pursuant to Section 404(C), redeemed or paid at maturity- shall, if surrendered to the Village or any Paying Agent, be cancelled by it and delivered to the Trustee, or if surrendered to the Trustee, be cancelled by it. All such Bonds shall be cancelled and destroyed by the Trustee and a certificate thereof delivered to the Village. Section 1206. Preservation and Inspection of Documents. All reports, certificates, statements, and other documents received by any Fiduciary under the provisions of the Bond Ordinance shall be retained in its possession and shall be available at all rea- sonable times to the inspection of the Village, any other Fiduciary or any Bondholder, and their agents and their representatives, any of whom may make copies thereof, but any such reports, certifi- -44- cates, statements or other documents may, at the election of such Fiduciary, be destroyed or otherwise disposed of at any time two years after such date as the pledge created by the Bond Ordinance shall be discharged as provided in Section 1201. Section 1207. Form of Bonds. Subject to the pro- visions of the Bond Ordinance, each Bond, the form of assignment, the Certificate of Authentication by the Trustee and the Notice and Demand to be attached to each Bond shall be, respectively, in substantially the following form, with such insertions or varia- tions as to the Series designation of Additional Bonds, or any redemption or amortization provisions and such other insertions or omissions, endorsements and variations as may be required or permitted by the Bond Ordinance: -45- (Form of Bond) UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTIES OF COOK AND LAKE VILLAGE OF DEERFIELD GENERAL OBLIGATION VARIABLE RATE DEMAND BOND, SERIES A The VILLAGE OF DEERFIELD (the "Village ".), a municipal corporation and a home rule unit of the State of Illinois situate in the Counties of Cook and Lake, acknowledges itself indebted and for value received hereby promises to pay to or registered assigns, the principal sum of on January 1, 2004, upon presentation and surrender hereof at the principal corporate trust office of LaSalle National Bank (the "Trustee ") in the City of Chicago, Illinois or, at the option of the owner hereof, at the principal office of any paying agent appointed by the Village, and to pay interest on such principal sum from the date hereof until the principal amount hereof shall have been fully paid at the Variable Rate per annum hereinafter referred to,.payable quarter - annually on April 1, 1985 and there- after on the first days of January, April, July and October in each year, interest to maturity being payable by check or draft mailed to the registered owner of record hereof, as of the Business Day next preceding such interest payment date, at the address of such registered owner appearing on the registration books main- tained by the Village for such purpose at the principal corporate trust office of the Trustee, or if the principal amount of this bond is at least $1',000,000, at the direction of such registered owner, by depositing immediately available funds in a bank account specified by such registered owner in written instructions to the Trustee. Both principal of and redemption premium, if any, and interest.on this bond are payable in legal tender of the United States of America. The full faith and credit of the Village are irrevocably pledged for the punctual payment of the principal of, redemption premium, if any, and interest on this bond according to its terms. This bond is one of a duly authorized series of bonds of the Village designated "General Obligation Variable Rate Demand Bonds, Series All and issued in the aggregate principal amount of $4,100,000 (the "Bonds ") under and pursuant to Section 6 of Article VII of the Illinois Constitution of 1970 and by virtue of an ordinance adopted by the President and Board of Trustees of the Village on December 17, 1984 and entitled: "Ordinance Authorizing the Issuance of General Obligation Variable Rate Demand Bonds of the Village of Deerfield, Illinois" (the "Bond Ordinance "). -46- The Bonds bear interest at a variable rate per annum (not exceeding 13% per annum) (the "Variable Rate ") determined from time to time by John Nuveen & Co. Incorporated or its succes- sors as Remarketing Agent (the "Remarketing Agent ") under the Bond Ordinance and computed on the basis of a year of 365 days or 366 days, if appropriate, for the number of days actually elapsed. Any change in the Variable Rate shall take effect on the Business Day immediately following the date such change is made. As referred to herein, Business Day means any day excluding Saturday and Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Illinois or dealers located in the City of New York, New York who are members of the National Association of Securities Dealers, Inc. are obligated by law or administrative order to close. The Bonds are general obligations of the Village equally and ratably secured and entitled to the protection given by the Bond Ordinance. Reference.is hereby made to the Bond Ordinance and -to all ordinances supplemental thereto for a description of the provisions; among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Village, the Trustee and the registered owners of the Bonds, and the terms upon which the Bonds are issued and secured including amounts which may be borrowed by the Trustee acting on behalf of the Village to pay the purchase price of tendered Bonds pursuant to the Credit Agreement, dated as of December 1, 1984 (the "Credit Agreement ") between the Village and National Westminster Bank PLC, Chicago Branch (the "Bank ").. Borrowings under the Credit Agreement are not available to pay the principal of, redemption premium, if any, and the interest on the Bonds when due. The commitment of the Bank to lend money under the Credit Agreement is subject to the satisfaction of certain preconditions and expires on December 1, 1989 or upon the earlier occurrence of certain events described therein. The Village may, but is not required to, extend the initial Credit Agreement or enter into an Alternate Credit Agreement (as defined in the Bond Ordinance) after the termination of the Credit Agreement. To the extent and in the respects permitted by the Bond Ordinance the provisions of the Bond Ordinance or any ordinance amendatory thereof or supplemental thereto may be modified or amended by action on behalf of the Village taken in the manner and subject to the conditions and exceptions prescribed in the Bond Ordinance. The obligations of the Village under the Bond Ordinance may be discharged at or prior to the maturity or redemp- tion of the Bonds upon the making of provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. The Bonds are subject to mandatory redemption prior to maturity, in part by lot, on January.l, 1987 and on each January 1 thereafter in principal amounts specified in the Bond Ordinance each constituting a sinking fund installment for the retirement of the Bonds. The Bonds are also subject to mandatory redemption prior to maturity upon the filing with the Trustee by the Village or the Bank of notice of the termination of the Credit Agreement. -47- The date fixed for such redemption will not be later than the latest possible redemption date immediately prior to the termina- tion date stated in such notice; provided, however that no Bonds shall be so redeemed if at least 35 days prior to such termination date, the Village shall have entered into an Alternate Credit Agreement in accordance with the provisions of the Bond Ordinance. The Bonds are subject to redemption prior to maturity at the option of the village as a whole, or in part by lot, at any time. Whenever Bonds are called for redemption the redemption price thereof will be equal to the principal amount thereof to be redeemed plus interest accrued thereon to the date fixed for such redemption. Whenever Bonds are called for redemption, notice there- of will be mailed to each registered owner of Bonds called for redemption, not less than 15 days nor more than 30 days prior to the redemption date, at the address of such registered owner shown on the registration books of the village maintained at the principal corporate trust office of the Trustee. The Bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the Bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, then from and after the redemption date interest on such Bonds or portions thereof shall cease to accrue and become payable to the registered owners entitled to payment thereof on such redemption. The registered owner of this bond may by execution of irrevocable written notice, in the form of the Notice and Demand attached hereto, or by giving irrevocable telephonic notice to the Remarketing Agent confirmed in writing by telex, telecopier, letter or telegram received by the Remarketing Agent and the Trustee by the close of business on the next Business Day, demand payment of the principal of and accrued interest on this bond to the date of payment specified by the registered owner (the "Final Payment Date ") which shall be a Business Day not prior to the seventh day next succeeding the earlier of (.i) the date of delivery of the Notice and Demand to the Trustee and the Remarketing Agent or (ii) the date that telephonic notice of tender is given to the Remarketing Agent. Upon the surrender of this bond to the Trustee, at its principal corporate trust office, or to J. Henry Schroder Bank & Trust Company, acting as agent for the Trustee, at its principal corporate trust office in the Borough of Manhattan, City and State of New York, at least two Business Days prior to the Final Payment Date with an appropriate endorsement for transfer or accompanied by a bond power endorsed in blank, payment shall be made in immediately available funds, deposited in accordance with instructions provided by the registered owner to the Trustee or, if no such instructions are provided, by check mailed to the registered owner at the address of such registered owner appearing on the registration books. -48- t i This bond is transferable as provided in the Bond Or- dinance, only upon the books of the Village kept for that purpose at the principal corporate trust office of the Trustee, by the registered owner hereof in person or by his attorney duly authorized in writing, upon surrender hereof together with a written instru- ment of transfer satisfactory to the Trustee duly executed by the registered owner or such duly authorized attorney, and thereupon the Village shall issue in the name of the transferee, a new Bond or Bonds of the same aggregate principal amount, maturity and interest rate as the surrendered Bond, as provided in the Bond Ordinance and upon the payment of the charges, if any, therein prescribed. The Village and the Trustee may treat and consider the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes whatsoever. Bonds may be deposited at the principal corporate trust office of J. Henry Schroder Bank & Trust Company, in the Borough of Manhattan, City and State of New York, for transmission to the Trustee for tender, payment, transfer or exchange. The Bonds are issuable in the form of registered bonds in the denomination of $100,000 or an integral multiple thereof. The Bonds, upon surrender thereof at the principal corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or his attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of Bonds of any other authorized denominations and of the same maturity. The registered owner of this bond shall have no right to enforce the provisions of the Bond Ordinance or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Bond Ordinance, or to institute, appear in or defend any suit or other proceedings with respect thereto except as provided in the Bond Ordinance. The principal of the Bonds may be declared due and payable whether or not in advance of maturity, and such declaration and its consequences may be annulled, as provided in the Bond Ordinance. This bond shall not be entitled to any benefit under the Bond Ordinance or become valid or obligatory for any purpose until the certificate of authentication hereon has been duly executed by the Trustee. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be per- formed precedent to and in the execution and delivery of the Bond Ordinance and the issuance of this bond, do exist, have happened and have been performed in the time, form and manner required by law and that the issue of bonds of which this bond is one, together with all other indebtedness of the Village, is within every debt and other limit prescribed by law. -49- r IN WITNESS WHEREOF, the Village of Deerfield, by its President and Board of Trustees, has caused this bond to be executed by the manual or facsimile signatures of its Village President and its Village Clerk and its corporate seal, or a facsimile thereof, to be impressed or reproduced hereon. Dated: (SEAL) Attest: Village Clerk -50- VILLAGE OF DEERFIELD By Village President (Form of Certificate of Authentication) This bond is one of the issue of Bonds described in the within- mentioned Bond Ordinance and is one of the series of such Bonds designated "General Obligation Variable Rate Demand Bond, Series All of the Village of Deerfield, Illinois. LaSalle National Bank, as Trustee By Authorized Officer (Form of'Assignment) ASSIGNMENT For value receive and transfers unto within Bond, and all rights constitutes and appoints transfer the within Bond on thereof, with full power of Dated: Witness: 3 the undersigned hereby sells, assigns, the thereunder, and hereby irrevocably Attorney to the books kept for registration substitution in the premises. -51- (Form of Notice and Demand attached to each Bond) NOTICE OF DEMAND FOR PAYMENT $ principal amount of Village of Deerfield, Illinois General Obligation Variable Rate Demand Bond, Series A Bond Number: The undersigned hereby tenders the hereinabove described Bond to the Trustee under the Bond Ordinance and demands payment of the principal of and accrued interest on the Bond to the date of payment which shall be (a date which is a Business Day not prior to the seventh day next succeeding the date of delivery of this notice or the telephonic notice of tender confirmed by this notice). Authorized Signature Taxpayer Identification Number: Dated: Instructions: 1. Deliver one copy of the Notice and Demand to the Trustee at the following address: LaSalle National Bank Corporate Trust Department 135 S. LaSalle Street Chicago, Illinois 60690 Attention: Corporate Trust Division 2. Deliver one copy of the Notice and Demand to the Remarketing Agent at the following address: John Nuveen & Co. Incorporated 140 Broadway New York, New York 10005 Attention: S. E. Canaday, Jr. 3. At least two Business Days prior to the date of payment deliver the Bond to either the Trustee or J. Henry Schroder Bank & Trust Company as agent for the Trustee at the follow- ing addresses: -52- LaSalle National Bank Corporate Trust Department 135 S. LaSalle Street Chicago, Illinois 60690 Attention: Corporate Trust Division J. Henry Schroder Bank & Trust Company One State Street Plaza New York, New York 10015 Attention: Corporate Trust Department Section 1208. No Personal Liability on Bonds. No re- course shall be had for the payment of the principal of or the interest on the Bonds or for any claim based thereon or on the Bond Ordinance against any officer or employee of the Village, or any person executing the Bonds; provided however, that nothing herein shall bar recourse in mandamus or otherwise to any such person or officer in his corporate as opposed to his individual capacity. Section 1209. Upointment of Remarketing Agent. John Nuveen & Co. Incorporated is hereby appointed as Remarketing Agent under the Bond Ordinance. The Remarketing Agent or any successor, may at any time resign by giving written notice of resignation to the Village and the Trustee. The Village may remove the Remarketing Agent or any successor at any time for such cause as shall be determined in the sole discretion of the Village. Upon receiving such notice of resignation or upon the removal of the Remarketing Agent, the Village shall promptly appoint a successor Remarketing Agent, which shall be a commercial bank or a member of the National Association of Securities Dealers, Inc., to act'as such Remarketing Agent under the Remarketing Agreement or any similar agreement. Notice of such appointment shall be given to the Trustee. Section 1210. Approval of Documents. The form of Credit Agreement and the form of Remarketing Agreement on file in the office of the Clerk are each hereby approved for execution and delivery on behalf of the Village. The Village President and Clerk are hereby authorized and directed to execute and deliver the Credit Agreement and the Remarketing Agreement. In accordance with the provisions of the Credit Agreement, the Village President and Clerk are hereby authorized to execute and deliver from time to time the Revolving Credit Note. The Contract of Purchase between the Village and John Nuveen & Co. Incorporated, as underwri- ter for the Series A Bonds, on file in the office of the Clerk is hereby approved for execution and delivery on behalf of the Village and the Village President and Clerk are hereby authorized and directed to execute and deliver said Bond Purchase Agreement. The Offering Memorandum prepared in connection with the offering of the Series A Bonds is hereby approved and authorized for distribution to Bondholders. The Village President is hereby authorized to make such changes in the foregoing documents as may be deemed necessary by the Village President in connection with the issuance of the Bonds. MIM • �L Section 1211. Publication and Notice. The Clerk is hereby authors d and directed to publish the Bond Ordinance in pamphlet form and to file copies thereof for public inspection in her office. The Clerk is hereby authorized and directed to cause notice of adoption of the Bond Ordinance to be published in a newspaper of general circulation in the Village. Said notice shall be in substantially the following form: "Public Notice Notice is hereby given that on December 17, 1984, the President and Board of Trustees of the Village of Deerfield, Illinois adopted an ordinance entitled: "Ordinance Authorizing the Issuance of.General Obligation Variable Rate Demand Bonds of the Village of Deerfield, Illinois," and that copies of said ordinance are on file and available for public inspection at the office of the Village Clerk of the Village of Deerfield. By /s/ Naomi S. Clampitt Village Clerk" Section 1212. Effective Date. This ordinance shall become effective upon its passage and approval in the manner provided by law. Adopted this 17th day of December, 1984 by roll call vote as follows: Ayes: MARTY, SEIDMAN, SWANSON, YORK (4) Nays: NON E ABSENT: JACKSON, MAROVITZ Abstain: NONE (0) (SEAL) Attest: -54- Approved: December 1, 1984 .Village President CERTIFICATE I, Naomi S. Clampitt, Village Clerk of the Village of Deerfield, Illinois, hereby certify that the foregoing ordinance entitled: "Ordinance Authorizing the Issuance of General Obliga- tion Variable Rate Demand Bonds of the Village of Deerfield, Illinois," is a true copy of an original ordinance which was duly adopted by'the recorded affirmative votes of a majority of the members of the President and Board of Trustees of the Village at a meeting thereof which was duly called and held at 8:00 p.m. on December 17, 1984 in the Council Chamber at the Village Hall, and at which a quorum was present and acting throughout, and that said copy has been compared by me with the original ordinance signed by the Village President of the Village, published in pamphlet form and recorded in the Ordinance Book of the Village and that it is a correct transcript thereof and of the whole of said ordinance, and that said ordinance has not been altered, amended, repealed or revoked, but is in full force and effect. IN WITNESS WE ERE OF, I have hereunto set my hand and affixed the seal of the Village this loth day of December, 1984. Villag Cle (SEAL) A13731 -A 12/14/84 LG:maj -55-