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HomeMy WebLinkAboutRes 1995-73m 11-15-1995 11:04AM FROM JOHN G.GLIEGE.ESQ.520204 1087 P.2 RESOLUTION NO.1995-73 ^^qJU^^L C TOWN OF FOUNTAIN 11 ILLS,ARIZONA (""?"L^^^T-7¥ RESOLUTION AUTHORIZING AND DIRECTING ISSUANCEANDSALEOF $2,455,000 PRINCIPALAMOUNTOFTOWNOFFOUNTAINHILLS,MARICOPACOUNTY,ARIZONA GENERALOBLIGATIONREFUNDING BONDS,SERIES1995AND$495,000AGGREGATE PAYMENTAMOUNTOFDETACHED SUPPLEMENTAL INTEREST CERTIFICATES;PROVIDING FOR THE ANNUAL LEVY OF A TAX FOR THE PAYMENT OF THE BONDS AND CERTIFICATES; ACCEPTING A PROPOSAL FOR THE PURCHASE OF IKE BONDS AND CERTIFICATES; DETERMINING THE DETAILS THEREOF;DETERMINING AND PROVIDING FOR PAYMENT OF Tlffi COST OF ISSUANCE;APPROVING THE FORM AND RATIFYING ALL ACTIONS TAKEN WITH RESPECT TO THE PREPARATION AND DISTRIBUTION OF THE PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT AW)AUTHORIZING THE MAYOR TO EXECUTE HIE SAME AND APPROVING Tlffi DISTRIBUTION OF THE SAMF.;AUTHORIZING THE APPROPRIATE OFFICERS OF Tlffi TOWN TO EXECUTE THE VARIOUS CLOSING CERTIFICATES AND THE CERTIFICATE AS TO ARBITRAGE AND TAX MATTERS;AND THE CERTIFICATE REGARDING CONTINUING DISCLOSURE;AUTHORIZING THEMAYORAND TIIF.CLERK OFTHE TOWN TO EXECUTE THE REGISTRAR AND PAYING AGENT'S AGREEMENT;AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT AND AN ESCROW TRUST AGREEMENT FOR TirE HOLDING OF THE SECURITIES PURCHASED WITH THE PROCEEDS OF THE REFUNDING BONDS AND THE CERTIFICATES;PROVIDING FOR THE RF.DF.MPTTON OF CERTAIN BONDS PRTOR TO THEIR RESPECTIVE MATURITIES;AND DECLARING ANEMERGENCY. WHEREAS,onMarch 12,1991,ata special bondelectionheld In andfor the Town of Fountain Hills,Maricopa County,Arizona (the "Town"),there was submitted tothe qualified electorsof (he Town,the question ofthe issuance andsaleoftheTownofFountainHills,ArizonaGeneral Obligation Bonds,inthetotal principal amountof'$3,530,000forthe purpose of improvement,construction,reconstruction and maintenance ofTownstreets .and highways andto pay alllegal,financial,engineering and other necessary costsandexpensesinconnectiontherewith;and WHEREAS,a majority ofthe qualified electors <~>f theTown,votingat the special bond election,approved the creation of the indebtedness and the issuanceandsaleoftheaforesaid issue ofbonds;nwl WHEREAS,theMayorand Council nf theTownduly mot onMarch 28,1991, andduly canvassed the returns of the special bond election and authorized theexecutionofaCertificaterelatingto 'the elect/foil toberecordedin theoffice of.theCountyRecorderof Maricopa.County,Arizona(the "County");and WHEREAS,theTownonMay 2,1991 adopted Resolution .1991-21 toprovide fortheissuanceandsaleof general obligation bonds In theaggregate principal amount of $3,530,000,to be.designated "Town of Fountain Hills, Arizona General Obligation Bonds,Series 1991"(the "SnrJoa 1991 Bonds") whichweredatedMay 1,1991,allofwhich were issued,sold anddelivered; and WHEREAS,Resolution No.1991-21allowedforthe redemption ofcertain oftheBondsBeing Refunded priortotheirstated maturity date;and WHEREAS,the issuance of Refunding Bonds (the "Bonds",or "Refunding Bonds")and Detached Supplemental Interest Certificates (the "Certificates") fs- c 11-15-1995 11:05AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.3 to refund a portion of the Town's indebtedness represented by the Series 1991 Bonds maturing onor after July 3,2001 (the "Bonds Being Refunded") will result ina savings totheTownand accordingly such refunding isin thebestinterestofthe Town;and WHEREAS,theMayorand Council has determined that it is expedient to refundtheBondsBeingRefundedandthattheissuanceoftheBondsand Certificatesandtheapplicationofthenetproceedsthereoftorefundthe BondsBeingRefundedisnecessaryandadvisableandisinthebestinterests oftheTownbecausetheproposed Bonds canbesoldtoeffect a lowerannual tax burden for the Town's taxpayers;and WHEREAS,in accordance with applicable law,the total aggregate of taxes levied to pay principal and interest onthe Bonds including interest evidencedbyThe Certificates intheaggregate shall notexceedthetotal aggregate principal and interest,amount to becomedueonthe Bonds Being Refunded from the date of issuance of the Bonds and Certificates to the finaldateof maturity oftheBondsBeingRefunded;and WHEREAS,theMayorandCouncilmayinvestandreinvestallmonies belonging or credited to the Series 1995 Bonds'Debt Service Fund in securitiesaspermittedby law,so longasthe principal ofandintereston the Bonds.BeingRefundedarepaidwhenduefromthetrustestablishedfor such purpose,no taxes needbe levied for the payment of amounts to become dueontheBondsBeingRefunded;providedhowever,thatifthetrustcreated for suchpurposeisever insufficient topaythe principal of and interest ontheBondsBeingRefundedwhen due,anytaxeslevied to pay principalof andinterestontheBonds shall first beappliedtothepaymentof amounts dueontheBondsBeingRefunded;and WHEREAS,uponthe creation of the trust for payment of the Bonds Being Refunded,all moneys collected thereafter during the current fiscal year which would otherwise havebeencreditedtothe Interest FundandRedemption Fundforthe Bonds Being Refunded shall be credited l.o the Interest Fundand Redemption Fund created to service the Bonds and Certificates;and WHEREAS,the Town has received an offer for the purchase of the Bonds and Certificates evidenced by a Bond Purchase Agroemmi;(the "Bond Purchase Agreement")from Feacock,Hislop,Staley and Giv»n (the "Purchaser");and WHEREAS,the Manager of the Town has advised the Mayor and Council of the Town that pursuant to the Bond Purchase Agreement,the.Purchaser has offered to pay $2,811,775.53,{representing the principal amount of the Bonds of $2,455,000,plus a net premium of $356,77r>.53 (snr.h net premium is comprised of the amount paid for the Certificates of $408,699.65 less original issue discount on the Bonds of $7,44o.00,less a municipal bond insurance premium of $12,977.42 and less Underwriter's compensation of $31,500^70)}plus "A"interest accrued on the Bonds from November 1,1995 to the date of delivery of the Bonds and Certificates.The Manager of the town hasrecommendedthattheBondsandCertificatesbeawardedtothePurchaser pursuant to the terms and provisions of the Bond Purchase Agreement;and WHEREAS,the Mayor and Council of the Town hereby find and determine thattheTermsandProvisionsoftheBondPurchaseAgreementwillresultin the lowest cost presently available tothe Town;and m 11-15-1995 11:10AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.4 C WHEREAS,the amount ofthe General Obligation Refunding Bonds authorizedtobeissuedwillnot increase,thebondedindebtednessof the Townnotinexcessofsixpercent(6%)of the.valuation of the taxable propertyinthe Town,as ascertained by the lastassessmentforStateand Countypurposes,previoustoincurringsuchindebtedness;and WHEREAS,bythisResolutiontheMayorandCouncildesiresto(i) authorize the issuance of $2,455,000 principal amount of General Obligation Refunding Bonds Series 1995 and $495,000 aggregate payment amount of Detached Supplemental Interest Certificates payable from ad valorem taxes levieduponallrealpropertywithinthe Town;(it)ratify all.actsofthe Mayor and Council andTown Manager takenwith respect tothese proceedings to date;(iii)prescribetheformofsuchBondsand Certificates;and(iv) accepttheofferforthepurchaseoftheBondsand Certificates;and WHEREAS,all acts,conditions and things required bythe Constitution and Laws ofthe State of Arizona tobedone preliminary tothe authorization and issuance of the Bonds and Certificates have been duly done and performed in the manner required by law,and the Mayor and Council are now empowered to proceed with the issuance andsaleoftheBondsand Certificates. NOW,THEREFORE,BEIT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAINHILLS,MARICOPACOUNTY,ARIZONATHAT: Section 1.The Mayor and Council of the Town hereby find and determine that the refinancing of the outstanding Bonds Being Refunded of theTownisinfurtheranceofthepublic interest. Section 2.The form,termsandprovisionsof the BondPurchase Agreement inthe form of such document as presented at this meeting is herebyaccepted. > Section 3.For the purpose of providing funds for the refunding of theBondsBeing Refunded pursuantto Title 35,Chapter 3,Article4Arizona Revised Statutes,as amendedthere is hereby authorized theissuanceand sale of $2,455,000 in principal amount of General Obligation Refunding Bonds of the Town tobo designated "Town of Fountain Hills,Arizona General Obligation Refunding Bonds,Series 1995"(the."Bonds")and there is further authorized to be issued and sold in connection therewith "b"supplemental Interest certificates (the "Certificates")in tho aggregate payment amount of $495,000.The Certificates shall bedatedasofthe initial dateof authenticationanddeliveryandbeintheform scL forth in ExhibitB attached hereto.TheBondsshall be.dated November 1,1995,andthe Certificates shall be dated as of the initial date of authentication and delivery.The Bonds and Certificates shall be numbered by maturity,and shall bein the form set forth in Exhibits A and B attached hereto.The Bonds and Certificates shall be issued and sold U^accordance with the provisionsofthis Resolution and applicable laws. The Bonds shall be issued only as fully registered Bonds,as to payment of both principal and "A"interest,the "A"interest being that which is paidtotheholderoftheBondsintheordinarycourseoftheretirementof the Bonds.The Bonds shall bein denominations of $5,000 eachorany integral multiples thereof;shall bear "A"interest at the rates shown \|gg^/ c 11_15_1gg5 11:11AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 below,fromtheirdatetomaturityor redemption,payablesemiannuallyon eachJanuary1andJuly 1,commencingonJanuary 1,1996,exceptthatBonds whicharereissuedupon transfer,exchangeorother replacement shallbear "A"interest at the per annum interest rates shown below from the most recent interest payment date to which "A"interest has been paid or duly provided for,orifno Bonds. Ainteresthasbeenpaid,fromthedateofthe The Bonds shallmatureonJuly 1 in each ofthe amounts and years,as follows: Maturity Amounts 2002 180,000 2003 235,000 2004 255,000 2005 255,000 2006 275,000 2007 295,000 2008 315,000 2009 310,000 2010 335,000 "A"InterestRates Per Annum 4.60 % 4.70 4.80 90 00 00 20 25 4 5 5 5 5 5.30 In addition to the interest designated as "A"interest indicated above, all of the Bonds shall bear interest designated as "B"interest at the per annum rates and payable on January 1or July 1 in each of the years and amounts as follows: Payment Date 07/01/96 01/01/97 07/01/97 01/01/98 07/01/98 01/01/99 07/01/99 01/01/00 07/01/00 01/01/01 07/01/01 01/01/02 Future Value Amount $35,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 200,000 35,000 Approximate Supplemental Yield A.00 % 4.10 4 .20 4.30 4.40 50 60 70 80 85 90 95 Such "B"interest shall be evidenced by ono or more fully registered Detached ^B"Supplemental Interest Certificates jn the aggregate total face value of $495,000 whichmaybe owned,transferred,and presented for payment separately fromthe Bonds.The Certificates shall represent that portion of interest designated "B"interest coming due for the interest accrual period, commencing theJanuary1orJuly 1,00 applicable immediately precedingthe applicable payment date through and including the day immediately prior to suchpaymentdatewhich the registeredownerthereofisentitledto P.5 (2 11-15-1995 11:11AMFROMJOHN G.GLIEGE.ESQ.5202041087 needed to fund the Trust established by the Escrow Trust Agreement (the "Trust")which amounts shall be invested by the.Trustee on behalf of the Town immediately in obligations issued byor guaranteed bytheUnited States of America which are sufficient,in addition*.to .any cash balance.existing in the Trust derived from any source,to pay principal and interest asthe same shall come due on the Bonds Being Refunded.the obligations purchased with the proceeds from the sale ofthe Bonds or Certificates and any Additional Fundsshallbeheld irrevocably inTrustbytheTrusteeforthebenefitof the registered owners ofthe outstanding Bonds Being Refunded and shall be usedtopaythe principal interest onthe Bonds Being Refund.Thetermsand provisionsoftheTrustAgreementareattached hereto,labeledExhibitC (the "Escrow Trust Agreement"),and are hereby approved .Any balance of thenet proceeds ofthe Bonds or Certificates remaining after their application asset forth herein and after payment ofthe costs of Finance shall be transferred tothe Interest Fund and Redemption Fund created for theBondsandCertificates.TheproceedsfromthesaleoftheBondsand Certificates areforthe purposes setforthin this section. The Trustee,upon receipt of a request from the Town and Bond Counsel, isauthorizedtomakesuchadjustmentstotheinvestmentheldintrustas arenecessarysothatthe interest earnings onthe amounts insuchfunddo not cause the Bonds or the Bonds Being Refunded to become "arbitrage bonds" for purposes of Section 148of the United States Internal Revenue Code of 1986,as amended,or the regulations promulgated thereunder.In the event that additional monies are required to be deposited to the Trust,the Town hereby authorizes the contribution of more funds from any source lawfully available therefore.IntheeventthattheTrusteemakesadistributionof excess monies from the Trust,said amounts shall be paid tothe Interest Fundorthe Redemption Fund ofthe Bonds,the allocation of which shall be directedbythe Town. Section 5.The Mayor and Council order that the following Bonds Being Refunded be refunded in advance of their maturity or paid at maturity or redeemed in advance of their maturity at the fol lowinr.rrvsp^etivc dates: Issue Designation Maturity Date (July1) Redemption Principal Date Amount(July 1) Ca 11 Price Redemption Premium G.0.Bonds Series 1991 Section 6. 7/1/01 $2,455,000 2000 to 7/1/10 The Certificates arenot subject 101.0 to call $24,550.00 for redemptli prior to their stated payment dates.The Bonds maturing on or before July 1,2005 are not subject to redemption prior to their stated maturity.The Bonds maturing on or after July 1,2006,are.subject to ca 11 for redemption prior to maturity,in whole or in part,on July 1,2005,or on any interest payment date thereafter bythe payment ofa redemption price equal to the principal amount ofeachBond called for redemption plus interest accrued to the date fixed for redemption plus a premium from any source lawfully available therefor,the premium (calculated as a percentage of the principal amount ofsuch Bonds tobe redeemed)tobe computed as follows: P.6 Vigffi^/ 11-15-1995 11:12AM FROMJOHN G.GLIEGE.ESQ.5202041087 P.7 Redemption Dates Premium July 1,2005andJanuary 1,2006 1.0 % July 1,2006andJanuary 1,2007 0.5 July 1,2007andthereafterwithout premium. Section 7.Not more than sixty (60)nor less than thirty (30)days before any redemption date,the Bond Registrar and Paying Agent shall cause a notice of any such redemption to be sent first-class mail,postage prepaid,tothe registered ownerofeachBondtoberedeemedattheaddress shown on the registration books maintained by the Bond Registrar and Paying Agent.Neither the failure to mail notice to any registered owner of Bonds, nor any defect in any notice will affect the validity of the proceedings for the redemption of Bonds with respect to the registered owners of other Bonds towhomnoticeisproperly given. TheTownmayredeemanamountwhichisincludedinaBondinthe denomination in excess of,but divisible by,$5,000.In that event,the registered owner will submit the Bond for partial redemption and the Bond Registrar and Paying Agent will make such partial payment and will cause to be issued a new Bond in a principal amount which reflects the redemption so made,tobe authenticated and delivered to the registered owner thereof. Section 8.TheBondsand Certificates shallbeexecutedonbehalfof the Town by the actual or facsimile signature of the Mayor and attested by the actual or facsimile signature of the Clerk and countersigned by the actual or facsimile signatures ofthe Treasurer ofthe Town.The Bonds and Certificates shall not be valid unless and until authenticated by the Bond Registrar and Paying Agent.In case any officer who shall,have signed or authenticated any Bond or Certificate (whether manually or by facsimile) shall cease to be such officer prior to delivery of the Bonds or Certificates,the Bonds or Certificates may nonetheless be delivered as though the person or persons who signed such Bond had remained in office. Section 9.The Bonds shall be in substantially the form set forth in Exhibit A attached hereto,with such necessary or appropriate variations, omissions and insertions asmay be consistent with the terms of this Resolution.The Certificates shall be in subntauiial1y Lhe form set forth in Exhibit B attached hereto,with such n^c^ssary or appropriate variations,omissions and insertions as may be consistent with the terms of this Resolution. The Bonds or Certificates may have notations,legends or endorsements required by law,securities exchange rules nr usage.Each Bond or Certificate shall show boththedateofthe l.swne.andthedateofsuch Bond's authentication and registration. The Bonds or Certificates are prohibited from being converted to coupon or bearer instruments without the consent of the.Mayor and Council and approval ofBondCounsel. Section 10.Until the definitive Bonds or Certificates are prepared, the Mayor and the Clerk ofthe Town may execute,attest and deliver,in lieu of definitive Bonds or Certificates,but subject to the same provisions, limitations and conditions as the definitive Bonds or Certificates,one or \ijg^j/ 11-15-1995 11:13AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.8 more Temporary Bonds or Certificates substantially ofthetenorofthe definitive Bonds or Certificates in lieu of which such temporary Bond,Bonds or Certificates are issued,andwithsuch omissions,insertions and variations asmaybe appropriate to temporary Bonds or Certificates.The installments of interest payable on such temporary Bonds orthe amounts to be paid pursuant tothe Certificates shall be payable in the same manner as the interest on the definitive Bonds or Certificates.The Bond Registrar and Paying Agent,upon the surrender of such temporary Bonds or Certificates for exchange,and upon cancellation of such surrendered temporary Bonds or Certificates,without charge to the registered owner thereof,shall deliver in exchange therefor,definitive Bonds or Certificates,ofthe same aggregate principal amount and maturity as the temporary Bonds or Certificates surrendered.Until so exchanged,the temporary Bonds or Certificates shallinall respects be entitledtothesamebenefitsand security as definitive Bonds or Certificates issued pursuant to this Resolution. Section 11.Ineachyear while anyoftheBondsorCertificates shall be outstanding,there shall be and hereby is levied upon all taxable property withintheTowna continuing,direct,annual,ad valorem taxover and above all other taxes authorized or limited by law,which tax,together with other funds then on hand and available for such purposes,shall be sufficient to pay the principal of and interest on the Bonds,including the interestrepresentedbytheCertificates,asthesamebecomedueandthe costs of administration of the registration and payment of the Bonds or Certificates.The tax shall be extended and collected for the Town,and the officials of the Town and Maricopa County,Arizona charged with the annual extensionandcollectionof taxes,withoutfurtherinstructionsfromthe Mayor and Council of the Town,shall extend and collect the tax upon issuance of the Bonds or Certificates.All moneys collected through such tax shall bepaidintothe treasury ofthe Town,tothe credit ofthe "Town of Fountain Hills,Arizona General Obligation Refunding Bonds Series 1995 Interest Fund and Redemption Fund,"from which fund the Bonds or Certificates shallbe payable,whichtax moneys slt.il I beheldin subfunds to be known as the."interest Fund"and the "Redemption Fund",which funds shall be kept separate and apart from and not commingled will)any other funds or moneys and which shall be used solely for,respectively,payment of interest onand principal of,and premium,if any,on the Bnnds or Certificates. The total aggregate of taxes levied to pay principal and interest on the Bonds (including interest evidenced by Ihe Certificates)in the aggregate shall not exceed the total aggregate principal and interest to becomedueontheBondsBeingRefunded from thedateofissuanceofthe Bonds and Certificates to the final date of maturity on the Bonds Being Refunded. Tothe best ofthe knowledge and belief of the Mayor and Council,no public officer or employee of the Town,or relative of such public officer oremployeeoftheTown,hasany substantial interest(asdefinedinSection 38-502,Arizona Revised Statutes)in any of the transactions contemplated by this Resolution,and the Mayor and the Clerk are hereby authorized and directed to execute,attest and deliver the Bond Purchase Agreement with such execution to constitute conclusive evidence of the Town's approval and acceptance. c c c U_l5-1995 11:15AM FROM JOHN G.GLIEGE.ESQ.520204 1087 P.9 Section 12.TrustAgreement.TheMayorandClerkoftheTownare herebyauthorizedanddirectedtoenterinto the irrevocableEscrowTrust Agreement or agreements with Norwest Bank Arizona,N.A.,as Trustee, regarding the deposit in trust ofthenet proceeds from thesaleofthe Bonds and Certificates and of the securities purchased from the net proceeds of the sale of the Bonds or Certificates for the refunding of a portion of the Series 1991 General Obligation Bonds,said Escrow Trust Agreement to contain such terms and conditions as shall secure the proper safeguarding, inventory,withdrawalandhandlingofthemoniesand securities.Execution of said Escrow Trust Agreement by the Mayor of the Town which is acceptable in form and substance to the Town's Bond Counsel is hereby approved. Section 13.TheMayoroftheTownishereby authorized and directed topurchaseorhavepurchasedbytheTrusteefortheTownthesecurities mentioned in the Escrow Trust Agreement.The.Mayor of the Town is hereby authorized and directed to instruct the Trustee to order the purchase of the securities from either the United States of America or from Peacock,His lop, Staley&Given,Inc.orboth. Section 14.Call for Redemption of Bonds Being_R^unded;L In accordance with the redemption provisions of the resolutions authorizing the issuance of the Bonds Being Refunded,the Town does hereby exercise its right to redeem and does hereby provide for the Refunding of the Bonds Being Refunded (subject tothe delivery ofthe Bonds and Certificates)so set forth inthe Escrow Trust Agreement on July .1,2000. Section 15.TheTown covenants with the registered owners of the Bonds and Certificates from time to time outstanding that,so long as any of the Bonds and Certificates remain outstanding,monies on deposit in any fund or account in connection with the Bonds and Certificates,whether or not such monies arederivedfromthe proceeds from thesaleof the Bondsand Certificates,orfromanyothersource,willnotbeused in amannerwhich willcausethe Bonds or Certificates to be "*rbirrflf»e bonds"withinthe meaning of Section 148 of the Internal Revenue Code of 1986.(the "Code"), and any and all regulations promulgated thereunder.Further,the Town covenants that it will seek competent professional assistance to adequately assure compliance with the Code.Further,the Town authorizes the Mayor and the Clerk to execute the Continuing Disclosure Certificate of even date herewith and covenants totake all action as set forth therein or contemplatedtherebyinordertocomplywith S.E.C.Rule 15c2-12. Section 16.TheMayorandClerkare hereby authorizedtodeliver the Bonds and Certificates to the Bond Registrar and Paying Agent for delivery to the Purchaser upon receipt of payment,of the purchase price thereof.Theproceedsfromthesaleof the Bondsand Certificates shallbe deposited withtheTrusteeunderthe F.scrow Trust Agreement tobe disbursed as provided therein. Section 17.Execution of Other Documents. A.TheMayorand Council approve theformand orders and directs the execution ofthe following contracts and agreements,eachin substantially theform presented totheMayorandCouncil: 1)The Registrar,Transfer and Paying Agent's Agreement 10 \^^y C 11-15-1995 11:16AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.10 2)The Escrow Trust Agreement 3)The Bond Purchase Agreement 4)The Continuing Disclosure Certificate B.The Mayor is authorized and directed to execute and deliver such agreements in substantially the form presented to the Mayor and Council with such necessary and appropriate omissions,insertions and variations as are permitted or required hereby and are approved by those officers executing such agreements on behalf ofthe Town.The Clerk is authorized and directed to attest such signature.Where applicable,any of the foregoing officers may affix their signatures by manual,mechanical or photographic means. C.The Mayor,in conjunction with the authorized officers ofthe Town,are authorized to cause the Official Statement tobe executed and delivered in connection with the sale of the Bonds or Certificates. Section 18.The payment of the cost of issuance and cost of Bond Insurance is hereby approved and the Trustee is authorized to immediately pay the demands for payment of the following upon receipt of said demands or invoices and the proceeds from the sale of Bonds or Certificates,said payment tobe made at the time of Closing or upon presentation of invoices therefore. Section 19.This Resolution constitutes a contract with the registered owners of the Bonds or Certificates.Subsequent to delivery of any of the Bonds or Certificates authorized herein,no material modification or amendment of this Resolution or of any resolution amendatory hereof or supplemental hereto,may be made without the written consent of the registered owners of all the principal amount of the Bonds or Certificates thenoutstanding. Section 20.In consideration of the purchase and acceptance of the Bonds or Certificates by the registered owner thereof from time to time and of retaining the exclusion from gross income for federal income taxes of the interest income on the Bonds or Certificates,and as authorized by Title 35, Chapter 3,Article 7,Arizona_JRevised_Statutes,as amended,the Town and the appropriate officials of the Town are hereby directed,to take all action required.or to refrain from taking any act ion prohibited,by the Internal Revenue Code of 1986,as amended and as supplemented by all applicable Treasury Regulations promulgated in connection with any applicable section thereof (collectively the "Code"),which would adversely affect in any respect such exclusion,including particularly,but not by way of limitation,(i)to cause the Bonds or Certificates to not be "private activity"bonds within the meaning of the Code fSect ion 141(a)of the Code), (ii)to cause the Bonds or Certificates to not be "arbitrage bonds"within the meaning of the Code (Section 148(a)of the Code)(iii)to comply with the provisions of the Code relating to rebate (Section 148(f)of the Code), (iv)to cause the Bonds or Certificates not to be "federally guaranteed" withinthemeaningoftheCode (Section 149(b)of the Code),(v)tomake the required information filing pursuant totheCode (Section 149(e)ofthe Code),and (vi)tomakethe required expenditures sothat the Bonds or Certificates shall not be deemed to be "hedge bonds"within the meaning of theCode (Section 149(g)ofthe Code). 11 U-15-1995 11:17AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.11 Section 21.TheTown hereby represents andwarrantsthattheTown has general taxing powers,the Bonds or Certificates are not private activity bonds within the meaning of the Code,ninety-five percent (95%)or moreofthenetproceedsoftheBondsorCertificateswill be usedfor local governmental activities ofthe Town,and the aggregate face amount"of all tax-exempt bonds or obligations (other than private activity bonds within the meaning of the Code)issued by the Town during the .1995 calendar year arenotreasonablyexpectedtoexceed $5,000,000. Section 22.The distribution by the Purchaser of the Preliminary Official Statement dated November 9,1995 andthe Final Official Statement dated November ,1995 (the "Official Statement")is hereby ratified, confirmed and approved and deemed final for purpose of Rule 15C2-12. Section 23.The Mayor,the Clerk,theTown Manager,andtheTown Attorney and other appropriate officers of the Town are hereby authorized to execute the closing certificates and other documents necessary for the sale of the Bonds and Certificates. Section 24.All actions of the officers and agents oftheTown which conformtothepurposesand intent ofthis Resolution andwhich further the issuance and sale of the Bonds and Certificates as contemplated by this Resolution whether heretofore or hereafter taken are hereby ratified, confirmed and approved.The proper officers and agents of the Town are hereby authorized and directed to do all such acts and things and to execute and deliver all such documents on behalf of the Town ns may be necessary to carry outthetermsandintentofthisResolution. Section 26.The Mayor and Council hereby designate the Bonds and Certificates as "Qualified Tax-Exempt Obligations"for purposes of Section 265(b)(3)ofthe Internal Revenue Codeof 1986.TheTown certifies thatit reasonably anticipates that the aggregate amount of qualified tax-exempt obligations(asdefinedinSection 265(b)(3)(B)ofthe Internal Revenue Code of 1986)which will be issued for or by the Town in the.calendar year 1995 willnotexceed $10,000,000. Section 27.If any section,paragraph,subdivision,sentence,clause, phrase or word of this Resolution is for any reason held to be illegal or unenforceable,such decision will not affect the validity of the remaining portions of this Resolution.The Mayor and Connr.il of the Town hereby declare that they would have adopted this Resolution and each and every other section,paragraph,subdivision,sentence,clauseorphrasehereofand authorized the issuance of the Bonds or Certificates pursuant hereto irrespective ofthe fact that anyoneormore sections,-paragraphs, subdivisions,sentences,clauses or phrases of this Resolution maybeheld illegal,invalid or unenforceable. Section 28.Thatby reason ofthe urgent need for the refinancing whichistobemadefromthe proceeds ofthe sale of the Bondsand Certificates herein authorized,the immediate operation ofthe provisions of this Resolution is necessary for the preservation of the public peace, healthand safety,andanemergencyisherebydeclaredto exist,andthat thisResolutionbeenactedasanemergencymeasureandbeinfullforceand C effect immediatelyuponitspassageand adoption,anditisso enacted. 12 11-15-1995 11:18AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 ADOPTED this 16th day of November,1995,by a vote of Nays,Abstaining. TOWN OF FOUNTAIN HITJ.S,ARIZONA By:. ATTEST: Mayor Clerk APPROVED AS TO FORM: Bond Counsel RFDBOND.RES/FOUNTAIN 13 P.12 Ayes, 11-15-1995 11:18AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.13 CERTIFICATION I hereby certify that the foregoing Resolution No.1995-73 was duly passedand adopted bytheMayorandtheTown Council oftheTownof Fountain hills,Arizona,at a regular meeting held on the 16th day of November,1995, and the vote was aye's and nay's and that the Mayor and Councilmemberswerepresent thereat. Clerk,TownofFountainHills RFDBOND.RES/FOUNTAIN 14 !1_15-1995 11:18AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.14 NO. United States of America State of Arizona County of Maricopa Town of Fountain Hills TOWN OF FOUNTAIN HILI.S MARICOPA COUNTY,ARIZONA GENERAL OBLIGATION REFUNDING BOND,SERIES 1995 REGISTERED OWNER: PRINCIPAL AMOUNT:$___ INTEREST RATE:% MATURITY DATE:July 1, ISSUE DATE:November 1,1995 KNOW ALL MEN BY THESE PRESENTS that the Town of Fountain Hills, Maricopa County,Arizona,a duly organized municipal corporation (the "Town")promises to pay,to the registered holder hereof,or registered assigns,solely from the sources hereinafter specified,on the maturity date specified above,the principal amount stated above,subject to prior C redemption as provided above,together with interest on said amount at the interest rate per annum stated above,said interest payable semiannually on the first dayofJanuaryandJulyofeachyearcommencingonJanuary 1, 1996,unless prior to the maturity date stated above,this Bond (hereinafter "Bond(s)"or "Refunding Bond(s)")is redeemed by the Town.Interest will be computed onthe basis ofa 360-day year consisting of twelve (12)thirty (30)day months.The Refunding Bonds ofthe Series of Refunding Bonds of which this Bond is one also bears interest designated as "B"interest which is evidenced by detached Supplemental Interest Certificates (the "Certificates")"B"supplemental interest is payable to the registered ownersoftheCertificatesandnottotheregistered owners oftherefunding Bonds. Principal willbepaidbythe Bond Registrar and Paying Agent on the dates when principal and interest become duo to the holder hereofatthe designated officeoftheBond Registrar and Paying A.e.ent whichasofthe date hereof is Norwest BankArizona,N.A.,which Is currently locatedat 3300 North Central,Phoenix Arizona 85012. Both principal and interest arepayablein lawful moneyoftheUnited StatesofAmerica.Paymentofeachinstallmentofinterestpriorto maturity(excluding interest evidenced bythe Certificates)will bepaidby checkpayabletotheorderofand mailed tothe registered ownerhereofat theaddressshownonthe registration books maintainedbytheBond Registrar and Paying Agent at the close of business onthe 15th dayofthe calendar monthnextprecedingtheinterestpayment date.The principal andthe final installmentof"A"interest andanypremiumwillbepaidwhendueto theregisteredownerhereofuponsurrenderofthis Refunding Bondfor payment atthe designated office ofthe Bond Registrar and Paying Agent, Njjjjss/ 11-15-1995 11:19AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.15 registered owner is entitled to receive in accordance with the provisions of Resolution No.1995-73 of the Town adopted on November 16,1995.The Town or the Bond Registrar will charge the registered owner of such Refunding Bond,for every such transfer of a Refunding Bond,an amount sufficient to reimburse them for any transfer fee,tax or other governmental charge required to be paid with respect to such transfer,and may require that such transfer fee,tax,or governmental charge be pai<\before any such new Refunding Bond shall be delivered. The Town and the Bond Registrar and Paying Agent shall not be required to issue or transfer any Bond (i)during a period beginning on the Record Date and ending at the close of business on the ensuing interest payment date,or (ii)during the period beginning on any date of selection of Bonds to be redeemed and ending on the day on which the applicable notice of redemption is given.The Bond Registrar and Paying Agent shall not be required to transfer any Bonds selected or called for redemption,in whole orinpart. This Refunding Bond is issued pursuant to the laws of the State of Arizona,and is one of an issue of Refunding Bonds of like tenor and date for the total sum of $2,455,000 in Aggregate Principal Amount and Supplemental Interest Certificates in the total payable amount of $495,000 which Bond and Certificates are issued pursuant to Resolution No.1995-73 (the "Resolution"),adopted on November 16,1995,to provide funds to refund a portion of the Town of Fountain Hills General Obligation Bonds,Series 1991 (the "Bonds Being Refunded"),the issuance of said Bonds being approved by a majority vote of the qualified electors of the.Town voting atan election duly called and held in the Town March 12,1991,and by a resolution of the Mayor and Council of the Town duly adopted prior to the issuance thereof,and pursuant to the Constitution and Laws of the State of Arizona,and that due provision has been made for the levy and collection of a direct,annual,ad valorem tax upon all of the real property in the Town for the payment of this Bond as the principal and interest each become due, provided,however,that the total aggregate of raves levied to pay principal and interest onthe issue of Refunding Bonds of which this is onein the aggregate shall not exceed the total aggregate principal,and interest to become due onthe Bonds Being Refunded from the date of issuance of the Refunding Bonds to the final date of maturity on the Bonds Being Refunded; and subject,further,to the rights vested in the owners of the Bonds Being Refunded to the payment of such Bonds Being Refunded from the same tax source inthe event ofa deficiency in the moneys and obligations issued by or guaranteed by the United States of America purr.based from the proceeds of the sale of the Refunding Bonds and placed in trust for the purpose of providing for payment of principal of and interest on the Bonds Being Refunded.TheownerofthisBondmustrelyonthesufficiencyofthemoneys and obligations placed irrevocably in trust for payment,of the Bonds Being Refunded. For the punctual payment of this Refunding Bond and the interest hereon,and for the levy and collection of ad valorem taxes sufficient for that purpose,the full faith and credit of the Town are hereby irrevocably pledged. It is hereby certified and recited that all conditions,acts and things required by the Constitution and Laws of the State of Arizona to exist,to occur and to be performed precedent to and in the issuance of this Refunding c 11 —15-1995 11:20AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.16 whichontheoriginalissuedate is NorwestBank Arizona,N.A.TheBond RegistrarandPayingAgentmaybechangedwithout notice. BondsmaturingonorbeforeJuly 1,2005,are notsubjecttoredemption prior to their stated maturity.Bonds maturing onor after July 1,2006, aresubjecttocallfor redemption priortomaturity inwholeor ih part onJuly 1,2005,oronany interest payment date thereafterbythepaymentofa redemption priceequaltothe principal amountofeachBond called for redemption plus interest accrued tothedate fixedforredemptionplusapremiumfromanysourcelawfullyavailable therefor,thepremium (calculated as a percentage ofthe principal amount of such Bonds to be redeemed)tobe computed asfollows: Redemption Dates Premium July 1,2005and January 1,2006 1.0% July 1,2006andJanuary 1,2007 0.5 % July 1,2007and thereafter without premium. Notmorethansixty(60)nor less thanthirty (30)daysbeforeany redemption date,theBondRegistrarandPayingAgent shall causeanoticeof anysuchredemptiontobesentfirst-classmail,postageprepaid,tothe registeredownerofeachBondtoberedeemedattheaddressshownonthe registrationbooksmaintainedbytheBondRegistrarandPaying Agent. Neitherthefailuretomail notice toanyregisteredownerofBonds,norany defectinanynoticewillaffectthevalidityoftheproceedingsforthe redemptionofBondswithrespecttotheregisteredownersofotherBondsto whomnoticeisproperly given. TheTownmayredeemanamountwhichisincludedinaBondinthe denomination inexcessof,but divisible by$5,000.in thatevent,the registered ownerwillsubmittheBondforpartial redemption andtheBond RegistrarandPayingAgentwillmakesuchpartialpaymentandwillcauseto beissuedanewBondinaprincipalamountwhichreflectsthe redemption so made,tobe authenticated and delivered tothe registered owner thereof. TheBond Registrar andPayingAgent will maintain the booksoftheTown fortheregistrationofownershipoftheRefundingBondas provided inthe Resolution.TheBond Registrar and Paying Agent maybe changed without notice. ThisRefundingBondmaybe transferred onthe registration booksupon delivery hereof totheBond Registrar and Paying Agent,accompanied bya written instrument of transfer informandwith gn.nranty of signature satisfactorytotheBondRegistrarandPaying Agent,duly executedbythe registered owner of this Refunding Bond or owner's attorney-in-fact or legal representative,containing writteninstructionsastothedetailsofthe transfer.No transfer ofthis Refunding Bondshallbe effective until enteredontheregistration books. Inall cases uponthe transfer ofa Refunding Bond,theBond Registrar andPayingAgentwillenterthe transfer of ownership inthe registration books and will authenticate and deliver in the name of the transferee or transferees anewfully registered BondorBondsof authorized denominations (exceptthatno Refunding Bondshallbeissuedwhichrelatestomorethana singleprincipalmaturity)fortheaggregate principal amountwhichthe Nlfe/ Nlgg/ N%g^ n_l5_19g5 11:21AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.17 Bonddo exist,haveoccurredandhavebeenperformedandthatdue provision hasbeenmadeforthelevyandcollectionofadirect,annual,ad valorem taxuponalloftherealpropertyintheTownforthepaymentofthis RefundingBondandoftheinteresthereonaseachbecomes due. ThisBondisauthorizedbyaResolutionoftheMayorandCouncilofthe Town (the "Mayor and Council")duly adopted prior to the issuance hereof, andpursuanttotheConstitutionandLawsoftheStateofArizonarelative tothe issuance and sale ofBondsand Refunding Bondsandallamendments theretoandall other LawsoftheStateofArizona thereunto enabling. This Refunding Bondshallnotbe entitled toany security orbenefit underthe Resolution orbevalidorbecome obligatory foranypurposeuntil thecertificateofauthenticationhereonshallhavebeensignedbytheBond Registrar. TheTownhasunlimitedrighttopayalloranyportionofthe principal ofthisBond prior toits maturity date without payment ofpremium. IN WITNESS WHEREOF,the Mayor and Council ofthe Town of Fountain Hills,MaricopaCounty,ArizonahascausedthisRefunding Bond tobe executed inthenameofsaid Town bythe signature oftheMayorofthe Town ofFountain Hills,MaricopaCounty Arizona,countersigned bythesignature oftheTreasureroftheTownofFountain Hills,MaricopaCounty,Arizona, AttestedbytheClerkoftheTownofFountain Hills,Maricopa County, Arizona,andthecorporatesealoftheTowntobeimpressedhereon. TOWN OFFOUNTAINHILLS,MARICOPACOUNTY, ARIZONA By: Mayor COUNTERSIGNED: By:. Treasurer,Town of Fountain Hills (SGAIi ATTEST: By: Clerk,Town of Fountain Hills 11-15-1995 11:22AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.18 DATE OF AUTHENTICATION AND REGISTRATION: AUTHENTICATION CERTIFICATE ThisRefundingBondistheTownof Fountain HillsGeneralObligation RefundingBondof1995describedinthe Resolution mentionedheretoforein this Refunding Bond. as Bond Registrar By: Authorized Representative TheTown,theRegistrarandthePayingAgentmaytreattheregistered ownerofthisRefundingBondastheabsoluteowner for thepurposeof receiving principal,interest andanypremiumand for allother purposes and noneofthemshallbeaffectedbyanynoticetothecontrary. The following abbreviations,when used inthe inscription ontheface ofthis Refunding Bond,shallbe construed as thoughthey were written out infullaccordingtoapplicablelawsor regulations: TEN COM -as tenants in common TENENT-astenantsbytheentireties JTTEN-asjointtenantswithrightofsurvivorship and not as tenants in common UNIF GIFT/TRANS MIN ACT-Custodian . (Cust)(Minor) under.the Uniform Gifts/Trans toMinors Act (State) Additional abbreviations mayalsobe used though not included inthe above list. 11-15-1995 11:22AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.19 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells,assigns and transfers unto (Name andaddressof transferee) the within Refunding Bond and all rights thereunder,and hereby irrevocably constitutes and appoints attorney to transfer thewithin Bond onthe books kept for registration thereof,with full powerof substitution in the premises. Dated: Note: The signature(s)on this assignment must correspond with the name(s)as written on the face of the within registered Refunding Bond in every particular without alteration or enlargement orany change whatsoever. Signature Guaranteed: (Notice:Signature(s)mustbeguaranteed byaneligibleguarantorinstitution pursuant to Securities andExchange Commission Rule 17-Ad-15.) BOND/FOUNTAIN ALL FEES AND COSTS OF TRANSFER SHALL BE PAID BY THE REGISTERED OWNER HEREOF ON THE PATE OF TRANSFER. n_l5-1995 11:23AM FROM JOHN G.GLIEGE.ESQ.520204 1087 P.20 UNITED STATES OF AMERICA STATEOFARIZONA COUNTYOFMARICOPA REGISTERED NO. TOWN OF FOUNTAIN HILLS,ARIZONA ARIZONA GENERAL OBLIGATION REFUNDING BONDS,SERIES 1995 DETACHED"B"SUPPLEMENTALINTERESTCERTIFICATE, ORIGINAL "BM INTEREST REGISTEREDOWNERPAYMENTDATEISSUEDATE PAYMENT AMOUNT 1995 TheTownof Fountain Hills,Maricopa County,Arizona,aduly organized corporation (the "Town"),for value received,hereby promises to pay to the registered owner named above,or registered assigns,on the payment date specified above,the "B"interest amount specified above,which amount represents a portion of the "B"interest payment which shall become due and payable on such date on the outstanding principal amount of the Town's General Obligation Refunding Bonds Series 1995,dated November 1,1995 issued in the principal amount of $2,455,000 (the "Bonds"or "Refunding Bonds"). The "B"interest on the Bonds represented by this Detached "B"Supplemental Interest Certificate (this "Certificate")has been authorized bya Bond Resolution (the "Bond Resolution")passed and adopted by the Mayor and Council ofthe Town,on November 16,1995.This Certificate isnot subject tocallfor redemption priortoitsstatedpayment date. The"B"interest onthe Bonds represented by this Certificate shall be payable in full to the registered owner hereof upon presentation and surrenderofthisCertificateontheabovedescribedPaymentDateatthe designated office of Norwest Bank Arizona,N.A.,in Phoenix,Arizona,or its successor,as Bond Registrar and Paying Agent,(the "Bond Registrar and Paying Agent").If the date for making such payment shall be a legal holiday or a day on which the principal office of the Bond Registrar and Paying Agent is authorized or required by law to remain closed,such payment may be made on the next succeeding day which is not a legal holiday ora day on which such principal office is authorized or required by law to remain closed.The "Record Date"fortheCertificatesshallbethecloseof businessonthe fifteenth (15th)dayofthemonthprecedingan interest paymentdate. Due provision has been made for the levy and collection of a direct, annual,ad valorem tax upon all of the real property in the Town for payment of this Certificate when due,provided however,that the total aggregate of taxes levied to pay principal and interest on the Bonds n_15-l995 11:24AM FROM JOHN G.GLIEGE.ESQ.520204 1087 P.21 C (including interest evidenced by the Certificates)in the aggregate shall not exceed the total aggregate principal and interest to become due on the Bonds Being Refunded (as such term is defined in the Bond Resolution)from thedateof issuance ofthe Bonds tothe final date or maturity onthe Bonds Being Refunded. For the punctual payment of this Certificate and for the levy and collection ofad valorem taxes sufficient for that purpose,the full faith andcreditoftheTownarehereby irrevocably pledged. The Certificates maybe transferred upon the registration books upon delivery hereof to the Bond Registrar and Paying Agent,accompanied by a writteninstrumentor instruments of transfer in form ofandwithguaranty of signature satisfactory to the Bond Registrar and Paying Agent,duly executed by the registered owner of the Certificates to be transferred or his attorney-in-fact or legal representative,containing written instructions astothedetailsofthe transfer.Notransferofany Certificate shall be effective until entered onthe registration books.In theeventofthetransferofa Certificate,theBondRegistrarandPaying Agent shall enter the transfer of ownership in the registration books and shall authenticate and deliver inthenameofthe transferee or transferees one or more new fully registered Certificates of authorized denomination of the same series and the same payment date for the aggregate amount of "B" interest which the registered owner is entitled to receive in accordance with the provision of the Bond Resolution.The.Bond Registrar and Paying Agent shall impose reasonable charges in connection with the changes or transfers of Certificates,which charges (n^well asanytaxorother governmental charge required to be paid with respect to such transfer)shall be paid by the registered owner of any Certificate requesting such exchange or transfer. The Bond Registrar and Paying Agent shall not be required to issue or transfer any Certificate during a period beginning on the Record Date and ending at the close of business on the ensuing interest payment date. The Bond Registrar and Paying Agent may be changed without notice. This Certificate shallnotbevalidor become obligatory forany purpose or be entitled to any security or benefit under the Resolution authorizing this Certificate until the Certificate of Authentication hereon shall have been signed bythe Bond Registrar and Paying Agent. It is hereby certified,recited and declared (i)that all conditions, acts and things required by the Constitution and laws of the State of Arizona to happen,tobe done,to exist and to he performed precedent to and inthe issuance ofthis Certificate andofthe <;eri«s of which itisone, have happened,have been done,do exist and have been performed in regular and due form and time as required by law;and (i i)that due provision has beenmade for the levy and collection ofa direct annua!ad valorem taxupon taxable property within the Town,over and above all other taxes authorized or limited by law,sufficient to pay this Certificate as it becomes due. INWITNESS WHEREOF,the Mayor and Council oftheTownof Fountain Hills,Maricopa County,Arizona,has caused this Certificate to be executed in the name of said Town by the manual or facsimile signature of the Mayor NSfc/ H-T5-1995 11:25AM FROMJOHN G.GLIEGE.ESQ.5202041087 P.22 of the Town of Fountain Hills,Maricopa County,Arizona,countersigned by the manual or facsimile signature of the Treasurer of the Town of Fountain Hills,Maricopa County,Arizona,attested by the manual or facsimile signature of the Clerk of the Town of Fountain Hills,Maricopa County, Arizona,and the Corporate Seal of the Town to be impressed herein. TOWNOFFOUNTAINHILLS,ARIZONA Mayor COUNTERSIGNED: Treasurer {SEAT. ATTEST: Clerk H-15-1995 11:25AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 (Formof Certificate of Authentication) CERTIFICATE OF AUTHENTICATION This Detached "B"Supplemental Interest Certificate is one of the Certificates evidencing the "B"interest described in the within mentioned Bond Resolution. Dateof Registration and Authentication asBondRegistrarandPayingAgent Authorized Representative The following abbreviations,when used in the inscription on the face ofthisCertificate,shallbeconstruedasthoughtheywerewrittenoutin full according to applicable laws or regulations: TEN COM -ap tenants in common TENENT-astenantsbythe entireties JTTEN-asjointtenantswith rightofsurvivorship and not as tenants in common UNTF GIFT/TRAN MTN ACT Custodian (Cust)(Minor) under Uniform Oifts/Transfers to Minors Act (State) Additional abbreviations may also be used though not in list above. P.23 11-15-1995 11:26AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 unto (FormofAssignment) FORVALUERECEIVEDtheundersignedhereby sells,assignsand transfers (Nameand address of Transferee)thewithin Certificate andall rights thereunder,andhereby irrevocably constitutes and appoints f attorneytotransferthewithinCertificateon thebookskeptfor registration thereof,with full powerofsubstitutionin thepremises. Dated '. SignatureGuaranteed: Note:The signature(s)onthis assignment must correspond With the name(s)as written on the faceof thewithinregistered Certificate in every particular without alteration or enlargement orany change whatsoever. (NOTICE:Signature(s)mustbeguaranteed byaneligibleguarantorinstitution pursuanttoSecuritiesandExchange Commission Rule 17-Ad-15.) ALL FEES AND TRANSFER COSTS SHALL BE PAID BY THE TRANSFEROR. SUPPINT.CRT/FOUNTAIN P.24 Niite^ 11-15-1995 11:26AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.25 (Exhibit C) ESCROW TRUST AGREEMENT This Escrow Trust Agreement dated as of ,1995 by and among the Fountain Hills,Arizona (the "Town"),NORVEST BANK ARIZONA,N.A., anationalbanking association authorized todotrustbusinessinthe Stateof Arizona,as trustee (the "Trustee"). WITNESSETH: WHEREAS,the following bondsoftheTownhavebeen issued andare currently outstanding (the "Bonds Being Refunded"): ;and WHEREAS,the Town,by resolution adopted on November 16,1995, (the "Bond Resolution")has authorized the.issuance.,sale and delivery of $2,455,000 in aggregate principal,amount of the Town's Refunding Bonds,Series 1995 (the "Bonds")and $495,000 aggregate payment amount of Certificates of Ownership of Supplemental Interest Payments (the "Certificates");and WHEREAS,the Bond Resolution authorizes and directs the Town to enterintoan irrevocable trustagreementwiththe Trustee forthe safekeepingandhandlingofthemoneysandsecuritiestobeheldin trusttopaytheBondsBeingRefunded;and WHEREAS,theTrustee agrees to accept and ndmfnister thetrust created hereby: NOW,THEREFORE,in consideration of the mutual covenants, conditions and agreement hereinafter set forth it is hereby agreed as follows: Section 1.TheTownhasorhascausedto be depositedwiththe Trustee fromBondand Certificate proceeds the net sumof $,togetherwith$ofotherTown moneys.Such proceeds andmoneysshallbe applied as follows:(i)$to refundtheBondsBeing Refunded;and (ii)$topaycostsof issuance. Section 2.The Trustee shall hold the moneys so deposited,all investments made withsuch moneys and all earnings from investment and reinvestment ofsuch moneys and all other moneys received bythe Trustee fromtheTownhereunderasaspecialfundandseparatetrust accountseparatefromallotherfundsandinvestmentsdepositedwith the Trustee (the "Trust Account").Notwithstanding the foregoing,the Trust Account shall not include anyamounts held to pay thecostsof Nfe/ H-15-1995 11:27AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.26 issuance.Titleto such,moneysandinvestmentsshallremaininthe Town forthe benefit oftheholdersof the.Bonds Being Refunded. Section 3.TheTrustAccountshall be immediately appliedas follows:(1)$shall beheldbytheTrusteefromthe proceeds ofthe Bonds uninvested as an initial case deposit for the Trust Account;(2)$deposited withthe Trustee fromthe proceeds ofthe Bonds andthe Certificates shall be applied to create a portfolioofgovernmentobligationsasdescribed In Exhibit A-l hereto (along withany replacement or substitutes therefor provided for herein,the "Government Obligations");and (3)$representing moneys otherwise available totheTown shall beappliedtocreatea portfolio of obligations as described in Exhibit A-2 hereto (the "Open Market Securities"). TheinvestmentincomefromtheGovernment Obiigat ionsandfromthe Open Market Securities shall be collected and received bythe Trustee and credited tothe Trust Account.The Trustee shall keep adequate recordsofsuch moneys,Government Obligations,OpenMarket Securities and investment earnings soastopermitthe portfolio tobe accounted forseparately. The Trustee shall not sell or redeem such Government Obligation or theOpen Market Securities in advance of their maturity dates except as provided in Section 5hereof. Section4.Thepartiesrecognizetheamountscreditedtothe Trust Account inthe portfolio or Government Obligations are,atthe timeof execution and delivery of this Agreement,subject to restrictions asto investment underthe Internal Revenue Codeof 1986, as amended (the "Code"),in order for the interest on the Refunding BondsandtheBondsBeingRefundedto be,or continue tobeexcluded fromgrossincomeforpurposesofcalculating fe<le»-;il income taxes.In order to comply with such current ly .applicable restrictions,and subject to the provisions of Section 4 hereof,the following provisions shallapplywithrespectto reinvestment,of amountscreditedtothe Trust Account. (a)Amountsreceivedasmaturingprincipaloforinterestonthe Government Obligations credited tothe portfolio priortothedatesuch amounts aretobeusedtopay principal ofor interest or redemption premium ontheBondsBeing Refunded andare not to he reinvested. (b)Yieldsaretobe calculated bymeansofan actuarial method of yield calculation whereby "yield"means the discount rate that,when usedincomputingthepresentvalueasof the.datetheinvestmentis first allocatedtothe Bonds of all unconditionally valueasofthe date the Investment if first allocated to the Bonds of all unconditionally payable receipts from the investment (using the same compounding intervals and financial conventions used to compute the yieldonthe Bonds),produces an amount equal tothe present valueof all unconditionally payable payment for the investments. c Nijjjjfj/ H-T5-1995 11:28AM FROMJOHN G.GLIEGE.ESQ.520204 1087 P.27 (c)The purchase priceofa Government Obligation usedin determining its yield must be market price ofthe Government Obligation on an established market.This means that a premium maynotbe paid to the adjust the yield and that a lower interest rate than is usually paidmaynotbe accepted.At the time of execution and delivery of this Agreement,ifa Government Obligation cannot be purchased on an establishedmarketorabonafidebidpricecannotbeestablishedata yield that does not exceed the yield restriction applicable tothe moneystobeinvested,investments arelimitedto United States Treasury Certificates ofIndebtedness,Notesand Bonds--State andLocal GovernmentSerieswhichyieldnomorethanthe restricted yield. (d)Notwithstandingthe foregoing,anyamountheldintheTrust Account maybe invested in investments having any yield if the parties hereto receive an opinion in form and substance satisfactory tothemof bond counsel experienced inthe filed of municipal bonds who opinions aregenerallyacceptedby purchasers of municipal bondstothe effect that such investment will not cause any of the.Bonds orthe Bonds Being Refundedtobecome arbitrage bonds within the meaningof Section 148of theCode,and will not otherwise causethe interest ontheBondsorthe Bonds Being Refunded to come include as gross income for purposes of calculatingfederalincometaxes. (e)Amounts received from reinvestment of maturing principal of aninterestonGovernment Obligations priorthedatesuchamountsare tobeusedtomake payments on the Bonds Being Refunded pursuant to this Section 4andwhicharenot needed to provide for payments on the BondsBeingRefundedmaybewithdrawnfromtheTrustAccountand returnedtoandappliedforthebenefitoftheTown in accordancewith applicable law. Section 5.TheTrusteemay sell orredeemTrustAccount investments in advance of their maturity dates and invest the proceeds thereoforredemptionorothermoneyscredited to theTrustAccountin direct obligations of the United States only n^on receipt by the Trusteeof written instructions from the Town l.o do so,and receipt by the parities hereto of: (a)An opinion in form and substance satisfactory tothemofbond counselexperienceditthe field of municipal bonds whoseopinionsare generally accepted by purchasers of municipal bonds tothe effect that 'such actionwillnotcausethe interest:ontheBondsBeingRefundedor the Bonds tobe includible in gross income forfederal income tax purposedandwillnotcausetheBondsBeingRefundedortheBondsto become "arbitrage bonds"within the meaning oT Section 148 of the Code,andwillnotadverselyaffecttherightoftheTowntoissue obligations,the interest onwhich is excluded from grossincomefor federalincometaxpurposes;and (b)A report from a nationally recognized accountant or firm of accountsverifyingtheaccuracyofthearithmeticcomputationofthe adequacyoftheproceedsfromtheliquidationtogetherwithother moneysandthematuringprincipalofandinterestfromtheliquidation togetherwithanyother moneys and the maturing principal ofand \mjwflsX 11-15-1995 11:29AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.28 interest onany Government Obligations and Open Market Securities tobe credited totheTrust Account in accordance,withthe Town's instructions,to pay,together with the maturing principal of and interest on any Government Obligations and Open Market Securities remaining in the Trust Account,when due,the principal of and interest and any redemption premiums on the Bonds Being Refunded as the same become dueat maturity or upon prior redemption. Uponanysuchsaleor redemption of investments and reinvestment any amounts not needed in the Trust Account to provide for payment of the Bonds Being Refunded,as shown by the accountant's report,may be withdrawn from the Trust Account and returned to and applied for the benefit of the Town in accordance with Applicable law. (c)The parties hereto acknowledge and agree that on the date the Bonds are issued and delivered against payment therefor (the "Delivery Date"),the Trustee is to receive the Government Obligations or Open MarketSecuritiesreferredtoaboveinSection 3.IftheTrusteeshall not receive any of the obligations (the "Failed Escrow Securities"), the Trustee shall accept,as temporary substitutes cash or,at the same purchase price,other direct obligations of the United States ("Substitute Escrow Securities")the payments on which are scheduled to provide,as determined by an independent certified public accountant, along with such cash,at least the same amounts of moneys on or before the same dates as the Failed Escrow Securities for which they are substituted.(The Trustee may rely upon a report on an independent firmofcertifiedpublicaccountantsthattheconditioninthe precedingsentenceis satisfied.)If Substitute.EscrowSecuritiesare delivered,thereafter,upon delivery to the Trustee of Failed Escrow Securities,together with any amount paid thereon subsequent to the Delivery Date,theTrusteeshallreturnanamountofsuchcashand Substitute Escrow Securities,and any amount paid thereon subsequent to theDelivery Date,correspondingtotheFailed F.«?crow Securities which theSubstituteEscrowSecurities replaced. Section 6.Any Trust Ar.rnnnt moneys which a»e not at any time invested in Government Obligations shall be h"ld as a demand deposit by the Trustee and shall be secured as deposits of public moneys. Section 7.TheTrustee shall make timely payments from the TrustAccount to,orupontheorder of,theTown in theamountsandon the dates sufficient to pay principal,interest and any applicable premiumcomingdueoneachseriesoftheBondsBeing Refunded,Unless otherwise directed bytheTown,inorderto determine,theamountsand thedatesonwhich principal,interest and applicable premiumisdueon each series of the Bonds Being Refunded,the.Trustee may rely upon the debt service schedules with respect to each series of the Bonds Being Refunded as it appears in the Verification Report prepared by Grant Thornton,LLP,certifiedpublicaccountantsinconnectionwiththe issuance of the Bonds. Section 8.The Trustee shall cause a notice of advance refunding of the Bonds Being Refunded in substantially the form of ExhibitBheretotobe provided to all registered ownersofthe Bonds N^Oj/ N^jjji^' 11-15-1995 11:30AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.29 Being Refunded andtotheservices listed in said Exhibit B.Such notice shall be mailed within thirty (30)days of the.date of issuance of the Bonds. In addition the Trustee shallmailtotheownersoftheBonds Being Refunded the notice of redemption in substantially the form of ExhibitCheretoatthetimesandinthemannersetforthineach BondBeingRefunded. Section 9.Ifatanytimeortimesthereareinsufficient funds on hand in the Trust Account to pay the principal ofand interest andany redemption premium onthe Bonds Being Refunded asthesame becomes due,or for the payment of the fees and expenses of the Trustee,the Trustee shall promptly notify the Town of such deficiency and the Town shall promptly pay the amount of such deficiency. Section 10.Onor before each February 15 and August 15 during the term hereof,the Trustee shall submit to the Town a report covering all moneys ithas received andall payments it hasmadeunderthe provisions hereof during the six-month period ending on the preceding July 1 and January 1 (except for the first such report,due February 15,1996,whichwillcovertheperiodcommencingwiththedateonwhich the Bonds were issued toan including January .1,1.996).Each such report shall also list all investments and moneys in the Trust Account asofthereportdate. Section 11.Forservices hereunder,theTrusteeshallbe entitled tothe Trustee's one-time initial feesetforthin Exhibit D attached hereto,such fee being due upon the initial deposit of moneys withtheTrusteeand representing payment of the.Trustee's initial fee and prepayment ofthe annual Trustee's fees for services hereunder duringtheterm hereof.TheTrustee shall -not create or permit tobe created any lien on moneys in the Trust Account for the failure to pay any such fees.The Trustee shall be reimbursed for all.outof pocket costs. Section 12.When all amounts payable onthe BondsBeing Refunded have become dueand the Trustee has on deposit all moneys necessaryforthepaymentofsuch amounts,and in anyeventonthe businessdayprecedingthedatethe Inst oftheBondsBeingRefunded maturesoristoberedeemed,the Trustee shall transfer allmoneysand investments creditedtotheTrust Account not.required forpaymentof principal,interest andpremium,\f any.wMb r^npor.t to the Bonds BeingRefundedtotheTown. Section 13.The parties recognize that the.owners oftheBonds BeingRefundedhavea beneficial vested interest in the moneys and investments held in the trust Account nnd that the Bonds will be delivered to and accepted by the owners therefor in reliance upon the irrevocable character of tbe trust so created.Therefore,this Agreementshallnotbe revoked,and shall not be amended in anymanner whichmayadverselyaffectthe rights hereinsoughttobe protected, untiltheprovisionsofthisAgreement have,beenfullycarried out. 11-15-1995 11:31AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 Section 14.The Trustee shall be under no obligation to Inquire into into or be otherwise responsible for the.performance or nonperformance by the Town or any paying agent for the Bonds Being Refunded or any of their obligations or to protect any of the rights of the Town under any of the proceedings with respect to the Bonds Being Refunded orthe Refunding Bonds.The Trustee,shall notbe liable for any act done or step taken or omitted by it or for any mistake of fact or law or for anything which may do or refrain from doing except for its negligence or its default in the.performance of any obligation imposeduponin hereunder.TheTrustee shall notbe liable toor responsible for any loss resulting from any investment made pursuant to this Agreement in compliance with the provisions hereof. Section 15.TheTownandtheAuditorGeneraloftheStateof Arizona,shall have the right to audit the books,records and accounts ofthe Trustee insofar as they pertain to the trust,created hereunder. Section 16.The Trustee is hereby authorized and directed to pay,solely from moneys deposited with the Trustee,the costs and expenses as set forth in Exhibit D hereto.Amounts deposited with the Trustee for such purpose shall be held in a separate account.Any amounts remaining on the date six (6)months following the date the Refunding Bonds are issued shall be transferred tothe Town and deposited to the Debt Service Fund and used to pay interest on the Bonds onthe next succeeding interest payment date. Section 17.Neither this Agreement northeTrust Account created hereunder may be assigned by the Trustee without the prior written consent of the Town unless the Trustee is required by law to divest itself of its interest in it s trust department or unless the Trustee sells or otherwise assigns all or substantially all of its trust business in which event the.trust shall be continued by the Trustee's successor in interest. Section 18 Ifany section,paragraph subdivision,sentence, clause or phrase hereof shall for any reason be held illegal or unenforceable,such decision shall not affect the validity ofthe remaining portions hereof.The parties fled are that theywouldhave executed this Agreement and each and every other section paragraph, subdivision,sentence clause and phrase hereof,irrespective ofthe factthatanyoneor more.sections.paragraphs,subdivisions, sentences,clauses or phrases hereof maybe held tobe illegal,invalid or unenforceable.ifany provision hereof contains an ambiguity which maybe construed as either valid or invalid,the valid construction shallbeadopted. Section 19.This agreement shall begovernedexclusivelybythe provisionshereofandbythe applicable lawsoftheStateofArizona and expresses the entire understanding ofthe parties hereto. Section 20.ThisAgreementmaybe executed inseveral counterparts,each of which shall bean original,but all of which together shall constitute buyoneinstrument. P.30 VljjjSgi/ 11-15-1995 11:31AM FROM JOHN G.GLIEGE.ESQ.520 204 1087 P.31 Section 21.TheTownherebygivesnoticetothe Trustee that Section 38-511,ArizonaRevised Statutes,as amended,provides thatthe State of Arizona,its political subdivisions or any department or agencyof either,maywithinthree(3)yearsafterexecutionthereof cancel any contract without penalty or further obligation,made by the State of Arizona,its political subdivisions or any department or agency or either,if any person significantly involved in initiating, negotiating,securing,drafting or creating such agreements on behalf of the State of Arizona,its po.1 itical subdivisions or any department or agency of either,is at any time while such contract or any extension thereof is in effect,an employee or agent of any other party to the contract in any capacity or a consultant to any other party to the contract with respect to the subject matter of the contract. IN WITNESS WHEREOF,the parties hereto have caused this Agreement tobe executed as of the day and year first above written. FOUNTAIN HTTJ.S,ARIZONA ESCROTRS.AGR/FOUNTAIN By Mayor NORWESTBANK ARIZONA,N.A.,as Trustee By Title