HomeMy WebLinkAboutOrdinance #3005 MINUTES of a regular public meeting of the City Council of the
City of Canton, Fulton County, Illinois, held at the Council
Chambers of the City, 2 North Main Street, Canton, Illinois, at
6:30 o'clock P.M., on the 4th day of December, 2012.
The Mayor called the meeting to order and directed the City Clerk to call the roll.
Upon roll call, the following at said location answered present: 2 North Main Street, the
Mayor, and Aldermen: Mayor Meade, Aldermen Pickel, Hartford, Pasley, West, Ellis, Nelson.
The following Aldermen were absent: Aldermen Schenck, Fritz. Alderman
Hartford/Pickel presented the following ordinance, copies of which were available to all in
attendance at said meeting who requested a copy:
No one requested a copy at the meeting.
ORDINANCE NO. 3005
AN ORDINANCE authorizing and providing for the issue of its
not to exceed $15,000,000 aggregate principal amount General
Obligation Waterworks and Sewerage Refunding Bonds (Alternate
Revenue Source), in one or more series, of the City of Canton,
Fulton County, Illinois, for the purpose of refunding prior bonds,
prescribing the details of said bonds, and providing for the
imposition of taxes to pay the same, and for the collection,
segregation and application of the waterworks and sewerage
system revenues to pay said Bonds.
TABLE OF CONTENTS
Pa~e
Section 1. Definitions ................................................................................................................5
Section 2. Incorporation of Preambles ......................................................................................9
Section 3. Determination to Issue Bonds; Acceptance of Report .............................................9
Section 4. Bond Details .............................................................................................................9
Section 5. Redemption ............................................................................................................10
Section 6. Execution; Authentication .....................................................................................12
Section 7. Registration of Bonds; Persons Treated as Owners ...............................................13
Section 8. Form of Bonds .......................................................................................................17
Section 9. Sale of the Bonds ...................................................................................................27
Section 10. Treatment of Bonds As Debt .................................................................................28
Section 11. Continuation of Waterworks and Sewerage Fund and Accounts Thereof
.............28
Section 12. Flow of Funds ........................................................................................................29
Section 13. Account Excesses ...................................................................................................31
Section 14. Pledged Taxes; Tax Levy .......................................................................................32
Section 15. Filing with County Clerk; Alternate Bond Fund ...................................................33
Section 16. Abatement of Pledged Taxes .................................................................................34
Section 17. Pledged Revenues; General Covenants .................................................................34
Section 18. Future Revenue Bonds, Additional Bonds and Subordinate Bonds ......................36
Section 19. Provisions a Contract .............................................................................................37
Section 20. Use of Proceeds ......................................................................................................37
Section 21. Non-Arbitrage and Tax-Exemption .......................................................................38
Section 22. Registered Form .....................................................................................................39
Section 23. Bond Registrar Covenants .....................................................................................39
Section 24. Continuing Disclosure Undertaking ......................................................................40
Section 25. Insurance Provisions ..............................................................................................41
Section 26. Severability ............................................................................................................42
Section 27. Repealer and Superceder ........................................................................................42
ORDINANCE NO. 3005
AN ORDINANCE authorizing and providing for the issue of its
not to exceed $15,000,000 aggregate principal amount General
Obligation Waterworks and Sewerage Refunding Bonds (Alternate
Revenue Source), in one or more series, of the City of Canton,
Fulton County, Illinois, for the purpose of improving the City's
waterworks and sewerage system, prescribing the details of said
bonds, and providing for the imposition of t~es to pay the same,
and for the collection, segregation and application of the
waterworks and sewerage system revenues to pay said Bonds.
WHEREAS the City of Canton, Fulton County, Illinois (the "City'~,is a duly organized
and existing municipality incorporated and existing under the provisions of the laws of the State
of Illinois, is now operating under the provisions of the Illinois Municipal Code, as amended (the
"Code'~, and for many years has owned and operated a municipally-owned waterworks and
sewerage system as a combined utility (the "System'~ as set forth in Division 139 of Article 11 of
the Code; and
WHEREAS, the City has previously issued its General Obligation Bonds (Alternate
Revenue Source), Series 2005 (the "Series 2005 Bonds" or the "Prior Bonds") and the Prior
Bonds are, by their terms, subject to redemption; and
WHEREAS, the Mayor and the City Council of the City (the "Corporate Authorities")
have determined that it is advisable, necessary and in the best interests of the City to pay the cost
of: (i) advance refunding of a portion of the Series 2005 Bonds (the "Refunded Bonds") and (ii)
issuance of the Bonds (as such term is hereinafter defined), all for the benefit of the inhabitants
of the City; and
WHEREAS, pursuant to the Constitution and Local Government Debt Reform Act 30
ILCS 3501, et.seq. (the "Debt Reform Act"), the City may issue its refunding bonds to refund a
portion of the Prior Bonds including interest (the portion to be refunded by this issue, known as
the "Refunded Bonds") as provided in one or more Bond Orders.
WHEREAS, the Corporate Authorities have received reports which indicate that a
refunding of the Refunded Bonds will effect a savings and benefit to the City; and
WHEREAS the City Council of the City (the "Corporate Authorities'~ have determined
that it is advisable, necessary and in the best interests of the City to issue its bonds (i) to refund
the Refunded Bonds (the "Refunding"), (ii) to pay the cost of issuance of the Bonds (as
hereinafter defined); and
WHEREAS the estimated cost of the refunding of the Prior Bonds is in the aggregate
principal amount not to exceed $15,000,000, and there are insufficient funds on hand and
lawfully available to pay the estimated costs of the Refunding, including legal, financial, bond
discount, printing and publication costs, and other expenses (collectively, the "Costs"); and
WHEREAS the City pursuant to the provisions of Division 139 of Article 11 of the
Municipal Code is authorized to issue its waterworks and sewerage revenue bonds for the
purpose of providing funds to pay the costs of the Refunding; and
WHEREAS as provided in Section 15 of the Local Government Debt Reform Act of the
State of Illinois, as supplemented and amended (the "Debt Reform Act'~, whenever revenue
bonds have been authorized to be issued pursuant to applicable laws, the City may issue its
general obligation bonds in lieu of such revenue bonds as authorized, and such general obligation
bonds may be referred to as "alternate bonds and
WHEREAS it is necessary and for the best interests of the City that the Prior Bonds be
refunded and for the purpose of refunding all or a portion of the Prior Bonds, and in accordance
with the provisions of the Debt Reform Act, as provided in the Municipal Code, in an amount
not to exceed $15,000,000 or in lieu thereof, authorizing the issuance of General Obligation
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Bonds (Alternate Revenue Source) (the "Bonds"), as provided in the Debt Reform Act in an
amount not to exceed $15,000,000; and
WHEREAS the Corporate Authorities are now authorized to issue the Bonds in the
aggregate principal amount not to exceed $15,000,000, or, in lieu thereof, the Bonds in the
aggregate principal amount not to exceed $15,000,000 in accordance with the provisions of the
Debt Reform Act; and
WHEREAS the City has heretofore entered into a Loan Agreement with the Illinois
Environmental Protection Agency, dated June 26, 2001 (the "IEPA Loan Agreement'~ pursuant
to Ordinance No, 1698, adopted by the City Council of the City on June 5, 2001 (the "2001
Ordinance'~ for the purpose of paying a part of the cost of constructing, improving and
extending the System; and
WHEREAS the IEPA Loan Agreement contains provisions for the issuance of additional
parity obligations, including the Bonds; and
WHEREAS pursuant to the IEPA Loan Agreement, the Illinois Environmental Protection
Agency has provided its consent to issue the Bonds on a parity with the City's outstanding loan
evidenced by the IEPA Loan Agreement; and
WHEREAS the City has previously issued and there are currently outstanding General
Obligation Bonds (Alternate Revenue Source), Series 2005 (the "Series 2005 Bonds'~ pursuant
to Ordinance Number 1847, adopted by the Corporate Authorities on October 4, 2005 (the "2005
Ordinance'~; and
WHEREAS pursuant to Section 18 of the 2005 Ordinance, the City may issue additional
alternate bonds on a parity with the Series 2005 Bonds; and
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WHEREAS the Bonds shall therefore be issued on a parity with the debt evidenced under
the IEPA Loan Agreement and with the outstanding Series 2005 Bonds; and
WHEREAS the Bonds to be issued will be payable from the Pledged Revenues and the
Pledged Ta~ces, as hereinafter defined; and
WHEREAS the Corporate Authorities have heretofore determined that the Pledged
Revenues will be sufficient to provide or pay in each year to final maturity of the Bonds all of
the following (1) Operation and Maintenance Costs as hereinafter defined, but not including
depreciation, (2) other contractual or tort liability obligations, if any, payable from the Revenues
as hereinafter defined, and (3) in each year, an amount not less than 1.25 times debt service of
the IEPA Loan Agreement, the outstanding Series 2005 Bonds and the Bonds now proposed to
be issued; and
WHEREAS such determination of the sufficiency of the Pledged Revenues with respect
to the Series 2005 Bonds was supported by the Feasibility Report (the "Report'~ of First
Midstate Inc. and Maurer Stutz, Inc. (collectively the "Feasibiliry Analyst'~, dated October 4,
2005, which report has been presented previously to the Corporate Authorities and is on file
currently with the City Clerk; and
WHEREAS, the issuance of refunding bonds such as the Bonds is exempt from the
requirements of the Bond Issue Notification Act; and
WHEREAS, the term of the Bonds will not be longer than the term of the Refunded
Bonds and the debt service payable in any year on the Bonds will not exceed the debt service
payable on the Refunded Bonds; and
WHEREAS the Corporate Authorities are now authorized to issue the Bonds in the
aggregate principal amount not to exceed $15,000,000 in accordance with the provisions of the
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Debt Reform Act, and the Corporate Authorities hereby determine that it is necessary and
advisable that there be issued at this time in the aggregate principal amount not to exceed
$15,000,000 of the Bonds so authorized:
NOW THEREFORE Be It Ordained by the City Council of the City of Canton, Fulton
County, Illinois, as follows:
Section 1. Definitions. The following words and terms used in this Ordinance shall
have the following meanings unless the context or use clearly indicates another or different
meaning is intended:
"Act" or "Debt Reform Act" means the Local Government Debt Reform Act of the State
of Illinois, as amended.
"Additional Bonds" means any alternate bonds issued in the future in accordance with the
provisions of the Debt Reform Act on a parity with and sharing ratably and equally in the
Pledged Revenues with the Bonds.
"Alternate Bond and Interest Subaccount" means the Alternate Bond and Interest
Subaccount maintained hereunder and further described by Section 12 of this Ordinance.
"Bond" or "Bonds" means one or more, as applicable, of the $15,000,000 aggregate not to
exceed principal amount General Obligation Waterworks and Sewerage Refunding Bonds
(Alternate Revenue Source), in one or more series, authorized to be issued by this Ordinance.
"Bond Fund" means the Alternate Bond Fund established hereunder and further described
by Section 15 of this Ordinance.
"Bond Register" means the books of the City kept by the Bond Registrar to evidence the
registration and transfer of the Bonds.
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"Bond Registrar" means MidAmerica National Bank, Canton, Illinois, or such other
entity as may be provided in the Bond Order(s), in its respective capacities as bond registrar and
paying agent.
"City" means the City of Canton, Fulton County, Illinois.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporate Authorities" means the City Council of the City.
"Counry Clerk" means the County Clerk of The County of Fulton, Illinois.
"Expense Fund" means the fund established hereunder and further described by
Section 20 of this Ordinance.
"Fiscal Year" means that twelve-calendar month period beginning on May 1 of the
calendar year and ending on the next succeeding Apri130.
"Future Bond Ordinances" means the ordinances of the City authorizing the issuance of
bonds payable from the Revenues, but not including this Ordinance or any other ordinance
authorizing the issuance of Additional Bonds.
"Net System Revenues" means moneys to the credit of the Alternate Bond and Interest
Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said Surplus
Account consisting of the funds remaining in the Waterworks and Sewerage Fund after the
required monthly deposits and credits have been made to the Operation and Maintenance
Account, the Depreciation Account and any other accounts as may be created in the future, of
said Waterworks and Sewerage Fund.
"Operation and Maintenance Costs" means all costs of operating, maintaining and
routine repair of the System, including wages, salaries, costs of materials and supplies, power,
fuel, insurance, taxes, including rebate of excess arbitrage profits to the U.S. government, and
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purchase of water or sewage treatment services (including all payments by the City pursuant to
long-term contracts for such services); but excluding debt service, depreciation, capital
improvements or replacements (including meter replacements) ar engineering expenses in
anticipation thereof or in connection therewith, or any reserve requirements; and otherwise
determined in accordance with generally accepted accounting principles for municipal enterprise
funds.
"Ordinance" means this Ordinance as originally adopted and as the same may from time
to time be amended or supplemented in accordance with terms hereof.
"Other Funds" means such other funds of the City as may be necessary and on hand from
time to time and lawfully available to pay principal and interest on the Bonds.
"Outstanding" means the IEPA Loan Agreement, the 2005 Bonds, the Bonds and
Additional Bonds which are outstanding and unpaid; provided, however, such term shall not
include any of the IEPA Loan Agreement, the 2005 Bonds, the Bonds or Additional Bonds (i)
which have matured and for which moneys are on deposit with proper paying agents or are
otherwise sufficiently available to pay all principal thereof and interest thereon or (ii) the
provision far payment of which has been made by the City by the deposit in an irrevocable trust
or escrow of funds or direct, full faith and credit obligations of the United States of America, the
principal of and interest on which will be sufficient to pay at maturity or as called for redemption
all the principal of and interest on such IEPA Loan Agreement, the 2005 Bonds, the Bonds or
Additional Bonds.
"Pledged Moneys" means, collectively, the Pledged Revenues and the Pledged Taxes.
"Pledged Revenues" means (a) Net System Revenues and (b) Other Funds.
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"Pledged Taxes" means the ad valorem taxes levied against all of the taxable property in
the City without limitation as to rate or amount, pledged hereunder by the City as security for the
Bonds.
"Revenues" means all income from whatever source derived from the System, including
(i) investment income; (ii) connection, permit and inspection fees and the like; (iii) penalties and
delinquency charges; (iv) capital development, reimbursement, or recovery charges and the like;
and (v) annexation or pre-annexation charges insofar as designated by the Corporate Authorities
as paid far System connection or service; but excluding expressly (a) non-recurring income from
the sale of property of the System; (b) governmental or other grants; and (c) advances or grants
made from the City; and as otherwise determined in accordance with generally accepted
accounting principles for municipal enterprise funds.
"System" refers to all property, real, personal or otherwise owned or to be owned by the
City or under the control of the City, and used for waterworks and sewerage purposes, including
any and all further extensions, improvements and additions to the System.
"Tax-exempt" means, with respect to the Bonds, the status of interest paid and received
thereon as not includible in the gross income of the owners thereof under the Code for federal
income tax purposes except to the extent that such interest will be taken into account in
computing an adjustment used in determining the alternative minimum tax for certain
corparations.
"Waterworks and Sewerage Fund" means the Waterworks and Sewerage Fund of the City
created hereunder and further described in Section 11 of this Ordinance.
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Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that
the recitals contained in the preambles to this Ordinance are true, correct and do hereby
incorporate them into this Ordinance by this reference.
Section 3. Determination to Issue Bonds; Acceptance of Report. It is necessary and
in the best interests of the City for the City to undertake the Refunding for the public health,
safety and welfare, in accordance with the estimate of costs therefor as described, and to issue
the Bonds to enable the City to pay the costs thereof.
Section 4. Bond Details. For the purpose of providing for the payment of costs of the
Refunding, there shall be issued and sold the Bonds in the aggregate principal amount of not to
exceed $15,000,000. The Bonds shall, be issued in one more series and shall each be designated
"General Obligation Waterworks and Sewerage Refunding Bond (Alternate Revenue Source),"
and dated as set forth in the hereinafter described Bond Order(s), and shall also bear the date of
authentication thereof. The Bonds shall be in fully registered form, shall be in denominations of
$5,000 or authorized integral multiples thereof (but no single Bond shall represent principal
maturing on more than one date), shall be numbered in such reasonable fashion as may be
selected by the Bond Registrar, and shall mature serially on December 1 or such other date as
provided in the Bond Order(s). Interest on the Bonds shall be payable semiannually on each
June 1 and December 1 of each year or such other date as provided in the Bond Order, beginning
not earlier than June 1, 2013 (such interest computed upon the basis of a 360-day year of twelve
30-day months). The Bonds shall become due and payable (subject to prior redemption as set
forth in the Bond Order) on December 1 over a period ending not later than December 1, 2023,
and in an amount not exceeding $2,300,000 per year, all as further detailed in one or more Bond
Orders to be filed in connection with the sale of each series of the Bonds (individually, a"Bond
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Order" and collectively, the "Bond Orders"); provided, however, that no Bond shall bear interest
at a rate per annum in excess of five percent (5%). The Mayor is hereby given full authority to
execute and deliver a Bond Order(s) for and on behalf of the City as herein provided. The Bond
Order(s) shall be made a part of the transcript of the proceedings related to the issuance of the
Bonds.
Interest on each Bond shall be paid by check or draft of the Bond Registrar, payable upon
presentation there lawful money of the United States of America, to the person in whose
name such Bond is registered at the close of business on the 15th day of the month next
preceding the interest payment date. The principal of the Bonds shall be payable in
lawful money of the United States of America upon presentation thereof at the principal
office of the Bond Registrar.
Section S. Redemption. If so provided in the Bond Order(s), the Bonds may be
subject to optional redemption prior to maturity at the option of the City, from any available
funds, in whole or in part, in integral multiples of $5,000, in any order of their maturity as
determined by the City (less than all of the Bonds of a single maturity to be selected by the Bond
Registrar and within any maturity by lot), on the date of redemption provided in the Bond
Order(s), and on any date thereafter, at the redemption price of par plus accrued interest to the
redemption date.
The Bonds may be subject to mandatory redemption as set forth in the Bond Order(s).
The Bonds shall be redeemed only in the principal amount of $5,000 and integral
multiples thereof. The City shall, at least forty-five (45) days prior to the redemption date
(unless a shorter time period shall be satisfactory to the Bond Registrar) notify the Bond
Registrar of such redemption date and of the principal amount and maturity or maturities of
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Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds
of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected
by lot by the Bond Registrar from the Bonds of such maturity by such method of lottery as the
Bond Registrar shall deem fair and appropriate; provided that such lottery shall provide for the
selection for redemption of Bonds or portions thereof so that any $5,000 Bond or $5,000 portion
of a Bond shall be as likely to be called for redemption as any other such $5,000 Bond or $5,000
portion. The Bond Registrar shall make such selection upon the earlier of the irrevocable deposit
of funds with an escrow agent sufficient to pay the redemption price of the Bonds to be
redeemed or the time of the giving of official notice of redemption.
The Bond Registrar shall promptly notify the City in writing of the Bonds or portions of
Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the
principal amount thereof to be redeemed.
Unless waived by any holder of Bonds to be redeemed, notice of the call for any such
redemption shall be given by the Bond Registrar on behalf of the City by mailing the redemption
notice by first class mail at least thirty (30) days and not more than sixty (60) days prior to the
date fixed for redemption to the registered owner of the Bond or Bonds to be redeemed at the
address shown on the Bond Register or at such other address as is furnished in writing by such
registered owner to the Bond Registrar.
All notices of redemption shall state:
(1) the redemption date,
(2) the redemption price,
(3) if less than all outstanding Bonds are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal amounts) of the Bonds to
be redeemed,
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(4) that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption, and that interest
thereon shall cease to accrue from and after said date,
(5) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal corporate trust office of
the Bond Registrar, and
(6) such other information then required by custom, practice or industry
standard.
Prior to any redemption date, the City shall deposit with the Bond Registrar an amount of
money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to
be redeemed on that date.
Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so
to be redeemed shall, on the redemption date, become due and payable at the redemption price
therein specified, and from and after such date (unless the City shall default in the payment of the
redemption price) such Bonds ar portions of Bonds shall cease to bear interest. Upon surrender
of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the
Bond Registrar at the redemption price. Installments of interest due on or prior to the
redemption date shall be payable as herein provided for payment of interest. Upon surrender for
any partial redemption of any Bond, there shall be prepared for the registered holder a new Bond
or Bonds of the same maturity in the amount of the unpaid principal.
If any Bond or portion of Bond called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the redemption date at
the rate borne by the Bond or portion of Bond so called for redemption. All Bonds which have
been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued.
Section 6. Execution; Authentication. The Bonds shall be executed on behalf of the
City with the manual or duly authorized facsimile signature of the Mayor and attested with the
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manual or duly authorized facsimile signature of the City Clerk or duly authorized City Clerk, as
they may determine, and shall have impressed or imprinted thereon the corporate seal or
facsimile thereof of the City. In case any officer whose signature shall appear on any Bond shall
cease to be such officer before the delivery of such Bond, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery.
All Bonds shall have thereon a certificate of authentication substantially in the form
hereinafter set forth duly executed by the Bond Registrar as authenticating agent of the City and
showing the date of authentication. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this Ordinance unless and until such certificate of
authentication shall have been duly executed by the Bond Registrar by manual signature, and
such certificate of authentication upon any such Bond shall be conclusive evidence that such
Bond has been authenticated and delivered under this Ordinance. The certificate of
authentication on any Bond shall be deemed to have been executed by it if signed by an
authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign
the certificate of authentication on all of the Bonds issued hereunder.
Section 7. Registration of Bonds; Persons Treated as Owners. (a) General. The
City shall cause books (the "Bond Register'~ for the registration and for the transfer of the Bonds
as provided in this Ordinance to be kept at the principal office of the Bond Registrar, which is
hereby constituted and appointed the registrar of the City. The City is authorized to prepare, and
the Bond Registrar shall keep custody of, multiple Bond blanks executed by the City for use in
the transfer and exchange of Bonds.
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Upon surrender for transfer of any Bond at the principal office of the Bond Registrar,
duly endorsed by, or accompanied by a written instrument or instruments of transfer in form
satisfactary to the Bond Registrar and duly executed by, the registered owner or his or her
attorney duly authorized in writing, the City shall execute and the Bond Registrar shall
authenticate, date and deliver in the name of the transferee or transferees a new fully registered
Bond or Bonds of the same maturity of authorized denominations, for a like aggregate principal
amount. Any fully registered Bond or Bonds may be exchanged at said principal office of the
Bond Registrar for a like aggregate principal amount of Bond or Bonds of the same maturity of
other authorized denominations. The execution by the City of any fully registered Bond shall
constitute full and due authorization of such Bond and the Bond Registrar shall thereby be
authorized to authenticate, date and deliver such Bond, provided, however, the principal amount
of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the
authorized principal amount of Bonds for such maturity less previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period beginning at the close of business on the 15th day of the month next preceding any
interest payment date on such Bond and ending at the opening of business on such interest
payment date, nor to transfer or exchange any Bond after notice calling such Bond for
redemption has been mailed, nor during a period of fifteen (15) days next preceding mailing of a
notice of redemption of any Bonds.
The person in whose name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of the principal of ar interest on any
Bond shall be made only to or upon the order of the registered owner thereof or his or her legal
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representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds, but the City or
the Bond Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of Bonds
except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond
surrendered for redemption.
(b) Global Book-Entry System. The Bonds shall be initially issued in the form of a
separate single fully registered Bond for each of the maturities of the Bonds determined as
described in Section 3 hereof. Upon initial issuance, the ownership of each such Bond shall be
registered in the Bond Register in the name of Cede & Co., or any successor thereto ("Cede'~, as
nominee of The Depository Trust Company, New York, New York, and its successors and
assigns ("DTC'~. All of the outstanding Bonds shall be registered in the Bond Register in the
name of Cede, as nominee of DTC, except as hereinafter provided. The Mayor and City Clerk,
the chief business official of the City and the Bond Registrar are each authorized to execute and
deliver, on behalf of the City, such letters to or agreements with DTC as shall be necessary to
effectuate such book-entry system (any such letter or agreement being referred to herein as the
"Representation Letter'~, which Representation Letter may provide for the payment of principal
of or interest on the Bonds by wire transfer.
With respect to Bonds registered in the Bond Register in the name of Cede, as nominee
of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any
broker-dealer; bank or other financial institution for which DTC holds Bonds from time to time
as securities depository (each such broker-dealer, bank or other financial institution being
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referred to herein as a"DTC Participant'~ or to any person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence,
the City and the Bond Registrar shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede or any DTC Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
registered owner of a Bond as shown in the Bond Register, of any notice with respect to the
Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any
other person, other than a registered owner of a Bond as shown in the Bond Register, of any
amount with respect to the principal of or interest on the Bonds. The City and the Bond
Registrar may treat and consider the person in whose name each Bond is registered in the Bond
Register as the holder and absolute owner of such Bond for the purpose of payment of principal
and interest with respect to such Bond, for the purpose of giving notices of redemption and other
matters with respect to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and
interest on the Bonds only to or upon the order of the respective registered owners of the Bonds,
as shown in the Bond Register, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the City's obligations
with respect to payment of the principal of and interest on the Bonds to the extent of the sum or
sums so paid. No person other than a registered owner of a Bond as shown in the Bond Register,
shall receive a Bond evidencing the obligation of the City to make payments of principal and
interest with respect to any Bond. Upon delivery by DTC to the Bond Registrar of written notice
to the effect that DTC has determined to substitute a new nominee in place of Cede, and subject
to the provisions, in Section 3 hereof with respect to the payment of interest to the registered
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owners of Bonds at the close of business on the 15th day of the month next preceding the
applicable interest payment date, the name "Cede" in this resolution shall refer to such new
nominee of DTC.
In the event that (i) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (ii) the agreement among the
City, the Bond Registrar and OTC evidenced by the Representation Letter shall be terminated for
any reason or (iii) the City determines that it is in the best interests of the beneficial owners of
the Bonds that they be able to obtain certificated Bonds, the City shall notify DTC and DTC
Participants of the availability through DTC of certificated Bonds and the Bonds shall no longer
be restricted to being registered in the Bond Register in the name of Cede, as nominee of DTC.
At that time, the City may determine that the Bonds shall be registered in the name of and
deposited with such other depository operating a universal book-entry system, as may be
acceptable to the City, or such depository's agent or designee, and, if the City does not select
such alternate universal book-entry system, then the Bonds may be registered in whatever name
or names registered owners of Bonds transferring or exchanging Bonds shall designate, in
accordance with the provisions of Section 7(a) hereof.
Notwithstanding any other provisions of this resolution to the contrary, so long as any
Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to
principal of and interest on such Bond and all notices with respect to such Bond shall be made
and given, respectively, in the name provided in the Representation Letter.
Section 8. Form of Bonds. The Bonds shall be in substantially the form hereinafter
set forth; provided, however, that if the text of the Bonds is to be printed in its entirety on the
front side of the Bonds, then the second paragraph on the front side and the legend "See Reverse
-17-
Side for Additional Provisions" shall be omitted and the text of paragraphs set forth for the
reverse side shall be inserted immediately after the first paragraph.
-18-
[Form of Bond - Front Side]
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF FULTON
CITY OF CANTON
GENERAL OBLIGATION WATERWORKS AND SEWERAGE REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 20_
See Reverse Side for
Additional Provisions
Interest Maturity Dated
Rate: % Date: 1, 20_ Date: l, 20_ CUSIP:
Registered Owner:
Principal Amount: Dollars
KNOW ALL PERSONS BY THESE PRESENTS that the City of Canton, Fulton
County, Illinois, a municipality and political subdivision of the State of Illinois (the "City'~,
hereby acknowledges itself to owe and for value received promises to pay to the Registered
Owner identified above, or registered assigns as hereinafter provided, on the Maturity Date
identified above, the Principal Amount identified above and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on such Principal Amount from the Dated Date
of this Bond identified above or from the most recent interest payment date to which interest has
been paid or duly provided for at the Interest Rate per annum identified above, such interest to be
payable on 1, 20_, and semiannually thereafter on 1 and 1 of each
-19-
year until the Principal Amount is paid or duly provided for. The Principal Amount of this Bond
is payable in lawful money of the United States of America upon presentation at the principal
office of MidAmerica National Bank, Canton Illinois, as paying agent and bond registrar (the
"Bond Registrar'~. Payment of interest shall be made to the Registered Owner hereof as
appearing on the Bond Register of the City maintained by the Bond Registrar at the close of
business on the 15th day of the month next preceding the interest payment date and shall be paid
by check or draft of the Bond Registrar, payable upon presentation in lawful money of the
United States of America, mailed to the address of such Registered Owner as it appears on such
registration books or at such other address furnished in writing by such Registered Owner to the
Bond Registrar.
Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, and such further provisions shall for all purposes have the same effect as if set forth at
this place.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the issuance of this Bond have been done and have happened and have been
performed in regular and due form of law; that the indebtedness of the City, including the issue
of Bonds of which this is one, does not exceed any limitation imposed by law; that provision has
been made for the collection of the Pledged Revenues, the levy and collection of the Pledged
Taxes, and the segregation of all Pledged Moneys to pay the interest hereon as it falls due and
also to pay and discharge the principal hereof at maturity; and that the City hereby covenants and
agrees that it will properly account for said Pledged Moneys and will comply with all the
covenants of and maintain the funds and accounts as provided by the Ordinance.
-20-
For the prompt payment of this Bond, both principal and interest at maturity, the full
faith, credit and resources of the City are hereby irrevocably pledged.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Bond Registrar.
-21-
IN WITNESS WHEREOF the City of Canton, Fulton County, Illinois, by its City
Council, has caused this Bond to be executed with the manual or duly authorized facsimile
signature of its Mayor and attested by the manual or duly authorized facsimile signature of its
City Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all
as appearing hereon and as of the Dated Date identified above.
Mayor
AT ~
~
' y Clerk
[SEAL]
Date of Authentication: ~G~ (
CERTIFICATE
OF
AUTHENTICATION
This Bond is one of the Bonds described Bond Registrar and Paying Agent:
in the within-mentioned Ordinance and is ,
one of the General Obligation Waterworks Canton, Illinois
and Sewerage Refunding Bonds (Alternate
Revenue Source), Series 20_, of the City
of Canton, Fulton County, Illinois.
,
as Bond Registrar
By
Authorized Officer
-22-
[Form of Bond - Reverse Side]
CITY OF CANTON
FULTON COUNTY, ILLINOIS
GENERAL OBLIGATION WATERWORKS AND SEWERAGE REFUNDING BOND
(ALTERNATE REVENUE SOURCE)
SERIES 20_
This bond and the bonds of the series of which it forms a part ("Bond" and "Bonds",
respectively) are of an authorized issue of Bonds of like dated date and tenor except as to
maturity and rate of interest and are issued pursuant to the Local Government Debt Reform Act
of the State of Illinois, as amended (the "Act'~. The Bonds are also issued pursuant to Division
139 of Article 11 of the Illinois Municipal Code, as supplemented and amended (the "Code'~, for
the purpose of paying the costs of improving the waterworks and sewerage system of the City
(the "System'~. The Bonds are issued pursuant to a bond ordinance passed by the City Council
of the City (the "Corporate Authorities'~ on the 4th day of December, 2012 and a Bond Order
executed on the day of , 20_ (the "Bond Order") by the Mayor of said City
pursuant thereto (collectively, the "Ordinance'~, to which reference is hereby expressly made for
further definitions and terms and to all the provisions of which the Registered Owner by the
acceptance of this Bond assents,
Under the Code and the Ordinance, the Revenues, as defined, from the operation of the
waterworks and sewerage system of the City (the "System") shall be deposited into the
Waterworks and Sewerage Fund of the City which shall be used only and has been pledged for
paying Operation And Maintenance Expenses, paying the principal of and interest on all bonds
of the City, that are payable by their terms from the revenues of the System, providing an
adequate depreciation fund, and in making all payments required to maintain the accounts
- 23 -
established under the Ordinance. The City may issue future waterworks and sewerage revenue
bonds, which bonds may have a prior lien on the Revenues, or additional alternate bonds on a
parity with the Bonds, in each case pursuant to the terms of the Bond Ordinance.
The Bonds are payable from (i) (a) together with the City's outstanding IEPA Loan
Agreement and outstanding Series 2005 Bonds, moneys to the credit of the Alternate Bond and
Interest Subaccount within the Surplus Account of the Waterworks and Sewerage Fund, said
Surplus Account consisting of the funds remaining in the Waterworks and Sewerage Fund after
the required monthly deposits and credits have been made under the Ordinance or future revenue
bond ordinances to the various accounts of the Waterworks and Sewerage Fund and (b) such
other funds of the City as may be necessary and on hand from time to time and lawfully available
far such purpose (the "Pledged Revenues'~, and (ii) ad valorem taxes levied against all of the
taxable property in the City without limitation as to rate or amount (the "Pledged Taxes'~ (the
Pledged Revenues and the Pledged Taxes being collectively called the "Pledged Moneys'~, all in
accordance with the provisions of the Act and the Code.
The City has designated the Bonds of this series as "qualified tax-exempt obligations"
pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
This Bond does not and will not constitute an indebtedness of the City within the
meaning of any constitutional or statutory provision or limitation, unless the Pledged Taxes shall
be extended pursuant to the general obligation, full faith and credit promise supporting the
Bonds, in which case the amount of the Bonds then Outstanding shall be included in the
computation of indebtedness of the City for purposes of all statutory provisions or limitations
until such time as an audit of the City shall show that the Bonds shall have been paid from the
Pledged Revenues for a complete City fiscal year.
-24-
Any Bond may be transferred or exchanged, but only in the manner, subject to the
limitations, and upon payment of the charges as set forth in the Ordinance. Upon surrender for
transfer or exchange of any Bond at the principal office of the Bond Registrar, duly endorsed by
or accompanied by a written instrument or instruments of transfer or exchange in form
satisfactory to the Bond Registrar and duly executed by the Registered Owner or an attorney for
such owner duly authorized in writing, the City shall execute and the Bond Registrar shall
authenticate, date and deliver in the name of the transferee or transferees or, in the case of an
exchange, the Registered Owner, a new fully registered Bond or Bonds of like tenor, of the same
maturity, bearing the same interest rate, of authorized denominations, for a like aggregate
principal amount.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period from the close of business on the 15th day of the calendar month next preceding an
interest payment date on the Bonds to the opening of business on such interest payment date, nor
to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed,
nor during a period of fifteen (15) days next preceding mailing of a notice of redemption of any
Bonds.
The City and the Bond Registrar may deem and treat the Registered Owner hereof as the
absolute owner, hereof for the purpose of receiving payment of or on account of principal hereof,
premium, if any, hereon and interest due hereon and for all other purposes; and neither the City
nor the Bond Registrar shall be affected by any notice to the contrary.
-25-
ASSIGNMENT
FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer the said Bond on the books kept for registration thereof with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature to this assignment must correspond with the name of the registered
owner as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
-26-
Section 9. Sale of the Bonds. The Bonds hereby authorized shall be executed as in
this Ordinance provided as soon after the passage hereof as may be, and thereupon be deposited
with the Treasurer of the City, and be by said Treasurer delivered to Ruan Securities, a Division
of D. A. Davidson & Co., as underwriter for the Bonds (the "Purchaser'~, upon receipt of the
purchase price of not less than 97% of the par amount of the Bonds plus accrued interest to date
of delivery, as further detailed in the Bond Order(s). The Mayor and the City Clerk are
authorized and directed to execute a bond purchase agreement (the "Purchase Contract") in
connection with the sale of the Bonds, in the name of and on behalf of the City, provided that the
Bonds shall be sold at such price and bear interest at such rates that neither the true interest cost
(yield) nor the net interest rate received upon such sale shall exceed the maximum rate otherwise
authorized by Illinois. The Purchase Contract shall be substantially in the form of purchase
contracts commonly used in transactions similar to that described in the ordinance, with such
changes as necessary to reflect the terms and provisions of the Bonds, this ordinance and such
other changes as the Mayor or City Treasurer shall determine are necessary or desirable in
connection with the sale of the Bonds. No person holding any office of the City, either by
election or appointment, is in any manner financially interested directly in his own name ar
indirectly in the name of any other person, association, trust or corporation, in the Purchase
Contract. Before being issued, the Bonds shall be registered and numbered, such registration
being made in a book provided for that purpose, in which shall be entered a description of the
Bonds issued, including the number, date, to whom issued, amount, rate of interest and when
due. The Bonds shall be executed as in this ordinance provided as soon after the execution of the
Purchase Contract as may be done, and thereupon the Bonds shall be deposited with the
-27-
Treasurer who receives the taxes of the City, and be by said Treasurer delivered to the Purchaser
upon receipt of the purchase price therefor.
The use by the Purchaser of any Preliminary Official Statement and any final Official
Statement relating to the Bonds and before the Corporate Authorities at the time of the adoption
hereof is hereby ratified, approved and authorized; the execution and delivery of said final
Official Statement is hereby authorized; and the officers of the City are hereby authorized to take
any action as may be required on the part of the City to consummate the transactions
contemplated by the contract for the sale of the Bonds, this Ordinance, said Preliminary Official
Statement, said final Official Statement and the Bonds.
Section 10. Treatment of Bonds As Debt. The Bonds shall be payable from the
Pledged Moneys and do not and shall not constitute an indebtedness of the City within the
meaning of any constitutional or statutory limitation, unless the Pledged Taxes shall be extended
pursuant to the general obligation, full faith and credit promise supporting the Bonds, as set forth
in Section 14 hereof, in which case the amount of the Bonds then Outstanding shall be included
in the computation of indebtedness of the City for purposes of all statutory provisions or
limitations until such time as an audit of the City shall show that the Bonds have been paid from
the Pledged Revenues for a complete Fiscal Year in accordance with the Act.
Section 11. Continuation of Waterworks and Sewerage Fund and Accounts Thereof.
Upon the issuance of any of the Bonds, the System shall continue to be operated on a
Fiscal Year basis. All of the Revenues shall be set aside as collected and be deposited in a
separate fund and in an account in a bank to be designated by the Corporate Authorities, which
fund is hereby created and is designated as the "Waterworks and Sewerage Fund" (the "Fund'~
of the City, which shall constitute a trust fund for the sole purpose of carrying out the covenants,
-28-
terms, and conditions of the 2001 Ordinance, the 2002 Ordinance, the 2005 Ordinance, this
Ordinance and any Future Bond Ordinances, and shall be used only in paying Operation and
Maintenance Expenses, providing an adequate depreciation fund, paying the principal of and
interest on all bonds of the City which by their terms are payable from the revenues derived from
the System, and providing for the establishment of and expenditure from the respective accounts
as hereinafter described.
Section 12. Flow of Funds. There shall be and there are hereby continued separate
accounts in the Waterworks and Sewerage Fund to be known as the "Waterworks Operation and
Maintenance Account," such other accounts as may be established under any Future Bond
Ordinances, the "Waterworks Depreciation and Contingencies Account" (the "Depreciation
Account'~, and the "Surplus Account," to which there shall be credited on or before the first day
of each month by the financial officer of the City, without any further official action or direction,
in the order in which said accounts are hereinafter mentioned, all moneys held in the Fund, in
accordance with the following provisions:
(a) Operation and Maintenance Account:
There shall be credited to or retained in the Operation and Maintenance Account
an amount sufficient, when added to the amount then on deposit in said Account,
to establish or maintain a balance to an amount not less than the amount
considered necessary to pay Operation and Maintenance Expenses for the then
current month,
(b) Accounts Created Pursuant to Future Bond Ordinances:
Future Bond Ordinances may create additional accounts in the Fund for the
payment and security of waterworks and sewerage revenue bonds that hereafter
may be issued by the City. Amounts in the Fund shall be credited to and
transferred from said accounts in accordance with the terms of the Future Bond
Ordinances.
(c) Depreciation Account:
-29-
Beginning the month after the delivery of the Bonds, there shall be credited to the
Depreciation Account and held, in cash and investments, such sum as the City
Council may deem necessary in order to provide an adequate depreciation fund
for the System. In future bond ordinances, the City may covenant to make
specific monthly deposits to said Depreciation Account and to accumulate funds
therein.
Amounts to the credit of said Depreciation Account shall be used for (i) the
payment of the cost of extraordinary maintenance, necessary repairs and
replacements, or contingencies, the payment for which no other funds are
available, in order that the System may at all times be able to render efficient
service, (ii) for the purpose of acquiring or constructing improvements and
extensions to the System, and (iii) the payment of principal of or interest and
applicable premium on any Outstanding Bonds at any time when there are no
other funds available for that purpose in order to prevent a default. Future Bond
Ordinances may provide for additional deposits to said Depreciation Account and
additional uses and transfers of the funds on deposit in said Depreciation Account.
(d) Surplus Account:
All moneys remaining in the Fund, after crediting the required amounts to the
respective accounts hereinabove provided for, and after making up any deficiency
in said accounts, shall be credited to the Surplus Account. Funds in the Surplus
Account shall first be used to make up any subsequent deficiencies in any of said
accounts and then shall be deposited to a separate and segregated account hereby
created and designated the "Alternate Bond and Interest Subaccount of the
Surplus Account" (the "Alternate Bond and Interest Subaccount'~, as follows:
A. There shall be paid into the Alternate Bond and Interest Subaccount in
each month after the required payments have been made into the Accounts above
described, a fractional amount of the interest becoming due on the next succeeding
interest payment date on all Outstanding Bonds and a fractional amount of the principal
becoming due on the next succeeding principal maturity date of all Outstanding Bonds
until there shall have been accumulated in the Alternate Bond and Interest Subaccount on
or before the month preceding such maturity date of interest or principal, an amount
sufficient to pay such principal or interest, or both, of all Outstanding Bonds.
B. In computing the fractional amount to be set aside each month in said
Alternate Bond and Interest Subaccount, the fraction shall be so computed that sufficient
funds will be set aside in said Subaccount and will be available for the prompt payment
of such principal of and interest on all Outstanding Bonds as the same will become due
and shall be not less than one-fifth of the interest becoming due on the next succeeding
interest payment date and not less than one-tenth of the principal becoming due on the
next succeeding principal payment date on all Outstanding Bonds until there is sufficient
money in said Subaccount to pay such principal or interest or both.
-30-
C. Credits to the Alternate Bond and Interest Subaccount may be suspended
in any Fiscal Year at such time as there shall be a sufficient sum, held in cash and
investments, in said Subaccount to meet principal and interest requirements in said
Subaccount for the balance of such Fiscal Year, but such credits shall be resumed at the
beginning of the next Fiscal Year.
D. All moneys in said Subaccount shall be used only for the purpose of
paying interest on and principal of Outstanding Bonds.
E. Any funds remaining in the Surplus Account after making the aforesaid
deposits to the credit of the Alternate Bond and Interest Subaccount, at the discretion of
the Corporate Authorities, shall be used, first, to make up any subsequent deficiencies in
any of the accounts hereinabove named; and then, for the remainder of all surplus
Revenues, at the discretion of the Corporate Authorities, for one or more of the following
purposes without any priority among them:
1. For the purpose of constructing or acquiring repairs, replacements,
improvements or extensions to the System; or
2. For making transfers to the Fund generally to be applied and
~ treated as Revenues when transferred; or
3. For the purpose of calling and redeeming Outstanding Bonds
payable from the System which are callable at the time; or
4. For the purpose of purchasing Outstanding Bonds payable from the
System; or
5. For the purpose of paying principal of and interest on any
subordinate bonds or obligations issued for the purpose of acquiring or
constructing repairs, replacements, improvements or extensions to the System; or
6. For any purpose enumerated in any Future Bond Ordinance; or
7. For any other lawful System purpose.
Money to the credit of the Fund may be invested pursuant to any authorization
granted to municipal corporations by Illinois statute or court decision.
Section 13. Account Excesses. Any amounts to the credit of the Accounts in excess of
the then current requirements therefor may be transferred at any time by the Corporate
Authorities to such other Account or Accounts of the Fund as it may in its sole discretion
designate.
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Section 14. Pledged Taxes; Tax Levy. For the purpose of providing additional funds
to produce sums necessary to pay the interest on the Bonds as it falls due and also pay and
discharge the principal thereof at maturity, there shall be levied upon all the taxable property
within the City a direct annual tax (the "Pledged Taxes") for each of the years while the Bonds or
any of them are outstanding, in amounts sufficient for that purpose, and that there be and there is
hereby levied upon all of the taxable property in the City, in each of the years 2012 to 2022 a
maximum direct annual tax in the amount of $2,400,000, such amount to be finalized in the
Bond Order(s).
Principal or interest coming due at any time when there are not sufficient funds on hand
from the foregoing tax levy to pay the same shall be paid from current funds on hand of the City,
and the fund from which such payment was made shall be reimbursed out of the taxes hereby
levied when the same shall be collected.
The City covenants and agrees with the Purchaser and the holders of the Bonds that so
long as the Bonds remain outstanding, the City will take no action or fail to take any action
which in any way would adversely affect the ability of the City to levy and collect the foregoing
tax levy, unless the abatement of any particular tax levy amount has been provided for through
the deposit of moneys in a segregated account, and the City and its officers will comply with all
present and future applicable laws in order to assure that the Pledged Revenues will be available
and the Pledged Taxes will be levied, extended and collected as provided herein and deposited in
the Bond Fund established to pay the principal of and interest on the Bonds.
The funds derived from the tax levy be and the same are hereby appropriated and set
aside for the sole and only purpose of paying principal and interest on said Bonds when and as
-32-
the same become due. The funds from the sale of said Bonds be and they are hereby
appropriated and set aside for the purpose hereinbefore set out.
Section 1 S. Filing with County Clerk; Alternate Bond Fund. After this Ordinance
becomes effective, a copy hereof, certified by the City Clerk, shall be filed with the County
Clerk. The County Clerk shall in and for each of the years required ascertain the rate percent
required to produce the aggregate Pledged Taxes hereinbefore provided to be levied in each of
said years; and the County Clerk shall extend the same for collection on the t~ books in
connection with other taxes levied in said years in and by the City for general corporate purposes
of the City; and the County Clerk, or other appropriate officer or designee, shall remit the
Pledged Taxes for deposit to the credit of a special fund to be designated the "Alternate Bond
Fund" (the "Bond Fund'), and in said years the Pledged Taxes shall be levied and collected by
and for and on behalf of the City in like manner as taxes for general municipal purposes of the
City for said years are levied and collected, and in addition to and in excess of all other t~es.
The Pledged Taxes are hereby irrevocably pledged to and shall be used only for the purpose of
paying principal of and interest on the Bonds. The purpose of the Bond Fund is to provide a
fund to receive and disburse the proceeds of the Other Funds and to receive and disburse Pledged
Taxes for any of the Bonds. All payments made with respect to the Bonds from the Net System
Revenues shall be made directly from the Alternate Bond and Interest Subaccount of the Fund.
There are hereby created two accounts in the Bond Fund, designated the "Other Funds Account"
and the "General Account." All proceeds of the Other Funds as required for the Bonds shall be
deposited to the credit of the Other Funds Account, and all Pledged Taxes shall be deposited to
the credit of the General Account. The Bond Fund and its respective accounts constitute a trust
fund established for the purpose of carrying out the covenants, terms and conditions imposed
-33-
upon the City by this Ordinance. It is hereby expressly provided that in the event there shall be
moneys both to the credit of the Alternate Bond and Interest Subaccount and the Bond Fund, the
Bond Fund shall be fully depleted before moneys to the credit of the Alternate Bond and Interest
Subaccount shall be used to pay principal of and interest on the Bonds.
Section 16. Abatement of Pledged Taxes. As provided in the Act, whenever the
Pledged Revenues shall have been determined by the City Council to provide in any calendar
year an amount sufficient to pay debt service of all outstanding Bonds for such year, the City
Council, or the City Treasurer acting with proper authority, shall, prior to the time the Pledged
Taxes levied in such calendar year are extended, direct the abatement of the Pledged Taxes, and
proper notification of such abatement shall be filed with the County Clerk in a timely manner to
effect such abatement. In any year the City may abate the Pledged Taxes before the Pledged
Revenues are on hand for the payment of the Bonds. If the City deposits funds from any lawful
source into the Bond Fund, the City Clerk shall file written direction with the County Clerk to
abate the ta~ces by the amount so deposited, and such deposits shall be made prior to any such
abatement being filed with the County Clerk. No Pledged Taxes may be abated unless and until
the proper amount of such abatement has been deposited irrevocably into the Bond Fund and
dedicated to the payment of the Bonds.
Section 17. Pledged Revenues; General Covenants. The City covenants and agrees
with the registered owners of the Bonds that, so long as any Bonds remain Outstanding:
A. The City hereby pledges the Pledged Revenues to the payment of the
Bonds, and the Corporate Authorities covenant and agree to provide for, collect and
apply the Pledged Revenues to the payment of the Bonds, all in accordance with
Section 15 of the Act.
B. The City will punctually pay or cause to be paid from the Alternate Bond
and Interest Subaccount and from the Bond Fund the principal of and the interest on the
Bonds in strict conformity with the terms of the Bonds and this Ordinance, and it will
-34-
faithfully observe and perform all of the conditions, covenants and requirements thereof
and hereof.
C. The City will pay and discharge, or cause to be paid and discharged, from
the Alternate Bond and Interest Subaccount and the Bond Fund any and all lawful claims
which, if unpaid, might become a lien or charge upon the Pledged Moneys, or any part
thereof, or upon any funds in the hands of the Bond Registrar, or which might impair the
security of the Bonds. Nothing herein contained shall require the City to make any such
payment so long as the City in good faith shall contest the validity of said claims.
D. The City will keep, or cause to be kept, proper books of record and
accounts, separate from all other records and accounts of the City, in which complete and
correct entries shall be made of all transactions relating to the Pledged Moneys, the
Alternate Bond and Interest Subaccount and the Bond Fund. Such books of record and
accounts shall at all times during business hours be subject to the inspection of the
registered owners of not less than ten per cent (10%) of the principal amount of the
Outstanding Bonds or their representatives authorized in writing.
E. The City will preserve and protect the security of the Bonds and the rights
of the registered owners of the Bonds and will warrant and defend their rights against all
claims and demands of all persons. From and after the sale and delivery of any of the
Bonds by the City, the Bonds shall be incontestable by the City.
F. The City will adopt, make, execute and deliver any and all such further
ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention of, or to facilitate the performance of, this Ordinance,
and for the better assuring and confirming unto the registered owners of the Bonds of the
rights and benefits provided in this Ordinance.
G. As long as any Bonds are Outstanding, the City will continue to deposit
the Pledged Revenues to the Alternate Bond and Interest Subaccount and, if applicable,
the Pledged Taxes to the Bond Fund. The City covenants and agrees with the purchasers
of the Bonds and with the registered owners thereof that so long as any Bonds remain
Outstanding, the City will take no action or fail to take any action which in any way
would adversely affect the ability of the City to collect the Pledged Taxes and to collect
and to segregate the Pledged Moneys. The City and its officers will comply with all
present and future applicable laws in order to assure that the Pledged Taxes can be
extended and that the Pledged Revenues and the Pledged Taxes may be collected and
deposited to the Alternate Bond and Interest Subaccount and the Bond Fund,
respectively, as provided herein.
H. Once issued, the Bonds shall be and forever remain until paid or defeased
the general obligation of the City, for the payment of which its full faith and credit are
pledged, and shall be payable, in addition to the Pledged Revenues, from the levy of the
Pledged Taxes as provided in the Act,
-35-
L The City will maintain the System in good repair and working order, will
operate the same efficiently and faithfully and will punctually perform all duties with
respect thereto required by the Constitution and laws of the State of Illinois and Federal
law.
J. The City will establish and maintain at all times reasonable fees, charges,
and rates for the use and service of the System and will provide for the collection thereof
and the segregation and application of the Revenues in the manner provided by this
Ordinance, sufficient at all times to pay Operation and Maintenance Expenses, to provide
an adequate depreciation fund, to pay the principal of and interest on all bonds of the City
which by their terms are payable from the revenues of the System, and to provide for the
creation and maintenance and funding of the respective accounts as provided in
Section 12 of this Ordinance; it is hereby expressly provided that the pledge and
establishment of rates or charges for use of the System shall constitute a continuing
obligation of the City with respect to such establishment and a continuing appropriation
of the amounts received.
K. There shall be charged against all users of the System, including the City,
such rates and amounts for water and sewerage services as shall be adequate to meet the
requirements of this section. Charges far services rendered the City shall be made
against the City, and payment for the same shall be made monthly from the corporate
funds into the Fund as revenues derived from the operation of the System; provided,
however, that the City need not charge itself for such services if in the previous Fiscal
Year Revenues not including any payments made by the City shall have met the
requirements of this Ordinance.
L. Within six months following the close of each Fiscal Year, the City will
cause the books and accounts of the System to be audited by independent certified public
accountants in accordance with appropriate audit standards. Said audit will be available
far inspection by the registered owners of any of the Bonds.
Section 18. Future Revenue Bonds, Additional Bonds and Subordinate Bonds. The
City reserves the right to issue without limit bonds payable solely and only from the Revenues,
which bonds may have a lien on the Revenues prior to the lien on the Revenues that secures the
Outstanding Bonds, provided that upon the issuance of such bonds, the City shall be able to
demonstrate that the requirements of the Act for the issuance of alternate bonds payable from the
Revenues shall have been met on such date for all Outstanding Bonds.
The City also reserves the right to issue Additional Bonds from time to time payable from
the Pledged Revenues, and any such Additional Bonds shall share ratably and equally in the
-36-
Pledged Revenues with the Bonds; provided, however, that no Additional Bonds shall be issued
except in accordance with the provisions of the Act as the Act is written at this time.
The City also reserves the right to issue revenue bonds from time to time payable from
the Revenues that are subordinate to the Bonds or Additional Bonds and are payable from the
money remaining in the Surplus Account created hereunder after making required deposits into
the Alternate Bond and Interest Subaccount.
Section 19. Provisions a Contract. The provisions of this Ordinance shall constitute a
contract between the City and the owners of the Outstanding Bonds and no changes, additions, or
alterations of any kind shall be made hereto, except as herein provided, so long as there are any
Outstanding Bonds.
Section 20. Use of Proceeds. The proceeds derived from the sale of the Bonds shall
be used as follows:
A. Accrued interest shall be credited to the Alternate Bond and Interest
Subaccount and applied to pay first interest due on the Bonds.
B. The amount necessary of the proceeds of the Bonds shall be deposited into
a separate fund, hereby created, designated the "Expense Fund," to be used to pay
expenses of issuance of the Bonds. Disbursements from such fund shall be made from
time to time upon the direction of the City Treasurer. Any excess in said fund shall be
deposited into the Alternate Bond and Interest Subaccount after six months from the date
of issuance of the Bonds.
C. The remaining funds shall be set aside in a separate fund hereby created
and designated as the "Escrow Fund" (the "Escrow Fund'), which the City shall maintain
as a separate and segregated account. Monies in said fund shall be withdrawn from time
to time as needed for the payment of costs of the Refunding and paying the fees and
expenses incidental thereto.
"Escrow Agent" means MidAmerica National Bank, a bank having trust powers, or a
successar thereto or a successor designated as escrow agent if an Escrow Agreement is to be
used to effect the Refunding.
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"Escrow Agreement" means an Escrow Agreement, by and between the City and the
Escrow Agent, as authorized to be executed pursuant to the Bond Order which may include if
approved pursuant to the Bond Order Government Securities or other escrow securities permitted
by the investment policies of the City as may be purchased for any Escrow Fund.
"Government Securities" means direct full faith and credit obligations of the United
States of America (including, bills, notes, bonds and obligations of the State and Local
Government Series) or other obligations unconditionally guaranteed as to timely payment by the
United States Treasury.
Section 21. Non-Arbitrage and Tax-Exemption. The City hereby covenants that it will
not take any action, omit to take any action or permit the taking or omission of any action within
its control (including, without limitation, making or permitting any use of the proceeds of the
Bonds) if taking, permitting or omitting to take such action would cause any of the Bonds to be
an arbitrage bond or a private activity bond within the meaning of the Internal Revenue Code of
1986, as amended (the "Code'~, or would otherwise cause the interest on the Bonds to be
included in the gross income of the recipients thereof for federal income tax purposes. The City
acknowledges that, in the event of an examination by the Internal Revenue Service of the
exemption from Federal income taxation for interest paid on the Bonds, under present rules, the
City is treated as the "taxpayer" in such examination and agrees that it will respond in a
commercially reasonable manner to any inquiries from the Internal Revenue Service in
connection with such an examination.
The City also agrees and covenants with the purchasers and holders of the Bonds from
time to time outstanding that, to the extent possible under Illinois law, it will comply with
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whatever federal tax law is adopted in the future which applies to the Bonds and affects the
tax-exempt status of the Bonds.
The Corporate Authorities hereby authorize the officials of the City responsible for
issuing the Bonds, the same being the Mayor of the City, the City Manager or the City Clerk or
City Treasurer who receives the taxes of the City, to make such further covenants and
certifications as may be necessary to assure that the use thereof will not cause the Bonds to be
arbitrage bonds and to assure that the interest on the Bonds will be exempt from federal income
taxation. In connection therewith, the City and the Corporate Authorities further agree: (a)
through their officers, to make such further specific covenants, representations as shall be
truthful, and assurances as may be necessary or advisable; (b) to consult with counsel approving
the Bonds and to comply with such advice as may be given; (c) to pay to the United States, as
necessary, such sums of money representing required rebates of excess arbitrage profits relating
to the Bonds; (d) to file such forms, statements, and supporting documents as may be required
and in a timely manner; and (e) if deemed necessary or advisable by their officers, to employ and
pay fiscal agents, financial advisors, attorneys, and other persons to assist the City in such
compliance.
Section 22. Registered Form. The City recognizes that Section 149(a) of the Code
requires the Bonds to be issued and to remain in fully registered form in order that interest
thereon is exempt from federal income taxation under laws in force at the time the Bonds are
delivered. In this connection, the City agrees that it will not take any action to permit the Bonds
to be issued in, or converted into, bearer or coupon form.
Section 23. Bond Registrar Covenants. If requested by the Bond Registrar, the Mayor
and City Clerk are authorized to execute the Bond Registrar's standard form of agreement
-39-
between the City and the Bond Registrar with respect to the obligations and duties of the Bond
Registrar hereunder. Subject to modification by the express terms of any such agreement, such
duties shall include the following:
(a) to act as bond registrar, authenticating agent, paying agent and transfer agent as
provided herein;
(b) to maintain a list of Bondholders as set forth herein and to furnish such list to the
City upon request, but otherwise to keep such list confidential to the extent permitted by law;
(c) to cancel and/or destroy Bonds which have been paid at maturity or submitted for
exchange or transfer;
(d) to furnish the City at least annually a certificate with respect to Bonds cancelled
and/or destroyed; and
(e) to furnish the City at least annually an audit confirmation of Bonds paid,
Outstanding Bonds and payments made with respect to interest on the Bonds.
The City Clerk is hereby directed to file a certified copy of this Ordinance with the Bond
Registrar.
Section 24. Bank Qualified Representations. The City represents:
(a) The tax-exempt Bonds are not private activity bonds as defined in Section 141 of the
Code;
(b) The City is authorized to designate the tax-exempt Bonds as qualified tax-exempt
obligations for purposes of Section 265(b) of the Code pursuant to the Bond Order(s)
provided that for 2012 or 2013 the reasonably anticipated amount of qualified tax-exempt
obligations (including 501(c)(3) obligations and tax-exempt leases but excluding other
private activity bonds) which will be issued by the City and all entities subordinate to the
-40-
City during such year does not exceed $10,000,000 (or such higher amount as authorized
pursuant to the Internal Revenue Code in existence at the time of issuance).
Section 25. Continuing Disclosure Undertaking. The Mayor or Treasurer of the City
is hereby authorized, empowered and directed to execute and deliver the Continuing Disclosure
Undertaking (the "Continuing Disclosure Undertaking'~ in substantially the same form as now
before the Corporate Authorities, or with such changes therein as the individual executing the
Continuing Disclosure Undertaking on behalf of the City shall approve, the official's execution
thereof to constitute conclusive evidence of the approval of such changes. When the Continuing
Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the
Continuing Disclosure Undertaking will be binding on the City and the officers, employees and
agents of the City, and the officers, employees and agents of the City are hereby authorized,
empowered and directed to do all such acts and things and to execute all such documents as may
be necessary to carry out and comply with the provisions of the Continuing Disclosure
Undertaking as executed. Notwithstanding any other provision of this Ordinance, the sole
remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of
the beneficial owner of any Bond to seek mandamus or specific performance by court order, to
cause the City to comply with its obligations under the Continuing Disclosure Undertaking.
Section 26. Bond Insurance. In the event the Purchaser certifies to the City that it
would be economically advantageous for the City to acquire a municipal bond insurance policy
for the Bonds, the City hereby authorizes and directs the Treasurer to obtain such an insurance
policy. The acquisition of a municipal bond insurance policy is hereby deemed economically
advantageous if the difference between the present value cost of (a) the total debt service on the
Bonds if issued without municipal bond insurance and (b) the total debt service on the Bonds if
-41 -
issued with municipal bond insurance, is greater than the cost of the premium on the municipal
bond insurance policy. In the event the payment of principal and interest on the Bonds is insured
pursuant to a municipal bond insurance policy issued by a bond insurer (the "Bond Insurer"), and
as long as such municipal bond insurance policy shall be in full force and effect, the City and the
Bond Registrar agree to comply with such usual and reasonable provisions regarding
presentment and payment of the Bonds, subrogation of the rights of the Bondholders to the Bond
Insurer upon payment of the Bonds by the Bond Insurer, amendment hereof, or other terms, as
approved by the Mayor of the City on advice of counsel, his or her approval to constitute full and
complete acceptance by the City of such terms and provisions under authority of this Section.
Section 27. Severabiliry. If any section, paragraph, clause or provision of this
Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this Ordinance.
Section 28. Repealer and Superceder. All ordinances, resolutions or orders, or parts
thereof, in conflict with the provisions of this Ordinance are to the extent of such conflict hereby
repealed.
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ADOPTED on the 4th day of December, 2012.
AYE: Alderman Pickel, Hartford, Paslev, West, Ellis, Nelson
NAY:
ABSENT: Alderman Schenck Fritz
Approved the 4th day of December, 2012.
.
Mayor
RECORDED in the City Records on the 4th day of December, 2012.
ATT .
,
City lerk
[SEAL]
- 43 -
Alderman Hartford moved and Alderman Pickel seconded the motion that said ordinance
as presented be adopted.
After a full and complete discussion thereof, including a public recital of the nature of the
matter being considered and such other information as would inform the public of the business
being conducted, the Mayor directed that the roll be called for a vote upon the motion to adopt
the ordinance.
Upon the roll being called, the following Aldermen voted
AYE: Aldermen Pickel, Hartford, Pasley, West, Ellis, Nelson
NAY:
ABSENT: Aldermen Schenck, Fritz
Whereupon the Mayor declared the motion carried and the ordinance adopted, and
henceforth did approve and sign the same in open meeting and did direct the City Clerk to record
the same in full in the records of the City Council of the City.
Other business not pertinent to the adoption of said ordinance was duly transacted at said
meeting.
Upon motion duly made and seconded, the meetin was adjourned.
ty Clerk
IN WITNESS WHEREOF, I have hereunto affixed my official signature and the seal of
the City this 4th day of December, 2012.
City Clerk
[SEAL]
-2-
STATE OF ILLINOIS )
)
COUNTY OF FULTON )
CERTIFICATION OF ORDINANCE AND MINUTES
I, the undersigned, do hereby certify that I am the duly qualified and acting City Clerk of
the City of Canton, Fulton County, Illinois (the "City'~, and as such officer I am the keeper of the
books, records, files, and journal of proceedings of the City and of the City Council (the
"Corporate Authorities'~ thereof.
I do further certify that the foregoing constitutes a full, true and complete transcript of the
minutes of the legally convened meeting of the Corporate Authorities held on the 4th day of
December, 2012, insofar as same relates to the adoption of an ordinance numbered 3005 and
entitled:
AN ORDINANCE authorizing and providing for the issue of its
not to exceed $15,000,000 aggregate principal amount General
Obligation Waterworks and Sewerage Refunding Bonds (Alternate
Revenue Source), in one or mare series, of the City of Canton,
Fulton County, Illinois, for the purpose of refunding prior bonds,
prescribing the details of said bonds, and providing for the
imposition of taxes to pay the same, and for the collection,
segregation and application of the waterworks and sewerage
system revenues to pay said Bonds.
a true, correct and complete capy of which said ordinance as adopted at said meeting appears in
the foregoing transcript of the minutes of said meeting.
I do further certify that the deliberations of the Corporate Authorities on the adoption of
said ordinance were taken openly; that the vote on the adoption of said ordinance was taken
openly; that said meeting was held at a specified time and place convenient to the public; that
notice of said meeting was duly given to all of the news media requesting such notice of said
meeting was duly given to all of the news media requesting such notice; that an agenda for said
meeting was posted at the location where said meeting was held and at the principal office of the
Corporate Authorities at least 96 hours in advance of the holding of said meeting, that said
meeting was called and held in strict accordance with the provisions of the Open Meetings Act of
the State of Illinois, as amended, the Illinois Municipal Code, as amended, and the Local
Government Debt Reform Act of the State of Illinois, as amended; and that the Corporate
Authorities have complied with all of the applicable provisions of said Act and their procedural
rules in the adoption of said ardinance.
~ 5/
Bond Purchase Agreement
$2,810,000
City of Canton
Fulton County, Illinois
General Obligation Waterworks and Sewerage
Refunding Bonds
(Altetnate Revenue Source), Series 2013
Januaiy I8, 2013
City of Canton
2 North Main Street
Canton, Illinois 61520
Ladies and Gentlemen:
The undersigned, Ruan Securities, a Division of D.A. Davidson & Co. (the
"Underwriter"), hereby agrees with you, the City of Canton, Fulton County, Illinois (the "City"},
as follows:
1. Issuance and Sale of the 13ond.s. Subject to the terms and conditions hereinafter
set forth in this Bond Purchase Agreement (the "Bond Purchase Ageement") and on the basis of
the representations and warranties herein contained, the City agrees to issue and sell to the
Uizderwriter, and the Underwriter agrees to pt~rchase from the City, all, but not less than all, of
the $2,810,000 in aggregate principal amount of the City of Canton, Fulton County, Illinois,
General Obligation Waterworks and Sewerage Refunding Bonds {Alternate Revenue Source),
Series 2013 (the "Bonds"}, The purchase price for the Bonds shall be $2,774,875.000
(representing the par amount of the Bonds, less Underwriter's Discount of $35,125.00).
The Bonds will be dated February 19, 2013, will mature an December 1 of the years set
forth in Schedule I hereto in the amounts therein specified and will bear interest at the rates set
forth therein and be subj ect to redemption as set forth in the Official Statement (herein defined}.
The proceeds of the Bonds will be used to effect the refunding of a portion of the outstanding
General Obligation Bonds (Alternate Revenue Source), Series 2005 and finance costs of issuance
of the Bonds.
The Bonds will be issued and secured under the Bond Ordinance adopted by the City on
December 4, 20i2 and a Bond Order executed on the 18th day of January, 2013, by the Mayor of
the City pursuant thereto (collectively, the "Ordinance"), and as described in the Official
Statement. Pursuant to the Ordinance, the City appointed MidAxnerica National Bank, Canton,
Illinois, as the Registrar and Paying Agent for the Bonds.
C/158184.2
In other respects, the Bonds and the other instruments referred to above will contain the
provisions summarized in the Preliminary Official Statement dated January 14, 2013 (the
"Preliminary Official Statement ) and the Official Statement, dated January 18, 2013, to be
delivered pursuant to Section 7 hereof (collectively, the "Official Statement").
The City deems the Official Statement to be ~nal as of the date hereof for the purposes of
Rule 15c2-12 ("Rule 15c2-12") promulgated by the Securities and Exchange Commission, and
the City hereby consents ta the circulation by the Underwriter of the Official Statement.
2. Offering. The Underwriter agrees ta make an initial bona fide offering of all of
ihe Bonds at prices not in excess of those set forth on the inside cover of the Official Statement.
It is understood and agreed, however, that such prices may be subsequently changed by the
Underwriter without notice to the City. The Underwriter may offer and sell the Bonds to certain
dealers (including dealers depositing bonds into investment trusts) at prices lower than the public
offering prices set forth on the cover page of the Official Statement.
3. Delivery and Payment for the Bonds. At or before 11:00 A.M., central time, on
February 19, 2013 or such other date as may be agreed to by the City and the Underwriter (the
"Closing Date"), the City will direct the Registrar and Paying Agent to release to The Depository
Trust Company ("DTC") in New York, New York, in such form as sha11 be acceptable to DTC,
for the account of the Underwriter and the Bonds, duly executed and authenticated, together with
the other documents hereinafter mentioned; and, subject to the terms and conditions hereof, the
Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in
Section 1 hereof by wire transfer to such account as the City shall designate.
Concurrently with such delivery the City shall deliver the certificates, reports and
documents described herein at the offices of Ice Miller LLP, Chicago, Illinois ("Bond Counsel").
Such delivery is referred to herein as the "Closing." The Bonds will be delivered as definitive
' fully registered Bonds in denominations as provided in the Ordinance, registered in the name of
such DTC noininee and in such arnounts as the Underwriter may request and shall be deposited
with DTC not later than one (1} business day prior to the Closing Date, subject to release by the
Registrar and Paying Agent upon completion of the Closing. The certificates for the Bonds will
be available for inspection by the Underwriter at least three (3} business days prior to the Closing
Date.
4. Representations and Warranties of the City. The City hereby represents and
warrants to the Underwriter that the representations and warranties of the City set forth in the
form of the Closing Certificate of the City attached hereto as Exhibit A are true and correct as of
the date hereof. The City acknowledges and agrees that the purchase and sale of the Bonds
pursuant to this Bond Purchase Agreement is an arm's-length commercial transaction between
the City and the Underwriter, acting solely as a principal amd nat as a financial advisor or agent
of the City, and that the Underwriter does not have a fiduciary dury to the City and has not
assumed a financial advisory responsibility in favor of the City with respect to the offering of the
Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the
Underwriter, has advised or is currently advising the City on other matters) or any other
obligation to the Ciry except the obligations expressly set forth in this Bond Purchase
Agreement, it being the City's understanding that a financial advisory relationship shall not be
2
G158184.2
deemed to exist when, in the course of acting as an underwriter, a broker, dealer or municipal
securities dealer, a person renders advice to an issuer, inciuding advice with respect to the
structure, timing, terms and other similar matters concerning a new issue of municipal securities.
5. Conditions to Underu~riter's ~bligations. The Underwriter shall have the right to
cancel its obligations hereunder by notifying the City of its election to do so between the date
hereof and the Closing if at any time hereafter and prior to the Closing any of tl~e following
events shall occur:
(a) Adverse Legislation, Etc. Any legislation, ordinance, rule or regulation
shall be introduced in, or be enacted or actively considered for enactment by, or be
favorably reparted out of committee to, or be recommended by the President of the
United States for passage or adoption by, any governrnental body, department or agency
of the United States of America or any State thereaf, or a decision shall be rendered by a
court of competent jurisdiction, or any other action or event shal! have occurred or
transpired, any of which, in the judgment of the Underwriter, has the purpose or effect of:
(i) imposing federal income taxes upon the interest payable on the
Bonds or obligations af the general character of the Bonds;
(ii) requiring the registration of the Bonds under the Securities Act of
1933, as amended;
(iii) changing the federal income tax consequences of a.ny of the
transactions contemplated in connection herewith; or
(iv) materially adversely affecting the market price of the Bonds or the
market price generally of ohligations of the general character of the Bonds.
(b) Adverse Events. The market price of the Bonds, or the market price
generally of obligations of the general character of the Bonds, is adversely affected in the
judgmexit of the Underwriter because: ~
(i) additional material restrictions or actions regarding monetary
affairs not in force as of the date hereof shall have been imposed by any national
securities exchange or governmental authority with respect to trading in securities
generally or extensions of credit by, or net capital requirements of, underwriters
generally;
(ii) a general banking moratorium shall have been established by
federal, New York, Iowa or Illinois authorities;
(iii) a war or escalation of hostilities involving the United States of
America shall have been declared or any other national or international calamity
shall have occurred or escalated;
(iv} the United States of America shall have defaulted in the payment ~
of principal or interest on any obligation of the U.S. Treasury, or any other action ~
~
~
C/158184.2
shall have been taken by any government with respect to its legislative or
monetary affairs which, in the opinion of the Underwriter, has a material adverse
effect on the United States' securities markets or on the market for the Bonds; or
(v) general political, economic or market conditions shalt have ~
occurred which, in the opinion of the Underwriter, are not satisfactory to permit
the sale af the Bonds.
(c) Material Changes. Any event shall have occurred after the date hereof
which makes untrue or incorrect in any material respect, any infortnation or statement
contained in the Official Statement or which is not reflected i~~ the Official Statement but
which should, in the opinion of the Underwriter, be reflected therein for the purpose f~r
which the Official Statement is to be used in order to make the statements and
information contained therein not misleading in any material respect.
6. Closing Conditions. The obligations of the Underwriter to accept delivery of the
Bonds and ta make payment therefor on the Closing Date shall be subject to the satisfaction of
the following conditions on or prior to the Closing Date:
(a) Basic Documents. The ~rdinance and fhis Bond Purchase Agreement,
each in the form heretofore approved by the Underwi-i~er or with such further changes as
may be mutually agreed upon, shall have been executed and delivered.
(b) Ordinances. There shall have been adopted and be in force and effect
such resolutions and ordinances of the City, substantially in the form set forth as
approved by Bond Counsel, authorizing the transactions herein cantemplated as may be
reasanably required by Bond Counsel, and the City shall have delivered to us certified
copies of all such ordinances.
(c} Closing Certifrcate. The City sha11 have executed and delivered to us a
Issuer`s 4rganization and General Certificate, dated the Closing Date, in substantially the
form attached hereto as Exhibit A.
(d) Opinions of Counsel. Bond Counsel shall have rendered its approving
opinion, addressed to the Issuer and the Underwriter.
(e) Arbitrage Certif cations. The City shall have executed and delivered a
certificate dated the Closing Date setting forth the City's expectations, on the basis of
facts, estimates and circumstances described therein (and in a certificate of the City
incorporated therein), as of the Closing Date, regarding the amount and use of the
proceeds of the Bonds and otherwise satisfying the requirements of the regulations ~
promulgated or proposed under the Internal Revenue Code of 1986, as amended (the
"Code").
Public Approval. The City shall have furnished evidence satisfactory to
Bond Counsel of compliance with the public hearing and notice requirements under the
Open Meetings Act, 5 ILCS 120/1 et seq.
4
C/ 158184.2
(g) Form 8038-G. The City shall have executed and delivered Internal
Revenue Service Form 8038-G dated the Closing Date. .
(h) Other Acdions and Documents. There shall have been taken such other
actions and there shall have been delivered such other documents, opinions, showings
and certificates not listed above, as may be reasonably requested by the Underwriter or
Bond Counsel in order to effectuate the transactions herein contemplated, and the
Underwriter shali have receivsd executed countetparts of all documents, certificates and
opinions referred to herein.
7. Officiul Stutemenl. The City shall deliver or cause to be delivered to the
Underwriter, promptly after its acceptance hereof and not later than seven business days after the
date hereof, copies of the Official Statement, in a sufficient quantity to enable the Underwriter to
comply with the requirements of Rule 15c2-12 and the rules of the Municipal Securities
Rulemaking Soard, including without limitadon Rules G-32 and G-36 ("Rules G-32 and G-36").
The City hereby authorizes the use by the Underwriter of copies of the Official Statement in
connection with the offering and sale of the Bonds.
8. Changes in Official Statemenl. During the time from the date of this Bond
Purchase Agreement to and including the date which is 90 days following the End of the
Underwriting Period (as defined below), (i) except to the extent required by ciause (ii) hereof,
the City will not adopt any amendment of or supplement to the Official Statement to which, after
having been furnished with a copy, the Underwriter shall object in writing and {ii) if any event or
fact relating to or affecting the City shall occur or be discovered as a result of which it is
necessary, in the opinion of Bond Counsel, to arnend or supplement the Official Statement in
order to make the Official Statement not misleading in the light of the circumstances existing at
the time it is deIivered to a purchaser af the Bonds, the City shall forthwith prepare and furnish
to the Underwriter copies in a sufficient c~uantity to comply with Rule 15c2-12 and Rules G-32
and G-36 of an amendment of or suppleme~nt to the Official Statement (in form and substance
satisfactory to Bond Counse]), which will amend or supplement the Official Statement so that it
will not cvntain an untrue statement of a material fact or omit to state a material Fact necessary in
order to make Ehe statements therein, in light of the circumstances existing at the time the ~
Official Statement is delivered to such purchaser, not misleading. The expense of preparing such
amendment or supplement shall be paid by the City. For the purposes of this Section 8, the City
shall furnish such information with respect to themselves as the Underwriter may from time to
time request. As used herein, the term "End of the Underwriting Period" means the later of such
time as (a) the City delivers the Bonds to the Underwriter or (b} the Underwriter does not retain,
directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale tp
the public.
9. State Registrations. The City agrees to cooperate with the Underwriter in .
registering the Bonds under the Blue Sky and other securities laws or regulations of any State or
in perfecting exemptions from registration thereunder.
10. Expenses. The Underwriter shall be under no obligation to pay, and the City
agrees to pay, all reasonable and necessary expenses relating to their obligations hereunder,
including but not limited to the following: (i) the fees and expenses of Bond Counsel, financial
5
ciis8~aa.2
advisors, if any, and counsel for the City; (ii) the cost of the preparation and printing of the
Bonds and the Official Statement, including any supplement or amendment thereto; (iii)
expenses incurred by the Underwriter; and (iv} all fees and expenses relating to qualifications or
exemptions under Section 9 of this Agreement, including all filing fees and fees and expenses of
counsel. Such expenses shall be paid whether or not the Bonds are purchased by the Underwriter
pursuant hereto,
The Underwriter agrees to pay: (i) all advertising expenses in connection with the public
ofFering of the Bonds; and (ii) all expenses incurred by the Underwriter in connection with its
public offering and distribution of the Bonds in excess of the amounts paid by the City for such
expenses.
The provisions of this Section 10 shall survive any termination of this Bond Furchase
Agreement.
11. Indemnification by the Ciry. ~
(a) Indemnification of Underwriter. The City agrees to indemnify and hold ~
harmless the Underwriter and each person, if any, who controls the Underwriter within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any applicable
state securities law, against any loss, liability, claim, damage or expense (including the ~
reasonable cost of investigating and defending agaii~st any claim therefor and counsel
fees incurred in connection therewith), joint or several, which may be based upon any
statute or at common law, {i} as a result of the failure of the City to obtain any requisite
order, approval or authorization of any public body in connection with the issue and sale
of the Bonds to the Underwriter, or (ii) on the graund that the Official Statement, as the
same may be amended, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the statements
therein not misleading. In no case is the City to be iiable with respect to any claim made
against the Underwriter or any such controlling person unless the Underwriter or sach
controlling person shall have notified the City in vv~•iting promptly after the summons or
other first legal process giving information of the nature of the claim shall have been
; served upon the Underwriter oar such controlling person, but the failure to notify the City
of any such claim shail not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account af the indemnity
agreement contained in this paragraph. The City will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such iiability, in which event such defense shall be conducted by counsel
chosen by the City and satisfactory to the Underwriter or such controlling person. In the
event the City elects to assume the defense for such suit and retain such counsel and to
paxticipate in the defense thereof, the Underwriter or any such controlling person shall
have the right to employ separate counsel and to participate in the defense thereof, but the
fees and expenses of such counsel shall not be at the expense of the City unless the
employment of such counsel has either been specifically authorized by the City or there is
a conflict of interest which would prevent counsel for the City from repxesenting both the
City and the Underwriter or any such controlling person. The City shall not be liable to
6
C/ 158154.2
indemnify any person for any settlement of any such suit effected without the consent of
the City. The indemnity agreement contained in this paragraph shall be in addition to any
liability the City may otherwise have.
{b) Cantribution. In order to provide for just and equitable contribution in
circumstances in which the i~idemnification provided for in paragraph (a) of this Section
is due in accordance with its terms but is for any reason held by a court to be unavailable
from the City on grounds of public policy or otherwise, the City and the Underwriter
shall contribute to the total losses, claims, damages and liabilities (including legal or
other expenses of investigation or defense) to which tliey may be subject in such
progortion so that the Underwriter is responsible for the percentage that the underwriting
fee specified in Section 1 is of the principal amount of the Bonds, and the City shall be
responsible for the balance. However, in no case will the Underwriter be responsible for
any amount in excess of the underwriting fee, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(fl of the Securities Act} will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person who controls the
Underwriter within the meaning of the Securities Act, the Exchange Act or any
applicable state securities law will have the same right to contribution as the Underwriter,
and each persoii who controls the Underwriter within the meaa~ing of any of such statutes
shall have the same right to contributiou as the City, all subject to the foregoing sentence.
Any party entitled to contribution will, promptly after receiving notice of commencement
of any action, suit o~• proceeding against such party in respect of which a claim for
contribution rnay be made under this paragraph, notify each party from which
contribution may be sought, but the ~ailure to give such natice shall not relieve any party
from any contribution may be sought from any obligation it would otherwise have under
this paragraph.
12. Notices. All notices required or permitted to be given hereundex shall be deemed
given when personally delivered or sent by telecopy or overnight courier service addressed as
follows:
If to the City: City of Canton
2 North Main Street
Canton, Illinois 61520
Attention: Mayor
Facsimile: (309) 647-0065
If to the Underwriter: Ruan Securities, a Division of D.A. Davidson & Co.
S I S E. Locust Street
Suite 2p0
Des Moines, IA 50309
Attention: Scott Stevenson
Facsimile: (515} 471-2702
;
7
~ C/158184.2
13. Counterpards. This Bond Purchase Agreement may be executed in any number of
counterparts, each af which shall constitute an originai but all together shall constitute one and
the same instrument.
14. Contract for Benefrt of Parties. This Bond Purchase Agreement is made solely
for the benefit of the parties hereto (including any successor or assignee of the Underwriter),
excluding Section 5 which is also made for the beneFit of the Beneficial Owners (as defined in
the Ordinance) of the Bonds, and no other person shali acquire or have any right hereunder or by
virtue hereof.
15. Survival of' Representations. All representations, warranties and agreements of
the City contained herein shall remain in full force and effect, regardless of (i} any
investigations made by or on behalf of the Underwriter; or (ii) delivery of and payment for the
Bonds hereunder; or (iii) any termination of this Bond Purchase Agreement.
16. Governing Law. This Bond Purchase Agreernent shall be governed by the laws of
the State of Illinois without regard to conflicts of law principles thereof.
If the foregoing is acceptable to you, please note your acceptance in the space below prior
to 2:00 P.M., central time, on the date hereof, whereupon this Bond 1'urchase Agreement shall
become a binding contract between us.
8
C/ I 58184.2
Accepted and agreed to thzs 18th day of January, 20I 3.
RUAN SECURITIES, A DIVISI4N OF D.A.
DAVIDSON & CO.
~y: _
Its: ; , G~,~
[Signature Page for Bond Purchase Agreement.]
C/t 58184.3
Accepted and agreed to this 18th day of January, 2013.
CITY OF CANTON, FULTON COUNTY,
ILLINOIS
By:
Title: ayo
ATT ST:
B .
Ti le: ity Clerk
~
[Signature Page for Bond Purchase Agreement.]
C/ 158184.2
SCHEDULEI .
MATURITY, PRINCIPAL AMOUNT. INTEREST RATE AND PRICE
December 1 Princi al Interest Rate Price
2014 $125,000 0.850% 100.000%
2017 160,000 I.400% 1 OO.OdO%
2018 450,000 1,600% l OQ.000%
2019 445,000 ] ,gpp% 100.000%
2020 4~0,000 2.050% 100.000%
2021 420,00~ 2.250% 100.000%
2022 385,000 2.400% 100.000%
2023 395,000 2.500% 100.000%
**'The Bonds due Decennber 1, 2014 are Term Bonds are subject to mandatory sinking fund
redemption on the following dates and in the following amounts:
December ] Princi~al
2013 $70,000
20i 4 . 55,000
**The Bonds due December 1, 2017 are Term Bonds are subject to mandatory sinking fund
redemption on the following dates and in the following amounts:
December 1 Principal
2015 $60,000
2016 SO,Q00
2017 50,000
C/158184.2
EXHIBIT A
[ATTACHED]
A-1
C/158t84.2