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HomeMy WebLinkAboutRes 1998-32RESOLUTION 1998 -32 RESOLUTION APPROVING THE FORMATION OF THE TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION AND THE MEMBER- SHIP OF ITS BOARD OF DIRECTORS; APPROVING THE ARTICLES OF INCORPORATION AND BYLAWS OF THE CORPORATION; APPROVING THE GENERAL PLAN FOR THE FINANCING OF CERTAIN PROJECTS FOR THE TOWN INCLUDING THE ISSUANCE OF REVENUE BONDS; AUTHORIZING THE PREPARATION OF A PRELIMINARY OFFICIAL STATEMENT; AND AUTHORIZING THE TOWN STAFF TO COOPERATE WITH SAID CORPORATION IN FORMULATING FINAL PLANS AND DOCUMENTS WITH RESPECT TO FINANCING AND CONSTRUCTING SUCH PROJECTS. WHEREAS, it has been determined by the Town of Fountain Hills, Arizona (the "Town "), that it would be to the advantage and benefit of the Town and its residents to finance and construct, furnish and equip a civic center, performing arts center and community center complex (the "Project "); and WHEREAS, the moneys presently available to the Town are insufficient, by reason of budget and bonding limitations, to construct and acquire the Project and are insufficient to lease suitable space to accommodate the needs of the Town; and WHEREAS, some interested citizens of the Town, at the request of the Council, have agreed to organize a nonprofit Arizona corporation known as the TOWN OF FOUNTAIN HILLS, ARIZONA MUNICIPAL PROPERTY CORPORATION (the "Corporation ") and have agreed to act as the Corporation's first Board of Directors for the purpose of assisting the Town in financing and constructing the Project; and WHEREAS, the Corporation proposes to cause the Project to be financed, designed, constructed, furnished and equipped and to lease- purchase the same, together with necessary and related equipment and furnishings, to the Town under a lease- purchase agreement at no profit to itself; and WHEREAS, the Corporation proposes to finance the Project by issuing its bonds which will be secured by the Corporation's rights under and moneys available pursuant to said lease- purchase agreement; and WHEREAS, under the lease- purchase agreement the Corporation would agree to lease with an option to purchase the Project to the Town in exchange for the payment of rental payments over a period of years, such rental payments being secured by a pledge of the Town's excise taxes; and WHEREAS, the Mayor and Council of the Town have reviewed the articles of incorporation and by -laws of the Corporation, the membership of its Board of Directors and the SwR:gmh 269504 7/20/98 proposed general plan of financing, acquiring, constructing, equipping and furnishing said Project and find nothing objectionable therein to the Town; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF FOUNTAIN HILLS, ARIZONA, AS FOLLOWS: Section 1. The formation of the Town of Fountain Hills, Arizona Municipal Property Corporation, a nonprofit Arizona corporation, is hereby found to be beneficial to the Town and to the citizens thereof for the reasons set forth above; and that the formation of the Corporation is hereby approved by the Mayor and Council of the Town. The articles of incorporation and by -laws of the Corporation in substantially the forms presented are hereby approved. Section 2. The following -named persons are hereby approved as directors of the Corporation until the first annual meeting, or until their successors are elected and qualified: Section 3. The plan of leasing, constructing, furnishing and equipping the Project as presented to this Mayor and Council appears in all respects to be proper and appropriate and the plan for the Corporation to cause the issuance of not to exceed $7,000,000 aggregate principal amount of revenue bonds (the "Bonds ") to finance the Project is hereby acknowledged and approved. The Bonds will bear interest at an average interest rate of not to exceed seven percent (7 %) per annum and shall be issued and sold and delivered against payment therefor to the underwriter, Peacock, Hislop, Staley & Given, Inc. The Bonds shall be sold in accordance with the terms and provisions of resolutions to be adopted by this Council and the Corporation at later dates granting final approval of the terms and conditions of the sale of the Bonds and in accordance with the provisions of a bond purchase contract to be entered into by and among the Town, the Corporation and the underwriter. Section 4. The preparation of a preliminary official statement is hereby authorized, and the Town's Manager or designee is authorized to deem "final" for all purposes of Section 240.15c2 -12, General Rules and Regulations, Securities Exchange Act of 1934 (the "Rule "), such preliminary official statement. The deemed "final" preliminary official statement, after approval by the Town's Manager or designee, is hereby authorized to be distributed by the Underwriter. The Town will cause a final official statement (the "Official Statement ") in substantially the form of the preliminary official statement referred to above to be prepared and distributed with the Bonds upon initial issuance. The Mayor or any member of this Council are authorized to approve, execute and deliver the Official Statement on behalf of the Town and the execution by the Mayor or such other officer shall be deemed conclusive evidence of such approval. Section 5 The staff members of the Town are hereby authorized and directed to cooperate with the officers, directors and staff of the Corporation in formulating final plans and -2- SWR:gmh 269504 7/20/98 documents with respect to the financing and construction of the Project by the Corporation including, but not limited to, retaining the services of a trustee for the financing. PASSED, ADOPTED AND APPROVED by the Mayor and Council of the Town of Fountain Hills, Arizona, on August 6, 1998. ATTEST: Clerk CERTIFICATION Wr I, Cassie Hansen, the duly appointed and acting Town Clerk of the Town of Fountain Hills, Arizona, do hereby certify that the above and foregoing Resolution No. l g 9 t "V�as duly passed by the Town Council of the Town of Fountain Hills, Arizona, at a regular meeting held on August 6, 1998, and the vote was `i aye's and a nay's and that the Mayor and S Council Members were present thereat. Cassie Hansen, Town Clerk -3- SWR:gmh 269504 7/20/98 BOND PURCHASE AGREEMENT 1,075,000 TOWN OF FOUNTAIN HILLS, ARIZONA HIGHWAY USER REVENUE REFUNDING BONDS, SERIES 1998 Mayor and Common Council of the Town of Fountain Hills, Arizona 16836 East Palisades, Building C Fountain Hills, Arizona 85269 Ladies and Gentlemen: Upon the terms and conditions hereof .and in reliance on the representations, warranties and covenants contained herein and in any certificates or other documents delivered pursuant hereto, Peacock, Hislop, Staley & Given, Inc. (hereinafter referred to as the "Underwriter "), acting not as agent or fiduciary to the Town of Fountain Hills, Arizona (hereinafter referred to as the "Town ") , but for and on behalf of the Underwriter, hereby offers to enter into the following agreement with the Town, which, upon the accep- tance of this offer by the Town, shall be binding upon the Town and the Underwriter. This offer is made subject to the written accep- tance of this Bond Purchase Agreement (hereinafter referred to as this "Purchase Agreement ") by the Town on or before 11:59 P.M., Arizona time, on August 6, 1998, and, if not so accepted, shall be subject to withdrawal by the Underwriter upon notice delivered to the Town at any time after such time and prior to the acceptance of this Purchase Agreement by the Town. Any financial advisory rela- tionship between the Underwriter and the Town (if such relationship has existed or now exists) with respect to the Bonds (as such terms are hereinafter defined) is hereby terminated, and the Town hereby expressly consents to the acquisition or participation in the purchase thereof on a negotiated basis by the Underwriter. If a financial advisory relationship exists, there may be a conflict of interest in changing from the capacity of financial advisor to underwriter, and the Town hereby expressly acknowledges such cir- cumstances. The Town also hereby acknowledges that Gust Rosenfeld P.L.C., "Bond Counsel," represents the Underwriter in financing transactions for other political subdivisions and hereby waives any conflict of interest that may exist as a result of such representa- tion. 1. (a) The Underwriter shall purchase from the Town, and the Town shall sell to the Underwriter, all of the $1,075,000 aggregate principal amount of the Town of Fountain Hills, Arizona Highway User Revenue Refunding Bonds, Series 1998 (hereinafter referred to as the "Bonds "). The Bonds shall be as described in, and shall be issued and secured under the provisions of, a resolu- tion adopted by the Mayor and Common Council of the Town on August 6, 1998 (hereinafter referred to as the "Bond Resolution "). The Underwriter has not previously made any final agreement with the Town to purchase the Bonds in an offering within the meaning of the SEC Rule (as such term is hereinafter defined). (b) The Bonds shall be dated as of August 6, 1998, and shall mature on the dates and in the amounts, have redemption provisions, bear interest at the rates per annum and produce the yields, in each case as set forth on Schedule I hereto, such inter- est being payable on January 1, 1999, and semiannually thereafter on each July 1 and January 1. (c) The net purchase price for the Bonds shall be $1,050,915.20 [consisting of the principal amount of the Bonds less an original issue discount of $4,647.30 less compensation for the Underwriter of $19,437.50 (which includes the fees and disburse- ments of the hereinafter described Counsel to the Underwriter)] plus interest accrued on the Bonds from August 1, 1998, to the date of the payment for and delivery of the Bonds (such payment and delivery and the other actions contemplated hereby to take place at the time of such payment and delivery of the Bonds herein sometimes called the "Closing" and to be on August 18, 1998, or on such other date as may be mutually agreeable to the Underwriter and the Town) . For convenience, the Underwriter shall pay by the Closing, on behalf of the Town $10,000.00 from the proceeds of the Bonds to the Insurer (as such term is hereinafter defined) as payment of the bond insurance premium for the Policy (as such term is hereinafter defined). The Town hereby expressly acknowledges that such pur- chase price [if the Bonds are sold to the public at the approximate prices or yields set forth on Schedule I hereto and on the cover page of the Final Official Statement (as such term is hereinafter defined)] shall result in remuneration to the Underwriter of $19,437.50 (which includes the fees and disbursement of Counsel to the Underwriter). 2. The Underwriter intends to make an initial public offering of all of the Bonds at not in excess of the public offer- ing prices (or not less than the yields) set forth on Schedule I hereto and on the cover page of the Final Official Statement of the Town relating to the Bonds, dated even date herewith (including all appendices thereto, hereinafter referred to as the "Final Official Statement ") and may subsequently change such offering prices (or yields). The Purchaser may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering prices (or higher than the yields) set forth on Schedule I hereto and on the cover page of the Final Official Statement. The Underwriter also reserves the right (i) to over -allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market and (ii) to discontinue such stabilizing, if commenced, at any time. 2 3. (a) The Town hereby approves, and consents to and authorizes the distribution and use by the Underwriter of, the Preliminary Official Statement of the Town relating to the Bonds, dated July 20, 1998 (including all appendices thereto, collective- ly, the "Preliminary Official Statement" and together with the Final Official Statement, hereinafter referred to as the "Official Statement "), and the information therein contained to be used by the Underwriter in connection with the public offering and the sale of the Bonds. (b) The Town has caused the Preliminary Official Statement to be prepared and hereby deems the Preliminary Official Statement to be "final" for all purposes of Section 240.15c2 -12, General Rules and Regulations, Securities Exchange Act of 1934 (hereinafter referred to as the "SEC Rule "). (c) The Town shall provide to the Underwriter copies of the Official Statement in sufficient quantity to comply with the SEC Rule and the Rules of the Municipal Securities Rule - making Board, particularly with respect to the Final Official Statement, within seven (7) business days after the date of this Purchase Agreement. (d) The Underwriter shall provide to the Town such information relating to the Bonds which is not within the scope of knowledge of the Town (including, but not limited to, the selling compensation of the Underwriter, offering price(s), interest rate(s), delivery date and other terms of the Bonds dependent upon such matters) . The Final Official Statement shall be substantially in the form of the Preliminary Official Statement with only such changes therein as shall be necessary to conform to the terms of this Purchase Agreement and with such other changes and amendments to the date thereof as have been accepted by the Underwriter. The execution and delivery of the Final Official Statement shall evi- dence the determination by the Town that the Final Official State- ment is "final" for all purposes of the SEC Rule. 4. (a) The undersigned on behalf of the Town, but not individually, hereby represents and warrants that: (i) the Town (A) has duly adopted the Bond Resolution; (B) has authorized the Mayor of the Town to approve and execute the Final Official Statement on behalf of the Town; (C) has duly authorized and approved the execution and delivery of, and the performance by the Town of the obliga- tions contained in, the Bonds; a written undertak- ing by the Town to provide ongoing disclosure for the benefit of certain beneficial owners of the Bonds as required under paragraph (b) (5) of the SEC Rule, in form and substance satisfactory to the Underwriter and O'Connor, Cavanagh, Anderson, Kil- 3 lingsworth & Beshears, P.A., "Counsel to the Under- writer," which shall be substantially in the form set forth in the Preliminary Official Statement, with such changes as may be agreed in writing by the Underwriter and Counsel to the Underwriter (hereinafter referred to as the "Continuing Disclo- sure Certificate "); a bond registrar, transfer and paying agent agreement with respect to the Bonds (hereinafter referred to as the "Agency Agree- ment"); a depository trust agreement with respect to the use of the proceeds of the sale of the Bonds (the "Trust Agreement ") and this Purchase Agree- ment, (D) has duly authorized and approved the per- formance of the obligations of the Town contained in the Bond Resolution and the consummation of all other transactions contemplated by the Continuing Disclosure Certificate, the Agency Agreement, the Trust Agreement, this Purchase Agreement and the Official Statement and (E) is not in breach of or in default under any applicable law or administra- tive regulation of the State or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument to which the Town is a party or to which it is otherwise subject or to which any of its property is otherwise subject because such property is property of the Town; (ii) the Town is, and at the Closing shall, to the extent possible, be or shall thereafter cause itself to be, in compliance in all respects with the Bond Resolution and this Purchase Agreement; (iii) the Town has, and at the date of the Closing will have, full legal right, power and au- thority (A) to enter into the Continuing Disclosure Certificate, the Agency Agreement, the Trust Agree- ment and this Purchase Agreement, (B) to adopt the Bond Resolution, (C) to deliver the Bonds to the Underwriter pursuant to the Bond Resolution as pro- vided herein and (D) to carry out and consummate the transactions contemplated on its part by the Bond Resolution, the Continuing Disclosure Certif- icate, the Agency Agreement, the Trust Agreement, this Purchase Agreement and the Official Statement; (iv) the Town has made all required filings with, and has obtained all approvals, consents and orders of, any governmental authority, board, agency or commission having jurisdiction (including the Arizona Department of Revenue which respect to the requirements of Section 35- 501(B), Arizona Re- 4 vised Statutes, as amended) which would constitute a condition precedent to the performance by the Town of the obligations of the Town pursuant to this Purchase Agreement and pursuant to the Bonds, the Continuing Disclosure Certificate, the Agency Agreement, the Trust Agreement and the Bond Resolu- tion; (v) the Bonds conform to the descriptions thereof contained in the Official Statement; (vi) the Bonds, when issued, executed, authen- ticated and delivered in accordance with the Bond Resolution and sold to the Underwriter as provided herein, shall be validly issued and outstanding special obligations of the Town, entitled to the benefits of the Constitution and laws of the State, and the Bond Resolution, and all actions necessary to create a legal, valid and binding pledge of the revenues specified therein to pay all the principal of and interest on the Bonds as the same become due shall have been or shall be taken to the extent such action may be taken at or prior to the Clos- ing; (vii) the execution and delivery of the Bonds, the Bond Resolution, the Continuing Disclosure Cer- tificate, the Agency Agreement, the Trust Agreement and this Purchase Agreement, and the compliance with the provisions of each, shall not conflict with or constitute a material breach of or default pursuant to any law, administrative regulation, judgment, decree, loan agreement, note, resolution, agreement or other instrument to which the Town is a party or to which the Town is otherwise subject or to which any of the property of the Town is otherwise subject because such property is property of the Town; (viii) (A) WHILE THE UNDERWRITER HAS PARTICI- PATED AND WILL PARTICIPATE WITH THE TOWN IN THE PREPARATION AND ASSEMBLAGE OF THE PRELIMINARY OFFI- CIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT, RESPECTIVELY, THE TOWN IS PRIMARILY RESPONSIBLE FOR THE CONTENT OF THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT and (B) as of the date thereof, and at the time of the acceptance by the Town of this Purchase Agreement, the Prelimi- nary Official Statement did not and does not con- tain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements there- 5 that: in, in the light of the circumstances under which they were made, not misleading; (ix) except as otherwise described in the Final Official Statement, there is neither any action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body, pending, nor is there any basis therefor, (A) in any way affecting the powers of the Town, the existence of the Town or the title to office of any of the officials of the Town, (B) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or the collection of the revenues pledged and to be applied to pay the principal of and interest on the Bonds, (C) in any way contesting or affecting the validity or en- forceability of the Bonds, the Bond Resolution, the Continuing Disclosure Certificate, the Agency Agreement, the Trust Agreement or this Purchase Agreement, (D) contesting in any way the complete- ness or accuracy of the Official Statement, (E) contesting the power of the Town or the au- thority of the Town with respect to the Bonds, the Bond Resolution, the Continuing Disclosure Certifi- cate, the Agency Agreement, the Trust Agreement or this Purchase Agreement or (F) questioning the status of the exclusion of interest on the Bonds for federal income tax purposes from gross income for federal income taxation and (x) except as otherwise disclosed in the Official Statement, the Town is currently in com- pliance with each continuing disclosure undertaking which the Town has entered into pursuant to para- graph (b)(5) of the SEC Rule. (b) The Town hereby agrees with the Underwriter (i) unless the Final Official Statement is amended or supplemented pursuant to subparagraph (v) of this subparagraph (b) , at the time of the acceptance by the Town of this Purchase Agreement and at all times subsequent thereto, up to and including the End of the Underwriting Period (as such term is hereinafter defined), the Final Offi- cial Statement (including the financial and statis- tical data included therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the 6 light of the circumstances under which they were made, not misleading; (ii) if the Final Official Statement is amend- ed or supplemented pursuant to subparagraph (v) of this subparagraph (b), at the time of each supple- ment or amendment thereto and at all times subse- quent thereto up to and including the date of the End of the Underwriting Period (unless the Final Official Statement is further amended or supple- mented pursuant to subparagraph (v) of this sub- paragraph), the Final Official Statement as so supplemented or amended (including the financial and statistical data provided or reviewed by the Town included therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iii) between the date of this Purchase Agree- ment and the Closing, the Town shall not, without the prior written consent of the Underwriter, which consent shall not be unreasonably withheld, issue any bonds, notes or other obligations for borrowed money, and subsequent to the respective dates as of which information is given in the Official State- ment up to and including the Closing, the Town has not incurred and will not incur any material lia- bilities, except those liabilities arising in the normal course of business or incurred with the consent of the Underwriter; (iv) the Town shall furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Under- writer may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may reasonably designate; provided, however, that the Town shall not incur any addi- tional expense with respect to such actions and further that the Town shall not be required to subject itself or any of its agents or employees to service of process outside the State through or in connection with any of the foregoing and (v) if, between the date of this Purchase Agreement and until ninety (90) days after the End of the Underwriting Period, unless the Final Offi- 7 cial Statement is provided to a nationally recog- nized municipal securities information repository and then until twenty -five (25) days thereafter, an event occurs affecting the Town of which the Town has knowledge and which would cause the Final Offi- cial Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circum- stances under which they were made, not misleading, the Town shall, with the prior written consent of the Underwriter, which consent shall not be unrea- sonably withheld, amend or supplement the Final Official Statement at its expense in a form and manner approved by the Underwriter and Counsel to the Underwriter. (c) Unless otherwise notified in writing by the Underwriter by the Closing, the Town can assume that the "End of the Underwriting Period" for purposes of the SEC Rule shall be the date of the Closing. In the event such notice is so given by the Underwriter, the Underwriter shall notify the Town in writing following the occurrence of the End of the Underwriting Period for purposes of the SEC Rule. 5. At the Closing, the Town shall deliver the Bonds to the Underwriter in definitive form, bearing CUSIP numbers (provid- ed, however, that lack of such CUSIP numbers shall not relieve the Underwriter from its obligation under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds), duly executed and authenticated, together with the other documents here- inafter mentioned and subject to the terms and conditions of this Purchase Agreement. The Underwriter shall accept such delivery and pay the purchase price for the Bonds as set forth in Paragraph 1 of this Purchase Agreement in immediately available or federal funds. Delivery and payment as aforesaid shall be made in Phoenix, Ari- zona, or at such place as may have been mutually agreed upon by the Town and the Underwriter. 6. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Town contained in this Purchase Agreement and to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Town of the obligations of the Town pursuant to this Purchase Agreement at or prior to the date of the Closing. Accordingly, the obligation of the Underwriter pursuant to this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds is subject to the performance by the Town of the obligations of the Town to be performed pursuant to this Pur- chase Agreement and pursuant to such aforesaid documents and r instruments at or prior to the Closing and is also subject to the 8 C fulfillment to the reasonable satisfaction of the Underwriter of the following conditions, that: (i) the representations and warranties of the Town contained in this Purchase Agreement shall be true, com- plete and correct on the date of this Purchase Agreement and on and as of the date of the Closing, as if made on the date of Closing; (ii) at the time of the Closing, the Bond Resolu- tion, the Continuing Disclosure Certificate, the Agency Agreement, the Trust Agreement and this Purchase Agree- ment shall be in full force and effect and shall not have been amended, modified or supplemented, and the Final Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (iii) at the time of the Closing, the Town shall have adopted and there shall be in full force and effect such resolutions as in the opinion of Bond Counsel and Counsel to the Underwriter shall be necessary in connection with the transactions contemplated by this Purchase Agreement, and all necessary action of the Town relating to the issuance of the Bonds shall have been taken, shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed ' to in writing by the Underwriter; (iv) the Underwriter may terminate the obligations of the Underwriter pursuant to this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Town of the election of the Underwriter to do so if at any time after the execution of this Pur- chase Agreement and at or prior to the Closing: (A) the marketability or market price of the Bonds, in the reasonable opinion of the Under- writer, has been materially adversely affected by (I) an amendment to the Constitution of the United States or the Constitution of the State, (II) any introduced or enacted federal or State legislation, (III) any decision of any federal or State court, (IV) any ruling or regulation (final, temporary or proposed) of the Treasury Department of the United States, the Internal Revenue Service or other fed- eral or State authority or (V) any bill favorably reported out of committee in either house of the Congress of the United States, in any such case affecting the tax status of the Town, its securi- ties (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by the W, Internal Revenue Code of 1986, as amended, or the statutes of the State; (B) a stop order, ruling, regulation, pro- posed regulation or statement by or on behalf of the Securities and Exchange Commission shall be issued or made having the effect or creating the probability that the issuance, offering or sale of obligations of the general character of the Bonds shall be or shall become a violation of any provi- sions of the Securities Act of 1933, as amended, the Securities and Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended; (C) in the Congress of the United States, legislation shall be enacted or a bill shall be favorably reported out of committee to either house, a decision by a court of the United States shall be rendered, or a ruling, regulation, pro- posed regulation or statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that securities of the Town or of any similar public body are not exempt from the registration, quali- fication or other requirements of the Securities Act of 1933, as amended, the Securities and Ex- change Act of 1934, as amended, or the Trust Inden- ture Act of 1939, as amended; provided, however, that the effective date of the events described in (A) , (B) and (C) of this subparagraph (iv) shall be prior to the date of the Closing; (D) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak of hostili- ties or a national or international calamity or crisis, or an escalation thereof, the effect of such outbreak, calamity or crisis on the financial markets of the United States being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Under- writer to market the Bonds or to enforce contracts for the sale of the Bonds; (E) there shall have occurred a general sus- pension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, or by the States of Arizona or New York; 10 (F) there shall exist any event which, in the reasonable judgment of the Underwriter, either (I) makes untrue or incorrect in any material re- spect any statement or information contained in the Official Statement or (II) is not reflected in the Official Statement, but should be reflected therein in order to make the statements and information contained therein not misleading in any material respect and, in either such event, the Town refuses to permit the Official Statement to be supplemented to correct or supply such statement or information, or the statement or information as supplemented is such as, in the reasonable judgment of the Under- writer, would materially adversely affect the mar- ket for the Bonds or the sale, at the contemplated offering price, by the Underwriter of the Bonds or (G) United States Treasury Securities - State and Local Government Series or other appropriate obligations are available for the purposes of the Trust Agreement and (v) at or prior to the Closing, unless otherwise agreed to by the Underwriter in writing, the Underwriter shall have received two counterpart originals of a tran- script of all proceedings relating to the authorization and issuance of the Bonds, including the following docu- ments: (A) (I) the approving opinions, dated the date of the Closing and addressed to the Town, of Bond Counsel in form and content satisfactory to the Underwriter, in substantially the forms at- tached as Appendix D to the Official Statement relating to the Bonds; (II) a letter from Bond Counsel, dated the date of Closing and addressed to the Underwriter, permitting the Underwriter to rely upon the opinion of Bond Counsel for that period during which the Underwriter is the lawful owner of the Bonds and (III) an opinion of Bond Counsel, dated the date of Closing and addressed to the Underwriter, to the effect that (a) the information contained in the Official Statement under the head- ings entitled "THE BONDS," "HIGHWAY USER TAX REVE- NUES - SOURCES, DISTRIBUTION AND LEGAL PROVISIONS," "QUALIFIED TAX- EXEMPT OBLIGATIONS," "TAX EXEMP- TION," "ORIGINAL ISSUE DISCOUNT," "MARKET DISCOUNT" and "CONTINUING SECONDARY MARKET DISCLOSURE" there- in, in Appendices "D" and "E" thereto and on the cover page thereof as it relates to the Bonds does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 11 the information included therein not misleading, (b) the offer and sale of the Bonds shall be exempt from registration under the Securities Act of 1933, as amended, and the Bond Resolution does not need to be qualified pursuant to the Trust Indentures Act of 1934, as amended, (c) the Agency Agreement, the Trust Agreement, the Continuing Disclosure Certificate and this Purchase Agreement have been duly authorized, executed and delivered by the Town and are legal valid and binding obligations of the respective parties, enforceable in accordance with their terms subject to customary exceptions for bankruptcy and judicial discretion and (d) the bonds being refunded with proceeds of the sale of the Bonds have been defeased legally for all pur- poses; (B) a certificate or certificates, dated the date of the Closing and signed on behalf of the Town by the Mayor of the Town or other authorized officer with respect to matters relating to the Town, to the effect that (I) the representations, warranties and covenants contained in this Purchase Agreement are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of the Closing; (II) except as otherwise described in the Final Official Statement, no litigation of any nature is then pending or, to their knowledge, threatened, seeking to restrain or enjoin the issu- ance and delivery of the Bonds or the collection of revenues pledged and to be applied to pay the prin- cipal thereof and interest thereon, questioning the proceedings and authority by which such pledge is made, affecting the validity of the Bonds or con- testing the corporate existence or boundaries of the Town or the title of the present officers to their respective offices; (III) no authority or proceedings for the issuance of the Bonds has been repealed, revoked or rescinded and no petition or petitions to revoke or alter the authorization to issue the Bonds has been filed with or received by any of the signors; (IV) the Town has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to, and to the extent possible before, the Closing and (V) to their knowledge, no event af- fecting the Town has occurred since the date of the Final Official Statement which should be disclosed in the Final Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements 12 and information therein not misleading in any material respect as of the date of Closing; (C) a certificate, dated the date of the Closing, signed on behalf of the Town by the Man- ager of the Town, (I) to the effect that, to the best of his knowledge, information and belief after appropriate review, the Final Official Statement is true in all material respects and does not omit any statement of material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (II) with respect to the adequacy of the revenues pledged to pay the Bonds as required by applicable law; (D) a counterpart original of the Final Official Statement manually executed on behalf of the Town by the Mayor of the Town; (E) a verification report relating to the Bonds Being Refunded prepared by Grant Thornton LLP, certified public accountants (hereinafter referred to as the "Verification Agent "), including consent from the Verification Agent to use its name in the Final Official Statement; (F) a specimen Bond; (G) a certified copy of the Bond Resolution; (H) the items required by the Bond Resolution as conditions for issuance of the Bonds; (I) a non - arbitrage certificate of the Town, in form and substance satisfactory to Bond Counsel; (J) an executed copy of the Continuing Dis- closure Certificate; (K) an executed copy of the Report of Bond and Security Issuance Pursuant to A.R.S. § 35 -501B of the Arizona Department of Revenue; (L) an executed copy of the Agency Agreement and the Trust Agreement; (M) the filing copy of the Information Return Form 8038 -G (IRS) for the Bonds; (N) evidence that MBIA Insurance Company has issued its Municipal Bond New Issue Insurance Poli- 13 cy with respect to the Bonds (hereinafter referred to as the "Policy ") as well as appropriate opinions and certificates from MBIA Insurance Company relat- ing to the Policy; (0) evidence that Moody's Investors Services has issued a rating of "Aaa" for the Bonds (herein- after referred to as the "Rating "), and that the Rating is then in effect and (P) such additional legal opinions, certifi- cates, instruments and other documents as the Underwriter or its counsel may reasonably request to evidence the truth and accuracy, as of the date of this Purchase Agreement and as of the date of the Closing, of the representations, warranties and covenants of the Town contained herein and of the statements and information contained in the Offi- cial Statement and the due performance or satis- faction by the Town at or prior to the Closing of all agreements then to be performed and all condi- tions then to be satisfied by the Town. (All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions of this Purchase Agreement if, but only if, they are in form and substance satisfactory to the Underwriter and Counsel to the Underwriter; provided, however, that acceptance by the Underwriter of the Bonds shall be deemed by the Underwriter to be satisfaction of the foregoing.) 7. If the Town is unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds are terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement (except representations and warranties of the Town herein) shall terminate and neither the Underwriter nor the Town shall be under further obligation hereunder. 8. (a) If a Closing shall take place hereunder, the Town shall pay, but solely from the proceeds of the sale of the Bonds, (i) the cost of the preparation and printing of the Bond Resolution, the Agency Agreement, the Trust Agreement, this Pur- chase Agreement, the Preliminary Official Statement and the Final Official Statement (including any amendments or supplements there- to); (ii) the cost of preparation and printing of the Bonds; (iii) the fees and disbursements of Bond Counsel and the Verifica- tion Agent; (iv) the initial fees and disbursements of Norwest Bank 14 Arizona, N.A., as "Bond Registrar and Transfer and Paying Agent" and separately as "Depository Trustee" for the Bonds, provided, however, that the Town shall be responsible for all other fees and disbursements of the Bond Registrar and Transfer and Paying Agent and the Depository Trustee; (v) the fees and expenses incurred by the Town or the Underwriter for the Rating and the Policy and (vi) reasonable miscellaneous, normally occurring, "out -of- pocket" expenses incurred by the Underwriter in connection with the issu- ance and sale of the Bonds not provided for in the next paragraph. (b) The Underwriter shall pay, if any, (i) all advertising expenses in connection with the public offering of the Bonds, (ii) the fees and disbursements of Counsel to the Underwrit- er and (iii) all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 9. As required by the provisions of Section 38 -511, Arizona Revised Statutes, as amended, notice is hereby given that the State, its political subdivisions (including the Town) or any department or agency of either may, within three years after its execution, cancel any contract, without penalty or further obliga- tion, made by the State, its political subdivisions, or any of the departments or agencies of either if any person significantly in- volved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions, or any of the departments or agencies of either is, at any time while the contract or any extension of the contract is in effect, an em- ployee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. The cancellation shall be effective when written notice from the Governor or the chief execu- tive officer or governing body of the political subdivision is received by all other parties to the contract unless the notice specifies a later time. The State, its political subdivisions or any department or agency of either may recoup any fee or commission paid or due to any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions or any department or agency of either from any other party to the contract arising as the result of the contract. This section is not intended to expand or enlarge the rights of the Town hereunder except as required by such Section. Each of the parties hereto hereby certifies that it is not presently aware of any violation of such Section which would adversely affect the enforceability of this Agreement and covenants that it shall take no action which would result in a violation of such Section. 10. (a) Any notice or other communication to be given pursuant to this Purchase Agreement must be given by delivering the same in writing to: 15 (g) This Purchase Agreement shall become effective upon the execution of the acceptance of this Purchase Agreement by the Mayor of the Town and shall be valid and enforceable as of the time of such acceptance. (h) This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Arizona. ACCEPTED THIS 6TH DAY OF AUGUST, 1998: Very truly yours, PEACOCK, HISLO , S & GIVEN, INC. B.g .. .. ...... B. ark Reader, Managing Director TOWN OF FOUNTAIN HILLS, ARIZONA B.. .... . ..... ............. i ( Mayor ATTEST: Clerk APPROVED AS TO FORM: < f, Town Attorney PSSICE15/080698 17 SCHEDULE I $1,075,000 TOWN OF FOUNTAIN HILLS, ARIZONA HIGHWAY USER REVENUE REFUNDING BONDS, SERIES 1998 BONDS Maturity Dates Principal Interest (July l) Amounts Rates Yield 1999 $ 30,000 3.7501 3.80% 2000 70,000 3.750 3.95 2001 70,000 4.000 4.05 2002 95,000 4.000 4.15 2003 90,000 4.100 4.20 2004 90,000 4.200 4.30 2005 90,000 4.300 4.35 2006 85,000 4.400 4.45 2007 110,000 4.500 4.50 2008 110,000 4.500 4.55 2009 105,000 4.600 4.65 2010 130,000 4.625 4.75 REDEMPTION PROVISIONS The Bonds are not subject to redemption prior to their maturity dates. I -1