REPORTS OF COMMITTEES CHICAGO July To the

7/30/97 REPORTS OF COMMITTEES 48761









CHICAGO, July 30,1997.





To the President and Members of the City Council:



Your Committee on Finance, having had under consideration an amended

ordinance authorizing the amendment of the Municipal Code of the City of

Chicago concerning the ground t r a n s p o r t a t i o n tax and h o r s e - d r a w n

carriages, having had the same under advisement, begs leave to report and

recommend t h a t Your Honorable Body P a s s the proposed a m e n d e d

ordinance transmitted herewith.



This recommendation was concurred in by a viva voce vote ofthe members

ofthe committee.





Respectfully submitted,



(Signed) EDWARD M. BURKE,

Chairman.





On motion of Alderman Burke, the said proposed amended ordinance

transmitted with the foregoing committee report was Passed by yeas and nays

as follows:



Yeas — Aldermen Granato, Haithcock, Tillman, Preckwinkle, Holt, Steele,

Beavers, Dixon, Shaw, Buchanan, Huels, Frias, Olivo, Burke, Coleman,

Peterson, Murphy, Rugai, Troutman, Evans, Munoz, Zalewski, Chandler,

Solis, Ocasio, Burnett, E. Smith, Burrell, Wojcik, Suarez, Gabinski, Mell,

Banks, Giles, Allen, Laurino, Doherty, N a t a r u s , Hansen, Levar, Shiller,

Schulter, M. Smith, Moore, Stone - 45.



Nays - None.

Alderman Beavers moved to reconsider the foregoing vote. The motion was

lost.



The following is said ordinance as passed:





Be It Ordained by the City Council of the City of Chicago:



SECTION 1. Sections 3-46-020, 3-46-030, 3-46-070, 3-46-073 and 3-46-

080 of the Municipal Code of Chicago are hereby amended by deleting the

language in brackets and inserting the language in italics, as follows:

48762 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







3-46-020 Definitions.

When any ofthe following words or terms are used in this chapter, they

shall have the meaning set forth below:



A. "Department of consumer services" m e a n s the d e p a r t m e n t of

consumer services ofthe city ofChicago.



B. "Department of revenue" means the department of revenue ofthe

city of Chicago.

C. "Director" or "director of revenue" means the director of revenue of

the city ofChicago.

D. "Ground transportation vehicle" means any for-hire [motor]

v e h i c l e used to p r o v i d e t r a n s p o r t a t i o n for a c h a r g e or o t h e r

consideration to passengers, regardless of whether the consideration is

paid by the passengers or by any other person. This term includes, but

is not limited to, water taxis, as defined in section 4-4-311 ofthis code,

horse-drawn carriages and taxicabs and all automobiles, limousines,

buses and other [motor] vehicles used to provide transportation to

passengers for a charge, whether or not licensed by the city or registered

or titled with the state oflllinois.



The term "ground transportation vehicle" does not include [motor]

vehicles operated by a government transportation agency or on behalf of

a government transportation agency pursuant to a contract or a grant,

[motor] vehicles devoted exclusively to funeral use, or [motor] vehicles

used as ambulances.



E. "License holder of a ground transportation vehicle" or "license

holder" means any person holding a license issued by the city under

chapter 9-108 or 9-112 ofthis code, as amended, or any person who has

registered or titled a [motor] vehicle with any state or the District of

Columbia if the vehicle is used to provide ground transportation to

passengers.



F. ["Motor vehicle" or] "Vehicle" means any vehicle t h a t is self-

propelled or horse-drawn and not operated on rails, but does not include

motorized wheelchairs.

G. "Taxicab" means any ground transportation vehicle in which the

lawful charge or fare is recorded and displayed by a taximeter or other

fare-recording device.



H. "Use in the city" means use of any ground transportation vehicle

where passengers are either picked up or dropped off in the city, or both.

7/30/97 REPORTS OF COMMITTEES 48763







3-46-030 Tax Imposed.

A. P u r s u a n t to the authority granted by section 11-42-6 of the Illinois

Municipal Code, as amended, 65 ILCS § 5/11-42-6, a tax is imposed on all

persons engaged in the occupation of providing ground transportation

vehicles for use in the city. The incidence ofthe tax and the obligation to

pay the tax are on the license holder of any ground transportation vehicle

which is used in the city or on t h e person o p e r a t i n g a g r o u n d

transportation vehicle for use in the city who is required to be, but is not, a

license holder.



B. (1) The rate of the tax shall be in accordance with the following

schedule:

(a) For ground transportation vehicles that are taxicabs, $3.00 for

each taxicab for each day the taxicab is used in the city to provide

ground transportation;



(b) For ground transportation vehicles, other than taxicabs, with a

seating capacity of 10 or fewer passengers, $3.50 for each vehicle for

each day the vehicle is used in the city to provide ground transportation;



(c) For ground transportation vehicles with a seating capacity of 11

to 24 passengers, $6.00 for each vehicle for each day the vehicle is used

in the city to provide ground transportation;



(d) For ground transportation vehicles with a seating capacity of

more than 24 passengers, $9.00 for each vehicle for each day the vehicle

is used in the city to provide ground transportation. ^



(2) For purposes ofthis subsection (B), it shall be presumed that the

seating capacity of a ground transportation vehicle is the seating capacity

designated by the vehicle's manufacturer.



C. (1) To prevent multiple taxation, any person who is licensed, or who

is required to be licensed, to operate a ground transportation vehicle used

in another municipality may claim a credit against the tax imposed by

this chapter equal to any similar occupation tax imposed on the person by

the other municipality with respect to such ground transportation vehicle,

but only to the extent of the amount of tax properly due and actually paid

to the other municipality. The credit may not exceed the amount of the

tax imposed by this chapter that otherwise would be due.

(2) This subsection 3-46-030(C) shall not apply in the case of any

person who is licensed, or who is required to be licensed, under chapter 9-

iOS or 9-112 ofthis code.

48764 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







D. Nothing in this chapter shall be construed to impose the tax on any

person or activity which, under the constitutions of the United States or

the state oflllinois, may not be taxed by the city.





3-46-070 Registration.

A. Every licensed holder of a ground transportation vehicle who is

required to pay the tax imposed by this chapter shall register with the

d e p a r t m e n t of c o n s u m e r s e r v i c e s , on a form p r e s c r i b e d by t h e

commissioner of consumer services, at least 10 days before the ground

transportation vehicle is used in the city.



B. Any licensed holder that has registered in accordance with the

Metropolitan Pier and Exposition Authority Airport D e p a r t u r e T a x

Ordinance § I-IO(A) (1992) or has been issued a license p u r s u a n t to

chapter 9-108 or 9-112 of this code shall be regarded as registered in

accordance with subsection (A) ofthis section.



C. If any information provided by a licensed holder on a registration

form ceases to be accurate, then the licensed holder shall file a corrected

form with the department of consumer services within 60 days.





3-46-073 Registration Emblems.

A. The department of consumer services shall issue to every license

holder registered in accordance with section 3-46-070 of this chapter an

annual registration emblem for every ground transportation vehicle t h a t

the license holder provides for use in the city, other than vehicles having a

seating capacity of more than 24 passengers or vehicles required to display

a sticker license emblem or a metal plate pursuant to chapter 9-108 or 9-

112 ofthis code. The emblems shall be issued on or before April 1st of each

calendar year to license holders of taxicabs and liveries and on or before

August 1st of each calendar year to license holders of all other ground

transportation vehicles. Emblems shall also be issued within 10 days of

initial registration in accordance with section 3-46-070 ofthis chapter.



B. Every license holder that is required to pay the tax imposed by this

chapter shall affix a registration emblem issued by the department of

consumer services on the front windshield of every ground transportation

vehicle t h a t is used in the city, other than vehicles having a s e a t i n g

capacity of more than 24 passengers or vehicles t h a t are required to

display a sticker license emblem or a metal plate pursuant to chapter 9-

108 or 9-112 of this code. If a ground transportation vehicle does not

display a registration emblem as required by this subsection, then the

license holder ofthe vehicle shall be prohibited from using or permitting

the use ofthe vehicle as a ground transportation vehicle in the city.

7/30/97 REPORTS OF COMMITTEES 48765







C. The department of consumer services shall not issue a registration

emblem to a license holder if the license holder has failed to file with the

department of revenue a tax return for any month that it was required to

pay the tax imposed by this chapter or if the license holder has failed to

pay any tax t h a t has been assessed by the department of revenue, unless:



(1) the license holder is contesting liability for the tax in a pending

administrative or judicial proceeding; or



(2) the license holder has filed a petition in bankruptcy and the full

amount ofthe tax due to the city is dischargeable in bankruptcy; or



(3) t h e license holder has e n t e r e d into an a g r e e m e n t with t h e

departmentof revenue for the payment of all the tax and the license

holder is in compliance with the agreement.



D. Immediately upon the sale of any ground transportation vehicle, the

seller or the purchaser shall remove the registration emblem from the

vehicle. It shall be unlawful for the purchaser to use the vehicle unless the

registration emblem has been removed.



E. Except as provided in subsection (C) of this section, any license

holder that has registered in accordance with section 3-46-070 of this

chapter may request the department of consumer services to issue a

registration emblem if the licensed holder acquires a new, used or

additional ground transportation vehicle.





3-46-080 Books And Records.

A. Every person required to pay the tax imposed by this chapter shall

keep accurate books and records of its business or activity, including

original source documents and books of entry denoting the transaction

t h a t gave rise, or may have given rise, to the tax liability or any

exemption that may be claimed and the days that such person's ground

transportation vehicles were used in the city. All such books and records

shall be kept in the English language and, at all times during business

hours or the day, shall be subject to and available for inspection by the

department of revenue.



B. It shall be presumed that a ground transportation vehicle which is

licensed pursuant to chapter 9-108 or 9-112 ofthis code was used in the

city on every day of any period for which no accurate books and records

required by subsection (A) ofthis section were kept.





SECTION 2. Section 4-156-020 of the Municipal Code of Chicago is

hereby amended by inserting the language in italics, as follows:

48766 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







4-156-020 Tax Imposed.



A. An amusement tax is imposed upon the patrons of any amusement

within the city in an amount equal to seven percent ofthe admission fees

or other charges paid for the privilege to enter, to witness, to view or to

participate in such amusement; provided, however, t h a t this tax shall not

apply to patrons of automatic amusenient machines as defined in Article II

of this chapter, or be imposed upon the privilege of w i t n e s s i n g or

participating in any stock show or business show that is not open to the

general public, or be imposed upon the privilege of hiring a horse-drawn

carriage licensed under chapter 9-108, or, except as limited below, be

imposed upon t h e privilege of w i t n e s s i n g or p a r t i c i p a t i n g in a n y

amusement sponsored or conducted by and the proceeds of which, after

payment of reasonable expenses, inui'e exclusively to the benefit of:



(1) religious, educational and charitable institutions, societies or

organizations;

(2) societies or organizations for the prevention of cruelty to children

or animals;

(3) societies or organizations conducted for the sole purpose of

maintaining symphony orchestras, opera performances and artistic

presentations, including, but not limited to, musical presentations, and

receiving substantial support from voluntary contributions;



(4) societies or organizations conducted and m a i n t a i n e d for the

purpose of civic improvement;

(5) fraternal organizations, legion posts, social and political groups

which conduct amusements, sponsored occasionally but not more often

t h a n twice yearly for periods not longer t h a n 30 days; provided,

however, t h a t the entities described in paragraphs (1) to (5) are not-for-

profit institutions, organizations, groups or societies, where no part of

the net earnings inure to the benefit of any "private shareholder or

person;



(6) organizations or persons in the armed services of the United

States, or National Guard organizations, reserve officers' associations,

or organizations or posts of war veterans, or auxiliary units or societies

of such posts or organizations, if such posts, organizations, units or

societies are organized in the state of Illinois, and if no part of their

earnings inure to the benefit of any private shareholder or person;



(7) organizations or associations created and m a i n t a i n e d for the

purpose of benefiting the members, or dependents or heirs of members,

ofthe police or fire departments of any political subdivision ofthe state

oflllinois.

7/30/97 REPORTS OF COMMITTEES 48767





B. (1) The tax imposed in subsection A ofthis section shall not apply to

or be imposed upon the admission fees to witness live performances of

professional theater companies in any auditorium or theater in the city

whose maximum seating capacity, including all balconies, is not more

than 750 persons.



A professional theater company, as used in this article, is hereby defined

as any society, organization, association, corporation or entity which

advances the cultural interests of the city of Chicago t h r o u g h t h e

production of live theatrical and dramatic presentations of plays, musicals

or operas to a seated audience in the city.



(2) Initiation fees and membership dues paid to a health club,

racquetball club, tennis club or a similar club or organization, when such

club or organization is organized and operated on a membership basis and

for the recreational purposes of its members and its members' guests, shall

be exempt from the tax imposed in subsection A of this section. This

exemption shall not be construed to apply to any fees paid or based upon,

in any way whatsoever, a per-event or a per-admission basis.



C. The tax imposed in subsection A ofthis section shall apply to and be

imposed upon 60 percent ofthe admission fees or other charges (including,

but not limited to, the gross lease or rental amount) paid for the privilege

of using special seating areas to witness or to view an amusement.



D. (1) In case of any amusement for which a full exemption from

payment ofthe amusement t a x i s provided under any ofthe classifications

in this article, written notice of the amusement shall be filed with the

director of reveriue by the person or persons who are sponsoring or

conducting the amusement or who are required to collect the tax, on a

form prescribed by the director of revenue, at least 15 days prior to the

holding of such amusement. This requirement shall not apply, however, if

the requirement contained in subsection (D)(2) is satisfied.



(2) In t h e e v e n t t h a t live performances are conducted by a

professional theater company in an auditorium or t h e a t e r t h a t h a s a

maximum seating capacity, including all balconies, of not more than 750

persons as provided in section 4-156-020(B)(l) of t h i s a r t i c l e , the

auditorium or theater may apply to the director for an exemption not to

exceed three years upon providing proof of its seating capacity. This

exemption may be renewed for additional periods, each renewal period not

to exceed three years, upon a showing to the director that the maximum

seating capacity ofthe auditorium or theater does not exceed 750 persons.

The three year exemption provided by this subsection shall not apply to

any a m u s e m e n t t h a t does not otherwise meet all the r e q u i r e m e n t s

contained in section 4-156-020(B)(l) ofthis article.



(3) No person may claim any full exemption provided by this article

unless the notice required by subsection (D)(1) of this section or the

48768 JOURNAL-CITYCOUNCIL-CHICAGO 7/30/97







application required by subsection (D)(2) of this section is filed with the

director. It shall be presumed that all amusements are subject to tax

under this article until the contrary is established.



E. For the purpose of determining the amount of the amusement tax

due under section 4-156-020, admission fees or other charges shall be

computed exclusive ofthis tax, any federal or state taxes imposed upon the

amusement patron and any separately stated charges for nonamusement

services or for sales of tangible personal property.



F. It is unlawful for any person to produce, present, conduct, or resell

tickets to, any amusement without collection of the tax, except as provided

in this article.

G. Notwithstanding subsection A ofthis section, if an owner, manager

or operator of an amusement or of a place where an amusement is being

held, of if a reseller of tickets to an amusement, is a party to a franchise

agreement or any other agreement with the city pursuant to which the

owner, manager, operator or reseller compensates the city for the right to

use the public way or to do business in the city, liability under the tax

imposed by subsection A shall be reduced by the amount paid to the City

pursuant to the agreement.





SECTION 3. Section 9-48-040 ofthe Municipal Code ofChicago is hereby

amended by deleting the language in brackets and adding the language in

italics, as follows:



9-48-040 H o r s e - D r a w n C a r r i a g e s — Left T u r n s -- L o a d i n g And

Unloading Passengers.

(a) No horse-drawn carriage shall make a left turn from any street

other than a one-way street unless such turn is expressly authorized by

permit, o r d i n a n c e or r o u t e d e s i g n a t i o n by t h e c o m m i s s i o n e r of

transportation.



(b) The driver of a horse-drawn carriage shall not stop such vehicle

upon any street at any place for the purpose standing, or for the purpose of

loading or unloading passengers, other than at a [designated] carriage

stand designated by ordinance passed by the city council, except:

(i) in the case of an emergency; or



(ii) as provided in a permit issued pursuant to Section 9-48-020(b); or



(iii) if a carriage stand is fully occupied, a driver may stop to unload

passengers to the front or rear ofthe stand, but in no event more than

25 feet from nearest boundary of the stand, and without obstructing

7/30/97 REPORTS OF COMMITTEES 48769







any traffic lane, intersection or crosswalk, and only for the period of

time necessary to unload passengers[.]; or



(iv) at any location designated by ordinance passed by the city council

for picking up or dropping off passengers when such transactions occur

in less than one minute. Such locations may include, but are not

limited to, places adjacent to cultural institutions, business districts

and restaurants. However, a place designated in accordance with this

subsection (iv) may not be used for purposes of standing.



(c) Whenever stopping to load or unload passengers, the driver of a

horse-drawn carriage shall stop the carriage parallel to the curb, with the

curbside wheels no more than 12 inches from the curb.





SECTION 4. Severability; Clarification Of Existing Law.



(a) The provisions ofthis ordinance are severable under Section 1-4-200

of the Municipal Code of Chicago, except t h a t if the a m e n d m e n t s to

Section 3-46-020 ofthe Municipal Code ofChicago contained in Section 1

ofthis ordinance (other than the amendment with respect to water taxis),

or the application thereof, is held unconstitutional or otherwise invalid,

the amendments to Section 4-156-020 of the Municipal Code of Chicago

contained in Section 2 ofthis ordinance shall cease to be in effect.



(b) The amendment of Section 3-46-020 of the Municipal Code of

Chicago contained in Section 1 of this ordinance with respect to water

taxis is intended as a clarification of existing law.





SECTION 5. This ordinance shall take effect September 1,1997.









PROPERTY AT 3 2 2 3 - 3 2 4 3 SOUTH WESTERN AVENUE APPROVED

FOR CLASS 6(b) TAX INCENTIVE BENEFITS PURSUANT

TO COOK COUNTY REAL PROPERTY

CLASSIFICATION ORDINANCE.





The Committee on Finance submitted the following report:





CHICAGO, July 30,1997.





To the President and Members of the City Council:

48770 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







Your Committee on Finance, having had under consideration a resolution

approving a Class 6(b) tax incentive classification for the property located at

3223 - 3243 South Western Avenue pursuant to the Cook County Real

Property Ordinance, having had the same under advisement, begs leave to

report and recommend t h a t Your Honorable Body Adopt the proposed

resolution transmitted herewith.



This recommendation was concurred in by a viva voce vote ofthe members

ofthe committee.



Respectfully submitted,



(Signed) EDWARD M. BURKE,

Chairman.





On motion of Alderman Burke, the said proposed resolution transmitted

with the foregoing committee report was Adopted by yeas and nays as follows:

Yeas — Aldermen Granato, Haithcock, Tillman, Preckwinkle, Holt, Steele,

Beavers, Dixon, Shaw, Buchanan, Huels, Frias, Olivo, Burke, Coleman,

Peterson, Murphy, Rugai, Troutman, Evans, Munoz, Zalewski, Chandler,

Solis, Ocasio, Burnett, E. Smith, Burrell, Wojcik, Suarez, Gabinski, Mell,

Banks, Giles, Allen, Laurino, Doherty, N a t a r u s , H a n s e n , Levar, Shiller,

Schulter, M. Smith, Moore, Stone - 45.



Nays — None.

Alderman Beavers moved to reconsider the foregoing vote. The motion was

lost.

The following is said resolution as adopted:





WHEREAS, The Cook County Board of Commissioners has amended the

Cook County Real Property Classification Ordinance to provide real estate

tax incentives to property owners and/or tenants who build, rehabilitate,

enhance and occupy property which is located within Cook County and

which is used for industrial purposes; and



WHEREAS, The City of Chicago (hereinafter referred to as the "City"),

consistent with the Cook County Real Property Classification Ordinance, as

amended, hereinafter referred to as (the "Ordinance") wishes to induce

industry to locate and expand in the City by offering financial incentives in

the form ofproperty tax relief; and

7/30/97 REPORTS OF COMMITTEES 48771







WHEREAS, Class 6(b) ofthis ordinance requires that the municipality in

which such real estate proposed for Class 6(b) designation is located by

lawful resolution approve such real estate to be necessary and appropriate

for the real estate tax reduction incentive; and



WHEREAS, BTI, Inc., doing business as Orbit Design, Inc. (the "Owner")

of a site located at 3223 — 3243 South Western Avenue, Chicago, Illinois

(hereinafter referred to as the "Subject Property"), will own or lease the

Subject Property which qualifies for the tax abatement as defined in the

Ordinance and will undertake a program of substantial rehabilitation with

the expectation that the project and property would be eligible for Class 6(b)

real estate tax reduction incentive p u r s u a n t to the Cook County Real

Property Classification Ordinance, as amended; and



WHEREAS, The Owner intends to file with the Office of the Assessor of

Cook County an eligibility application for Class 6(b) classification; and



WHEREAS, The Subject Property will be utilized for industrial purposes

in that BTI, Inc., doing business as Orbit Design, Inc., has been an industrial

company operating as a manufacturer and distributor of home accessories in

Chicago; and



WHEREAS, The grant of Class 6(b) tax incentives for the Subject Property

is necessary for the execution ofthe intended substantial rehabilitation; and



WHEREAS, The execution of this substantial rehabilitation and the

future use ofthe Subject Property will provide significant present and future

employment, both temporary and permanent; and



WHEREAS, The Permanent Real Estate Index Numbers for the Subject

Property are 17-31-101-001-0000,17-31-101-006-0000, 17-31-101-007-0000,

17-31-101-009-0000, 17-31-014-001-0000, 17-31-104-002-0000 and 17-31-

104-033-0000; and

WHEREAS, N o t w i t h s t a n d i n g the Class 6(b) s t a t u s of t h e Subject

Property, the substantial rehabilitation of and utilization thereof will

generate significant new revenues to the City in the form of additional real

estate taxes and other tax revenues; now, therefore.



Be It Resolved by the City Council of the City of Chicago:



SECTION 1. The Subject Property is appropriate for Class 6(b) tax

incentive benefits pursuant to the Cook County Real Property Classification

Ordinance, as amended; and



SECTION 2. The incentives provided by the Class 6(b) real property

assessment classification are necessary for the proposed improvements of

the site located at 3223 — 3243 South Western Avenue, Chicago, Illinois; and

48772 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







SECTION 3. Pursuant to the Cook County Real Property Classification

Ordinance, as amended, the City of Chicago; Illinois hereby approves,

consents and supports the classification of the Subject Property as Class 6(b)

property, and the Class 6(b) real estate tax incentives shall apply to the

property identified as Permanent Real Estate Index Numbers 17-31-101-

001-0000,17-31-101-006-0000,17-31-101-007-0000,17-31-101-009-0000,17-

31-014-001-0000,17-31-104-002-0000 and 17-31-104-033-0000; and



SECTION 4. The Clerk of the City of Chicago is authorized to and shall

send a certified copy of this resolution to the Office of the Cook County

Assessor, Room 312, County Building, Chicago, Illinois 60602; and



Be It F u r t h e r Resolved, T h a t t h i s resolution s h a l l be effective

immediately upon its passage and approval, or as otherwise provided by law.









PROPERTY OWNED BY GOOSELAND VENTURE APPROVED

FOR CLASS 6(b) TAX INCENTIVE BENEFITS PURSUANT

TO COOK COUNTY REAL PROPERTY

CLASSIFICATION ORDINANCE.





The Committee on Finance submitted the following report:



CHICAGO, July 30,1997.





To the President and Members of the City Council:

Your Committee on Finance, having had under consideration a resolution

approving a Class 6 (b) tax incentive classification for the property owned by

Gooseland Venture pursuant to the Cook County Real Property Ordinance,

having had the same under advisement, begs leave to report and recommend

that Your Honorable Body Adopt the proposed resolution t r a n s m i t t e d

herewith.



This recommendation was concurred in by a viva voce vote ofthe members

of the committee.



Respectfully submitted,



(Signed) EDWARD M. BURKE,

Chairman.

7/30/97 REPORTS OF COMMITTEES 48773







On motion of Alderman Burke, the said proposed resolution transmitted

with the foregoing committee report was Adopted by yeas and nays as follows:



Yeas — Aldermen Granato, Haithcock, Tillman, Preckwinkle, Holt, Steele,

Beavers, Dixon, Shaw, Buchanan, Huels, Frias, Olivo, Burke, Coleman,

Peterson, Murphy, Rugai, Troutman, E v a n s , Munoz, Zalewski, Chandler,

Solis, Ocasio, Burnett, E. Smith, Burrell, Wojcik, Suarez, Gabinski, Mell,

Banks, Giles, Allen, Laurino, Doherty, N a t a r u s , Hansen, Levar, Shiller,

Schulter, M. Smith, Moore, Stone - 45.



Nays — None.

Alderman Beavers moved to reconsider the foregoing vote. The motion was

lost.

The following is said resolution as adopted:





WHEREAS, The Cook County Board of Commissioners has amended the

Cook County Real Property Classification Ordinance to provide real estate

tax incentives to property owners who build, rehabilitate, enhance and

occupy property which is located within Cook County and which is used for

industrial purposes; and



WHEREAS, The City of Chicago (hereinafter referred to as "City"),

consistent with the Cook County Real Property Classification Ordinance, as

amended, wishes to induce industry to locate and expand in the City by

offering financial incentives in the form ofproperty tax relief; and

WHEREAS, Class 6(b) ofthis ordinance requires that the municipality in

which such real estate proposed for Class 6(b) designation is located by

lawful resolution approve such real estate to be appropriate for incentive

abatement; and

WHEREAS, Gooseland Venture, an Illinois general p a r t n e r s h i p (the

"Owner") of the property located at the northwest corner of Division Street

and Cherry Avenue, the northeast corner of Division Street and Cherry

Avenue and the northeast corner of Division Street and Hooker Street,

Chicago Illinois (hereinafter referred to as the "Subject Property"), will

undertake the new construction of four (4) industrial warehouse/wholesale

distribution facilities having a total area of three hundred forty-four

thousand two hundred eighty (344,280) square feet with the expectation t h a t

the project and property would be eligible for Class 6(b) tax incentives

pursuant to the Cook (bounty Real Property Classification Ordinance, as

amended; and



WHEREAS, The Owner intends to file with the Office of the Assessor of

Cook County an eligibility application for Class 6(b) classification; and

48774 JOURNAL--CITY COUNCIL-CHICAGO 7/30/97







WHEREAS, The Subject Property is located within the boundaries of

Chicago Enterprise Zone Number 4; and



WHEREAS, The Subject Property will be utilized for industrial purposes

in t h a t t h e i m p r o v e m e n t s will be l e a s e d to i n d u s t r i a l u s e r s for

warehousing/wholesale distribution of products; and



WHEREAS, The grant of Class 6(b) tax incentives for the Subject Property

is necessary for the execution ofthe intended new construction; and



WHEREAS, The execution of this new construction and the future use of

t h e Subject P r o p e r t y will p r o v i d e , s i g n i f i c a n t p r e s e n t a n d f u t u r e

employment, both temporary and permanent; and



WHEREAS, The Permanent Real Estate Index Numbers for the Subject

Property are 17-05-203-010, 17-05-204-006, 17-05-205-024 and 17-05-205-

025; and

WHEREAS, Notwithstanding the Class 6(b) status ofthe Subject Property

the new construction of and utilization thereof will generate significant new

revenues to the City in the form of additional real estate taxes and other tax

revenues; now, therefore,



Be It Resolved by the City Council of the City of Chicago:



SECTION 1. The Subject Property is appropriate for Class 6(b) tax

incentive benefits pursuant to the Cook County Real Property Classification

Ordinance, as amended; and



SECTION 2. The incentives provided by the Class 6(b) real property

assessment classification are necessary for the proposed new construction at

the northwest corner of Division Street and Cherry Avenue, the northeast

corner of Division Street and Cherry Avenue and the northeast corner of

Division Street and Hooker Street; and



SECTION 3. Pursuant to the Cook County Real Property Classification

Ordinance, as amended, the City of Chicago, Illinois hereby approves,

consents and supports the classification ofthe Subject Property as Class 6(b)

property, and the Class 6(b) tax incentives shall apply to the property

identified as Permanent Index Numbers 17-05-203-010, 17-05-204-006, 17-

05-205-024 and 17-05-205-025; and



SECTION 4. The Clerk of the City of Chicago is authorized to and shall

send a certified copy of this resolution to the Office of the Cook County

Assessor, Room 312, County Building, Chicago, Illinois 60602; and



Be It F u r t h e r Resolved, T h a t t h i s resolution s h a l l be effective

immediately upon its passage and approval, or as otherwise provided by law.

7/30/97 REPORTS OF COMMITTEES 48775





AUTHORIZATION FOR ISSUANCDE OF TAX INCREMENT

ALLOCATION BONDS (CENTRAL LOOP

REDEVELOPMENT PROJECT)

SERIES 1997.





The Committee on Finance submitted the following report:



CHICAGO, July 30,1997.





To the President a n d Members of the City Council:

Your Committee on F i n a n c e , h a v i n g had u n d e r c o n s i d e r a t i o n a n

ordinance authorizing the issuance of Tax Increment Allocation Bonds

(Central Loop Redevelopment Project) Series 1997, in an a m o u n t not to

exceed $195,000,000, having had the same under advisement, begs leave to

report and recommend t h a t Your Honorable Body P a s s t h e proposed

ordinance transmitted herewith.



This recommendation was concurred in by a viva voce vote ofthe members

ofthe committee with no dissenting vote.



Alderman Burke abstained from voting pursuant to Rule 14 of the City

Council's Rules of Order and Procedure.



Respectfully submitted,



(Signed) EDWARD M. BURKE,

Chairman.





On motion of Alderman Burke, the said proposed ordinance transmitted

with the foregoing committee report was Passed by yeas and nays as follows:

Yeas — Aldermen Granato, Haithcock, Tillman, Preckwinkle, Holt, Steele,

Beavers, Dixon, Shaw, Buchanan, Huels, Frias, Olivo, Coleman, Peterson,

Murphy, Rugai, Troutman, Evans, Munoz, Zalewski, Chandler, Solis, Ocasio,

Burnett, E. Smith, Burrell, Wojcik, Suarez, Gabinski, Mell, B a n k s , Giles,

Allen, Laurino, Doherty, Natarus, Hansen, Levar, Shiller, Schulter, M. Smith,

Moore, Stone - 44.



Nays - None.

Alderman Beavers moved to reconsider the foregoing vote. The motion was

lost.

48776 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







Alderman Burke was excused from voting under the provisions of Rule 14 of

the City Council's Rules of Order and Procedure.



The following is said ordinance as passed:





W H E R E A S , By v i r t u e of Section 6(a) of Article VII of t h e 1970

Constitution of the State of Illinois, the City of Chicago (the "City") is a

home rule unit of local government and as such may exercise any power and

perform any function pertaining to its government and affairs; and



WHEREAS, P u r s u a n t to an ordinance adopted by the City Council (the

"City Council") ofthe City on J u n e 20,1984 and published at pages 7573 and

7681 - 7714 ofthe Journal of Proceedings ofthe City Council (the "Journal")

of such date, a certain redevelopment plan and project (the "North Loop

Redevelopment Plan") for the North Loop Tax Increment Redevelopment

Project Area (the "North Loop Redevelopment Project Area") was approved

pursuant to the Illinois Tax Increment Allocation Redevelopment Act, as

amended (65 ILCS 5/11-74.4-1, et seq.) (the "Act"); and



WHEREAS, P u r s u a n t to an ordinance adopted by the City Council on

June 20, 1984 and published at pages 7715 and 7716 ofthe Journal of such

date, the North Loop Redevelopment Project Area was designated as a

redevelopment project area pursuant to the Act; and



WHEREAS, P u r s u a n t to an ordinance adopted by the City Council on

J u n e 21, 1984 and published at pages 7715, 7717 and 7718 ofthe Journal of

such date, tax increment allocation financing ("Tax Increment Allocation

Financing") was adopted pursuant to the Act as a means of financing certain

Redevelopment Project Costs (as defined in the Act) incurred pursuant to the

North Loop Redevelopment Plan; and



WHEREAS, Pursuant to an ordinance adopted by the City Council on

N o v e m b e r 24, 1986, t h e City i s s u e d F i f t y - e i g h t M i l l i o n D o l l a r s

($58,000,000) aggregate principal amount of its North Loop Tax Increment

Bonds, Series 1986 (the "Series 1986 Bonds"), for the purpose of paying such

Redevelopment Project Costs, which Series 1986 Bonds have been paid and

retired; and



WHEREAS, Pursuant to an ordinance adopted by the City Council on

February 7,1997, and published at pages 38400, 38403 - 38412 and 38413 -

38414 of t h e J o u r n a l of such d a t e , t h e City, in order to e n c o u r a g e

redevelopment of areas located adjacent to the North Loop Redevelopment

Project A r e a , h a s e x p a n d e d t h e b o u n d a r i e s of t h e N o r t h Loop

Redevelopment Project Area and has designated the additional a r e a s

described in Section 2 of such ordinance (the "Added Project Area") as a

redevelopment project area under the Act, thereby creating an expanded

redevelopment project area designated the "Central Loop Redevelopment

Project Area"; and

7/30/97 REPORTS OF COMMITTEES 48777







WHEREAS, P u r s u a n t to an ordinance adopted by the City Council on

February 7,1997, and published at pages 38260 - 38400 and 38401 - 38402

of the Journal of such date, the City has adopted the Central Loop Tax

Increment Financing Redevelopment Project and Plan (the "Central Loop

Redevelopment Plan"), amending the North Loop Redevelopment Plan and

adopting a redevelopment plan and project for the Added Project Area; and



WHEREAS, P u r s u a n t to an ordinance adopted by the City Council on

February 7,1997, and published at pages 38412, 38415 - 38423 and 38424 -

38425 ofthe Journal of such date, the City has implemented Tax Increment

Allocation Financing for the Added Project Area; and



WHEREAS, The City Council of Chicago has determined t h a t it is

necessary and in the best interest of the City that the City issue its Tax

Increment Allocation Bonds (Central Loop Redevelopment Project), Series

1997 (the "Series 1997 Bonds") for the purpose of (i) paying Redevelopment

Project Costs incurred pursuant to the Central Loop Redevelopment Plan

("Project Costs"), (ii) paying a portion ofthe interest accruing on the Series

1997 Bonds, (iii) paying certain expenses incurred in connection with the

issuance of Series 1997 Bonds, (iv) paying necessary premiums and fees in

connection with any Bond Insurance Policy, Debt Reserve Credit Instrument

or Credit Facility (each hereinafter defined), if any, pertaining to the Series

1997 Bonds, and (v) providing the required deposit in the Reserve and

Redemption Account (as defined in the Indenture); now, therefore,



Be It Ordained by the City Council of the City of Chicago:



SECTION 1. Incorporation Of Recitals. This City Council, after a public

meeting heretofore held on this ordinance by the Committee on Finance of

the City Council, pursuant to proper notice having been given thereof, and

in accordance with the findings and recommendations of such Committee,

hereby incorporates the recitals contained in the preambles to this ordinance

into this ordinance by this reference.

SECTION 2. Findings And Determinations. This City Council hereby

finds and determines as follows:



(a) that the Project Costs to be financed by the City involve numerous

expenditures over an extended period of time;



(b) that the City's ability to issue Series 1997 Bonds from time to time

without further action by this City Council at various times, in various

principal amounts and with various interest rates, maturities, redemption

provisions and other terms will enhance the City's opportunities to obtain

financing for such Project Costs upon the most favorable terms available;

and



(c) t h a t the delegations of a u t h o r i t y t h a t are c o n t a i n e d in t h i s

ordinance, including the authority to make the specific determinations

48778 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







described herein, are necessary and desirable because this City Council

cannot itself as advantageously, expeditiously or conveniently exercise

such authority and make such specific determinations. Thus, authority is

granted to the Mayor or the Chief Financial Officer to determine to sell

one (1) or more series of Series 1997 Bonds and on such terms as and to the

extent such officers determine that such sale or sales is desirable and in

the best financial interest ofthe City.



SECTION 3. Authorization Of Series 1997 Bonds. The Series 1997

Bonds are hereby authorized to be issued in the aggregate original principal

a m o u n t of not to exceed One H u n d r e d Ninety-five Million D o l l a r s

($195,000,000) plus an amount equal to the amount of any original issue

discount used in the marketing of the Series 1997 Bonds (not to exceed ten

percent (10%) of the original principal amount thereof) for the purposes

aforesaid; and the Series 1997 Bonds may be issued from time to time in said

aggregate original principal amount, or such lesser aggregate original

principal amount, as may be determined by the Chief Financial Officer of

the City appointed by the Mayor or, if there is no such officer then holding

said office, the City Comptroller (such officer being referred to herein as the

"Chief Financial Officer").



The Series 1997 Bonds shall be issued and secured pursuant to the terms

of a Trust Indenture (the "Indenture") to be entered into between the City

and a trustee having its principal corporate trust office located within the

City as shall be selected by the Chief Financial Officer (the "Trustee"), as

supplemented by one (1) or more supplemental indentures setting forth the

terms and provisions of each series of S e r i e s 1997 Bonds (each a

"Supplemental Indenture"). The Mayor or the Chief Financial Officer are

each hereby authorized to execute and deliver the Indenture on behalf of the

City, such Indenture to be in substantially the form attached hereto as

Exhibit A and made a part hereof and hereby approved with such changes

therein as shall be approved by the Mayor or Chief Financial Officer

executing the same, with such execution to constitute conclusive evidence of

their approval and this City Council's approval of any changes or revisions

therein from the form of Indenture attached hereto. The Mayor or the Chief

Financial Officer are each hereby also authorized to execute and deliver one

(1) or more Supplemental Indentures on behalf of the City setting forth the

terms and provision of each series of Series 1997 Bonds consistent with the

provisions of t h i s ordinance, such S u p p l e m e n t a l I n d e n t u r e to be in

substantially the form attached hereto as Exhibit B and made a part hereof

and hereby approved with such changes therein as shall be approved by the

Mayor or Chief Financial Officer executing the same, with such execution to

constitute conclusive evidence of their approval and this City Council's

approval of any changes or revisions therein from the form of Supplemental

Indenture attached hereto.



All capitalized terms used in this ordinance without definition shall have

the meanings assigned to such terms in the Indenture or Supplemental

7/30/97 REPORTS OF COMMITTEES 48779







Indenture, as the case may be. , For purposes of this ordinance the term

"principal o f when used in reference to the Series 1997 Bonds shall mean

and include the purchase price payable to the holder of any Series 1997 Bond

that has been tendered, or has been deemed to have been tendered, for

p u r c h a s e p u r s u a n t to t h e t e r m s of t h e I n d e n t u r e a n d t h e r e l a t e d

Supplemental Indenture. The Mayor or the Chief Financial Officer are each

hereby authorized to act as an Authorized Officer for the purposes provided

in the Indenture and any Supplemental Indenture.



SECTION 4. Security for the Series 1997 Bonds. The Series 1997 Bonds

shall be limited obligations of the City, payable solely from P l e d g e d

Revenues, including the Incremental Taxes, as provided in the Indenture.

In order to secure the payment of the principal of, premium, if any, and

interest on the Series 1997 Bonds and such additional bonds as m a y be

issued on a parity therewith in the future, such Pledged Revenues, including

the Incremental Taxes, are hereby pledged to the extent and for the purposes

as provided in the Indenture and each Supplemental Indenture and are

hereby appropriated for the purposes set forth in the Indenture and each

Supplemental Indenture. Nothing contained in this ordinance shall limit or

restrict the subordination of the pledge of Pledged Revenues, including the

Incremental Taxes, as set forth in the Indenture and each Supplemental

Indenture as executed and delivered by the City, to the payment of any other

obligations ofthe City enjoying a lien or claim on such Pledged Revenues as

ofthe date of issuance ofthe initial series of Series 1997 Bonds, all as shall

be determined by the Chief Financial Officer at the time of the sale of the

initial series of Series 1997 Bonds. The Indenture shall set forth such

covenants with respect to the collection and application of the Pledged

Revenues, including the Incremental Taxes, as shall be deemed necessary by

the Chief Financial Officer in connection with the sale of the Series 1997

Bonds.



SECTION 5. Terms And Provisions Of Series 1997 Bonds. The Series

1997 Bonds may be issued in one (1) or more series and may be issued as

Current Interest Bonds, Capital Appreciation Bonds, Capital Appreciation

and Income Bonds or Tender Option Bonds (which may consist of Variable

Rate Bonds) (as each such term is defined in the Indenture), as shall be

determined by the Chief Financial Officer at the time of sale of the Series

1997 Bonds, subject to the limitations contained in this ordinance. Each

Supplemental Indenture shall set forth the terms and provisions of the

related series of Series 1997 Bonds, including provisions r e l a t i n g to the

payment of interest and the registration, transfer and redemption and

mandatory and optional purchase ofthe Series 1997 Bonds (consistent with

the provisions of prior issues of Capital Appreciation Bonds and Capital

Appreciation and Income Bonds of t h e City in the case of C a p i t a l

Appreciation Bonds and Capital Appreciation and Income Bonds a n d

consistent with the provisionsof prior issues ofthe City's General Obligation

Tender Notes and Bonds in the case of any Tender Option Bonds).

48780 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97









The principal ofthe Series 1997 Bonds shall become due and payable on or

before J u n e 1, 2007. The Series 1997 Bonds (whether issued as Current

Interest Bonds, Capital Appreciation Bonds, Capital Appreciation and

Income Bonds or Tender Option Bonds) shall bear interest (or in the case of

Capital Appreciation Bonds, have Yields to M a t u r i t y , as h e r e i n a f t e r

defined) not in excess of ten percent (10%) per annum; provided, however,

that in the event one (1) or more series of Series 1997 Bonds are issued as

Variable Rate Bonds, such Bonds may bear interest at an interest rate not in

excess of twelve percent (12%) per annum.



Any Series 1997 Bonds issued as Current Interest Bonds shall be dated

such date as shall be determined by the Chief Financial Officer, shall be

issuable in fully registered form in denominations of Five Thousand Dollars

($5,000) each or any integral multiple thereof and shall be numbered one (1)

and upward. Each Current Interest Bond shall bear interest (computed on

the basis of a three hundred sixty (360) day year of twelve (12) thirty (30)

day months) payable on such dates as shall be determined by the Chief

Financial Officer at the time of sale of such Current Interest Bonds.



Any Series 1997 Bonds issued as Capital Appreciation Bonds shall be

dated the date of issuance thereof and s h a l l also bear t h e d a t e of

authentication, shall be issuable in fully registered form in denominations

equal to Five Thousand Dollars ($5,00(3) principal amount at maturity or

any integral multiple thereof and shall be numbered as determined by the

Trustee. Each Capital Appreciation Bond shall bear interest from its date at

the rate per annum compounded semiannually on such dates as shall be

determined by the Chief Financial Officer at the time of sale of such Capital

Appreciation Bonds, which will produce the yield to maturity identified

therein until the maturity date thereof (the "Yield to Maturity"). Interest on

the Capital Appreciation Bonds shall be payable only at the respective

maturity dates thereof.



While in the form of Capital Appreciation Bonds, any Series 1997 Bonds

issued and sold as Capital Appreciation and Income Bonds shall be subject to

all of the provisions and limitations of this ordinance relating to Capital

Appreciation Bonds and while in the form of Current Interest Bonds, any

Series 1997 Bonds issued and sold as Capital Appreciation and Income

Bonds shall be subject to all of the provisions and limitations of this

ordinance relating to Current Interest Bonds.

Any Bonds issued as Tender Option Bonds shall be dated such date as

shall be determined by the Chief Financial Officer, shall be issuable in fully

registered form in the denominations of One Hundred Thousand Dollars

($100,000) each or any integral multiple thereof and shall be numbered as

determined by the Trustee.



The Series 1997 Bonds may be made subject to redemption prior to

maturity at the option of the City, in whole or in part on any date, at such

7/30/97 REPORTS OF COMMITTEES 48781







times and at such redemption prices (to be expressed as a percentage of the

principal amount of Current Interest Bonds or Tender Option Bonds being

redeemed and expressed as a percentage ofthe Compound Accreted Value of

Capital Appreciation Bonds being redeemed) not to exceed one h u n d r e d

three percent (103%), plus, in the case of Current Interest Bonds and Tender

Option Bonds, accrued interest to the date of redemption, as shall be

determined by the Chief Financial Officer at the time of the sale thereof.

Certain of the Series 1997 Bonds may be made subject to s i n k i n g fund

redemption, at par plus accrued interest to the date fixed for redemption, as

determined by the Chief Financial Officer at the time of the sale thereof;

provided, t h a t no Series 1997 Bond shall mature later than the date set forth

above.

The Series 1997 Bonds may be issued in either certificated or book-entry

only form as determined by the Chief Financial Officer. In connection with

the issuance of Series 1997 Bonds in book-entry only form, the Chief

Financial Officer is authorized to execute and deliver a representation letter

to the book-entry depository selected by the Chief Financial Officer in

substantially the form previously used in connection with obligations issued

by the City in book-entry form.



The Series 1997 Bonds shall be executed by the officers of the City and

prepared in the form as provided in the applicable Supplemental Indenture,

with such revisions as shall be appropriate in the case of Series 1997 Bonds

issued as Capital Appreciation Bonds, Capital Appreciation and Income

Bonds and Tender Option Bonds. If the Series 1997 Bonds are not issued in

calendar year 1997, the series designation of such bonds shall be revised

accordingly.



The Series 1997 Bonds of any series may be issued as bonds the interest on

which is exempt from gross income for federal income tax purposes or, if so

determined by the Chief Financial Officer at the time ofthe sale thereof, as

bonds the interest on which is not exempt from gross income for federal

income tax purposes.



SECTION 6. S a l e a n d D e l i v e r y of Series 1997 Bonds. The Series 1997

Bonds shall be sold and delivered to an underwriter or group of underwriters

to be selected by the Chief Financial Officer (the "Underwriters"), subject to

the terms and conditions of a contract of purchase related thereto; provided,

that the aggregate purchase price ofthe Series 1997 Bonds shall be not less

than ninety-seven percent (97%) ofthe original principal amount thereof to

be issued (less any original issue discount used in the marketing thereof not

to exceed ten percent (10%) of the original principal amount of the Series

1997 Bonds) plus accrued interest from their date to the date of delivery

thereof. The Mayor and the Chief Financial Officer are each hereby

authorized to execute on behalf of the City, with the concurrence of the

Chairman ofthe Committee on Finance ofthe City Council, one (1) or more

contracts of purchase in substantially the form previously used for tax

increment allocation financings of the City with appropriate revisions to

48782 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







reflect the terms and provisions of the Series 1997 Bonds and such other

revisions in text as the Chief Financial Officer shall determine are necessary

or desirable in connection with the sale of Series 1997 Bonds.



SECTION 7. Bond Insurance Policy; Debt Reserve Credit Instrument.

In connection with the sale of any Series 1997 Bonds, the Chief Financial

Officer is hereby authorized to obtain (i) a Bond Insurarice Policy from such

Bond Insurer and (ii) a surety bond, an insurance policy, a letter of credit or

other credit facility assuring the availability of cash to fund any applicable

debt service reserve requirement (a "Debt Reserve Credit Instrument") from

such provider as the Chief Financial Officer shall determine, if said Chief

Financial Officer determines such Bond Insurance Policy or Debt Reserve

Credit Instrument to be desirable in connection with such sale of such Series

1997 Bonds. The Chief Financial Officer is also authorized to enter into such

agreements and make such covenants with any Bond Insurer or provider of a

Debt Reserve Credit Instrument that said Chief Financial Officer deems

necessary; provided, however, t h a t any a g r e e m e n t to r e i m b u r s e such

provider shall be payable solely and only from the sources pledged to the

payment ofthe Series 1997 Bonds as described in Section 4 ofthis ordinance.



SECTION 8. Credit Facility. In connection with the sale of any Series

1997 Bonds, the Mayor or the Chief Financial Officer is hereby authorized to

obtain a letter of credit, line of credit or similar credit facility (each herein

called a "Credit Facility") with one (1) or more financial institutions. The

Mayor or the Chief Financial Officer is hereby authorized to enter into,

execute and deliver on behalf of the City a reimbursement agreement (and

related promissory note) in connection with the provision of such Credit

Facility. Any Credit Facility and any reimbursement a g r e e m e n t (and

related promissory note) shall be in substantially the form of the credit

facilities and reimbursement agreements (and related promissory notes)

previously entered into by the (5ity in connection with the sale of revenue

obligations of the City, but with such revisions in text as the Mayor or the

Chief Financial Officer shall determine are necessary or desirable, the

execution thereof by the Mayor or the Chief Financial Officer to evidence

this City Council's approval ofall such revisions. The annual fee paid to any

financial institution that provides a Credit Facility shall not exceed one

percent (1%) of the average principal amount of such Series 1997 Bonds

o u t s t a n d i n g during such a n n u a l period. The final form of any such

reimbursement agreement (and related promissory note) entered into by the

City with respect to the Series 1997 Bonds s h a l l be a t t a c h e d to t h e

notification of sale filed with the City Clerk pursuant to Section 9 hereof.

The reimbursement obligations of the City under any such reimbursement

agreement (and related promissory note) shall be payable solely and only

from the sources pledged to the payment of the Series 1997 Bonds as

described in Section 4 ofthis ordinance and shall bear interest at a rate not

exceeding fifteen percent (15%) per annum.



SECTION 9. Notification Of Sale. Subsequent to the sale of any Series

1997 Bonds, the Chief Financial Officer shall file in the Office of the City

7/30/97 REPORTS OF COMMITTEES 48783







Clerk a notification of sale directed to the City Council setting forth (i) the

aggregate original principal amount of, maturity schedule and redemption

provisions for the Series 1997 Bonds sold, (ii) the indemnity ofthe Trustee,

(iii) the principal amounts ofthe Series 1997 Bond sold as Current Interest

Bonds, Capital Appreciation Bonds, Capital Appreciation and Income Bonds

and Tender Option Bonds, respectively, (iv) in the case of Series 1997 Bonds

sold as Capital Appreciation Bonds, (A) the original principal amounts of

and Yields to Maturity on the Capital Appreciation Bonds being sold and (B)

a table of Compound Accreted Values per Five Thousand Dollars ($5,000)

Compound Accreted Value at maturity for any Capital Appreciation Bonds

being sold, setting forth the Compound Accreted Value of each such Capital

Appreciation Bond on each semiannual compounding date, (v) the interest

rates on the Current Interest Bonds and Tender Option Bonds sold, (vi) the

identity of the Borid Insurer issuing the Bond Insurance Policy, if any, the

identity of the provider of the Debt Reserve Credit Facility, if any, and the

identity of the provider of a Credit Facility, if any, (vii) the identity of the

Underwriters selected by the Chief Financial Officer, (viii) the compensation

paid to the Underwriters in connection with such sale, (ix) the identity of

any Swap Provider with which the City has entered into a Qualified Swap

Agreenient relating to 1997 Bonds pursuant to Section 13 hereof, and (x) the

identity of any Remarketing Agent selected by the City pursuant to Section

14 hereof There shall be attached to each such notification final forms ofthe

Indenture, each Supplemental Indenture, any Reimbursement Agreement

(and related promissory note) referred to in Section 8 hereof, any Qualified

Swap Agreement referred to in Section 13 hereof and any R e m a r k e t i n g

Agreement referred to in Section 14 hereof.



SECTION 10. Disclosure Documents. In connection with any sale of the.

Series 1997 Bonds, the Mayor and the Chief Financial Officer are each

hereby authorized to execute and deliver, and the Underwriters are hereby

authorized to use and distribute, such disclosure documents as they shall

deem appropriate on behalf of the City, which disclosure documents shall be

in substantially the form previously used for prior tax increment allocation

financings ofthe City, with such revisions as shall be necessary to reflect the

terms and provisions of the Series 1997 Bonds determined by the Chief

Financial Officer as provided herein and to describe completely a n d

accurately the Pledged Revenues, including the Incremental Taxes, and any

of such actions heretofore t a k e n with respect to any such disclosure

document are hereby ratified, approved and confirmed.



SECTION 11. Continuing Disclosure Undertaking. The Chief Financial

Officer is hereby authorized to execute and deliver a Continuing Disclosure

Undertaking (the "Continuing Disclosure Undertaking") evidencing the

City's agreerneat to comply with the provisions of Section (b)(5) of Rule

15(c)2-1.2, adopLcd by the Securities and Exchange Commission under the

Securities .E:
Counsel. l..ipori its execution and delivery on behalf of the City as herein

pro"ided, ll :• Continuing Disclosure Undertaking will be binding vn the

City, and l.' o o.fricers, employees and a g e n t s of the City are hereby

48784 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







authorized 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 U n d e r t a k i n g as executed. The Chief Financial

Officer is hereby further authorized to amend the Continuing Disclosure

Undertaking in accordance with its terms from time to time following its

e x e c u t i o n a n d d e l i v e r y a s s a i d officer s h a l l d e e m n e c e s s a r y .

Notwithstanding any other provision of this ordinance, the sole remedy for

any failure by the City to comply with t h e C o n t i n u i n g D i s c l o s u r e

Undertaking shall be the ability of the beneficial owner of any Series 1997

Bond to seek mandamus or specific performance by court order to cause the

City to comply with its obligations under t h e C o n t i n u i n g Disclosure

Undertaking.



SECTION 12. Use Of Proceeds Of Series 1997 Bonds. The proceeds from

the sale of any of the Series 1997 Bonds shall be applied to (i) pay, or

reimburse the City for the payment of, the Project Costs described in P a r t C

ofthe Central Loop Redevelopment Plan (as such plan may be amended from

time to time), (ii) pay a portion of the interest accruing on the Series 1997

Bonds, (iii) pay certain expenses incurred in connection with the issuance of

the Series 1997 Bonds, (iv) pay necessary premiums and fees for any Bond

Insurance Policy, Debt Reserve Credit I n s t r u m e n t or Credit F a c i l i t y

pertaining to the Series 1997 Bonds, and (v) provide any required deposit in

the Reserve and Redemption Account, all as shall be set forth in the

Indenture or any Supplemental Indenture, and such proceeds are hereby

appropriated for said purposes.

SECTION 13. Qualified Swap Agreements. The Mayor and the Chief

Financial Officer are each hereby authorized to execute and deliver from

time to time one (1) or more Qualified Swap Agreements (as defined in the

Indenture) with Swap Providers (as defined in the Indenture) selected by the

Chief Financial Officer. The stated aggregate notional amount under all

Qualified Swap Agreements authorized h e r e u n d e r shall not exceed the

original principal amount ofthe Series 1997 Bonds issued hereunder (net of

offsetting transactions entered into by the City). Any such agreement to the

extent practicable shall be in substantially the form of either the Local

Currency — Single Jurisdiction version or the Multicurrency — Cross Border

version ofthe 1992 I.S.D.A. Master Agreement accompanied by the United

States Municipal Counterparty Schedule published by the International

Swap Dealers Association (the "I.S.D.A.") or any successor form to either

published by the I.S.D.A., a n d in the a p p r o p r i a t e confirmations of

transactions governed by that agreement, with such insertions, completions

and modifications thereof as shall be approved by the officer of the City

executing the same, his or her execution to constitute conclusive evidence of

t h i s City C o u n c i l ' s a p p r o v a l of such i n s e r t i o n s , c o m p l e t i o n s a n d

modifications thereof. Amounts payable by the City under any such

Qualified Swap Agreement shall be payable solely and only from the sources

actually pledged to the payment of the Series 1997 Bonds as described in

7/30/97 REPORTS OF COMMITTEES 48785





Section 4 ofthis ordinance. Nothing contained in this Section 13 shall limit

or restrict the authority ofthe Mayor or the Chief Financial Officer to enter

into Qualified Swap A g r e e m e n t s p u r s u a n t to p r i o r or s u b s e q u e n t

authorization ofthis City Council.



SECTION 14. Remarketing Agent; Remarketing Agreement. The Chief

Financial Officer is hereby authorized to designate a Remarketing Agent to

serve as Remarketing Agent for purposes of any series of Series 1997 Bonds.

The Mayor or the Chief Financial Officer are each hereby authorized to

execute and deliver one (1) or more Remarketing Agreements in connection

with any series of Series 1997 Bonds. Any Remarketing Agreement shall be

in substantially the form ofthe remarketing agreements previously entered

into by the City in connection with revenue obligations ofthe City, but with

such revisions in text as the Mayor or the Chief Financial Officer shall

determine are necessary or appropriate, the execution thereof by the Mayor

or Chief Financial Officer to evidence this City Council's approval ofall such

revisions.



SECTION 15. Transition Provisions. Effective as of the date of issuance

ofthe initial series of Series 1997 Bonds (a) any funds on hand in the Special

Tax Allocation Fund for the North Loop Redevelopment Project Area (and

any accounts therein) shall be transferred as may be directed by the Chief

Financial Officer consistent with the Central Loop Redevelopment Plan, (b)

on and after such date the Incremental Taxes Fund created by the City

pursuant to Section 502 of the Indenture shall constitute the "Special Tax

Allocation F u n d " for the Central Loop Redevelopment Project Area in

accordance with the Act, and (c) as soon as practicable the Special Tax

Allocation Fund for the North Loop Redevelopment Project Area shall be

eliminated except as may be necessary for City accounting purposes.



SECTION 16. Sale Of Escrow Securities. Nothing in this ordinance

shall prohibit any defeasance deposit made pursuant to the Indenture with

respect to the Series 1997 Bonds from being subject to a subsequent sale of

such escrow securities and reinvestment of all or a portion of the proceeds of

that sale in escrow securities which, together with money to remain so held

in trust, shall be sufficient to provide for payment of principal, redemption

premium, if any, and interest on any of the defeased Series 1997 Bonds.

Amounts held by an Escrow Agent or the Trustee in excess of the amounts

needed so to provide for payment of the defeased Series 1997 Bonds may be

subject to withdrawal by the City. The Mayor or the Chief Financial Officer

is hereby authorized to execute and deliver from time to time one (1) or more

agreements with counterparties selected by the Chief Financial Officer, with

respect to the investment and use of such excess amounts held by an Escrow

Agent or the Trustee.



SECTION 17. Additional Authorization. The Mayor, the Chief

Financial Officer, the City Treasurer, the City Clerk and the Deputy City

48786 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







Clerk are each hereby authorized to execute and deliver such other

documents and agreements and perform such other acts as may be necessary

or desirable in connection with the Series 1997 Bonds, including, but not

limited to, the exercise following the delivery date of the Series 1997 Bonds

of any power or authority delegated to such official under this ordinance

with respect to the Series 1997 Bonds upon original issuance, but subject to

any limitations on or restrictions of such power or authority as herein set

forth.



SECTION 18. Proxies. The Mayor and the Chief Financial Officer may

each designate another to act as their respective proxy and to affix their

respective signatures to each Series 1997 Bond, whether in temporary or

definitive form, and to any other instrument, certificate or d o c u m e n t

required to be signed by the Mayor or the Chief Financial Officer pursuant

to this ordinance, the Indenture or any Supplemental Indenture. In each

case, each shall send to the City Council written notice of the person so

designated by each, such notice stating the name of the person so selected

and identifying the instruments, certificates and documents which such

person shall be authorized to sign as proxy for the Mayor and the Chief

Financial Officer, respectively. A written signature of the Mayor or the

Chief Financial Officer, respectively, executed by the person so designated

underneath, shall be attached to each notice. Each notice, with signatures

attached, shall be recorded in the Journal of the Proceedings of the City

Council and filed with the City Clerk. When the signature of the Mayor is

placed on an instrument, certificate or document at the direction of the

Mayor in the specified manner, the same, in all respects, shall be as binding

on the City as if signed by the Mayor in person. When the signature of the

Chief Financial (Officer is so affixed to an i n s t r u m e n t , certificate or

document at the direction of the Chief Financial Officer, the same, in all

respects, shall be binding on the City as if signed by the Chief Financial

Officer in person.



SECTION 19. Separability. If any provision of this ordinance shall be

held to be invalid or unenforceable for any reason, t h e i n v a l i d i t y or

unenforceability of such provision shall not affect any of the r e m a i n i n g

provisions ofthis ordinance.



SECTION 20. Inconsistent Provisions. All ordinances, resolutions,

motions or orders in conflict with this ordinance are hereby repealed to the

extent of such conflict.

SECTION 21. Effective Date. This ordinance shall be in full force and

effect immediately upon its passage.





Exhibits "A" and "B" referred to in this ordinance read as follows:

7/30/97 REPORTS OF COMMITTEES 48787







Exhibit "A".







City Of Chicago







To









As Trustee









Trust Indenture





Dated As Of ,1997.









Securing City Of Chicago



Tax Increment Allocation Bonds



(Central Loop Redevelopment Project).







This Trust Indenture dated as of , 1997 (the "Indenture"), by

and between the City of Chicago, a municipal corporatiori and home rule

unit of local government organized and existing under the laws ofthe State

of Illinois and located in Cook and DuPage Counties, Illinois (the "City"),

and , a national banking association duly

organized, existing and authorized to accept and execute trusts of the

character herein set out under and by virtue ofthe laws ofthe United States

of America, with its principal corporate trust office located in Chicago,

Illinois, as trustee (said association, and any successor or successors as

trustee hereunder, being herein referred to as the "Trustee").

48788 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







Witnesseth:





W h e r e a s , By v i r t u e of Section 6(a) of Article VII of t h e I l l i n o i s

Constitution of 1970 and pursuant to an ordinance duly adopted by the City

Council ofthe City (the "City Council") on July _ , 1997 (the "Ordinance"),

the City is authorized to enter into this Indenture and to do or cause to be

done all the acts and things herein provided or required to be done; and



Whereas, P u r s u a n t to the Ordinance, the City has duly authorized the

issuance of its $ aggregate principal amount of Tax Increment

Allocation Bonds (Central Loop Redevelopment Project) Series 1997 (the

"Bonds") for the purpose of financing Project Costs (as defined in this

Indenture) and paying costs related to the issuance of the Bonds and has

appointed to act as Trustee under this Indenture; and

Whereas, All things necessary to make the Bonds, when authenticated by

the Trustee and issued as in this Indenture provided, the valid, binding and.

legal obligations of the City according to the import thereof, a n d to

constitute this Indenture a valid pledge of and grant of a lien on the Pledged

Revenues (as hereinafter defined) to secure the payment of the principal of,

premium, if any, and interest on the Bonds (as hereinafter defined) have

been done and performed, in due form and time, as required by law; and



Whereas, The execution and delivery ofthe Bonds and this Indenture have

in all respects been duly authorized and all things necessary to make such

Bonds, when executed by the City and authenticated by the Trustee, the

valid and binding limited obligations ofthe City and to make this Indenture

a valid and binding agreement, have been done;



Granting Clauses.





Now, Therefore, This Trust Indenture Witnesseth:



That in order to secure the payment ofthe principal of, premium, if any,

and interest on all Bonds issued and to be issued hereunder, according to

the import thereof, and to secure further the payment of the principal of,

premium, if any, and interest on the Junior Lien Obligations to the extent

provided herein, and the performance and observance of each and every

covenant and condition herein and in the Bonds contained, and for and in

consideration of the premises and of the acceptance by the Trustee of the

trusts hereby created, and ofthe purchase and acceptance ofthe Bonds by

the respective Owners (as hereinafter defined) thereof, and for other good

and v a l u a b l e c o n s i d e r a t i o n , t h e sufficiency of which is h e r e b y

acknowledged, and for the purpose of fixing and declaring the terms and

conditions upon which the Bonds shall be issued, authenticated, delivered,

secured and accepted by all persons who shall from time to time be or

7/30/97 REPORTS OF COMMITTEES 48789







become owners thereof, the City does hereby pledge and grant a lien upon

the following, Trust Estate to the Trustee and its successors in trust and

assigns, to the extent provided in this Indenture:



(a) The Pledged Revenues.



(b) All monies and securities and earnings thereon in all Funds,

Accounts and Sub-Accounts (except the Rebate Account) established

pursuant to this Indenture; provided, however, t h a t any Sub-Account

established within the Reserve and Redemption Account for any Series of

Bonds pursuant to a Supplemental Indenture shall only secure and be

pledged to the payment of such Series of Bonds unless otherwise provided

in this Supplemental Indenture.



(c) Any and all monies, securities and property furnished from time to

time to the Trustee by the City or on behalf of the City or by any other

persons to be held by the Trustee under the terms ofthis Indenture.





But In Trust Nevertheless, for the equal and proportionate benefit and

security of the Bonds issued and to be issued hereunder and secured by this

Indenture, including any Bonds hereafter issued, without preference,

priority or distinction as to participation in the lien, benefit and protection

hereof of any one (1) Bond over any other or from the others by reason of

priority in the issue or negotiation thereof or by reason ofthe date or dates of

maturity thereof, or for any other reason whatsoever (except as expressly

provided in this Indenture), so that each and all of such Bonds shall have the

same right, lien and privilege under this Indenture and shall be equally

secured hereby, with the same effect as if the same had all been made,

issued and negotiated upon the delivery hereof (all except as expressly

provided in this Indenture, as aforesaid).



And In Trust F u r t h e r , for the benefit and security of J u n i o r Lien

Obligations to t h e e x t e n t provided herein and in t h e S u p p l e m e n t a l

I n d e n t u r e s executed and delivered from time to time a u t h o r i z i n g the

issuance of Junior Lien Obligations.



Provided, However, that these presents are upon the condition that, if the

City, or its successors, shall well and truly pay or cause to be paid, or provide

for the payment ofall principal, premium, if any, and interest on the Bonds

due or to become due thereon, at the times and in the manner stipulated

therein and herein, then this Indenture and the rights hereby granted shall

cease, terminate and be void, but shall otherwise be and remain in full force.



And It Is Hereby Covenanted And Agreed by and among the City, the

Trustee and the Owners from time to time of the Bonds, that the terms and

conditions upon which the Bonds are to be issued, authenticated, delivered,

secured and accepted by all persons who shall from time to time be or become

the Owners thereof, and the trusts and conditions upon which the monies

48790 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







and securities hereby pledged are to be held and disposed of, which trusts

and conditions the Trustee hereby accepts, are as follows:





Article I.



Definitions And Interpretation.





Section 101. Definitions.

The following terms shall, for all purposes of this Indenture and of any

indenture amendatory or supplemental hereto, have the following meanings

unless a different meaning clearly appears from the context:



"Accreted Amount" means, with respect to any capital appreciation

bonds, the amount set forth in the supplemental indenture authorizing

such bonds as the amount representing the initial public offering price

thereof, plus the amount of interest that has accreted on such bonds,

compounded periodically, to the date of calculation, d e t e r m i n e d by

reference to accretion tables contained in each such bond or contained or

referred to in any supplemental indenture authorizing the issuance of

such bonds. The accreted amounts for such bonds as of any date not stated

in such tables shall be calculated by adding to the accreted amount for

such bonds as ofthe date stated in such tables immediately preceding the

date of computation a portion of the difference between the accreted

amount for such preceding date and the accreted amount for such bonds as

of the date shown on such tables immediately succeeding the date of

calculation, apportioned on the assumption that interest accretes during

any period in equal daily amounts on the basis of a three hundred sixty

(360) day year consisting of twelve (12) thirty (30) day months.



"Act" means the Tax Increment Allocation Redevelopment Act of the

State oflllinois, Division 74.4 of Article 11 ofthe Illinois Municipal Code,

65 ILCS 5/11-74.4-1, et seq., as amended and supplemented from time to

time.

"Added Project Area " shall have the meaning assigned to such term in

the ordinance.

"Aggregate Certified Initial Equalized Assessed V a l u e " means the

aggregate ofthe certified initial equalized assessed value of each piece of

property in the original project area and in areas encompassing the Added

Project Area.



"Annual Debt Service Requirement" means, with respect to any bond

year, the aggregate of the i n t e r e s t r e q u i r e m e n t and the principal

requirement for such bond year.

7/30/97 REPORTS OF COMMITTEES 48791







"Authorized Denominations" m e a n s as to any series of bonds such

denominations as may be specified in the s u p p l e m e n t a l i n d e n t u r e

authorizing the issuance thereof.



"Authorized Officer" means the mayor, the chief financial officer or any

other officer or employee ofthe city authorized to perform specific acts or

duties hereunder by ordinance or resolution duly adopted by the city

council.



"Average Annual Debt Service Requirement" means, as of any date of

calculation, t h e m a t h e m a t i c a l m e a n of t h e A n n u a l D e b t S e r v i c e

Requirements for all outstanding bonds.

"Bond" or "Bonds" means any bond or bonds, including any refunding

bonds, authenticated and delivered under and pursuant to Article II ofthis

indenture, other than junior lien obligations.



"Bond I n s u r a n c e Policy" m e a n s any m u n i c i p a l bond n e w i s s u e

insurance policy insuring and guaranteeing the payment of the principal

of and interest on a series of bonds or certain maturities thereof as may be

provided in the supplemental indenture authorizing such series.



"Bond Insurer" means any person authorized under law to issue a Bond

Insurance Policy.

"Bond Year" means each twelve (12) month period commencing on

of each calendar year and ending on of t h e n e x t

succeeding calendar year.

"Business Day" means any day which is not a Saturday, a Sunday, a

legal holiday or a day on which banking institutioris in the city where the

principal corporate trust office of any fiduciary is located are authorized by

law or executive order to close (and such fiduciary is in fact closed).



"Capital Appreciation and Income Bond" means any Bond as to which

accruing interest is not paid prior to the interest commencement date

specified therefor and is compounded periodically on certain designated

dates prior to the interest commencement date specified therefor, all as

provided in the supplemental indenture authorizing the issuance of such

capital appreciation and income bond.



"Capital Appreciation Bond" means any Bond the interest on which (i)

shall be compounded periodically on certain designated dates, (ii) shall be

payable only at maturity or redemption prior to maturity and (iii) shall be

determined by subtracting from the Accreted Amount the initial public

offering price thereof, all as provided in the supplemental i n d e n t u r e

authorizing the issuance of such capital appreciation bond. The term

"Capital Appreciation Bond" as used throughout this indenture also

48792 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97









includes any Capital Appreciation and Income Bond prior to the interest

commencement date specified therefor.



"Central Loop Redevelopment Plan" shall have the meaning assigned to

such term in the ordinance.

"Central Loop Redevelopment Project Area" shall have the m e a n i n g

assigned to such terrri in the Central Loop Redevelopment Plan!



"Certified Initial Equalized Assessed Value" means (i) with respect to

the original project area, in the aggregate, $ , (ii) with respect to

the Added Project Area, in the aggregate, $ and (iii) with respect

to the Central Redevelopment Loop Project Area, the sum of (i) and (ii), in

each case as certified by the Clerk of the County of Cook, Illinois in

accordance with Section 11-74.4-9 ofthe Act.



"Chief Financial Officer" means the chief financial officer of the city

appointed by the mayor of the city or, if there is no such officer then

holding said office, the city comptroller.



"City" means the City ofChicago, a home rule unit of local government.



"City Council" means the governing body of the City as from time to

time constituted.



"Code and Regulations" means the Internal Revenue Code of 1986, as

amended, and the regulations promulgated or proposed pursuant thereto

as the same may be in effect from time to time.

"Counsel's Opinion" means an opinion signed by an attorney or firm of

attorneys of recognized standing in the area of law to which the opinion

relates, who may be counsel to the City (including the Corporation

Counsel or Acting Corporation Counsel ofthe City).



"Credit Bank" means, as to any particular series of bonds, the person

(other than a Bond Insurer) providing a credit facility, as may be provided

in the supplemental indenture authorizing such series.



"Credit Facility" means, as to any particular series of bonds, a letter of

credit, a line of credit, a guaranty, a standby bond purchase agreement or

other credit or liquidity e n h a n c e m e n t facility, other t h a n a Bond

Insurance Policy, as may be provided in the supplemental i n d e n t u r e

authorizing such series.



"Current Funds" means monies which are immediately available in the

hands ofthe payee at the place of payment.

7/30/97 REPORTS OF COMMITTEES 48793







"Current Interest Bond" m e a n s any Bond the interest on which is

p a y a b l e on the i n t e r e s t p a y m e n t d a t e s p r o v i d e d t h e r e f o r in t h e

supplemental indenture authorizing such Bond. The term " c u r r e n t

interest bond" as used throughout this indenture also includes any Capital

Appreciation and Income Bond from and after the interest commencement

date specified therefor.



"Debt Reserve Credit Instrument" means, as to any particular series of

Bonds, a unconditional and irrevocable surety bond, insurance policy,

letter of credit or other credit facility assuring the availability of cash to

fund the debt service reserve requirement applicable to such series of

bonds, as provided in the supplemental indenture authorizing such series.



"Debt Service Reserve Requirement" means, with respect to the Bonds

of any series outstanding at any time, that amount, if any, as shall be

required to be maintained in the applicable sub-account of the reserve and

redemption account e s t a b l i s h e d by the t e r m s of the s u p p l e m e n t a l

indenture authorizing such series of Bonds.



"Defeasance Government Obligations" means government obligations

which are not subject to redemption other than at the option ofthe holder

thereof.



"Defeasance O b l i g a t i o n s " m e a n s (i) D e f e a s a n c e G o v e r n m e n t

Obligations and (ii) obligations of any state or territory of the United

States or any political subdivision thereof which obligations are rated in

the highest rating category by any of the r a t i n g agencies and which

obligations meet the following requirements: (a).the obligations are not

subject to redemption or the trustee therefor has been given irrevocable

instructions by t h e issuer thereof not to call such o b l i g a t i o n s for

redemption; (b) the obligations a r e secured by cash or Defeasance

Government Obligations that may be applied only to interest, principal

and premium payments of such obligations; (c) the principal of and

interest on the Defeasance Government Obligations (plus any cash in the

escrow fund) are sufficient to meet the liabilities ofthe obligations; (d) the

Defeasance G o v e r n m e n t O b l i g a t i o n s serving as security for such

obligations are held by an escrow agent or trustee; and (e) the Defeasance

Government Obligations are not available to satisfy any other claims,

including those against such escrow agent or trustee.



"Depositary" means any bank, national bankirig association or trust

company having capital stock, surplus and retained earnings aggregating

at least One Million Dollars ($1,000,000), selected by an Authorized

Officer as a depositary of monies and securities held under the provisions

ofthis indenture, and may include the trustee.



"Escrow Agent" means with respect to any Bonds refunded after the

date of execution and delivery ofthis indenture, any trust company, bank

or national banking association duly appointed for such purpose.

48794 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







"Event of Default" means any event so designated and specified in

Section 801.



"Fiduciary" or "Fiduciaries" m e a n s the trustee, the registrar, the

paying agents and any Depositary, or any or all of them, as may be

appropriate.



"Fiscal Year" means the period J a n u a r y 1 through December 31 of the

same year.



"Government Obligations" m e a n s (i) any direct obligations of, or

obligations the principal of and interest on which are unconditionally

guaranteed by, the United States of America and (ii) certificates of

ownership of the principal of or interest on obligations of t h e type

described in clause (i) ofthis definition, (a) which obligations are held in

trust by a commercial bank which is a member of the Federal Reserve

System in the capacity of a custodian; (b) the owner of which certificate is

the real party in interest and h a s the right to proceed directly and

individually against the obligor of the underlying obligations; and (c) for

which the underlying obligations are held in safekeeping in a special

account, segregated from the custodian's general assets, and are not

available to satisfy any claim of the custodian, any person claiming

through the custodian, or any person to whom the custodian may be

obligated.



"Incremental Taxes" means the ad valorem taxes, if any, arising from

t h e t a x levies upon t a x a b l e r e a l p r o p e r t y in t h e C e n t r a l Loop

Redevelopment Project Area by any and all taxing districts or municipal

corporation having the power to tax real property in the Central Loop

Redevelopment Project Area, which taxes are attributable to the increase

in the then current equalized assessed valuation of each taxable lot, block,

tract or parcel of real property in the Central Loop Redevelopment Project

Area over and above the Certified Initial Equalized Assessed Value of

each such piece of property.



"Incremental Taxes Fund" m e a n s the Central Loop Redevelopment

Project Area Special Tax Allocation Fund of the City, a special tax

allocation fund for the Central Loop Project Area established pursuant to

Section 11-74.4-8 ofthe Act and created under this indenture p u r s u a n t t o

Section 502.



"Indenture" means this trust indenture, dated as of , 1997,

by and between the City and the trustee, as from time to time amended

and supplemented by supplemental indentures executed and delivered by

the City and the trustee in accordance with Article X hereof.

"Independent" when used with respect to any specified person means

such person who is in fact independent and is not connected with the City

7/30/97 REPORTS OF COMMITTEES 48795





as an officer, employee, underwriter or person performirig a similar

function. Whenever it is provided in this Indenture or any supplemental

indenture that the opinion or report of any independent person shall be

furnished, such person shall be appointed by the (5ity, and such opinion or

report shall state that the signer has read this definition and t h a t the

signer is independent within its meaning.



"Interest Commencement Date" means, with respect to any Capital

Appreciation and Income Bond, the date specified in the supplemental

indenture authorizing the issuance of such Bond (which date must be prior

to the maturity date for such Capital Appreciation and Income Bond) after

which interest accruing on such Capital Appreciation and Income Bond

shall be payable periodically, with the first such payment date being the

applicable interest payment date immediately succeeding such interest

commencement date.



"Interest Payment Date" means any date on which interest on a series of

bonds is payable as established in the supplemental indenture authorizing

such series.



"Interest Period" means the period from the date of the Bonds of any

series to and including the day immediately preceding the first Interest

Payment Date and thereafter shall mean each period from and including

an Interest Payment Date to and including the day immediately preceding

the next Interest Payment Date.

"Interest Requirement" for any Bond Year or any Interest Period, as the

context may require, as applied to Bonds of any series then outstanding,

shall mean the total of the sums that would be deemed to accrue on such

Bonds during such Bond Year or Interest Period if the interest on the

Current Interest Bonds of such series were deemed to accrue daily during

such year or Interest Period in equal amounts, and employing the methods

of calculation set forth (i) in Section 207(a) hereof in the case of a qualified

swap agreement and (ii) in subparagraphs (X) and (Y) of Section 205(b)

hereof in the cases of tender option bonds and variable rate bonds;

provided, however, t h a t interest expense shall be excluded from the

determination of interest requirement to the extent that such interest is to

be paid (a) from the proceeds of Bonds allocable to the payment of such

interest as provided in the supplemental indenture a u t h o r i z i n g t h e

issuance of such Bonds or other available monies or from investment (but

not reinvestment) earnings thereon if such proceeds shall have been

invested in investment securities and to the extent such earnings may be

determined precisely or (b) from investment earnings on deposit in the

reserve and redemption account to the extent any such earnings may be

determined precisely. Unless the City shall otherwise provide in a

supplemental indenture, interest expense on Credit Facilities drawn upon

to purchase but not to retire Bonds, except to the extent such interest

exceeds the interest otherwise payable on such Bonds, shall not be

included in the determination of interest requirement. If interest is not

48796 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







payable at a single numerical rate for the entire term of such Bonds, then

"Interest Requirement" shall have the appropriate m e a n i n g assigned

thereto by the supplemental indenture authorizing such Bonds.



" I n v e s t m e n t S e c u r i t i e s " m e a n s a n y of t h e following s e c u r i t i e s

authorized by law as permitted investments of City funds at the time of

purchase thereof:

(i) Government Obligations;



(ii) bonds, debentures, notes or other evidences of indebtedness issued

by any of the following agencies: Government National Mortgage

Association, Federal National Mortgage Association, Federal Home

Loan Mortgage Corporation, Federal Land Banks, Federal Home Loan

Banks, Federal Intermediate Credit Banks, Banks for Cooperatives,

Tennessee Valley Authority, United States Postal Service, F a r m e r s

Home Administration, Export-Import Bank, Federal Financing Bank,

Resolution F u n d i n g Corporation a n d S t u d e n t Loan M a r k e t i n g

Association;



(iii) investments in a money m a r k e t fund registered under the

Investment Company Act of 1940, as amended (including any such

money market fund sponsored by or affiliated with any Fiduciary),

comprised of any of the investments set forth in subparagraph (i) or

subparagraph (ii) above;



(iv) negotiable or non-negotiable certificates of deposit or time

deposits or other banking a r r a n g e m e n t s issued by any bank, t r u s t

company or national banking association (including any Fiduciary),

which certificates of deposit or t i m e deposits or other b a n k i n g

a r r a n g e m e n t s shall be continuously secured or collateralized by

obligations described in subparagraphs (i), (ii) or (iii) ofthis definition,

which obligations shall have a m a r k e t value (exclusive of accrued

interest) at all times at least equal to the principal amount of such

certificates of deposit or time deposits or other banking arrangements

and shall be lodged with the trustee, as custodian, by the bank, trust

company or national banking association issuing such certificates of

deposit or time deposits or other b a n k i n g a r r a n g e m e n t s , which

certificates of deposit or time deposits or other banking arrangements

acquired or entered into pursuant to this subparagraph (iv) shall be

deemed for purposes of this Indenture, including without limitation

Section 603, to constitute investments and not deposits;



(v) repurchase agreements with any bank, trust company or national

banking association (including any Fiduciary) or government bond

dealer reporting to the Federal Reserve Bank of New York continuously

secured or collateralized by obligations described in subparagraph (i) of

this definition which obligations shall have a market value (exclusive of

accrued interest) at all times at least equal to the amortized value of

7/30/97 REPORTS OF COMMITTEES 48797







such repurchase agreements, provided such security or collateral is

lodged with and held by the trustee or the City as title holder, as the

case m a y b e ;

(vi) public housing bonds issued by public housing authorities or by

other political subdivisions or bodies politic and corporate so authorized,

fully secured as to the payment of both principal and interest by a

pledge of annual contributions under an annual contributions contract

or contracts with the United States of America; and project notes issued

by public housing authorities or by other political subdivisions or bodies

politic and corporate so authorized, fully secured as to the payment of

both principal and interest by a requisition or payment agreement with

the United States of America;



(vii) investment agreements which represent the unconditional

obligation of one (1) or more banks, insurance companies or other

financial institutions, or are guaranteed by a financial institution, in

either case that has an unsecured rating, or which agreement is itself

rated, as ofthe date of execution thereof, in one (1) ofthe two (2) highest

rating categories by each ofthe rating agencies; and



(viii) any other securities authorized for investment of City funds by

Article VI ofChapter 2-32 ofthe Municipal Code ofChicago (1990), as

from time to time amended.





"Junior Lien Obligations" m e a n s any bonds or o t h e r obligations

permitted to be issued pursuant to Section 206 hereof.



"Maximum Annual Debt Service Requirement" means, as of any date of

calculation, the largest Annual Debt Service Requirement occurring in

the then current and all succeeding Bond Years.



"1997 Project Account" means the account within the project fund so

designated and established in Section 503(b) hereof.



"North Loop Redevelopment Plan" shall have the meaning assigned to

such term in the Ordinance.



"Original Project Area" shall have the meaning assigned to such term in

the Central Loop Redevelopment Plan.

"Outstanding", when used with reference to Bonds, means, as of any

date, all Bonds theretofore or t h e r e u p o n being a u t h e n t i c a t e d a n d

delivered under this Indenture except:



(i) any Bonds canceled by the trustee at or prior to such date;

48798 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







(ii) Bonds (or portions of Bonds) for the payment or redemption of

which monies and/or Defeasance Obligations, equal to the principal

amount or redemption price thereof, as the case may be, with interest to

the date of maturity or date fixed for redemption, are held in trust under

this Indenture and set aside for such payment or redemption (whether

at or prior to the maturity or redemption date), provided t h a t if such

Bonds (or portions of Bonds) are to be redeemed, notice of such

redemption shall have been given as in Article IV provided or provision

satisfactory to the trustee shall have been made for the giving of such

notice;

(iii) Bonds in lieu of or in substitution for which other Bonds shall

have been authenticated and delivered pursuant to Article III, Section

406 or Section 1106 hereof;



(iv) Bonds deemed to have been paid as provided in Section 1201(b)

hereof; and

(v) tender option bonds deemed to have been purchased in accordance

with the provisions of the supplemental indenture authorizing their

issuance in lieu of which other Bonds have been authenticated and

delivered under such supplemental indenture.





"Owner" means any person who shall be the registered owner of any

Bond or Bonds.



"Paying Agent" means any bank, national banking association or trust

company designated by an Authorized Officer as paying agent for the

Bonds of any series, and any successor or successors appointed by an

Authorized (Dfficer under this Indenture.



"Payment Date" shall mean any Interest Payment Date or principal

payment date.

" P e r s o n " m e a n s a n d i n c l u d e s an a s s o c i a t i o n , u n i n c o r p o r a t e d

organization, a corporation, a partnership, a limited liability corporation,

a joint venture, a business trust, or a government or an agency or a

political subdivision thereof, or any other public or private entity or a

natural person.



"Pledged Revenues" means Incremental Taxes and any other revenues

from any source whatsoever designated to pay principal of, premium, if

any, or interest on the Bonds, including, without limitation, amounts on

deposit in and pledged to various funds and accounts (other t h a n the

program expenses account and the rebate account) as provided in this

Indenture, together with interest earriings thereon.

7/30/97 REPORTS OF COMMITTEES 48799







"Principal" or "principal" m e a n s (i) with respect to any C a p i t a l

Appreciation Bond, the Accreted Amount thereof (the difference between

the stated amount to be paid at maturity and the Accreted Amount being

deemed unearned interest) except as used in this Indenture in connection

with the authorization and issuance of Bonds and with the order of

priority of payments of Bonds after an event of default, in which case

" p r i n c i p a l " m e a n s t h e i n i t i a l p u b l i c offering price of a C a p i t a l

Appreciation Bond (the difference between the Accreted Amount and the

initial public offering price being deemed interest) but when used in

connection with d e t e r m i n i n g w h e t h e r t h e Owners of t h e r e q u i s i t e

principal amount of Bonds then Outstanding have given any request,

demand, authorization, direction, notice, consent or waiver or with respect

to the redemption price of any Capital Appreciation Bond, "principal

amount" means the Accreted Amount and (ii) with respect to the principal

amount of any Current Interest Bond or tender option bond, the principal

amount of such Bond payable in satisfaction of a sinking fund installment,

if applicable, or at maturity.



"Principal Payment Date" means the date upon which the principal of

any Bond is stated to mature or upon which the principal of any term bond

is subject to redemption in satisfaction of a sinking fund installment as

established in the supplemental indenture authorizing such series.



"Principal Requirement" for any Bond Year, as applied to the Bonds of

any series, means an amount of money equal to the aggregate of the

principal amount of Outstanding Bonds of said series which m a t u r e

during said Bond Year, reduced by the aggregate principal amount of such

Outstanding Bonds which would at or before such Bond Year be retired by

reason of the payment when due and application in accordance with this

Indenture and the supplemental indenture creating such series of sinking

fund installments payable before such Bond Year for the retirement of

Outstanding Bonds.



"Program Expenses" means, in any Bond Year, all initial and ongoing

administrative expenses related to or incurred in connection with the

Bonds, including, specifically, (i) the sum necessary to pay all costs and

expenses of any trustee, registrar or paying agent, (ii) the expected a n n u a l

fees or premiums of any issuer or provider of any Credit Facility with

respect to the Bonds, which expected a n n u a l fees may include additional

amounts owing to such issuer or provider pursuant to any reimbursement

or other agreement, other than reimbursement obligations arising from

any draw or payment under such Credit Facility and other than payments

on the Bonds, (iii) fees related to the calculation or verification of any

required payment to the United States of America pursuant to Section

148(f) of the Code and (iv) auditing fees incurred in connection with the

preparation ofthe financial statements required pursuant to Section 707

ofthis Indenture; but excluding, specifically, expenses ofthe City relating

specifically to the administration ofthe project.

48800 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







"Project" means the redevelopment project approved by the Central

Loop Redevelopment Plan.



"Project Cost" m e a n s those costs i n c l u d e d in t h e d e f i n i t i o n of

"redevelopment project costs" in the Act as in effect on the effective date of

this Indenture and shall also include any costs added to the definition of

"redevelopment project costs" in the Act from time to time after the

effective date ofthis Indenture; in no event, however, shall the removal of

a cost from the definition of "redevelopment project costs" from and after

the effective date ofthis Indenture cause such cost not to be a "project cost"

within the meaning of this Indenture.



"Project Fund" means the project fund established in Section 503.



" P u r c h a s e P r i c e " m e a n s the p u r c h a s e price e s t a b l i s h e d in a n y

supplemental indenture authorizing tender option bonds as the purchase

price to be paid for such Bonds upon an optional or mandatory tender ofall

or a portion of such Bonds.



"Qualified Swap Agreement" mearis an agreement between the City

and a swap provider under which the City agrees to pay the swap provider

an amount calculated at an agreed-upon rate or index based upon a

notional amount and the swap provider agrees to pay the City for a

specified period of time an amount calculated at an agreed-upon rate or

index based upon such notional amount, where (i) each rating agency (if

such rating agency also rates the unsecured obligations of the swap

provider or its guarantor) has assigned to the unsecured obligations of the

swap provider, or ofthe Person who guarantees the obligation ofthe swap

provider to make its payments to the City, as of the date the swap

agreement is entered into, a rating that is equal to or higher than the

rating then assigned to the Bonds by such rating agency (without regard

to Bond Insurance or any other Credit Facility), and (ii) the City has

notified each rating agency (whether or not such rating agency also rates

the unsecured obligations of the swap provider or its g u a r a n t o r ) in

writing, at least fifteen (15) days prior to executing and delivering the

swap agreement of its intention to enter into the swap agreement and has

received from such rating agency a written indication that the entering

into of the swap agreement by the City will not in and of itself cause a

reduction or withdrawal by such rating agency of its rating on the Bonds.



" R a t i n g Agencies" m e a n s each a n d every one of the n a t i o n a l l y

recognized rating services that shall have assigned ratings to any Bonds

Outstanding as requested by or on behalf of the City, and which ratings

are then currently in effect.



"Record Date" means the date established as the record date with

respect to an I n t e r e s t P a y m e n t Date for a series of Bonds in t h e

supplemental indenture creating such series.

7/30/97 REPORTS OF COMMITTEES 48801







"Redemption Price" means, with respect to any Bond, the Principal

thereof plus the applicable premium, if any, payable upon the date fixed

for redemption.



"Refunding Bonds" means all Bonds hereinafter issued p u r s u a n t to

Section 206 hereof.



"Registrar" means any bank, national b a n k i n g association or trust

company appointed by an Authorized Officer under this Indenture and

designated as registrar for the Bonds of any series, and its successor or

successors.



"Serial Bonds" means the Bonds of a series which shall be stated to

mature in annual installments.



"Series" means all ofthe Bonds designated as a series and authenticated

and delivered on original issuance in a simultaneous transaction, and any

Bonds thereafter authenticated and delivered in lieu of or in substitution

for such Bonds pursuant to Article III or Sections 406 or 1106.



"Sinking Fund Installment" means with respect to any Series of Bonds,

each principal amount of Bonds scheduled to be redeemed through sinking

fund redemption provisions of a supplemental indenture creating such

Series by the application of amounts on deposit in the Principal and

Interest Account, established pursuant to Section 502 hereof.



"S.L.G.s" means United States Treasury Certificates of Indebtedness,

Notes and Bonds — State and Local Government Series.



"Supplemental Indenture" means any supplemental indenture of the

City authorized pursuant to Article X hereof.



"Swap Provider" means any counterparty with whom the City enters

into a Qualified Swap Agreement.

"Tender Option Bonds" means any Bonds with respect to which the

Owners thereof have the option tb tender to the City, to any Fiduciary br

to any agent thereof, all or a portion of such Bonds for p a y m e n t or

purchase; provided, that no tender option bonds shall be issued unless (i)

the City has notified each Rating Agency in writing of its intention to

issue such tender option bonds and (ii) each Rating Agency shall notify the

City t h a t the issuance of such tender option bonds by the City will not in

and of itself cause a reduction or withdrawal by such Rating Agency of its

rating on the Bonds.



"Term Bonds" means the Bonds of a Series other than Serial Bonds

which shall be stated to mature on one or more dates through the payment

of Sinking Fund Installments.

48802 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97









"Trustee" means , Chicago, Illinois, and any

successor or successors appointed under this I n d e n t u r e as hereinafter

provided.

"Trust Estate" means the Pledged Revenues and all other property

pledged to the Trustee pursuant to this Indenture.

"Variable Rate Bonds" means any Bonds the interest rate on which is

not established at the time of issuance thereof at a single numerical rate

for the entire term thereof; provided, no variable rate bonds shall be issued

unless (i) the City has notified each R a t i n g Agency in w r i t i n g of its

intention to issue such variable rate bonds and (ii) each Rating Agency

shall notify the City t h a t the issuance of such variable rate bonds by the

City will not in and of itself cause a reduction or withdrawal by such

Rating Agency of its rating on Bonds.





Section 102. Interpretation.



As used herein, and unless the context shall otherwise indicate, the words

"Bond", "Owner", and "Person" shall include the plural as well as the

singular number.



As used herein, the terms "herein", "hereunder", "hereby", "hereto",

"hereof and any similar terms refer to this Indenture.



The term "principal o f the Bonds, as used in this I n d e n t u r e , unless

otherwise expressly provided herein, shall mean and include the Accreted

Amount of any Capital Appreciation Bond, and the Purchase Price of any

Tender Option Bond.



Unless the context shall otherwise indicate, references herein to articles,

sections, subsections, clauses, paragraphs and other subdivisions refer to the

designated articles, sections, subsections, clauses, p a r a g r a p h s and other

subdivisions ofthis Indenture as originally executed.







Article II.

Authorization And Issuance Of Bonds, J u n i o r Lien

Obligations And Qualified Swap Agreements.





Section 201. Authorization Of Bonds, Junior Lien Obligations And

Qualified Swap Agreements.

7/30/97 REPORTS OF COMMITTEES 48803







(a) The City shall not issue any Bonds while this Indenture is in effect

except in accordance with the provisions of this Article II. All Bonds issued

under this Indenture shall be designated "Tax Increment Allocation Bonds"

or "Tax Increment Allocation Refunding Bonds", and shall include such

further appropriate designations as the City may determine.



(b) Bonds may be issued in one or more Series and each Bond shall bear

upon its face the designation determined for its Series. Any two (2) or more

Series may be consolidated for purposes of sale in such manner as may be

provided in the Supplemental Indenture authorizing such Series. \



(c) The City shall not issue any Junior Lieri Obligations or enter into any

Qualified Swap Agreements while this Indenture is in effect except in

accordance with the provisions ofthis Article II.





Section 202. Indenture To Constitute Contract.



In consideration of the purchase and acceptance of the Bonds by the

holders from time to time of the Bonds, the provisions of this Indenture and

any Supplemental Indenture shall constitute a contract among the City, the

Trustee and the Owners from time to time ofthe Bonds.





Sections 203. General Provisions For Issuance And Delivery Of Bonds.



(a) Each Series of Bonds shall be created by a Supplemental Indenture

which shall prescribe expressly or by reference with respect to such Series

(unless otherwise determined herein):



(i) the authorized principal amount, designation and Series of such

• Bonds;

(ii) the purposes for which such Series of Bonds is being issued;



(iii) the manner in which the proceeds ofthe Bonds of such Series are to

be applied;



(iv) the date, and the maturity date or dates, ofthe Bonds of such Series;



(v) the interest rate or rates of the Bonds of such Series, or the m a n n e r

of determining such rate or rates, and the Interest Payment Dates and

Record Dates therefor;



(vi) the Authorized D e n o m i n a t i o n s and the m a n n e r of d a t i n g ,

numbering and lettering of the Bonds of such Series;



(vii) the Registrar and the Paying Agent or Paying Agents for the

Bonds of such Series;

48804 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







(viii) the Redemption Price or Prices, if any, and any redemption dates

and terms for the Bonds of such Series;



(ix) the place or places of payment of the principal and Redemption

Price, if any, of, and interest on, the Bonds of such Series or the m a n n e r of

designating the same;



(x) the amount and date of each Sinking Fund Installment, if any, for

Bonds of like maturity of such Series, provided that the aggregate of such

Sinking Fund Installments shall equal the aggregate principal amount of

all such Bonds less the principal a m o u n t scheduled to be retired at

maturity;



(xi) provisions as to registration ofthe Bonds of such Series;

(xii) the form and text ofthe Bonds of such Series and provision for the

Trustee's authentication thereof by certificate or otherwise;



(xiii) the amount ofthe Debt Service Reserve Requirement with respect

to such Series of Bonds, if any, calculated i m m e d i a t e l y after such

authentication and delivery; and



(xiv) any other provisions deemed advisable by the City as shall not

conflict with the provisions hereof.



(b) Bonds of the same Series and maturity shall be of like tenor except as

to denomination and form. After the original issuance of Bonds of a Series,

no Bonds of such Series shall be issued except in lieu of or in substitution for

other Bonds of such Series pursuant to Article III, Section 406 or Section

1106 hereof.



(c) Bonds issued pursuant to Article II hereof may be issued as Current

Interest Bonds, Variable Rate Bonds, Capital Appreciation Bonds, Capital

Appreciation and Income Bonds, Tender Option Bonds (provided the City

shall deliver to the Trustee upon the authentication of such Bonds a Credit

Facility which the Trustee or another Fiduciary may draw upon to pay the

Purchase Price of any such Bonds), Serial Bonds or Term Bonds or any

combination thereof, all as provided in the S u p p l e m e n t a l I n d e n t u r e

providing for their issuance.





Section 204. Conditions Precedent To Delivery Of Any Series.



Bonds of any Series shall be executed by the City and delivered to the

Trustee and thereupon shall be authenticated by the Trustee and delivered

to the City or upon its order, but only following the receipt by the Trustee of:

7/30/97 REPORTS OF COMMITTEES 48805







(a) a copy of an ordinance adopted by the City Council, certified by the

City Clerk, authorizing the execution and delivery of the Supplemental

Indenture referred to in Section 203;



(b) a Counsel's Opinion to the effect that (i) the City had the right and

power to adopt the ordinance referred to in (a) above; (ii) the ordinance has

been duly and lawfully adopted by the City Council, is in full force and

effect and is valid and binding upon the City and is enforceable in

accordance with its terms (except as limited by any applicable bankruptcy,

liquidation, reorganization, insolvency or other similar laws and by

general principles of equity in the event t h a t equitable remedies are

sought); (iii) this Indenture and such Supplemental Indenture have been

duly and lawfully executed by authorized officers of the City, are in full

force and effect and are valid a n d b i n d i n g upon the City a n d are

enforceable in accordance with their terms (except as limited by any

applicable bankruptcy, liquidation, reorganization, insolvency or other

similar laws and by general principles of equity in t h e e v e n t t h a t

equitable remedies are sought); (iv) this Indenture and Supplemental

Indenture create the valid pledge of Pledged Revenues, monies and

securities held thereunder for the benefit and security of the Bonds,

subject to application thereof in the manner provided therein; and (v) upon

the execution, authentication and delivery thereof, the Bonds of such

Series will have been duly and validly authorized and issued in accordance

with the Constitution and laws ofthe State oflllinois, this Indenture and

such Supplemental Indenture;



(c) a written order as to the delivery of such Series, executed by an

Authorized Officer stating (i) the identity of the purchasers, aggregate

purchase price and date and place of delivery of such Series; (ii) t h a t no

Event ofDefault has occurred and is continuing under this Indenture and

fixing and determining all terms and provisions of the Bonds of such

Series not fixed or determined by this Indenture or the Supplemental

Indenture referred to in Section 203;



(d) an original executed counterpart of this Indenture (or copy duly

certified by the City Clerk of the City) and the Supplemental Indenture

referred to in Section 203;

(e) with respect to all Series of Bonds, other than Refunding Bonds to

the extent p e r m i t t e d by Section 205 hereof, issued a n d delivered

subsequent to the initial Series of Bonds, a certificate of an Authorized

Officer:



(i) setting forth the amount of the Pledged Revenues in the most

recently ended Bond Year next preceding the date of issuance of such

Bonds,

48806 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







(ii) setting forth for the current Bond Year and each Bond Year

thereafter, the Annual Debt Service Requirements on account" of all

Bonds then Outstanding and the Bonds proposed to be issued hereunder;



(iii) establishing that the amount shown in subparagraph (i) above

shall be not less than percent of the Maximum Annual Debt

Service Requirement on account of all Bonds then Outstanding and the

Bonds proposed to be issued; and

(iv) stating, that all required deposits to all Funds, Accounts and Sub-

Accounts hereunder are current.





In applying the foregoing test, if any of t h e Bonds O u t s t a n d i n g

immediately prior to or after the issuance of the Bonds to be issued

constitute Tender Option Bonds or Variable Rate Bonds, the provisions set

forth in subparagraphs (X) and (Y) of Section 205(b) shall be applied in

determining the Annual Debt Service Requirements of such Bonds.





Section 205. Refunding Bonds.



(a) One (1) or more Series of Refunding Bonds may be authenticated and

delivered upon original issuance to refund or advance refund any or all

Outstanding Bonds of one (1) Or more Series, to refund or advance refund

any Junior Lien Obligations, to pay costs and expenses incident to the

issuance of such Refunding Bonds and to make deposits in any Fund,

Account or Sub-Account under this Indenture as determined by the City in

the Supplemental Indenture authorizing such Bonds.



(b) Refunding Bonds of a Series to refund or advance refund Outstanding

Bonds shall be authenticated and delivered by the Trustee only upon receipt

by it (in addition to the documents, securities and monies required by

subsections (a), (b), (c) and (d) of Section 404 hereof) of:



(i) Such instructions to the Trustee as necessary to comply with all

requirements set forth in Section 1201 hereof so that the Bonds to be

refunded or advance refunded will be paid or deemed to be paid pursuant

to said Section 1201.



(ii) Either (A) monies in an amount sufficient to effect payment of the

principal and Redemption Price, if applicable, and interest due and to

become due on the maturity date thereof, as the case may be, which

monies shall be held by the Trustee or any of the Paying Agents in a

separate account irrevocably in trust for and assigned to the respective

Owners of t h e Bonds to be refunded or advance refunded or (B)

Government Obligations in such principal amounts, of such maturities,

and bearing interest at such rates as shall be necessary, together with the

7/30/97 REPORTS OF COMMITTEES 48807







m o n i e s , if any, deposited with the Trustee at the same time, to comply

with the provisions of Section 1201(B) hereof.



(iii) A certificate of an Authorized Officer evidencing either t h a t (A) (i)

the term of the Refunding Bonds does not exceed the term of the Bonds

being refunded, and (ii) the Annual Debt Service Requirements for any

Bond Year on account ofall Bonds Outstanding, after the issuance of such

Refunded Bonds and the redemption or provision for payment ofthe Bonds

to be refunded, shall not exceed the Annual Debt Service Requirements for

the corresponding Bond Years on account of all the Bonds Outstanding,

including the Bonds to be refunded, immediately prior to the issuance of

such Refunding Bonds, or (B) in the case of a refunding of Outstanding

Bonds that does not meet the requirements of the preceding clause (A),

satisfaction of the test set forth in Section 204 hereof in connection with

the issuance of Bonds as applied to the Refunding Bonds to be issued under

the provisions of this section, giving effect to the redemption or provision

for payment ofthe Bonds being refunded.





In applying the test set forth in subparagraph (b) (iii) above, if any of the

Bonds O u t s t a n d i n g immediately prior to or after the i s s u a n c e of t h e

Refunding Bonds to be issued constitute Tender Option Bonds or Variable

Rate Bonds, the following provisions shall be applied in determining the

Annual Debt Service Requirements of such Bonds:





(X) Tender Option Bonds. If any of the Outstanding Bonds constitute

Tender Option Bonds, then for purposes ofthe amounts to be shown as set

forth in optional subparagraph (b)(iii) above, the options ofthe Owners of

such Bonds to tender the same for payment prior to their stated maturity

or maturities shall be ignored, and (1) if such Bonds also constitute

Variable Rate Bonds, the City shall adjust such amounts to be shown as

set forth in s u b p a r a g r a p h (b)(iii) of t h i s section as p r o v i d e d in

subparagraph (Y) below; (2) if such Bonds are secured by a Credit Facility,

the Credit Bank or obligations secured by credit facilities issued by such

Credit Bank shall be rated in one (1) of the three (3) highest r a t i n g

categories (without reference to gradations such as "plus" or "minus") by

any of the Rating Agencies; and (3) any obligation the City may have,

other than its obligation on such Bonds (which need not be uniform as to

all Owners thereof), to r e i m b u r s e any Credit B a n k i n c l u d i n g any

obligations so to r e i m b u r s e in excess of the A n n u a l Debt Service

Requirements on such Bonds (determined without regard to whether such

Credit Bank shall then be holding or shall then have had pledged to it

such Bonds) shall be subordinated to. the obligation o f t h e City on the

Bonds.



(Y) Variable Rate Bonds. If any of the Outstanding Bonds constitute

Variable Rate Bonds, then for purposes ofthe amounts to be shown as set

forth in s u b p a r a g r a p h (B)(3) above, the i n t e r e s t r a t e used in such

48808 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







c o m p u t a t i o n shall be the least of (a) t h e m a x i m u m i n t e r e s t r a t e

established in the Supplemental Indenture authorizing such Bonds, (b) if

and so long as a Qualified Swap Agreement is in effect, the interest rate

determined by reference to Section 207 hereof. The conversion of Bonds

constituting Variable Rate Bonds to bear interest at a different variable

rate or a fixed rate or rates, in accordance with their terms, shall not

constitute a new issuance of Bonds under Section 203 or Section 205 ofthis

Indenture.





(c) Refunding Bonds of a Series issued to refund or advance refund Junior

Lien Obligations shall be authenticated and delivered by the Trustee only

upon receipt by it (in addition to the documents, securities and monies

required by Section 204 hereof) of:



(i) A certificate of an Authorized Officer evidencing satisfaction of the

test set forth in Section 204(e) in connection with the issuance of Bonds as

applied to the Refunding Bonds to be used under the provisions of this

section.



(ii) A certificate ofthe Trustee then duly appointed or acting under the

Supplemental Indenture, indenture, resolution or other a p p r o p r i a t e

instrument securing and authorizing such Junior Lien Obligations or of

the City if there shall be no such trustee, t h a t (A) provision has been duly

made for the redemption or payment at maturity of such J u n i o r Lien

Obligations in accordance with the t e r m s thereof, (B) the pledge of

Pledged Revenues securing such Junior Lien Obligations and all other

rights granted by such indenture, resolution or instrument shall have

been discharged and satisfied, and (C) such trustee or the paying agents

for such Junior Lien Obligations hold in trust the monies or securities,

together with i n v e s t m e n t income t h e r e o n , r e q u i r e d to effect such

redemption or payment.



(iii) A Counsel's Opinion to the effect t h a t all actions required under the

indenture, resolution or other appropriate i n s t r u m e n t s e c u r i n g and

authorizing such Junior Lien Obligations to provide for the redemption or

payment of such Junior Lien Obligations have been taken.



(iv) The proceeds, including accrued interest, ofthe Refunding Bonds of

each Series shall be applied upon their delivery as follows:



(A) there shall be deposited in any Fund, Accourit or Sub-Account

under this Indenture the amount, if any, required by the Supplemental

Indenture authorizing such Series, including, but not limited to, an

amount to be applied to the payment of costs and expenses incident to

the issuance of such Refunding Bonds,



(B) the amount of such proceeds needed for the refunding of the

Bonds, Junior Lien Obligations to be refunded and for the payrnent of

7/30/97 REPORTS OF COMMITTEES 48809





expenses incidental to such refunding shall be used for such purposes,

and



(C) a n y balance of such proceeds s h a l l be deposited in t h e

Incremental Taxes Fund for application pursuant to Section 502.





(v) Such Refunding Bonds may be issued as Capital Appreciation

Bonds, Capital Appreciation and Income Bonds, Current Interest Bonds,

Variable Rate Bonds, Tender Option Bonds (provided the City delivers

upon the authentication of such Bonds a Credit Facility which the Trustee

pr another Fiduciary may draw'upon to pay the Purchase Price of any such

Bonds), Serial Bonds or Term Bonds or any combination thereof, all as

provided in the Supplemental I n d e n t u r e providing for the issuance

thereof.





Section 206. Junior Lien Obligations.



(a) The City may authorize and issue Junior Lien Obligations from time

to time pursuant to the Supplemental Indenture for any of the purposes for

which Bonds may be issued hereunder. The Junior Lien Obligations shall be

payable out of the Pledged Revenues and may be secured by a pledge and

assignment of such amounts in the Accounts and Sub-Accounts established

pursuant to Section 504 of this Indenture and the respective Supplemental

Indenture as may from time to time be available for the purpose of payment

thereof as provided therein, provided, however, t h a t any such pledge and

assignment shall be, and shall be expressed to be, subordinate to the pledge

ofthe Trust Estate as security for the Bonds to the extent provided herein.



(b) The Junior Lien Obligations shall have such terms and provisions as

shall be set forth in the Supplemental Indenture providing for the issuance

thereof; provided, however, that no holder of a Junior Lien Obligation shall

have the right to cause the acceleration of such Junior Lien Obligation in the

event of a default thereunder.





Section 207. Hedging Transactions.



(a) If the City shall enter into a Qualified Swap Agreement with a Swap

Provider requiring the City to pay a fixed interest rate on a notional amount,

or requiring the City to pay a variable interest rate on a notional amount,

and the City has made a determination that such Qualified Swap Agreement

was entered into for the purpose of providing substitute interest payments

for Bonds of a particular maturity or maturities in a principal amount equal

to the notional amount of the Qualified Swap Agreement, then during the

term of the Qualified Swap Agreement and so long as the Swap Provider

under such Qualified Swap Agreement is not in default under such Qualified

Swap Agreement:

48810 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







(i) for purposes of any calculation of Interest Requirements, the interest

rate on the Bonds of such maturity or maturities shall be determined as if

such Bonds bore interest at the fixed interest rate or the variable interest

rate, as the case may be, payable by the City under such Qualified Swap

Agreement;



(ii) any net payments required to be made by the City to the Swap

Provider p u r s u a n t to such Qualified Swap Agreement from Pledged

Revenues shall be made solely from amounts on deposit to the credit ofthe

Incremental Taxes Fund; and

(iii) any net payments received by the City from the Swap Provider

pursuant to such Qualified Swap Agreement shall be deposited to the

credit ofthe Incremental Taxes Fund.





(b) If the City shall enter into a swap agreement of the type generally

described in subsection (a) of this Section 207 t h a t does not satisfy the

requirements for qualification as a Qualified Swap Agreement, then:



(i) the i n t e r e s t r a t e a d j u s t m e n t s or a s s u m p t i o n s referred to in

paragraph (i) of said subsection (a) shall not be made;



(ii) any net payments required to be made by the City to the Swap

Provider pursuant to such swap agreement from Pledged Revenues shall

be made only from amounts on deposit in the General Account; and

(iii) any net payments received by the City from the Swap Provider

pursuant to such swap agreement may be treated as Pledged Revenues at

the option of the City, and if so treated shall be deposited to the credit of

the Incremental Taxes Fund.







Article III.



General Terms And Provisions Of Bonds.



Section 301. Obligation Of Bonds; Medium Of Payment; Form And

Date; Letters And Numbers.

(a) The Bonds shall be payable, with respect to interest, principal and

Redemption Price, in any coin or currency of the United States of America

which at the time of payment is legal tender for the payment ofpublic and

private debts.

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(b) Any Bonds of a Series shall be issued only in the form of fully

registered Bonds without coupons or, p u r s u a n t to the provisions of a

Supplemental Indenture, in any other form permitted by law at the time of

o r i g i n a l i s s u a n c e , including, b u t n o t l i m i t e d to. B o n d s w h i c h a r e

transferable through a book-entry system.



(c) Each Bond shall be lettered and numbered as provided in t h i s

Indenture or the Supplemental Indenture authorizing the Series of which

such Bond is a part and so as to be distinguished from every other Bond.



(d) Bonds shall be d a t e d as p r o v i d e d in t h i s I n d e n t u r e or t h e

Supplemental Indenture authorizing the Bonds of such Series.



Section 302. Legends.



The Bonds of each Series may contain or have endorsed thereon such

provisions, specifications and descriptive words not inconsistent with the

provisions of this Indenture as may be necessary or desirable to comply with

custom, law, the r u l e s of any s e c u r i t i e s exchange or commission or

brokerage board, or otherwise, as may be determined by the City or the

Trustee prior to the authentication and delivery thereof.





Section 303. Execution And Authentication.



(a) The Bonds shall be executed in the name ofthe City by the m a n u a l or

facsimile signatures of its Mayor and City Clerk, and its corporate seal (or a

facsimile thereof) shall be impressed, imprinted, engraved or otherwise

reproduced thereon. In case any one (1) or more o f t h e officers who shall

have signed or sealed any of the Bonds shall cease to be such officer before

the Bonds so signed and sealed shall have been authenticated and delivered

by the Trustee, such Bonds may, nevertheless, be a u t h e n t i c a t e d a n d

delivered as herein provided, and may be issued as if the Persons who signed

or sealed such Bonds had not ceased to hold such offices. Any Bond may be

signed and sealed on behalf of the City by such Persons who at the time of

the execution of such Bond shall hold the proper office in the City, although

at the date of such Bond such Persons may not have been so authorized or

have held such office.



(b) The Bonds shall bear a certificate of authentication, in the form set

forth in this Indenture or the Supplemental Indenture authorizing such

Bonds, executed manually by the Trustee. Only such Bonds as shall bear

such certificate of authentication shall be entitled to any right or benefit

under this Indenture, and no such Bond shall be valid or obligatory for any

purpose until such certificate of authentication shall have been d u l y

executed by the Trustee. Such certificate ofthe Trustee upon any such Bond

executed on behalf of the City shall be conclusive evidence that the Bond so

authenticated has been duly a u t h e n t i c a t e d and delivered u n d e r t h i s

48812 JOURNAL-CITY COUNCIL-CHICAGO 7/30/97







Indenture and that the Owner thereof is entitled to the benefits of this

Indenture.



Section 304. Interchangeability Of Bonds.



Subject to the provisions of Section 306 hereof, any Bond, upon surrender

at the principal office of the Registrar with a written instrument of transfer

satisfactory to the Registrar, duly executed by the Owner or its duly

authorized attorney, may, at the option of the Owner and upon payment of

any charges which the Trustee may make as provided in Section 306, be

exchanged for an equal aggregate principal amount of fully registered Bonds

of the same Series and m a t u r i t y and tenor of any other A u t h o r i z e d

Denominations.





Section 305. Negotiability, Transfer And Registration.



(a) Each Bond shall be transferable only upon the registration books of

the City, which shall be kept for that purpose by the Registrar, by the Owner

in Person or by its attorney duly authorized in writing, upon s u r r e n d e r

thereof with a written instrument of transfer satisfactory to the Registrar,

duly executed by the Owner or its duly authorized attorney. Upon the

transfer of any such Bond, the City shall issue in the name ofthe transferee

a new Bond or Bonds in Authorized Denominations of the same aggregate

principal amount, Series and maturity as the surrendered Bond.



(b) The City and each Fiduciary may deem and treat the Person in whose

name any Bond shall be registered upon the registration books ofthe City as

the absolute owner of such Bond, whether such Bond shall be overdue or not,

for the purpose of receiving payment of, or on account of, the principal and

Redemption Price, if any, of and interest on such Bond and for all other

purposes, and all such payments so made to any such Owner or upon its

order shall be valid and effectual to satisfy and discharge the liability upon

such Bond to the extent ofthe sum or sums so paid, and neither the City nor

any Fiduciary shall be afTected by any notice to the contrary.



Section 306. Provisions With Respect To Exchanges And Transfers.



In all cases in which the privilege of transferring or exchanging Bonds is

exercised, the City shall execute and the Trustee shall authenticate and

deliver Bonds in accordance with the provisions ofthis Indenture. All Bonds

surrendered in any such exchanges shall forthwith be cancelled by the

Trustee. For any exchange or transfer of Bonds, whether temporary or

definitive, the City, the Trustee or the Registrar may make a charge

sufficient to reimburse it for any tax, fee or other governmental charge

required to be paid. The Registrar and the Trustee shall not be required to

make any registration, transfer or exchange of any Bond during the period