HomeMy WebLinkAbout06/04/2013 Council Agenda PacketMARANA TOWN COUNCIL
REGULAR COUNCIL MEETING
NOTICE AND AGENDA
11555 W. Civic Center Drive, Marana, Arizona 85653
Council Chambers, June 4, 2013, at or after 7:00 PM
Ed Honea, Mayor
Patti Comerford, Vice Mayor
David Bowen, Council Member
Herb Kai, Council Member
Carol McGorray, Council Member
Jon Post, Council Member
Roxanne Ziegler, Council Member
Pursuant to A.R.S. § 38.431.02, notice is hereby given to the members of the Marana Town Council and to the
general public that the Town Council will hold a meeting open to the public on June 4, 2013, at or after 7:00
PM located in the Council Chambers of the Marana Municipal Complex, 11555 W. Civic Center Drive,
Marana, Arizona.
ACTION MAY BE TAKEN BY THE COUNCIL ON ANY ITEM LISTED ON THIS AGENDA. Revisions
to the agenda can occur up to 24 hours prior to the meeting. Revised agenda items appear in italics.
As a courtesv to others, please turn off or put in silent mode all pagers and cell phones.
Meeting Times
Welcome to this Marana Town Council meeting. Regular Council meetings are usually held the first and third
Tuesday of each month at 7:00 PM at the Marana Municipal Complex, although the date or time may change
and additional meetings may be called at other times and/or places. Contact the Town Clerk or watch for
posted agendas for other meetings. This agenda may be revised up to 24 hours prior to the meeting. In such a
case a new agenda will be posted in place of this agenda.
Speaking at Meetings
If you are interested in speaking to the Council during the Call to the Public or Public Hearings, you must fill
out a speaker card (located in the lobby outside the Council Chambers) and deliver it to the Town Clerk prior
to the convening of the meeting.
All persons attending the Council meeting, whether speaking to the Council or not, are expected to observe
the Council rules, as well as the rules of politeness, propriety, decorum and good conduct. Any person
interfering with the meeting in any way, or acting rudely or loudly will be removed from the meeting and will
not be allowed to return.
Accessibility
To better serve the citizens of Marana and others attending our meetings, the Council Chambers are
wheelchair and handicapped accessible. Persons with a disability may request a reasonable accommodation,
Regular Council Meeting - June 4, 2013 - Page 1 of 296
such as a sign language interpreter, by contacting the Town Clerk at (520) 382-1999. Requests should be
made as early as possible to arrange the accommodation.
Agendas
Copies of the agenda are available the day of the meeting in the lobby outside the Council Chambers or online
at www.marana.com, by linking to the Town Clerk page under Agendas, Minutes and Recent Actions. For
questions about the Council meetings, special services or procedures, please contact the Town Clerk, at 382-
1999, Monday through Friday from 8:00 AM to 5:00 PM.
This Notice and Agenda Posted no later than Monday, June 03, 2013, 7:00 PM, at the Marana Municipal
Complex, 11555 W. Civic Center Drive, the Marana Operations Center, 5100 W. Ina Road, and at
www.marana.com on the Town Clerk page under Agendas, Minutes and Recent Actions.
REGULAR COUNCIL MEETING
CALL TO ORDER AND ROLL CALL
PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE
APPROVAL OF AGENDA
CALL TO THE PUBLIC
At this time any member of the public is allowed to address the Town Council on any issue within the
jurisdiction of the Town Council, except for items scheduled for a Public Hearing at this meeting. The
speaker may have up to three minutes to speak. Any persons wishing to address the Council must
complete a speaker card located outside the Council Chambers and deliver it to the Town Clerk prior to
the commencement of the meeting. Individuals addressing a meeting at the Call to the Public will not be
provided with electronic technology capabilities beyond the existing voice amplification and recording
capabilities in the facilities and the Town's overhead projector/document reader. Pursuant to the Arizona
Open Meeting Law, at the conclusion of Call to the Public, individual members of the Council may
respond to criticism made by those who have addressed the Council, and may ask staff to review the
matter, or may ask that the matter be placed on a future agenda.
PROCLAMATIONS
MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS
MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS
PRESENTATIONS
CONSENT AGENDA
The Consent Agenda contains items requiring action by the Council which are generally routine items
not requiring Council discussion. A single motion and affirmative vote will approve all items on the
Consent Agenda, including any resolutions or ordinances. Prior to a motion to approve the Consent
Agenda, any Council member may remove any item from the Consent Agenda and that item will be
discussed and voted upon separately.
C 1: Resolution No. 2013-052: Relating to Community Development; approving and
authorizing Town staff to implement the Town of Marana Housing Rehabilitation Program
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Guidelines (T VanHook)
C 2: Resolution No. 2013-053: Consideration and possible adoption of a resolution
authorizing the defeasance of payment obligations of the Town with respect to the Fourth
Supplement to Amended and Restated Town Lease and Series 1982 Town Lease with
Town of Marana Municipal Property Corporation as determined by the Finance Director of
the Town; authorizing the taking of other actions necessary to the consummation of the
transactions contemplated by this resolution and declaring an emergency (Erik Montague)
C 3: Resolution No. 2013-054: Consideration and possible adoption of a resolution
approving the sale and execution and delivery of pledged excise tax revenue and revenue
refunding obligations evidencing a proportionate interest of the owners thereof in a
purchase agreement from the Town; approving the form and authorizing the execution and
delivery of such purchase agreement and other necessary agreements for such sale;
delegating authority to determine certain matters and terms with respect to the foregoing;
authorizing the taking of all other actions necessary to the consummation of the
transactions contemplated by this resolution and declaring an emergency (Erik Montague)
LIQUOR LICENSES
BOARDS, COMMISSIONS AND COMMITTEES
B 1: Resolution No. SSCFD 2013-02: [Marana Town Council acting as the Saguaro
Springs Community Facilities District Board of Directors]: A resolution of the Board of
Directors of Saguaro Springs Community Facilities District approving and authorizing the
execution and delivery of a District Development, Financing Participation and
Intergovernmental Agreement (Saguaro Springs Community Facilities District) (Frank
Cassidy)
B 2: Resolution No. 2013-051: Relating to Boards, Commissions and Committees; re-
appointing John Soper and Joe Reilly to the District Board of the Dove Mountain Resort
Community Facilities District (Jocelyn Bronson)
COUNCIL ACTION
A 1: Resolution No. 2013-055: Relating to Utilities; Authorizing Town staff to seek out
acquisition of additional water resources. (John Kmiec)
A 2: Resolution No. 2013-056: Relating to Elections; declaring and adopting the results
of the general election held on May 21, 2013. (Jocelyn Bronson)
A 3: Resolution No. 2013-057: Relating to development; approving and authorizing the
execution and delivery of a District Development, Financing Participation and
Intergovernmental Agreement (Saguaro Springs Community Facilities District) and
declaring an emergency (Frank Cassidy)
A 4: Ordinance No. 2013.09: Relating to Development; Amending Ordinance No.
2013.003 (creating the Towne Center Specific Plan) by retroactively repealing Section 4
concerning the execution and recording of property owner waivers; and setting an effective
date (Frank Cassidy)
A 5: Relating to Mayor and Council; selection of the Vice Mayor (Jocelyn Bronson)
ITEMS FOR DISCUSSION/POSSIBLE ACTION
D 1: Presentation: Relating to Mayor and Council; discussion and direction regarding
options for the 2013 Strategic Plan retreat (Gilbert Davidson)
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D 2: Relatin� to Le�islation and Government Actions; Discussion and possible action
regarding all pending state, federal, and local legislation/government actions and on recent
and upcoming meetings of other governmental bodies (Gilbert Davidson)
EXECUTIVE SESSIONS
Pursuant to A.R.S. § 38-431.03, the Town Council may vote to go into executive session, which will
not be open to the public, to discuss certain matters.
E l: Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for
discussion or consultation for legal advice with the Town Attorney concerning any matter
listed on this agenda.
FUTURE AGENDA ITEMS
Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more
Council members request that an item be placed on the agenda, it must be placed on the agenda for the
second regular Town Council meeting after the date of the request, pursuant to Marana Town Code
Section 2-4-2(B).
ADJOURNMENT
Regular Council Meeting - June 4, 2013 - Page 4 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: T VanHook, Community Development Director
Strategic Plan Focus Area:
Community
Strategic Plan Focus Area - Additional Information:
Item C 1
The 2010 General and 2012 Strategic Plans call for the provision of sufficient availability and variety of
safe, decent and appropriate affordable housing stock within cohesive neighborhoods that meet the
needs of present and future Marana residents. Taking a cue from the these plans, Community
Development and Neighborhood Services is working to address voter approved objectives to: (1)
promote quality residential development along with diverse types of housing; (2) encourage the
development of affordable owner-occupied housing units; (3) encourage and promote community efforts
to revitalize mature neighborhoods; (4) provide for adequate housing opportunities for seniors and
special needs groups, and (5) support programs and agencies that seek to eliminate housing
discrimination.
The Strategic Plan Community focus area, Initiative #4 is to develop diverse housing opportunities for
residents of all income levels. Included under this Initiative is the strategy of continuing to identify
needs and to pursue alternative funding sources for rehabilitation of infrastructure in older
neighborhoods and Colonias.
Ensuring that the Town has adequate infrastructure with the colonias helps build a stronger community,
protects the environment, and supports diversity in housing options. residents of all income levels.
Ensuring that the Town has adequate infrastructure with the colonias helps build a stronger community,
protects the environment, and supports diversity in housing options.
Subj ect: Resolution No. 2013-052: Relating to Community Development; approving and authorizing
Town staff to implement the Town of Marana Housing Rehabilitation Program Guidelines
Discussion:
The Town of Marana offers a variety of housing rehabilitation programs to assist residents and help
improve and preserve existing neighborhood infrastructure including Owner-Occupied Housing
Rehabilitation, Emergency Home Repair, and Weatherization. Retrofits, repairs, and renovations
performed through these programs are completed by the Town's Housing Rehabilitation Specialist or
licensed contractors (depending on the nature of the repair) at no cost to the homeowner.
The current funding sources for the Owner-Occupied Housing Rehabilitation and Emergency Home
Repair Programs includes U.S. Department of Housing and Urban Development Community
Development Block Grant (CDBG) Program funds administered through an intergovernmental
agreement with Pima County, as well as Marana's Revolving Affordable Housing Fund.
Regular Council Meeting - June 4, 2013 - Page 5 of 296
The Housing Rehabilitation Program Guidelines establish policies and procedures for administration of
funding for the Owner-Occupied Housing Rehabilitation, Emergency Home Repair, and Weatherization
programs.
Council action adopting the Guidelines is a requirement for application for funding under the Arizona
Department of Housing CDBG Colonia Set Aside Competitive Grant process.
Financial Impact:
Adoption of the Housing Rehabilitation Guidelines does not have any impact on the budget or
management of grant funding currently under contact. Council action adopting the Guidelines is a
requirement for application for funding under the Arizona Department of Housing CDBG Colonia Set
Aside Competitive Grant process.
ATTACHMENTS:
Name: Description: Type:
� Resolution 2013-
052 approvinq Housinq Rehab Proqram Guidelines Resolution 2013-052 Resolution
(00034243).doc
�
Exhibit A to Housinq Rehabilitation Proqram Guidelines Exhibit A to Housing Rehab Resolution Exhibit
(00034233).docx
Staff Recommendation:
Staff recommends approval of the Housing Rehabilitation Program Guidelines.
Suggested Motion:
I move to adopt Resolution No. 2013-052, approving and authorizing Town staff to implement the Town
of Marana Housing Rehabilitation Program Guidelines.
Regular Council Meeting - June 4, 2013 - Page 6 of 296
MARANA RESOLUTION NO. 2013-052
RELATING TO CONINIUNITY DEVELOPMENT; APPROVING AND AUTHORIZING
TOWN STAFF TO INIPLEMENT THE TOWN OF MARANA HOUSING REHABILITATION
PROGRAM GUIDELINES
WHEREAS the Town of Marana recognizes the need to provide safe affordable housing
and neighborhood infrastructure for its citizens; and
WHEREAS in March 2012, the Town Council of the Town of Marana adopted the Town
of Marana Strategic Plan II(the "Plan"), and under the Community focus area of the Plan,
Initiative 4 is to develop diverse housing opportunities for residents of all income
levels; included within this Initiative is the strategy of continuing to identify needs and to pursue
alternative funding sources for rehabilitation of infrastructure in older neighborhoods and
colonias; and
WHEREAS adoption of Housing Rehabilitation Guidelines is a requirement for
application for funding under the Arizona Department of Housing Community Development
Block Grant (CDBG) Colonia Set Aside Competitive Grant process; and
WHEREAS the Mayor and Council of the Town of Marana find it is in the best interests
of its citizens to adopt these guidelines.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, as follows:
SECTION 1. The Town of Marana Housing Rehabilitation Program Guidelines attached
to and incorporated by this reference in this resolution as Exhibit A are hereby approved.
SECTION 2. The Town's Manager and staff are hereby directed and authorized to
undertake all other and further tasks required or beneficial to implement and carry out the terms,
obligations, and obj ectives of the guidelines.
Marana Resolution 2013-052 - 1 -
Regular Council Meeting - June 4, 2013 - Page 7 of 296
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona,
this 4 th day of June, 2013.
ATTEST:
Mayor Ed Honea
APPROVED AS TO FORM:
Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney
Marana Resolution 2013-052 - 2 -
Regular Council Meeting - June 4, 2013 - Page 8 of 296
Housing Rehabilitation Program Guidelines
Introduction
The 2010 General and 2012 Strategic Plans call for the provision of sufficient availability and variety of
safe, decent and appropriate affordable housing stock within cohesive neighborhoods that meet the
needs of present and future Marana residents. Taking a cue from the General Plan, Community
Development is working to address voter approved objectives to: (1) promote quality residential
development along with diverse types of housing (2) encourage the development of affordable
owner-occupied housing units; (3) encourage and promote community efforts to revitalize mature
neighborhoods; (4) provide for adequate housing opportunities for seniors and special needs groups; and
(5) support programs and agencies that seek to eliminate housing discrimination.
Targeting funding and programs to improve community condition, and emphasizing initiatives serving
vulnerable, low-to-moderate income and underserved populations, is critical to the economic growth and
long-term viability of the community. Many of the Economic Activity Centers outlined in the Marana
Economic Roadmap, including the Downtown, Airport, and Heritage areas, are located adj acent to or in
clear view of blighted areas and colonia neighborhoods. Without substantial improvements to both
infrastructure and housing quality these areas become a liability for the Town when marketing the area
for future development. Investment in improving these areas not only improves the lives of the
residents, it also positions the Town to market the community from an economic development area.
Housing Rehabilitation Programs
The Town of Marana offers a variety of Housing Rehabilitation Programs to assist residents and help
improve and preserve existing neighborhood infrastructure. These programs include the
Owner-Occupied Housing Rehabilitation Program, the Emergency Home Repair Program, and the
Weatherization Program, each of which will be discussed below. Retrofits, repairs, and renovations
performed through these programs are completed by the Town's Housing Rehabilitation Specialist or
licensed contractors (depending on the nature of the repair) at no cost to the homeowner. Temporary
relocation is not included within the scope of these programs.
The current funding sources for the Owner-Occupied Housing Rehabilitation and Emergency Home
Repair Programs includes U.S. Department of Housing and Urban Development (HUD) Community
Development Block Grant (CDBG) Program funds administered through an intergovernmental
agreement with Pima County, as well as Marana's Revolving Affordable Housing Fund. All of the
funding received is subject to eligibility and reporting requirements prescribed by the funding agency.
Additional funds are obtained periodically depending on their availability and program needs. Due to
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 9 of 296
limits in the amount of funding available under these programs, funding is prioritized to meet the needs
of target populations including the elderly (persons 60 years or older), persons with disabilities, and
female-headed households with children under the age of eight (8).
Eligibility Requirements for all Housing Rehabilitation Programs
1. The property must be located within Marana town limits.
2. The home must be owner-occupied by a full-time, permanent resident for at least 12 months prior to
application. Applicants must certify that the property is their primary residence.
3. Property taxes and mortgages must be current with no arrears.
4. Town employees and contractors must be able to access the home during reasonable business hours
before, during and after the completion of the work to perform inspections and repairs.
5. Motor homes, recreational vehicles (RV's), and travel trailers do not qualify.
6. The applicant must have a verifiable annual income for the current year.
7. The applicant must meet income limits for the specific program applied for, as follows:
a. For the Owner-Occupied Housing Rehabilitation Program and the Emergency Home Repair
Program — income shall not exceed 80% of area median income
b. For the Weatherization Program — income shall not exceed 200% of the Federal Poverty Level
Income verification is valid for a period of six (6) months from date of verification and must be
renewed every six (6) months thereafter to maintain eligibility.
9. Applicants with properties located in Special Flood Hazard Areas must have a flood insurance policy
in place and are responsible for ensuring that flood insurance is maintained for the statutorily
prescribed period and dollar amount. Grant recipients must maintain flood insurance for the life of
the building.
10. The homeowner must have a current homeowner's insurance policy when required by the funding
source utilized.
11. The property owner must sign all Service Agreements, Rights-of-Entry and Construction Easement
documents required by the Town.
12. The homeowner must remove all obstacles and locate any buried utilities or other underground
structures on their property prior to exterior repairs.
13. The property must have a visible property address.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 10 of 296
14. The homeowner must agree to allow photographs to be taken of the home before and after repairs
are completed.
15. Any dogs on the property must be licensed and confined during inspections and work.
16. The homeowner must agree to fill out a Program Evaluation form upon completion of the work
17. The homeowner must agree to allow access to the property for yearly audits conducted by the
funding agency to inspect the completed work.
Owner-Occupied Housing Rehabilitation Program
The Owner-Occupied Housing Rehabilitation Program provides grant assistance to low-income
households in owner-occupied qualifying conventional homes or manufactured homes. The program's
main obj ectives include: improving living conditions, eliminating health and safety hazards, bringing
major systems up to code, improving energy efficiency, and preserving the quality and appearance of
existing housing stock for eligible homeowners.
While the Owner-Occupied Housing Rehabilitation Program provides assistance with costly major
repairs and energy efficiency repairs, this program is not a comprehensive rehabilitation program
designed to address all repair needs within clients' homes. The program does not provide assistance to
homeowners for normal maintenance issues, remodeling room additions, or any other items solely for
aesthetic value.
The Owner-Occupied Housing Rehabilitation Program was designed to provide maximum flexibility to
program staff when assessing and repairing clients' homes. At a minimum, all code violations must be
addresses within the scope of services. Residents may be eligible for the following types of repairs.
Roof Repair - deteriorated roof systems of all types (shingles, built up roofs, rolled roofs, or metal roofs)
can be repaired or replaced, including damaged wood sheathing and fascia.
Heatin� and Coolin�(HVAC) Repair - the repair or replacement of heating and cooling systems,
including furnaces, coolers, water heaters, and related items.
Septic Svstem Repair or Replacement - the repair or replacement of septic systems may include
percolation testing leach field repair, and septic tank replacement.
Sanitarv Sewer Conversion - failing septic systems within area served by public sanitary sewer systems
may be eligible for conversion to the public sanitary sewer and septic abandonment.
Major Svstems Repair - general or multiple home repairs may include replacement of gas lines,
electrical service upgrades, and other related items such as electrical and plumbing deficiencies,
weatherproofing, insulation, ceiling, wall, and window and door repairs.
Owner-Occupied Housing Rehabilitation assistance will be funded through grants. The grant amount
available to each participant will be dependent on available resources and will be reviewed annually by
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 11 of 296
the Community Development and Neighborhood Services Director. Consideration to current
construction costs, emergency needs, and allocation of monies by funding sources will be used to
determine the grant amount. Exceptions to the maximum grant amount may be approved by the
Community Development and Neighborhood Services Director on a case-by-case basis.
Applicants are eligible for Owner-Occupied Housing Rehabilitation Program assistance once per
lifetime. Waivers to the one-time assistance rule may be considered by the Community Development
and Neighborhood Services Director depending on emergency and/or extenuating circumstances.
Owner-Occupied Housing Rehabilitation Program Application Process
Applications are available both in English and Spanish at the Marana Municipal Complex, by mail,
and on the Town of Marana website at www.marana.com/housin�rehab.
The application is revised periodically to incorporate new income guidelines, new program
requirements, new funding sources and any other changes that are deemed necessary by the Housing
rehabilitation Program staff and approved by the Community Development and Neighborhood
Services Director.
2. Applicants must complete the entire application and submit all required supplemental documentation
before any repairs will be considered for the home. The following steps are taken by the Grants and
Housing Coordinator to review the application:
a. Review application for completeness, ensure that applicant meets the program eligibility criteria,
and log the name and address of the applicant on the master list.
b. If the application is not complete, a letter is sent requesting the required documentation. The
application will be placed on the Pending List until all the information has been received.
c. Check property address on Assessor's website to determine if it is in the Marana town limits,
verify ownership via Recorder's Office, verify flood zone status, and date of construction.
d. Review income verification for all household members.
e. Prepare a file folder and add all the necessary forms to the application that will be required for
the Housing Rehabilitation Program assistance process.
3. Eligible applications are ranked and dated. Applications are ranked based on the Ranking and
Waiting List Policy set forth below.
4. Ranked applications are reviewed to confirm the requested repairs and the homeowner is contacted
to schedule an initial inspection. A Walk-Through Inspection Sheet is used to document home
conditions and needs, and photos are taken of the home. The Housing Rehabilitation Specialist will
complete a housing inspection, scope of work, and cost estimates, as described below, to determine
the extent of services required, including certification that a septic system is non-functional prior to
conversion to the public sanitary sewer system, if applicable.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 12 of 296
5. After all the necessary documentation is received and reviewed, the information is verified, and a
scope of work and cost estimates have been developed, the Community Development and
Neighborhood Services Director, the Housing Rehabilitation Specialist, and the Grants and Housing
Coordinator will meet to determine whether the property is suitable for rehabilitation under the
constraints of the Owner-Occupied Housing Rehabilitation Program.
6. The applicant will receive notification of approval or denial of program assistance.
a. A letter is sent to homeowners confirming that they have qualified for the program and have
been added to the waiting list, if applicable.
b. A formal notice is mailed to applicants that do not qualify. The letter explains the reason(s) why.
They are also provided with a list of other agencies whose programs may provide assistance.
7. The Director reviews the file for completeness and approves the scope of work prior to initiating
services.
Emergency Home Repair Program
The Emergency Home Repair Program provides emergency assistance for repairs to alleviate hazardous
conditions for the occupants of qualifying conventional homes or manufactured homes. The program's
main obj ectives include: improving living conditions, eliminating health and safety hazards, bringing
major systems up to code, improving energy efficiency, and preserving the quality and appearance of
existing housing stock for eligible homeowners.
Examples of emergency repair items include: inoperative evaporative coolers, A/C units, furnaces and
water heaters, severely leaking roofs, leaking gas and water lines, and backed up septic systems. An
emergency situation is determined by various factors including: time of year, hazard to resident, and the
health and age of the applicant and other family members living in the home.
Emergency Home Repair assistance will be funded through grants. The grant amount available to each
participant will be dependent on available resources and will be reviewed annually by the Community
Development and Neighborhood Services Director. Consideration to current construction costs,
emergency needs, and allocation of monies by funding sources will be used to determine the grant
amount. Exceptions to the maximum grant amount may be approved by the Community Development
and Neighborhood Services Director on a case-by-case basis.
Emergency Home Repair Program Application Process
1. Applications are available both in English and Spanish at the Marana Municipal Complex, by mail
and on the Town of Marana website at www.marana.com/housin�rehab.
The application is revised periodically to incorporate new income guidelines, new program
requirements, new funding sources and any other changes that are deemed necessary by the Housing
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 13 of 296
rehabilitation Program staff and approved by the Community Development and Neighborhood
Services Director.
2. Applicants must complete the entire application and submit all required supplemental documentation
before any repairs are considered for the home. The following steps are taken by the Grants and
Housing Coordinator to review the application:
a. Review application for completeness, ensure that applicant meets the program eligibility criteria,
and log the name and address of the applicant on the master list.
b. If the application is not complete, staff will work with the applicant to secure required
documentation as quickly as possible. Emergency repairs cannot move forward until all required
information has been received and a preliminary review completed.
c. Check property address on Assessor's website to determine if it is in the Marana Town limits,
verify ownership via Recorder's Office, verify flood zone status, and date of construction.
d. Review income verification for all household members.
e. Prepare a file folder and add all the necessary forms to the application that will be required for
the Emergency Home Repair assistance process.
£ Complete a housing inspection and preliminary scope of work to determine the extent of services
required, including certification that a septic system is non-functional prior to conversion to the
public sanitary sewer system, if applicable.
g. After all the necessary documentation is received and the information is verified, the Grants and
Housing Coordinator forwards completed files requesting emergency repairs to the Housing
Rehabilitation Specialist.
3. The Housing Rehabilitation Specialist contacts the homeowner to get specific details about the
problem and schedule an initial inspection. The Housing Rehabilitation Specialist will complete a
housing inspection and preliminary scope of work to help determine the extent and urgency of the
emergency, including certification that a septic system is non-functional prior to conversion to the
public sanitary sewer system, if applicable.
4. Depending on the severity of the emergency, the Housing Rehabilitation Specialist may be required
to take action to mitigate additional damage. In this case the Housing Rehabilitation Specialist will:
a. Draft a work write-up for the repair.
b. Notify the Director to obtain a verbal approval to proceed with the work in situations that need
immediate attention. Contact the appropriate contractor to schedule the work, if applicable.
c. Inform the owner of the emergency situation, and how and by whom the repairs will be completed.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 14 of 296
d. Complete all necessary homeowner documents.
e. Complete or contract for the work following established protocols and procurement processes.
5. As soon as is possible, a formal notice is mailed to participants and the homeowner will be assisted
in applying for the Owner-Occupied Housing Rehabilitation Program, if applicable.
6. Emergency situations take priority over other pending non-emergency applications. To determine
the severity of the need, the Housing Rehabilitation Specialist, Grants and Housing Coordinator, and
Director may review the reported emergency repair items listed on the application. Applications for
non-emergency repairs will be processed through the Owner-Occupied Housing Rehabilitation
Program procedures.
Weatherization Program
The Weatherization Program provides services aimed at reducing utility bills by making energy
improvement repairs to homes. Services provided under this program may include repairs such as duct
sealing, augmenting insulation, caulking repairing doors, weather stripping, repairing broken windows,
and other repairs that increase the comfort and safety of homes.
Weatherization assistance will be funded through grants. The grant amount available to each participant
will be dependent on available resources and will be reviewed annually by the Community Development
and Neighborhood Services Director. Consideration to current construction costs, emergency needs, and
allocation of monies by funding sources will be used to determine the grant amount. Exceptions to the
maximum grant amount may be approved by the Community Development and Neighborhood Services
Director on a case-by-case basis.
Energy Efficiency
All mechanical units and appliance retrofits completed under Marana's Housing Rehabilitation
Programs meet Energy Star standards. It is the policy of the Town to utilize the HUD guidelines for
conducting energy efficient housing rehabilitation. Incorporating HUD energy efficiency guidelines into
the Town's Housing Rehabilitation Programs is a significant step toward achieving High Performance
Housing - housing that is energy efficient, durable, sustainable and healthy - addressing several Strategic
Plan initiatives.
The Town uses the Energy Efficiency Rehab Advisor for recommendations for following these
guidelines when undertaking any type of renovation project in single family and multifamily housing.
The Advisor's energy efficiency recommendations are based on ENERGY STAR� specifications, where
applicable.
Ranking and Waiting List Policy
Applicants will not necessarily be assisted in a sequential order based on the date the application was
completed. Instead, applications are ranked and placed on a waiting list based on the following criteria,
in the following order. (1) health and safety issues (emergency); (2) existence of the following
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 15 of 296
populations living in the residence: (a) elderly persons (60 years or older), (b) persons with disabilities,
and/or (c) female-headed households with child/ren under the age of eight; and (3) application
completion date.
Additionally, contractor availability may affect the order of assisting applicants.
Rehabilitation Standards
All work will be performed by the Town's Housing Rehabilitation Specialist or a licensed contractor
(depending on the nature of the work) in compliance with the current International Building Codes
adopted by the Town of Marana, HUD Lead Safe Housing Requirements, and any other rehabilitation
standards set forth by the funding source.
Housing Inspection, Scope of Work, and Cost Estimates
The Housing Rehabilitation Specialist will be responsible for developing a scope of work during the
inspection process that will be used by the contractor to provide a job estimate. The Housing
Rehabilitation Specialist contacts the homeowner to schedule an initial inspection and will then
complete the housing inspection to assesses the home, develop a scope of work, and determine which
program is best suited to meet the needs of the homeowner. The scope of work will identify all
necessary repairs. Using historical costs for like repairs, established bid item prices, and professional
estimates, the Housing Rehabilitation Specialist will develop an estimate of job costs. Non-specific
work items with an hourly cost and percent mark-up on the material and labor are covered under the
miscellaneous line item.
Purchasing and Contracting of Services
Established Town of Marana procurement procedures will be used in the selection of contractors for the
various Housing Rehabilitation Programs.
The Housing Rehabilitation Specialist is responsible for:
• preparing specifications for the required work items when undergoing a new requisition for
services
• working with the Town's Finance Department to ensure compliance with Town Code and
established practices
• tracking the expenditures and current balance
• ensuring that the contractors are keeping within the contract/j ob order specifications
• making any necessary changes to existing contract terms
• reviewing any price increase or change in scope of services requests by the contractor
• maintaining records in accordance with Town standards and contract requirements
The Grants and Housing Coordinator is responsible for:
• tracking grant expenditures and current balance
• ensuring that the work performed is within the parameters of the funding agreement
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 16 of 296
• completing required reporting and reimbursement requests
All requisitions must be submitted to the Finance Department for appropriate approvals. The requisition
includes a definition of the required services and/or products including appropriate specifications,
scope-of-work, minimum requirements and approval for funding.
The Purchasing Coordinator reviews the requisition and specifications, and if the request has not been
bid, will select the best purchasing method, which will typically be a Request for Quote (RFQ),
Invitation for Bid (IFB), Request for Proposal (RFP) or Invitation for Qualifications (IFQ). Staff is
responsible for conducting the purchasing using appropriate and approved purchasing processes.
Informal Bids - For service contracts and purchases of less than $10,000 but more than $1,000, the
Marana Town Code allows for an informal bid process referred to as a Request for Bid (RFB). The
Housing Rehabilitation Specialist will obtain, at a minimum, three quotes/informal bids in writing, by
phone, or electronically to support the price and delivery obtained. The purchase order is awarded to the
vendor offering the lowest responsive responsible quote/bid and meeting the terms, conditions and
delivery requirement of the Town.
Formal Bids - Whenever a contemplated purchase of goods or services or contract for building services
is for a sum exceeding $10,000, the Town Code requires that a notice inviting bids (IFB) be published at
least ten days prior to the date set for the receipt of bids. The notice shall include a general description of
the purchase or services to be performed and the time and place for opening bids. The bid shall be
awarded as provided for in the terms and conditions of the IFB. Unless otherwise stated, the bid shall be
awarded to the bidder who has submitted the lowest responsive, responsible bid to the Town, meeting
the terms and conditions and specifications as requested. A contract or purchase order may be issued for
the requested supplies, equipment or services.
Pre-Construction Conference
Once the purchase order is forwarded to the contractor, the Housing Rehabilitation Specialist schedules a
meeting with the homeowner to discuss the scope of services and the homeowner signs the required Town
agreement, and lead base paint form (if applicable) and receives a copy of the work order.
When the job is scheduled to start, the Housing Rehabilitation Specialist will meet the contractor at the
job site, oversee work progress, and communicate between the homeowner and the contractor.
Construction Inspection Process
Job inspections will be conducted by the Housing Rehabilitation Specialist during the course of the
repairs and will include a final inspection at the end of the j ob.
When required, the Housing Rehabilitation Specialist or contractor will obtain the proper building
permits from the Town of Marana Development Services. The permitted work will be inspected by a
representative from Development Services.
Upon completion, a final inspection will be scheduled with the contractor(s) Housing Rehabilitation
Specialist, and homeowner. The homeowner will sign an acceptance of work form.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 17 of 296
Quality Assurance Procedures
All homeowners assisted by the Town's Housing Rehabilitation Programs will receive a Homeowner
Questionnaire by mail upon completion of the work In addition to allowing homeowners to share
comments and suggestions, this questionnaire enables the homeowner to rate the program services and
provides valuable feedback as to the performance of program staff and contractors. This feedback is
reviewed periodically to address any procedural, staff, or contractor performance issues, and to ensure the
optimal performance of the program.
Marketing
Marana's Housing Rehabilitation Programs will be marketed to Marana residents by the following
methods:
• Press releases and outreach materials sent out every six months to non-profit agencies,
neighborhood centers and organizations, and to local media serving the community.
• Flyers and posters distributed during meetings with neighborhood, civic, and community- and
faith-based organizations.
• Outreach to non-profit, community and civic organizations, and school and medical social
workers.
• Door knocking and flyer distribution in colonias and targeted areas.
• Presentations at neighborhood and homeowner's association meetings.
• Social media, including the Town's website at www.marana.com/housin r� ehab
Staffing and Administrative Structure
Communitv Development and Nei�hborhood Services Director: The Director makes major
administrative decisions and signs Notices to Proceed for contractors to begin work, emergency repair
authorizations, and other items.
Housin� Rehabilitation Specialist: The Specialist inspects homes, prepares work write-ups, purchases
supplies, monitors contractors, and completes a variety of home repairs.
Grants and Housin� Coordinator: The Coordinator fields inquiries about the Housing Rehabilitation
Programs, oversees the programs' day-to-day operation, including ranking applications, establishing and
maintaining contact with clients, follow-up with clients, maintaining information in application files,
sending out and accepting applications, maintaining files of applicants on jobs that have not yet begun,
tracking expenditures under different grant funding sources, obtaining purchase orders (POs), ensuring
payment of contractors and other vendors, and coordinating rehabilitation projects with other agencies in
the Marana area.
Definitions
Female Head of Household: An adult female with no male significant other, with dependents.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 18 of 296
Low-Income Household: A household where the combined income of all residents is at or below 80%
of the Area Median Income as defined by the Arizona Department of Housing in accordance with U.S.
Department of Housing and Urban Development (HUD) guidelines. These guidelines are updated
annually.
Owner-Occupied: A house that is owned by one of the residents.
Primarv Residence: The one and only main residence where a resident intends to reside more than nine
months of the year. A person can have only one primary residence no matter how many homes they
own. If the home is used as a vacation home, occupied by a non-qualified family member or if the
person has a homestead exemption for a home in another state, the listed home cannot qualify as a
primary residence.
Qualifvin� Manufactured Home: A manufactured/modular home manufactured after June 15, 1976 and
affixed to the property as recorded by the Pima County Recorder's Office.
Exhibit A- TOWN OF MARANA COMMUNITY DEVELOPMENT AND NEIGHBORHOOD SERVICES DEPARTMENT
HOUSING REHABILITATION PROGRAM GUIDELINES — REVISED MAY 2013
Regular Council Meeting - June 4, 2013 - Page 19 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Erik Montague, Finance Director
Strategic Plan Focus Area:
Not Applicable
Item C 2
Subj ect: Resolution No. 2013-053: Consideration and possible adoption of a resolution authorizing
the defeasance of payment obligations of the Town with respect to the Fourth Supplement to
Amended and Restated Town Lease and Series 1982 Town Lease with Town of Marana
Municipal Property Corporation as determined by the Finance Director of the Town;
authorizing the taking of other actions necessary to the consummation of the transactions
contemplated by this resolution and declaring an emergency
Discussion:
On May 22, 2013 Council approved Resolution 2013-050 authorizing the defeasance of certain payment
obligations. However, Resolution 2013-050 was adopted by fewer than three-fourths vote of all Council
members, so it could not be passed as an emergency measure. The emergency provision of the resolution
is critical due to aggressive time frames. Therefore, staff is presenting this item to Council again in
hopes that it will be readopted with a sufficient vote to qualify as an emergency measure.
Financial Impact:
If adopted, this resolution will authorize the Finance Director to reduce the Town's outstanding
indebtedness by a principal amount of up to $6,165,000.
ATTACHMENTS:
Name: Description: Type:
� Resolution 2013-
053 Series 2008B Defeasance Resolution 2013-053
(00034239).docx
Staff Recommendation:
Staff recommends adoption of Resolution No. 2013-053.
Suggested Motion:
I move to adopt Resolution No. 2013-053.
Resolution
Regular Council Meeting - June 4, 2013 - Page 20 of 296
MARANA RESOLUTION NO. 2013-053
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
MARANA, ARIZONA, AUTHORIZING THE DEFEASANCE OF
PAYMENT OBLIGATIONS OF THE TOWN WITH RESPECT TO
THE FOURTH SUPPLEMENT TO AMENDED AND RESTATED TOWN
LEASE AND SERIES 1982 TOWN LEASE WITH TOWN OF
MARANA MIJNICIPAL PROPERTY CORPORATION AS
DETERMINED BY THE FINANCE DIRECTOR OF THE TOWN;
AUTHORIZING THE TAKING OF OTHER ACTIONS NECESSARY
TO THE CONSiJNIIr1ATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS RESOLUTION AND DECLARING AN
EMERGENCY
WHEREAS, the Mayor and Council of the Town of Marana,
Arizona (the "Town"), have determined to pay an amount (the "Deposit")
pursuant to the Fourth Supplement To Amended and Restated Town Lease
and Series 1982 Town Lease, dated as of August 1, 2008, by and between
the Town and the Town of Marana Municipal Property Corporation (the
"Corporation"), which, by giving effect to the earliest prepayment
allowed thereby, results in the obligations of the Town thereunder
with respect to the Municipal Facilities Revenue Bonds, Series 2008B
(the "Bonds") of the Corporation being considered paid in part under
the terms provided hereby; and
WHEREAS, this resolution was originally presented to the
Mayor and Common Council of the Town at its May 22, 2013 meeting as
Marana Resolution No. 2013-050, where it was approved by a vote of
five in favor and none opposed with two Council members absent, which
did not meet the three-fourths vote requirement of A.R.S. � 19-142
paragraph B for the adoption of an emergency measure; and
WHEREAS, this resolution is intended to readopt Marana
Resolution No. 2013-050 with a sufficient vote to enable it to be
adopted as an emergency measure;
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF
THE TOWN OF MARANA, ARIZONA, THAT:
Section 1 . The Finance Director of the Town is hereby
authorized to determine the amount (up to the full principal amount of
the bonds, currently $6,165,000) and date of payment of the Deposit, the
payments of the Bonds to which the Deposit are to be applied and the
disposition of the Deposit until applied to make such payments of the
Bonds.
Section 2 . The Mayor or, in the absence thereof, Vice Mayor
and Clerk of the Town are hereby authorized and directed, for and on
behalf of the Town, to sign and attest and deliver, respectively, any
documents necessary in connection with the purpose hereof.
Regular Council Meeting - June 4, 2013 - Page 21 of 296
Section 3 . (A) If any section, paragraph, clause or provision
of this Resolution shall for any reason be held to be invalid or
unenforceable, the invalidity or unenforceability of such section,
paragraph, clause or provision shall not affect any of the remaining
provisions of this Resolution.
(B) All orders and resolutions or parts thereof,
inconsistent herewith, are hereby waived to the extent only of such
inconsistency. This waiver shall not be construed as reviving any order
or resolution or any part thereof.
(C) The immediate operation of this Resolution is
necessary for the defeasance on the most attractive terms available to
the Town of portions of the amounts due with respect to the Town Lease
and the resulting preservation of the public health and welfare; an
emergency is hereby declared to exist. This Resolution shall be in full
force and effect from and after its passage and approval by the Mayor
and Council of the Town, as required by law and this Resolution is
hereby exempt from the referendum provisions of the constitution and
laws of the State of Arizona pursuant to Section 19-142(B), Arizona
Revised Statutes, as amended.
(D) Upon the adoption of this Resolution by a vote
sufficient to satisfy the three-fourths vote requirement of A.R.S.
� 19-142 paragraph B for the adoption of an emergency measure, Marana
Resolution No. 2013-050 shall be replaced by this Resolution.
PASSED AND ADOPTED this 4 day of June, 2013.
.......................................
Ed Honea, Mayor, Town of Marana,
Arizona
ATTEST:
................................
Jocelyn Bronson, Clerk, Town of
Marana, Arizona
APPROVED AS TO FORM:
................................
Frank Cassidy, Town Attorney,
Town of Marana, Arizona
2
Regular Council Meeting - June 4, 2013 - Page 22 of 296
CERTIFICATION
I hereby certify that the foregoing Resolution No. 2013-XXX was duly
passed and adopted by the Mayor and Common Council of the Town of
Marana, Arizona, at a regular meeting held on the 4th day of June,
2013, and the vote was .......... ayes and .......... nays and .......... absent or not
voting.
.....................................
Town Clerk
3
Regular Council Meeting - June 4, 2013 - Page 23 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Erik Montague, Finance Director
Strategic Plan Focus Area:
Community
Strategic Plan Focus Area - Additional Information:
Community Initiative 1: Secure all necessary water resources and infrastructure
Item C 3
Subj ect: Resolution No. 2013-054: Consideration and possible adoption of a resolution approving the
sale and execution and delivery of pledged excise tax revenue and revenue refunding
obligations evidencing a proportionate interest of the owners thereof in a purchase agreement
from the Town; approving the form and authorizing the execution and delivery of such
purchase agreement and other necessary agreements for such sale; delegating authority to
determine certain matters and terms with respect to the foregoing; authorizing the taking of
all other actions necessary to the consummation of the transactions contemplated by this
resolution and declaring an emergency
Discussion:
On May 22, 2013 Council approved Resolution 2013-049 authorizing the sale and execution and
delivery of pledged excise tax revenue and revenue refunding obligations for the primary purposes of
the Obligations to fund the initial acquisition of and improvements to the Town's wastewater utility, in
accordance with the April 9 settlement agreement with Pima County, and to refinance higher-interest
2003 bonds for the construction of the Town's municipal complex. However, the emergency provision of
this resolution could not be passed as there was not a sufficient number of voting Council members. The
emergency provision of the resolution is critical due to aggressive time frames included within the April
9 settlement agreement. Therefore, this item provides for the replacement of Resolution No. 2013-049
with a new resolution passed by enough Council members to adopt the emergency provision.
As with the resolution as originally presented on May 22, a draft Preliminary Official Statement (the
"POS") for the Obligations which is the subject of the resolution being considered is provided as backup
material in connection with this agenda item to allow the Mayor and Council members an opportunity to
review and return questions or comments. The POS is required by the rules of the Securities and
Exchange Commission ("SEC") before the Obligations can be purchased by an underwriter; a version of
the POS, revised to reflect the result of the sale of the Obligations, will be sent to prospective purchasers
in connection with sale of the Obligations. The POS must not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements therein not misleading. The POS has
been assembled using information that is typically included in an Arizona municipality's preliminary
official statement, is currently in draft form and will be reviewed and edited by Town officials and
members of the group working on the sale and issuance of the Obligations before it is sent to potential
investors. However, content of the POS is the sole responsibility of the Town, and statements b
officials in recent years have clarified that participation by Mayor and Council members in review of the
POS is required. Members should focus on the information about the Town and specifically financiall�
Regular Council Meeting - June 4, 2013 - Page 24 of 296
related matters in this regard.
Other backup documents provided with this agenda item and associated with the Obligations include the
current drafts of the purchase agreement and the trust agreement with Wells Fargo Bank, and the
Obligation Purchase Agreement with Stifel Nicolaus.
If adopted, the Resolution proposed for adoption by this item will authorize the Mayor and Town staff to
prepare, finalize, and execute the various documents and undertake all necessary and prudent actions
related to the sale of the Obligations.
Financial Impact:
If approved, this item will obligate the Town to pay a principal amount of up to $39,000,000, and a
probable actual amount of approximately $33,775,000, over a 20-year period. About $14,160,000 of this
amount will refund existing higher-interest 2003 series bonds. The remainder will be used primarily for
the initial acquisition and improvement of the Town's wastewater utility. More specific information is
provided in the supporting materials.
ATTACHMENTS:
Name:
Description:
Type:
Resolution
Backup Material
Backup Material
Backup Material
Backup Material
� Resolution 2013-
054 Series 2013 Revenue obliqations (00034236).docx Resolution 2013-054
�
OS Marana, T of EXC REF, Srs 13 PRELIM sp 5- 20130513 Draft Preliminary Offering Statement
13-13 DRAFT.pdf
�
330263594 v 1 FIRST PURCHASE AGREEMENT.docx Wells Fargo Purchase Agreement
� 330263641 v 1 FIRST TRUST AGREEMENT.docx Wells Fargo Trust Agreement
� #1938847v2 Phoenix - AGR -
Town of Marana ET Rev Rev Rfdq Obliq 2013 - Stifel Nicolaus Obligation Purchase Agreement
Obliqation Purchase Aqreement.doc
Staff Recommendation:
Staff recommends approval of Resolution No. 2013-054.
Suggested Motion:
I move to adopt Resolution No. 2013-054.
Regular Council Meeting - June 4, 2013 - Page 25 of 296
RESOLUTION NO. 2013-054
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF TOWN OF
MARANA, ARIZONA, APPROVING THE SALE AND EXECUTION AND
DELIVERY OF NOT TO EXCEED $39,000,000 AGGREGATE PRINCIPAL
AMOUNT OF PLEDGED EXCISE TAX REVEN UE AND REVEN UE
REFUNDING OBLIGATIONS EVIDENCING A PROPORTIONATE
1NTEREST OF THE OWNERS THEREOF 1N A FIRST PURCHASE
AGREEMENT; APPROVING THE FORM AND AUTHORIZING THE
EXECUTION AND DELNERY OF SUCH PURCHASE AGREEMENT, A
FIRST TRUST AGREEMENT, A CONTINUING DISCLOSURE
UNDERTAKING, AN OBLIGATION PURCHASE CONTRACT AND OTHER
NECESSARY AGREEMENTS; DELEGATING AUTHORITY TO THE
MAYOR, MANAGER AND FINANCE DIRECTOR OF THE TOWN TO
DETERMINE CERTAIN MATTERS AND TERMS WITH RESPECT TO THE
FOREGOING; AUTHORIZING THE TAKING OF ALL OTHER ACTIONS
NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS RESOLUTION AND DECLARING AN
EMERGENCY
WHEREAS, the Mayor and Common Council of the Town of Marana, Arizona
(the "Town"), have determined (i) to finance the costs to acquire certain wastewater treatment
facilities for the Town and to make certain improvements thereto and (2) to refinance the lease
purchase of a portion of the new municipal complex (MPC Series 2003) (together, the
"Projects"), by entering into a First Purchase Agreement, to be dated as of the first day of the
month of the dated date of the hereinafter described Obligations established as provided herein
(the "Purchase Agreement"), with Wells Fargo Bank, N.A., as trustee (the "Trustee"), in its
separate capacity as "Seller"; and
WHEREAS, in connection with the Purchase Agreement, the Mayor and
Common Council of the Town have deemed it necessary and desirable to provide for the sale and
execution and delivery of pledged revenue and revenue refunding obligations, provided for by
this Resolution (the "Obligations"), evidencing proportionate interests of the owners of the
Obligations in payments to be made by the Town to the Trustee pursuant to the First Trust
Agreement, to be dated as of the first day of the month of the dated date of the Obligations (the
"Trust Agreement"), between the Trustee and the Town, such payments to be made pursuant to
the Purchase Agreement; and
WHEREAS, the payments represented by the Obligations will be secured by
amounts received under the Purchase Agreement pursuant to which the Town will pledge Excise
Tax Revenues and State Shared Revenues (as such terms are defined in the Purchase
Agreement); and
Marana Resolution 2013-054 Page 1 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 26 of 296
WHEREAS, there have been presented to the Mayor and Common Council of
the Town at the meeting at which this Resolution is being adopted (1) the proposed form of the
Purchase Agreement; (2) the proposed form of the Trust Agreement; (3) the proposed form of a
Continuing Disclosure Undertaking, to be dated the date of delivery of the Obligations (the
"Undertaking"), from the Town necessary for purposes of compliance with Securities and
Exchange Commission Rule 15c2-12; (4) the proposed form of the Obligation Purchase
Contract, to be dated the date of the sale of the Obligations (the "Purchase Contract"), by and
between the Town and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), for the
purchase of the Obligations and (5) the proposed form of the Preliminary Official Statement, to
be dated the date of the dissemination thereof (the "Preliminary Official Statement"), relating to
the Obligations, which, as to be revised after the sale of the Obligations, shall constitute the
Official Statement, to be dated the date of sale of the Obligations (the "Official Statement"),
relating to the Obligations; and
WHEREAS, this resolution was originally presented to the Mayor and Common
Council of the Town at its May 22, 2013 meeting as Marana Resolution No. 2013-049, where it
was approved by a vote of five in favor and none opposed with two Council members absent,
which did not meet the three-fourths vote requirement of A.R.S. § 19-142 paragraph B for the
adoption of an emergency measure; and
WHEREAS, this resolution is intended to readopt Marana Resolution No.
2013-049 with a sufficient vote to enable it to be adopted as an emergency measure; and
WHEREAS, financing and refinancing of the costs of the Projects pursuant to the
Purchase Agreement is in furtherance of the purposes of the Town and in the public interest;
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND
COMMON COUNCIL OF THE TOWN OF MARANA, ARIZONA, THAT:
approved.
Section L(a) The execution and delivery of the Obligations by the Trustee is
(b) The Manager or Finance Director of the Town are each authorized
to determine on behalf of the Town the series name and designation of the Obligations; the date
the Obligations are to be sold to the Underwriter; the total aggregate principal amount of the
Obligations which are to be executed and delivered but not to exceed in the aggregate principal
amount of $39,000,000; the date the Obligations are to be dated; the dates on which interest on
the Obligations is to be payable and the interest rates per annum the Obligations are to bear; the
dates the Obligations are to mature but not later than twenty-one (21) years from the date of the
execution and delivery of the Obligations, the principal amounts to mature on such dates and the
provisions for redemption thereof in advance of such dates; the obligations to be refinanced with
proceeds of the sale of the Obligations and the exercise of prepayment and redemption
provisions with respect thereto and the terms upon which the Obligations are to be sold to the
Underwriter (including determinations of price, original issue discount and premium and
underwriting compensation); provided, however, that the foregoing determinations shall not
result in the yield on the Obligations, as calculated in accordance with Section 148 of the Code
exceeding four and one-half percent (4.5%).
Marana Resolution 2013-054 Page 2 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 27 of 296
(c) The Manager and Finance Director of the Town are further each
authorized to determine on behalf of the Town whether the purchase of an insurance policy
securing payment of the Obligations or a surety bond or other reserve fund guaranty which
would be a"qualified guarantee" for purposes of the Code would be advantageous to the Town
or the terms of the financing represented by the Obligations. The Manager and Finance Director
of the Town are each authorized to negotiate with and secure, with proceeds of the Obligations
or otherwise, such an insurance policy or a reserve fund guaranty, or both, from one or more
institutions, the claims-paying ability of which are then assigned one of the two highest rating
categories by a nationally recognized credit rating agency. The Mayor, Manager and Finance
Director of the Town are each authorized to execute and deliver any instruments or documents
necessary in connection with the purchase of any such insurance policy and/or reserve fund
guaranty, including those making provision for the repayment of amounts advanced by the
institutions issuing such insurance policy and/or reserve fund guaranty.
(d) The forms and other terms of the Obligations, including the
provisions for the signatures, authentication, payment, registration, transfer, exchange,
redemption and number shall be as set forth in the Trust Agreement and are approved.
Section 2. The Obligations are to be sold to the Underwriter pursuant to the
terms of the Purchase Contract as such terms are to be determined as provided hereinabove.
Section 3. The form, terms and provisions of the Purchase Agreement, the Trust
Agreement, the Purchase Contract and the Undertaking in substantially the forms of such
documents (including the Obligations and other exhibits thereto) presented at the meeting of the
Mayor and Common Council of the Town at which this Resolution is being adopted are
approved, with such final provisions, insertions, deletions and changes as determined as provided
hereinabove and shall be approved by the Mayor of the Town, any other member of the Council,
and, in the case of the Purchase Contract, the Manager of the Town, the execution of each such
document being conclusive evidence of such approval, and the Mayor of the Town or any other
member of the Council and, in the case of the Purchase Contact, the Manager of the Town, or the
Clerk of the Town, where applicable, are authorized and directed, for and on behalf of the Town,
to execute and deliver and attest or approve the Purchase Agreement, the Trust Agreement, the
Purchase Contract and the Undertaking and to take all action to carry out and comply with the
terms of such documents.
Section 4. The distribution of the Preliminary Official Statement by the
Underwriter is approved, and the Final Official Statement in substantially the form of the
Preliminary Official Statement, with such changes or revisions therein from the form of the
Preliminary Official Statement as may be approved by the Mayor of the Town or any other
member of the Council executing the same, is approved, and the Mayor of the Town or any other
member of the Council is authorized, empowered and directed, in the name and on behalf of the
Town, to execute and deliver the same to the Underwriter and to execute and deliver instruments
confirming that the Preliminary Official Statement is "deemed final" in accordance with
Securities and Exchange Commission Rule 15(c)2-12.
Section 5. The Trustee (including in its separate capacities as Seller and the
Escrow Trustee) is requested to take any and all action necessary in connection with the
Marana Resolution 2013-054 Page 3 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 28 of 296
execution and delivery of the Purchase Agreement, the Trust Agreement, the Purchase Contract
and the Undertaking and the sale and execution and delivery of the Obligations and is further
authorized and directed to take such action as may be reasonable for the administration of the
trusts so held by it.
Section 6. The covenants and agreements contained the Purchase Agreement as
to the pledge of and the lien on Excise Tax Revenues and State Shared Revenues and the
restriction on the issuance of further parity obligations secured by Excise Tax Revenues and
State Shared Revenues are approved and confirmed.
Section 7. The Mayor, the Manager, the Finance Director and other officers of
the Town, on behalf of the Town, are authorized and directed, without further order of the Mayor
and Common Council of the Town, to do all such acts and things and to execute and deliver all
such certificates, proceedings, agreements and other documents as may be necessary or
convenient to be executed and delivered on behalf of the Town, to evidence compliance with, or
further the purposes of, all the terms and conditions of this Resolution and the consummation of
the transactions contemplated by the Preliminary Official Statement and the Official Statement
and as may be necessary to carry out the terms and intent of this Resolution.
Section 8. All actions of the officers and agents of the Town which conform to
the purposes and intent of this Resolution and which further the sale and execution and delivery
of the Obligations as contemplated by this Resolution, whether heretofore or hereafter taken, are
ratified, confirmed and approved.
Section 9. If any section, paragraph, clause or phrase of this Resolution shall for
any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
section, paragraph, clause or phrase shall not affect any of the remaining provisions of this
Resolution. All orders, resolutions and ordinances or parts thereof inconsistent herewith are
hereby waived to the extent only of such inconsistency. This waiver shall not be construed as
reviving any order, resolution or ordinance or any part thereof.
Section 10. The immediate operation of the provisions of this Resolution is
necessary for the preservation of the public peace, health and safety, particularly to immediately
sell the Obligations to secure the best, available economic terms therefor, and an emergency is
hereby declared to exist, and this Resolution will be in full force and effect from and after its
passage by the Mayor and Common Council of the Town and it is hereby excepted from the
referendum provisions of the Constitution and laws of the State of Arizona. After any of the
Obligations are delivered by the Trustee to the Underwriter and upon receipt of payment
therefor, this Resolution shall be and remain irrepealable until the Obligations and the interest
and premium, if any, thereon shall have been fully paid, cancelled and discharged.
Section 11. Upon the adoption of this Resolution by a vote sufficient to satisfy
the three-fourths vote requirement of A.R.S. § 19-142 paragraph B for the adoption of an
emergency measure, Marana Resolution No. 2013-049 shall be replaced by this Resolution.
Marana Resolution 2013-054 Page 4 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 29 of 296
PASSED AND ADOPTED by the Council and approved by the Mayor of the
Town of Marana, Arizona, this 4 th day of June, 2013.
. . . ............................................................................
Mayor
ATTEST:
.................................................................
Town Clerk
APPROVED AS TO FORM:
.................................................................
Town Attorney
330263582.1-5/13/2013
Marana Resolution 2013-054 Page 5 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 30 of 296
CERTIFICATION
I hereby certify that the foregoing Resolution No. 2013-XXX was duly passed
and adopted by the Mayor and Common Council of the Town of Marana, Arizona, at a regular
meeting held on the 4 th day of June, 2013, and the vote was ... ... .... ayes and ... ... .... nays and
... ... .... absent or not voting.
....................................................................................
Town Clerk
Marana Resolution 2013-054 Page 6 of 6 5/29/2013 11:21 AM
Regular Council Meeting - June 4, 2013 - Page 31 of 296
PRELIMINARY OFFICIAL STATEMENT DATED JUNE _, 2013
NEW ISSUE — BOOK-ENTRY-ONLY RATING: See "RATING" herein.
In the opinion of Greenberg Traurig, LLP, Special Counsel, assuming compliance with certain tax covenants, the portion of each
installment payment made by the Town pursuant to the First Purchase Agreement and denominated as and comprising interest
pursuant to the First Purchase Agreement and received by Owners of the Obligations (the `7nterest Portion') will be excludable from
gross income for federal income tax purpose, will not be an item of tax preference for purposes of the alternafive minimum tax for
individuals and corporations (but will be taken into account in determining adjusted current earnings for purposes of computing such
tax imposed on certain corporations) and will be exempt from income taxation under the laws of the State ofArizona so long as the
Interest Porfion is excludable from gross income for federal income tax purposes. See "TAX MATTERS" herein for a descripfion of
certain federal tax consequences of ownership of the Obligations. See also "TAXMATTERS— Originallssue Discount and Original
Issue Premium" herein.
$33,775,000*
TOWN OF MARANA, ARIZONA
PLEDGED EXCISE TAX REVENUE AND
REVENUE REFUNDING OBLIGATIONS, SERIES 2013
Dated: Date of Delivery
DRAFT II
5/13/13
Due: January 1 and July 1, as shown on the inside front cover page
The Pledged Excise TaY Revenue and Revenue Refunding Obligations, Series 2013 (the "Obligarions") will be executed and delivered
to (i) finance the costs of the assets being acquired pursuant to the Intergovernmental Settlement Agreement entered into by and
between Pima County, Arizona (the "County") and the Town of Marana, Arizona (the "Town"), including reimbursement of certain
legal and engineering expenses, and to make improvements (the "New Projects"); (ii) to refinance certain payments due pursuant to
the Second Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, from the
Town of Marana Municipal Properry Corporation (the "Corporarion") to the Town of certain properry (the "Existing Projec�' and with
the New Projects, the "Projects"); (iii) to pay capitalized interest through July 1, 2015*; and (iv) to pay the costs and expenses relaring
to the execution and delivery of the Obligations. See "THE NEW PROJECTS" and "PLAN OF REFUNDING" herein.
Interest represented by the Obligarions will be payable semiannually on each January 1 and July 1, commencing January 1, 2014*.
The Obligarions will be issuable as fully registered obligations without coupons and will be inirially registered in the name of Cede &
Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the
Obligations. Beneficial ownership interests in the Obligations will be available to purchasers in amounts of $5,000 of principal due on
a specific payment date and any integral multiple thereof only under the book-entry-only system maintained by DTC through brokers
and dealers who are, or act through, DTC participants. Purchasers will not receive physical certificates. So long as any purchaser is
the beneficial owner of an Obligation, such purchaser must maintain an account with a broker or a dealer who is, or acts through, a
DTC participant to receive payment of principal and interest with respect to such Obligations. See APPENDIX G-`BOOK-ENTRY-
ONLY SYSTEM" herein.
SEE PAYMENT SCHEDULE ON INSIDE FRONT COVER PAGE
The Obligations will be subject to oprional [and mandatory] redemprion prior to their stated payment dates as described under "THE
OBLIGATIONS — Prepayment Provisions" herein*.
The Obligations will be undivided, proportionate interests in the installment payments to be made by the Town pursuant to a First
Purchase Agreement, to be dated as of June 1, 2013* (the "Purcl�ase Agreemen�'), between the Town and Wells Fargo Bank, N.A., as
trustee (the "Trustee"). The installment payments to be made by the Town will be payable from and secured by a limited pledge of
Excise Tax Revenues and State Shared Revenues (both as defined herein), subject only to the paramount lien for the herein described
Prior Lease. Except to the ea�tent described herein, such pledge will be on a subordinate and secondary lien on the Town's pledge of
Excise TaY Revenues and State Shared Revenues to the Prior Lease (as defined herein) and Addirional Revenue Obligarions (all as
defined herein). See "SECURITY FOR AND SOURCES OF PAYMENT OF TI� OBLIGATIONS" herein.
THE OBLIGATIONS WILL BE SPECIAL, LIMTTED REVENUE OBLIGATIONS OF THE TOWN AND WILL BE
PAYABLE SOLELY FROM THE SOURCES DESCRIBED HEREIN. THE OBLIGATIONS WILL NOT BE GENERAL
OBLIGATIONS OF THE TOWN OR THE STATE OF ARIZONA OR ANY POLTTICAL SUBDIVISION THEREOF, AND
THE FULL FAITH AND CREDIT OF THE TOWN, THE STATE OF ARIZONA OR ANY POLTTICAL SUBDIVISION
THEREOF WILL NOT BE PLEDGED FOR THE PAYMENT OF THE OBLIGATIONS.
The Obligarions are offered when, as and if issued by the Town and received by the underwriter idenrified below (the "Underwriter"),
subject to the legal opinion of Greenberg Traurig, LLP, Special Counsel, as to validity and taY exemption. In addition, certain legal
matters will be passed upon for the Underwriter by Gust Rosenfeld, P.L.C. It is expected that the Obligations will be available for
delivery through the facilities of DTC on or about June 27, 2013 *.
This cover page contains certain information with respect to the Obligations for convenience of reference only. It is not a summary of
material information with respect to the Obligations. Investors must read this entire Official Statement to obtain information essential
to the making of an informed investment decision with respect to the Obligations.
Rvgu4,�► �#��.- June 4, 2013 - Page 32 of 296
$33,775,000*
TOWN OF MARANA, ARIZONA
PLEDGED EXCISE TAX REVENUE AND
REVENUE REFUNDING OBLIGATIONS, SERIES 2013
PAYMENT SCHEDULE*
Base CUSIPO� No.
Payment Principal
Date Amount
7/1/2014 $ 315,000
1/1/2015 345,000
7/1/2015 345,000
1/1/2016 355,000
7/ 1/2016 1,145,000
1/1/2017 365,000
7/ 1/2017 1,180,000
1/1/2018 380,000
7/ 1/2018 1,225,000
1/1/2019 395,000
7/ 1/2019 1,280,000
1/1/2020 415,000
7/ 1/2020 1,325,000
1/ 1/2021 430,000
7/ 1/2021 1,385,000
1/1/2022 445,000
7/ 1/2022 1,440,000
1/1/2023 465,000
7/ 1/2023 1,500,000
Interest
Rate
Price or CUSIP��'� Payment Principal Interest
Yield No. Date Amount Rate
% 1/1/2024 $ 485,000 %
7/ 1/2024 1,575,000
1/1/2025 510,000
7/ 1/2025 1,650,000
1/1/2026 540,000
7/ 1/2026 1,73 5,000
1/1/2027 570,000
7/ 1/2027 1,820,000
1/1/2028 595,000
7/ 1/2028 1,915,000
7/ 1/2029 1,385,000
7/ 1/2030 1,450,000
7/ 1/2031 1,525,000
7/ 1/2032 1,600,000
7/ 1/2033 1,685,000
Price or CUSIP��'�
Yield No.
%
$
%
% Term Bond due July 1, 20_ —__% Yield CUSIl'OO �'� No.
* Subject to change.
�'� CUSIPOO is a registered trademark of the American Bankers Association. Copyright0 1999-2013 Standard &
Poor's, Financial Services, LLC. All rights reserved. CUSIPO data herein is provided by Standard & Poor's
CUSIP Service Bureau. This data is not intended to create a database and does not serve in any way as a
substitute for the CUSIP Service Bureau. CUSIPO numbers are provided for convenience of reference only.
None of the Town, the Underwriter or their agents or counsel assumes responsibility for the accuracy of such
numbers.
Regular Council Meeting - June 4, 2013 - Page 33 of 296
REGARDING THIS OFFICIAL STATEMENT
No dealer, broker, salesperson or other person has been authorized by the Town of Marana, Arizona (the "Town"), or
Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), to give any infarmation ar to make any representations
other than those contained in this Official Statement, and, if given ar made, such other infarmation or representations must
not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell
ar the solicitation of an offer to buy nor shall there be any sale of the Obligations by any person in any jurisdiction in
which it is unlawful for such person to make such offer, solicitation or sale.
The infarmation set forth in this Official Statement, which includes the cover page, inside front cover page and appendices
hereto, has been obtained from the Town, the Arizona Department of Revenue, the Assessor, Treasurer and Finance
Department of Maricopa County, Arizona, and other sources that are considered to be accurate and reliable and
customarily relied upon in the preparation of similar official statements, but such information has not been independently
confirmed or verified by the Town ar the Underwriter, is not guaranteed as to accuracy or completeness, and is not to be
construed as the promise or guarantee of the Town ar the Underwriter. [A variety of other infarmation, including financial
information, concerning the Town is available from publications and websites of the Town and others. Any such
information that is inconsistent with the information set forth in this Official Statement should be disregarded. No such
information is a part of or incorporated into this Official Statement, except as expressly noted herein.]
The Underwriter has provided the following sentence for inclusion in this Official Statement "The Underwriter has
reviewed the infarmation in this Official Statement pursuant to its responsibilities to investors under the federal securities
laws, but the Underwriter does not guarantee the accuracy or completeness of such infarmation."
The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent
historical infarmation and is not intended to indicate future or continuing trends in the financial position or other affairs of
the Town. All infarmation, estimates and assumptions contained herein have been based on past experience and on the
latest information available and are believed to be accurate and reliable, but no representations are made that such
information, estimates and assumptions are correct, will continue, will be realized or will be repeated in the future. To the
extent that any statements made in this Official Statement involve matters of forecasts, proj ections, opinions, assumptions,
or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or
certainty, and no representation is made that any of these statements have been or will be realized. All forecasts,
projections, assumptions, opinions or estimates are "forward looking statements" that must be read with an abundance of
caution and that may not be realized ar may not occur in the future. Information other than that obtained from official
records of the Town has been identified by source and has not been independently confirmed or verified by the Town or
the Underwriter and its accuracy cannot be guaranteed. The infarmation and forward looking statements herein are subject
to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the Town or any of the other parties or
matters described herein since the date hereof.
The Obligations will not be registered under the Securities Act of 1933, as amended, or any state securities law and will
not be listed on any stock or other securities exchange in reliance upon certain exemptions. Neither the Securities and
Exchange Commission nor any other federal, state or other governmental entity or agency will have passed upon the
merits of the Obligations the accuracy or adequacy of this Official Statement or approved the Obligations for sale.
The Town has undertaken to provide continuing disclosure as described in this Official Statement under the caption
"CONTINUING DISCLOSj.IRE" and in APPENDIX F—"FORM OF CONTINUING DISCLOSURE
iJNDERTAKING," all pursuant to Rule 15c2-12 of the Securities and Exchange Commission.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERAI,LOT OF EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OBLIGATIONS OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMIv�NCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY
OFFER AND SELL THE OBLIGATIONS TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS
AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE FRONT COVER PAGE
HEREOF AND SUCH PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE
j.JNDERWRITER.
The information in APPENDIX G—`BOOK-ENTRY-ONLY SYSTEM" attached hereto has been furnished by The
Depository Trust Company and no representation is made by the Town ar the Underwriter, or any of their counsel or
agents, as to the accuracy or completeness of such infarmation.
(i)
Regular Council Meeting - June 4, 2013 - Page 34 of 296
TABLE OF CONTENTS
Pa�e
INTRODUCTORY STATEMENT ........................................................................................
THEOBLIGATIONS .............................................................................................................
General ...................................................................................................................
PrepaymentProvisions ......................................................................................................
Registration and Transfer When Book-Entty-Only System Has Been Discontinued .......
PLAN OF REFUNDING ........................................................................................................
Schedule of Obligations Being Refunded .........................................................................
THENEW PROJECTS ..........................................................................................................
SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS ...................
General ..............................................................................................................................
Pledge ................................................................................................................................
Coverage Requirements ....................................................................................................
Additional Revenue Obligations .......................................................................................
ReserveFund .....................................................................................................................
SOURCES USES OF FUNDS ......................................................................................
ESTIMATED DEBT SERVICE REQUIREMENTS AND PROJECTED COVERAGE......
EXCISE TAX REVENUES AND STATE SHARED REVENUES ......................................
TownSales Taxes .............................................................................................................
Licenses and Pernuts; Fines and Forfeitures .....................................................................
State -Shared Revenues ......................................................................................................
Historical and Projected Excise Tax Revenues and State Shared Revenues .....................
LITIGATION .........................................................................................................................
LEGAL MATTERS ...............................................................................................................
TAXMATTERS ....................................................................................................................
General ..............................................................................................................................
Original Issue Discount and Original Issue Premium .......................................................
Information Reporting and Backup Withholding ..............................................................
RATING .................................................................................................................................
UNDERWRITING .................................................................................................................
POLITICAL CONTRIBUTIONS ..........................................................................................
RELATIONSHIP AMONG PARTIES ..................................................................................
CONTINUING DISCLOSURE ..............................................................................................
FINANCIAL STATEMENTS ................................................................................................
CERTIFICATION CONCERNING OFFICIAL STATEMENT ............................................
CONCLUDING STATEMENT .............................................................................................
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APPENDIX A: TOWN OF MARANA, ARIZONA —
DEMOGRAPHIC AND ECONOMIC INFORMATION
APPENDIX B: TOWN OF MARANA, ARIZONA — FINANCIAL DATA
APPENDIX C: TOWN OF MARANA, ARIZONA —
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012
APPENDIX D: SUNIMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS
APPENDIX E: FORM OF APPROVING LEGAL OPINION
APPENDIX F: FORM OF CONTINUING DISCLOSURE UNDERTAKING
APPENDIX G: BOOK-ENTRY-ONLY SYSTEM
�ll�
Regular Council Meeting - June 4, 2013 - Page 35 of 296
OFFICIAL STATEMENT
$33,775,000*
TOWN OF MARANA, ARIZONA
PLEDGED EXCISE TAX REVENUE AND
REVENUE REFUNDING OBLIGATIONS, SERIES 2013
INTRODUCTORY STATEMENT
This Official Statement, which includes the cover page, the inside front cover page and the appendices hereto (this
"Official Statemen�'), provides certain information concerning the Pledged Excise TaY Revenue and Refunding
Obligarions, Series 2013 (the "Obligations"), to be executed and delivered in the principal amount indicated on the
inside front cover. The Obligations will be undivided, participating, proportionate interests in installment payments
(the "Payments") to be made by the Town of Marana, Arizona (the "Town"), pursuant to a First Purcl�ase
Agreement, to be dated as of June 1, 2013* (the "Purchase Agreemen�'), between the Town, as buyer, and Wells
Fargo Bank, N.A., in its capacity as trustee (the "Trustee"), as seller.
The Obligations are being executed and delivered to (i) finance the costs of the assets being acquired pursuant to the
Intergovernmental Setklement Agreement entered into by and between Pima County, Arizona (the "County") and the
Town (the "New Projects"), including reimbursement of certain legal and engineering expenses, and to make
improvements; (ii) to refinance certain payments due pursuant to the Second Supplement to Amended and Restated
Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, from the Town of Marana Municipal
Property Corporation (the "Corporation") to the Town of certain property (the "Exisring Project" and with the New
Projects, the "Projects") (the "Refunding"); (iii) to pay capitalized interest through July 1, 2015*; and (iv) to pay the
costs and expenses relaring to the execution and delivery of the Obligarions.
The Obligarions will be executed and delivered pursuant to a First Trust Agreement, to be dated as of June 1, 2013 *
(the "Trust Agreement"), between the Town and the Trustee. Certain of the Trustee's interests under the Purchase
Agreement, including, without limitarion, the right to receive and collect the Payments and the right to force the
Town to make the Payments, will be held by the Trustee for the benefit of the registered owners of the Obligarions.
See APPENDIX D-"SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS" in addition to the
information herein below for descriptions of the terms of the Purchase Agreement and the Trust Agreement and the
definition of terms not elsewhere defined herein. See APPENDIX A-"TOWN OF MARANA, ARIZONA —
DEMOGRAPHIC AND ECONOMIC INFORMATION" and APPENDIX C-"TOWN OF MARANA, ARIZONA
— AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED J[JNE 30, 2012" for information
about the Town.
The Payments will be payable from and secured by a pledge of Excise Tax Revenues and State Shared Revenues
subject only to the paramount pledge for the Prior Lease, on parity with the pledge for the Addirional Revenue
Obligations. "Excise Tax Revenues" means revenues from the Town sales taY, license and pernut fees and fines and
forfeitures which the Town now collects; provided that the Mayor and Council of the Town may impose other
transaction privilege taxes in the future, the uses of revenue from which will be restricted at the discretion of such
Council. "State Shared Revenues" means revenues from amounts allocated or apportioned to the Town by the State
of Arizona (the "State"), any political subdivision thereof or any other governmental unit or agency, except the share
of the Town of any taYes which by State Law, rule or regulation must be expended for other purposes, such as motor
vehicle fuel taYes.
The Town has heretofore incurred a lease purchase obligation with the Corporarion, with regard to issuance of
certain bonds by the Corporarion and thereafter supplemented such lease four rimes with regard to issuance of other
bonds of the Corporation (as so supplemented, the "Prior Lease"). The Town irrevocable pledged, on a first lien
* Subject to change.
Regular Council Meeting - June 4, 2013 - Page 36 of 296
basis for the payment of amounts due under the Prior Lease, Excise TaY Revenues and State Share Revenues. See
Table 5 for amounts which will remain due pursuant to the Prior Lease after execution and delivery of the
Obligations. Pursuant to the Purchase Agreement, the Town will agree to incur no further obligations on
parity with the pledge for the Prior Lease.
So long as any amounts due thereunder remain unpaid or unprovided for, the Town may not further encumber
Excise TaY Revenues and State Shared Revenues on a basis equal to the pledge for the Purchase Agreement unless
certain requirements are satisfied. See SECURITY FOR AND SOURCES OF PAYMENT OF THE
OBLIGATIONS — Additional Revenue Obligations" and, for detail about amounts due pursuant to the Purchase
Agreement, APPENDIX B—"TOWN OF MARANA, ARIZONA — FINANCIAL INFORMATION."
Brief descriprions of the security for the Obligations and of matters related to the Town are included in this Official
Statement together with a summary of select provisions of the Purcl�ase Agreement and the Trust Agreement. Such
descriptions do not purport to be comprehensive or definitive. All references to the Purcl�ase Agreement and the
Trust Agreement are qualified in their entirety by reference to such documents, and references herein to the
Obligations are qualified in their entirety by reference to the form thereof included in the Trust Agreement, copies of
all of which are available for inspecrion at the designated corporate trust office of the Trustee. Capitalized terms not
defined herein shall have the meanings set forth in APPENDIX D-"SUNIMARY OF SELECT PROVISIONS OF
PRINCIl'AL DOCUMENTS - DEFINITIONS OF CERTAIN TERMS."
Neither this Official Statement nor any statement that may l�ave been made orally or in writing in connection
herewith is to be considered as, or as part of, a contract with the original purcl�asers or subsequent owners or
Beneficial Owners (as defined in APPENDIX G) of the Obligarions.
References to provisions of federal or State of Arizona (the "State" or "Arizona") law, whether codified or
uncodified, are references to those current provisions. Those provisions may be amended, repealed or
supplemented.
THE OBLIGATIONS
General Terms
The Obligations will be dated the date of initial authenrication and delivery and inirially will be registered only in
the name of Cede & Co., the nominee of The Depository Trust Company, New York, New York ("DTC") under the
book-entry-only system described in APPENDIX G(the `Book-Entry-Only System"). Beneficial ownership
interests in the Obligations may be purchased through direct and indirect participants of DTC in amounts of $5,000
of principal due on a single payment date or integral multiples thereof. See APPENDIX G—`BOOK-ENTRY-
ONLY SYSTEM." The Obligations will mature on the dates and in the principal amounts and bear interest from
their dated date at the rates all as set forth on the inside front cover page of this Official Statement. Interest on the
Obligarions will accrue originally from the dated date of the Obligations and will be payable on January 1, 2014, and
on each July 1 and Januaty 1 thereafter (each an"Interest Payment Date") until payment.
Prepayment Provisions*
Optional Prepayment. Principal represented by the Obligations payable before or on July 1, 20_, will not be
subject to prepayment prior to their stated payment date. Principal represented by the Obligations payable on or
after July 1, 20� may be prepaid prior to maturity, in whole or in part on any date, in any order of maturity and by
lot within any maturity, by the Town, on or after July 1, 20_, at a prepayment price equal to the principal amount
thereof plus accrued interest on such principal to the date fixed for prepayment, but without premium.
* Subject to change.
Regular Council Meeting - June 4, 2013 - Page 37 of 296
Mandatory Prepayment. Principal represented by the Obligations maturing on July 1, 20_* (the "Term
Obligarions") will be subject to mandatory prepayment and will be prepaid on July 1 of the respecrive years set forth
below and in the principal amounts set forth below, by payment of a prepayment price equal to the principal amount
of the Term Obligations then called for prepayment plus the interest accrued to the date fiYed for prepayment, but
without premium, as follows:
Term Obligation due July 1, 20_*
Prepayment
Date Principal
(July 1) Amount
(final payment)
Whenever Term Obligations subject to mandatory prepayment are purchased, prepaid (other than pursuant to
mandatory prepayment) or delivered by the Town to the Trustee for cancellarion, the principal amount of the Term
Obligations so retired shall satisfy and be credited against the mandatory prepayment requirements for such Term
Obligarions for suchyears as the Town may direct.
Manner of Selection for Prepayment. Principal represented by the Obligations will be prepaid only in amounts of
$5,000 payable on a specific payment date of a series or integral multiples thereof. The Town will, at least 45 days
prior to the prepayment date, notify the Trustee of such prepayment date and of the payment dates of the Obligations
and the principal amount of the Obligations of any such payment date of a series to be prepaid on such date. For the
purposes of any prepayment of less than all of the Obligations due on a single payment date, the particular
Obligarions or portions of the Obligations to be prepaid will be selected through the procedures of DTC. For
purposes of any prepayment of less than all of the Obligations payable on a single payment date, the particular
Obligarions or portions of the Obligarions to be prepaid on a single payment date will be selected on a pro rata basis
by the Trustee by lot not more than 45 days nor less than 30 days prior to the prepayment date. While the Town
intends tl�at allocations be made in accordance with the foregoing proportional provisions, the selecrion of the
Obligarions for prepayment will be subject to pracrices and procedures of DTC as in effect from rime to time.
Notice of Prepayment. Prepayment notices will be sent only to DTC by electronic media, not more than 60 nor less
than 30 days prior to the date set for prepayment. See APPENDIX G—`BOOK-ENTRY-ONLY SYSTEM." Such
notice will state that if, on the specified prepayment date, moneys for prepayment of all the Obligations to be
prepaid together with interest to the date of prepayment, is held by the Trustee, then, from and after said date of
prepayment, interest with respect to the Obligations will cease to accrue and become payable and that if such
moneys are not so held, the prepayment will not occur.
Registration and Transfer When Book-Entry-Only System Has Been Discontinued
If the Book-Entry-Only System is discontinued, the Obligations will be transferred only upon the bond register
maintained by the Trustee and one or more new Obligarions, registered in the name of the transferee, of the same
principal amount, payment and rate of interest as the surrendered Obligation or Obligations will be authenricated,
upon surrender to the Trustee of the Obligation or Obligarions to be transferred, together with an appropriate
instrument of transfer executed by the transferor if the Trustee's requirements for transfer are met. The Corporation
and the Town has chosen the fifteenth day of the month preceding an interest payment date as the "Record Date" for
the Obligations. The Trustee may, but is not required to, transfer or exchange any Obligarions during the period
from the Record Date to and including the respective Interest Payment Date. The Trustee may, but is not required
to, transfer or exchange any Obligations which l�ave been selected for prior redemprion.
* Subject to change.
Regular Council Meeting - June 4, 2013 - Page 38 of 296
The transferor will be responsible for all transfer fees, taxes, fees and any other costs relating to the transfer of
ownership of individual Obligations.
PLAN OF REFUNDING
An amount of the net proceeds of the sale of the the Obligarions, together with any other legally available funds, if
applicable, will be deposited with the trustee for the below described obligations (the "Obligarions Being
Refunded") in sufficient amounts, without further investment, to pay debt seivice when due or redeemed on the
Obligations Being Refunded.
Schedule of Obligations Being Refunded*
Prepayment
Premium
Principal Obligations Prepayment (as a
Issue Series Payment Amount Being Date Percentage CUSIP��
of the Corporation Date Coupon Outstanding Refunded (July 1) of Principal) No. 565748
Municipal Facilities
Revenue Bonds,
Series 2003
* Subject to change.
7/1/2014
1/1/2015
7/1/2015
1/1/2016
7/1/2016
1/1/2017
7/1/2017
1/1/2018
7/1/2018
1/1/2019
7/1/2019
1 /1 /2020
7/1 /2020
4.125%
4.250
4.250
4.375
4.375
4.500
4.500
4.500
4.500
4.625
4.625
4.800
4.800
$345,000
360,000
360,000
375,000
375,000
390,000
390,000
410,000
410,000
425,000
430,000
445,000
450,000
$345,000
360,000
360,000
375,000
375,000
390,000
390,000
410,000
410,000
425,000
430,000
445,000
450,000
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
0.0%
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
ECO
ED8
EE6
EF3
EG1
EH9
EJS
EK2
ELO
EM8
EN6
EP1
EQ9
7/1/2023 5.000 2,960,000 2,960,000 2013 0.0 ER7
7/1/2028 5.000 6,035,000 6,035,000 2013 0.0 ESS
$14,160,000 $14,160,000
��� See foolnote ��� to the inside front cover page.
Upon delivery of the Obligations and such deposit of the proceeds, the Obligarions Being Refunded will no longer
be outstanding and will not be secured by Excise Tax Revenues and State Shared Revenues.
4
Regular Council Meeting - June 4, 2013 - Page 39 of 296
THE NEW PROJECTS
The New Projects consist of (i) the acquisirion of the Marana Wastewater Reclamation Facility ("MWRF") from the
County; (ii) the reimbursement of certain costs advanced by the Town in connection with acquisition of the MWRF;
and (iu) design, permitting, construction and equipping, as applicable, of operarional improvements to the MWRF,
including new aeration and biodiffusers equipment, clarifier and headworks improvements, new influent lift station
pumps, a flow metering device, sludge dewatering equipment, and associated electrical and control devices.
SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS
General
The Obligations will be special, limited revenue obligations, taking the form of undivided, participating,
proportionate interests in the Payments. The obligation of the Town to make the Payments will be limited to
payment from Excise Tax Revenues and State Shared Revenues and will in no circumstances constitute a general
obligation or a pledge of the full faith and credit of the Town or the State or any political subdivisions thereof, or
require the levy of, or be payable from the proceeds of, any ad valorem property taYes.
Subject to the rights with respect to the Prior Lease, Excise TaY Revenues and State Shared Revenues in excess of
amounts, if any, required to be deposited with or held by the Trustee for payments due under the Purchase
Agreement will constitute surplus revenues and may be used by the Town for any lawful purpose for the benefit of
the Town. The Town may also make the Payments from its other funds as permitted by law and as the Town
determines from time to rime, and the Trustee will thereafter have no claim to such other funds.
Under the terms of the Trust Agreement, an irrevocable trust will be administered by the Trustee for the equal and
proportionate benefit of the Owners of the Obligations, which trust includes: (1) all right, title and interest of the
Trustee, as seller, in the Purcl�ase Agreement and the right to (a) make claim for, collect or receive all amounts
payable or receivable thereunder, (b) to bring actions and proceedings thereunder or for the enforcement of such
rights, and (c) to do any and all other things which the Trustee is enritled to do thereunder; (2) amounts on deposit
from time to time in the funds created pursuant to the Trust Agreement and (3) any and all other property of any
kind hereafter conveyed as addirional security for the Obligations. See APPENDIX D-"SUMMARY OF SELECT
PROVISIONS OF PRINCIl'AL DOCUMENTS - THE TRUST AGREEMENT."
Pledge
The Payments will be secured, subject only to the payment and first lien and pledge for the Prior Lease after the
Refunding, by a subordinate and second lien on and pledge of Excise Tax Revenues and State Shared Revenues on
parity with the pledge and lien granted by the Town for the payment and security of Additional Revenue
Obligarions. No addirional obligarions will be incurred on a parity with the Prior Leases. The Payments will be
coequal as to the pledge of and lien on Excise TaY Revenues and State Shared Revenues and sl�are ratably, without
preference, priority or distinction, as to the source or method of payment from Excise Tax Revenues and State
Shared Revenues or security therefor. If at any time moneys are not sufficient to make the deposits and transfers
required, any such deficiency will be made up from the first moneys thereafter received and available for such
transfers under the terms of the Purchase Agreement and, with respect to payment from Excise TaY Revenues and
State Shared Revenues after paying amounts due pursuant to the Prior Leases, pro rata with amounts due with
respect to any Additional Revenue Obligarions. The Purcl�ase Agreement will not terminate so long as any of the
Payments are due and owing pursuant to the terms of the Obligations.
Payment of the principal and interest represented by the Obligations will not be secured by the Projects or property
financed with the Obligations Being Refunded and the Owners of the Obligations l�ave no claim or lien on the
Refunding or any part thereof.
THE PAYMENTS WILL NOT CONSTITLTTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE
TOWN NOR WILL THE TOWN BE LIABLE FOR THE PAYMENTS FROM AD VALOREM PROPERTY
Regular Council Meeting - June 4, 2013 - Page 40 of 296
TAXES. PURSUANT TO THE TRUST AGREEMENT, THE OBLIGATIONS WILL BE SPECIAL, LIMITED
REVENUE OBLIGATIONS, PAYABLE SOLELY FROM THE PAYMENTS MADE PURSUANT TO THE
PURCHASE AGREEMENT. THE OBLIGATIONS WILL NOT BE GENERAL OBLIGATIONS OF THE TOWN,
THE STATE OR ANY POLITICAL SUBDIVISION THEREOF AND WILL NOT REPRESENT OR
CONSTITLTTE A DEBT OR A DIRECT OR INDIRECT PLEDGE OF THE FULL FAITH AND CREDIT OF THE
TOWN, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF.
Coverage Requirements
To the eatent permitted by applicable law, Excise TaY Revenues and State Shared Revenues will be retained and
maintained so that the amounts received from Excise TaY Revenues and State Shared Revenues within and for the
most recently completed fiscal year of the Town, will be equal to at least two (2) rimes the Annual Debt Seivice for
the current fiscal year of the Town. If Excise Tax Revenues and State Shared Revenues for any such fiscal year
shall not have been equal to at least two (2) times the Annual Debt Service for the current fiscal year of the Town or
if at any time it appears that Excise TaY Revenues and State Shared Revenues will not be sufficient to meet such
requirements, the Town will, to the extent permitted by applicable law, impose new exactions of the type of the
components of the revenues which are Excise Tax Revenues, or increase the rates for the components of the
revenues which are Excise Tax Revenues currently imposed by the Town fully sufficient at all times, after making
allowances for contingencies and errors, in each fiscal year of the Town in order that (i) Excise TaY Revenues and
State Shared Revenues will be sufficient to meet all such requirements and (ii) Excise TaY Revenues and State
Shared Revenues will be reasonably calculated to attain the level as required by the first sentence of this paragraph.
Additional Revenue Obligations
"Addirional Revenue Obligations" may be issued or incurred by the Town (or any financing conduit acting on behalf
of the Town) which are on a parity with the Excise TaY Revenues and State Shared Revenues in the most recently
completed Fiscal Year have amounted to at least two (2) times the MaYimum Annual Debt Service.
Reserve Fund
The First Trust Agreement and the First Purchase Agreement establish a reserve fund to secure payment of the
Obligarions (the "Reserve Fund"), but provides that no deposits need to be made into the Reserve Fund if the Excise
TaY Revenues and State Shared Revenues collected for the preceding fiscal year are at least two (2) times the
highest aggregate debt service requirements on all Parity Obligarions for the current or any future fiscal year (the
"Reseive Requirement"). In the event tl�at the Excise TaYes collected for the preceding fiscal year are less than two
(2) times the highest aggregate debt service requirements on all Parity Obligations for any such fiscal year, the Town
shall deposit into the Reseive Fund, on each Interest Payment Date, one-tenth (1/lOth) of the highest aggregate debt
service requirements on any Parity Obligations, except any for which a separate reserve fund is established or for
which no reserve fund is required, until the amount in the Reserve Fund equals the highest aggregate debt service
requirements on all Parity Obligations.
Regular Council Meeting - June 4, 2013 - Page 41 of 296
SOURCES AND USES OF FUNDS
Principal Amount $33,775,000.00*
Net Original Issue Premium (a)
Total Sources of Funds
Deposit to Acquisirion Fund
Payment to Escrow Trustee
Deposit to Payment Fund —
Capitalized interest account
Payment of Costs of Issuance (b)
Total Uses of Funds
* Subject to change.
(a) Net premium consists of original issue premium on the Obligations less original issue discount (if any) with
respect to the Obligations.
(b) Includes Underwriter's compensation.
Regular Council Meeting - June 4, 2013 - Page 42 of 296
ESTIMATED DEBT SERVICE REQUIREMENTS AND PROJECTED COVERAGE
The following table sets forth the amounts required to pay annual debt service on the Prior Leases, net of the
Obligarions Being Refunded and the estimated annual debt service on the Obligations.
TABLE 1
Schedule of Estimated Annual Debt Service Requirements and Projected Coverage (a) *
Town of Marana, Arizona
Excise Tax
Revenues
and State
Excise Tax Prior Shared
Revenues Lease Revenues Plus:
and State Payments Available The Obligations
Fiscal Shared After for Debt Estimated
Year Bavanuas �) Bafixnding* (b) 0arvioa � Prinoipal* rntarasr�c�
2011/12 $ 33,500,823
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021 /22
2022/23
2023/24
2024/25
2025/26
2026/27
2027/28
2028/29
2029/30
2030/31
2031/32
2032/33
* Subject to change.
$ 5,189,022
4,213,859
3,853,203
3,859,959
3,862,378
3,859,388
3,860,472
3,860,644
3,859,078
3,863,681
3,748,359
3,745,359
3,760,616
3,104,694
3,097,066
3,102, 53 8
$28,311,801
$ 315,000
690,000
1,500,000
1,545,000
1,605,000
1,675,000
1,740,000
1,815,000
1,885,000
1,965,000
2,060,000
2,160,000
2,275,000
2,390,000
2,510,000
1,385,000
1,450,000
1,525,000
1,600,000
1,685,000
$ 33,775,000
$ 1,549,882 (�(g)
1,521,375 (S)
1,500,525
1,453,550
1,391,450
1,326,950
1,259,550
1,189,650
1,116,750
1,038,625
939,875
836,250
727,500
613,000
492,875
382,250
313,000
240,500
164,250
84,250
Estimated
Combined
Debt
Service*
$ 5,189,022
6,078,741
6,064,578
6,860,484
6,860,928
6,855,838
6,862,422
6,860,194
6,863,728
6,865,431
6,751,984
6,745,234
6,756,866
6,107,194
6,100,066
6,105,413
1,767,250
1,763,000
1,765,500
1,764,250
1,769,250
MaYimum
Annual Debt
Service
Coverage
on the
Obligations* (e)
6.46x
(a) The amount of Excise Tax Revenues and State Shared Revenues used to calculate the coverage requirements
for exisfing and projected debt service is the audited amount for fiscal year 2011/12. See TABLE 5—
"EXCISE TAX REVENUES AND STATE SHARED REVENUES — Historical and Projected Excise Tax
Revenues and State Shared Revenues Collections. "
(b)
(c)
Net of the Corporafion's Municipal Facilifies Revenue Bonds, Series 20088 being paid off on July 1, 2013
and net of the Obligations Being Refunded.
Excise Tax Revenues and State Shared Revenues (net of maximum amounts due with respect to the Prior
Leases which have not been refunded) received in fiscal year 2011/12.
8
Regular Council Meeting - June 4, 2013 - Page 43 of 296
(d) Interest is estimated at 3.5% for the Obligations.
(e)
�
Debt service coverage is based on revenues available for debt service (see footnote (a)) compared to
maximum annual debt service payments pursuant to the Purchase Agreement.
The first interest payment on the Obligations will be due on January 1, 2014. Thereafter, interest payments
will be made semiannually on July 1 and,Ianuary 1 until the final payment or prepayment of the Obligations.
(� Includes capitalized interest through July 1, 2015.
EXCISE TAX REVENUES AND STATE SHARED REVENUES
NO ASSURANCES CAN BE GIVEN THAT THE AMOUNT OF STATE SHARED SALES TAXES OR STATE
SHARED 1NCOME TAXES DESCRIBED HEREINBELOW WII,L NOT BE REDUCED OR ELIMINATED BY
THE STATE LEGISLATLTRE 1N THE FUTURE.
Town Sales Taxes
The Town's unrestricted transaction privilege (sales) taY is levied by the Town upon persons and entities on account
of their business activiries within the Town. The amount of taY due is calculated by applying the taY rate against the
gross proceeds of sales or gross income derived from the business activities shown in the table below.
TABLE 2
TRANSACTION PRIVILEGE (SALES) TAX RATES BY CATEGORY
Category
Mining
Construction
Manufacturing
Transportarion, communications and utilikes
Wholesale trade
Retail trade
Restaurants and bars
Fire, insurance and real estate
Hotels and other lodging
Services
All others
Rate
2.0%
4.0
2.0
4.0
2.0
2.0
2.0
2.0
6.0
2.0
2.0
Regular Council Meeting - June 4, 2013 - Page 44 of 296
The following table shows the amounts of the Town's unrestricted transaction privilege (sales) taY collecrions by
industry classification for fiscal years 2007/08 through and including 2011/12, projected collecrions for fiscal year
2012/13 and proposed budgeted collections for fiscal year 2013/14.
TABLE 3
TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS
BY INDUSTRY CLASSIFICATION (a)
Proposed
Actual Projected Budgeted
Industry Classification 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 (b) 2013/14 (b)
Mining
Construction
Manufacturing
Transportation, communication
and utilities
Wholesale trade
Retail trade
Restaurants and bars
Fire, insurance andreal estate
Hotels and other lodging
Services
All others
Total (c)
$ 33,335 $ 1,950 $ 3,729 $ 15,601 $ 15,732 $ 20,767 $ 15,000
9,885,085 6,450,530 4,448,469 4,870,797 5,782,644 5,109,828 4,879,836
183,545 154,594 13 8,817 123,524 128,089 126,016 145,967
2,459,656 2,522,671 2,768,198 2,927,271 2,985,979 3,168,416 3,374,515
528,937 339,051 184,203 194,392 233,850 313,520 292,166
9,380,086 8,554,331 8,673,055 8,667,896 8,804,206 9,259,585 9,178,225
1,407,901 1,3 84,914 1,5 5 5,032 1,65 8,180 1,789,232 1,786,111 1,810,25 5
1,616,223 903,810 1,050,046 1,253,481 1,350,977 1,253,019 1,271,318
626,656 508,199 1,378,271 1,914,004 1,991,767 1,891,336 1,655,413
1,056,309 1,002,992 1,057,433 982,631 1,026,443 964,899 986,810
141,735 581,380 404,852 192,137 430,042 169,311 177,962
$27,319,468 $22,404,422 $21,662,105 $22,799,914 $24,538,961 $ 24,062,808 $ 23,787,467
(a) Due to the Town's participation in the Arizona Department of Revenue ( ADOR ) sales tax collection
program and ADOR's reporting of collections on a cash basis, the totals represented here may differ from
the amounts shown for Town Sales Tax Collections in TABLE 5.
(b) Projected figures for fiscal year 2012/13 and proposed budgeted figures for fiscal year 2013/14 are
unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are `forward-
looking" statements which should be considered with an abundance of caution.
(c) The sales tax totals in this table do not include nonrecurring sales tax audit revenues resulting from audits
performed on behalf of the Town.
Licenses and Permits; Fines and Forfeitures
The Town imposes and collects a business license taY on the right to engage in business within the Town and the
right to urilize certain Town property, an occupational license tax on certain occuparions and various permit fees for
engaging in certain activities within the Town, for the right to utilize certain Town property and for parks and
recreation. The Town also imposes and collects fines and forfeitures for violation of State laws and Town
ordinances relating to, among other things, traffic and parking offenses.
State-Shared Revenues
From rime to time, bills are introduced in, and legislation enacted by, the Arizona Legislature to change the formulas
used to allocate the State-Shared Sales TaYes, State-Shared Income TaYes and State-shared vehicle license taY,
including proposed adjustments that would reduce the distriburion to ciries and towns. The possibility of changes in
this respect are more likely to be adverse to the Town when the State is experiencing financial difficulries. The
Town cannot deternune whether any such measures will become law or how they might affect the revenues which
comprise the State-Shared Revenues. In addition, initiative measures are circulated from time to time seeking to
place on the ballot changes in Arizona law which would repeal or modify state sales taYes, state income taYes (the
major source of funds for state revenue sl�aring) and vehicle license taYes. The Town cannot predict if any such
10
Regular Council Meeting - June 4, 2013 - Page 45 of 296
iniriarive measures will ever actually be submitted to the electors, what form the measures might take or the outcome
of any such election.
State Shared Income Taxes. Under current State law, Arizona cities and towns are preempted from imposing a local
income taY. Ciries and towns are, however, entitled by statutory formula to receive typically 15.00% of the net
revenues of the State's personal and corporate income taY collecrions for the fiscal year which is two fiscal years
prior to the current fiscal year. Distriburion of such funds is made monthly based on the proportion of each city's or
town's population to the total popularion of all incorporated cities and towns in the State as determined by the latest
census. Reduced economic activity or reducrions in the statutory formula share could adversely affect the Town's
revenues.
State-Shared Sales Taxes. Pursuant to statutory formula, cities and towns in Arizona receive a portion of the State-
levied transacrion privilege (sales) taY. The State transacrion privilege (sales) taY is levied against the same
categories of business acrivity as the Town's transaction privilege (sales) taY with the exception of food sales, which
the State exempts from taY. As TABLE 4 indicates, the rate of taYarion by the State varies among the different types
of business acrivities taYed, with the most common effective rate being subject to the hereinafter described
distribution share being 5.00% of the amount or volume of business transacted.
Under current State law, the aggregate amount distributed to all Arizona cities and towns is equal to 25.00% of the
"distribution share" of revenues attributable to each category of taYable activity. The allocation of each city and
town of the revenues available to all ciries and towns is based on their population relarive to the aggregate
popularion of all cities and towns as shown by the latest decennial or special census. State-levied transacrion
privilege (sales) taYes are collected by the State and are distributed monthly to cities and towns.
TABLE 4
STATESALESTAX
TAXABLE ACTIVITIES, TAX RATES AND DISTRIBUTION SHARE
Taxable Activities
Transparting
Utilities
Telecommunications
Pipeline
Private car line
Publication
Job printing
Prime contracting
Owner builder sales
Amusement
Restaurant
Personal property rental
Retail (excluding food sales)
Transient lodging
Mining - non-metal, oil/gas
Commercial lease
Severance - metalliferous mining
Use tax utilities
Jet fuel use tax
State Transaction Privilege (Sales) Tax Rates
0.60% 1.00%
State Distribution Education Temporary Combined
Tax Rate Base Tax Rate (a) Tax Rate Tax Rate
5.000 %
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.000
5.500
3.125
0.000
2.500
5.000
(c�
20.00 %
20.00
20.00
20.00
20.00
20.00
20.00
20.00
20.00
40.00
40.00
40.00
40.00
50.00
32.00
53.33
80.00
20.00
40.00
0.60 %
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
N/A
N/A
N/A
N/A
0.60
N/A
1.00 %
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
N/A
N/A
N/A
1.00
N/A
6.600 %
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.600
6.500
3.125
0.000
2.500
6.600
(c�
11
Regular Council Meeting - June 4, 2013 - Page 46 of 296
N/A = Not applicable.
(a) Represents the State transacfion privilege (sales) tax rate approved by voters of the State in November 2000
(the "Education Tax ) on certain of the categories of business activity at six-tenths of one percent (0.6%).
The Educalion Tax collections are dedicaxed exclusively to educalion and are not distributed to the Town
or pledged to the payment of debt service with respect to the Ob&galions. The effective dates for the
Educafion Tax are June 1, 2001 through June 30, 2021.
(b) Represents the State transacfion privilege (sales) tax rate approved by voters of the State on May 18, 2010
(the "Temporary Tax ) on certain of the categories of business activity at one percent (1. 0%). Two-thirds of
the Temporary Tax collections are dedicated exclusively to primary and secondary education and the
remaining one-third is dedicated exclusively to health and human services and public safety purposes. The
Temporary Tax is not distributed to the Town or pledged to the payment of debt service with respect to the
Obligalions. The effecfive dates for the Temporary Tax are June 1, 2010 through May 31, 2013.
(c) Does not include $0. 0305 per gallon State tax on the retail sale of jet fuel, which tax is only levied on the first
ten million gallons sold to each purchaser in each calendar year.
Source: Arizona Department of Revenue.
Historical and Projected Excise Tax Revenues and State Shared Revenues
The following table sets forth the Town's actual Excise Tax Revenues and State Shared Revenues collections for
fiscal years 2007/08 through and including 2011/12, projected collections for fiscal year 2012/13 and proposed
budgeted collecrions for fiscal year 2013/14.
TABLE 5
HISTORICAL AND PROJECTED EXCISE TAX REVENUES
AND STATE SHARED REVENUES COLLECTIONS (a)
Proposed
Actual Projected Budgeted
c�ego�y aoo�ios aoosio9 aoo9no aoioni aoiina aoiaii3 �� aoi3n4 ��
TownSales Tax $27,319,468 $22,404,422 $21,662,077 $22,947,818 $24,538,961 $ 24,099,842 $ 24,037,467
State-shared Sales Taxes 2,458,329 2,126,636 1,961,225 2,099,083 2,731,863 2,805,820 3,020,895
State-shared Income Taxes 3,761,010 3,971,447 3,450,478 2,601,218 2,950,734 3,570,867 3,900,421
Licenses andpermits 2,965,068 1,951,817 2,150,360 2,502,494 2,720,872 4,255,159 3,194,225
Fines andforfeitures
andpenalties 792,823 692,526 641,484 537,680 558,393 668,541 625,000
$37,296,698 $31,146,848 $29,865,624 $30,688,293 $33,500,823 $ 35,400,230 $ 34,778,008
(a) The Obligations will be secured by a first lien and pledge on the Excise Tax Revenues subject to a prior
pledge on the Prior Lease. See "SECURITY FOR AND SO URCES OF PAYMENT OF THE OBLIGATIONS
— Generally. "
Due to the Town's participation in the Arizona Department of Revenue ( ADOR ) sales tax collection
program and ADOR's reporting of collections on a cash basis, the totals represented here may differ from
the amounts shown for Town Sales Tax Collections in TABLE 3.
(b) Projected figures for fiscal year 2012/13 and proposed budgeted figures for fiscal year 2013/14 are
unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are `forward-
looking" statements which should be considered with an abundance of caution.
12
Regular Council Meeting - June 4, 2013 - Page 47 of 296
LITIGATION
respecrive rights to adopt or comply with the provisions of the documents under which the Obligations have been
authorized or the validity or enforceability thereof or to consummate the transactions described therein or herein; nor
is there any lirigation or administrative action or proceeding threatened against the Town which, if decided adversely
to the Town, as applicable, would impair the Town's ability to comply with all of the requirements of the documents
under which the Obligarions have been authorized or l�ave a material adverse effect upon the financial condition of
the Town. Representatives of the Town will deliver certificates to that effect at the rime of the initial delivery of the
Obligarions.
LEGAL MATTERS
Legal matters incident to the execurion and delivery of the Obligations and with regard to the taY-exempt status of
the interest portion of the Obligations are subject to the legal opinion of Special Counsel, whose services have been
retained by the Town. The signed legal opinion of Special Counsel, dated and premised on the law in effect as of
the date of the Obligations, will be delivered to the Underwriter at the time of original delivery of the Obligations.
The proposed teat of the legal opinion is set forth as APPENDIX E—"FORM OF APPROVING LEGAL
OPINION." The legal opinion to be delivered may vary from the teat of APPENDIX E if necessary to reflect the
facts and law existing on the date of delivery. The opinion will speak only as of its date, and subsequent
distribution, by recirculation of this Official Statement or otherwise, should not be construed as a representation tl�at
Special Counsel has reviewed or expressed any opinion concerning any matters relaring to the Obligations
subsequent to the original delivery of the Obligarions.
From time to rime, there are legislarive proposals (and interpretations of such proposals by courts of law and other
entiries and individuals) that, if enacted, could alter or amend the properry taY system of the State and numerous
matters, both financial and non-financial, impacting the operations of school districts that could have a material
impact on the Town and could adversely affect the secondary market value of the Obligarions. It cannot be
predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to
obligations (such as the Obligations) issued prior to enactment.
Certain legal matters will be passed upon for the Underwriter by Gust Rosenfeld, P.L.C., as counsel to the
Underwriter.
The various legal opinions to be delivered concurrently with the delivery of the Obligations eapress the professional
judgment of the attorneys rendering the opinions as to the legal issues eaplicitly addressed therein. By rendering a
legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment,
of the transaction opined upon, or of the future performance of parties to the transaction. Nor does the rendition of
an opinion guarantee the outcome of any legal dispute tl�at may arise out of the transaction.
TAX MATTERS
General
In the opinion of Special Counsel, under existing law, the portion of each of the Payments made by the Town
pursuant to the Purchase Agreement and denominated as and comprising interest pursuant to the Purchase
Agreement and received by the Owners of the Obligations (the "Interest Portion") will be excludable from gross
income for federal income taY purposes pursuant to Section 103 (a) of the Code, will not be treated as an item of taY
preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and
corporations (but will be taken into account in determining adjusted current earnings for purposes of computing such
taY imposed on certain corporations) and will be exempt from Arizona income taYarion so long as the Interest
Portion is excludable from gross income for federal income tax purposes. Special Counsel expresses no opinion as
to the treatment for federal or Arizona income taY purposes on the Interest Portion as to any other taY consequence
relaring to the Obligarions.
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The Code prescribes a number of qualificarions and conditions for such interest to be and to remain excluded from
gross income for federal income taY purposes, some of which, including provisions for potential payments by the
Town to the federal government, require future or continuing compliance after delivery of the Obligations in order
for the Interest Portion to be and to remain so excluded from the date of execution and delivery. Such opinion on
such tax matters will be based on and will assume the accuracy of certain representarions and certifications and
compliance with certain conrinuing covenants of the Town contained in documents which are part of the transcript
of proceedings for the Obligarions and which are intended to evidence and assure tl�at the Interest Portion will
remain excluded from gross income for federal income tax purposes. Special Counsel will not independently verify
the accuracy of the certificarions and representations, or compliance with the covenants, made by the Town.
Noncompliance with these requirements could cause the Interest Portion to be included in gross income for federal
income taY purposes and to be subject to federal and Arizona income taYarion retroacrive to the date of execution
and delivery of the Obligarions. The Town has covenanted in the Purchase Agreement to take all such acrions that
may be required of them for the Interest Portion to be and remain excluded from gross income for federal income
taY purposes and not to take any actions that would adversely affect that exclusion.
Prospective purchasers of the Obligarions should be aware that the ownership of the Obligations may result in other
collateral federal taY consequences, including (i) the denial of a deduction for interest on indebtedness incurred or
continued to purchase or carry the Obligarions or, in the case of a financial institurion, tl�at portion of an owner's
interest expense allocable to interest on an Obligation; (ii) the reducrion of the loss reserve deduction for property
and casualty insurance companies by fifteen percent (15%) of certain items, including the Interest Portion; (iu) the
inclusion of the Interest Portion in the earnings of certain foreign corporations doing business in the United States of
America (the "United States") for purposes of the branch profits taY; (iv) the inclusion of the Interest Portion in
passive investment income subject to federal income taYation of certain Subchapter S corporarions with Subchapter
C earnings and profits at the close of the taYable year; and (v) the inclusion in gross income of the Interest Portion in
the determination of the taxability of certain Social Security and Railroad Rerirement benefits to certain recipients of
such benefits. The nature and ea�tent of the other taY consequences described above will depend on the particular taY
status and situation of each owner of the Obligarions. Prospecrive purchasers of the Obligations should consult their
own taY advisors as to the impact of these other taY consequences.
From time to rime, there are legislarive proposals suggested, debated, introduced or pending in Congress tl�at, if
enacted into law, could alter or amend one or more of the federal taY matters described above including, without
limitation, the excludability from gross income of the Interest Portion, adversely affect the market price or
marketability of the Obligations, or otherwise prevent the holders from realizing the full current benefit of the status
of the interest thereon. It cannot be predicted whether or in what form any such proposal may be enacted, or
whether, if enacted, any such proposal would apply to the Obligations. If enacted into law, such legislation could
affect the market price or marketability of the Obligations. Prospecrive purchasers of the Obligations should consult
their taY advisors as to the impact of any proposed or pending legislarion.
Special CounsePs opinions are based on e�sting law, which is subject to change. Such opinions are further based on
factual representations made to Special Counsel as of the date thereof. Special Counsel assumes no duty to update
or supplement its opinion to reflect any facts or circumstances that may thereafter come to Special CounsePs
attention, or to reflect any changes in law that may thereafter occur or become effecrive. Moreover, Special
Counsel's opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or
the courts; rather, such opinions represent Special CounsePs professional judgment based on its review of existing
law, and in reliance on the representarions and covenants that it deems relevant to such opinion.
Original Issue Discount and Original Issue Premium
Certain of the Obligations as indicated on the inside front cover of this Official Statement ("Discount Obligations"),
were offered and will be sold to the public at an original issue discount ("Original Issue Discount"). Original Issue
Discount is the excess of the stated redemption price at maturity (the principal amount) over the "issue price" of a
Discount Obligarion. The issue price of a Discount Obligation is the inirial offering price to the public (other than to
bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial
amount of the Discount Obligations of the same maturity will be sold pursuant to that offering. For federal income
taY purposes, Original Issue Discount accrues to the owner of a Discount Obligation over the period to maturity
based on the constant yield method, compounded semiannually (or over a shorter permitted compounding inteival
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Regular Council Meeting - June 4, 2013 - Page 49 of 296
selected by the owner). The portion of Original Issue Discount that accrues during the period of ownership of a
Discount Obligation (i) will be interest excludable from the owner's gross income for federal income taY purposes to
the same eatent, and subject to the same considerarions discussed above, as other interest on the Obligarions, and (ii)
will be added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior
sale or other disposirion of tl�at Discount Obligation. A purchaser of a Discount Obligarion in the inirial public
offering at the price for that Discount Obligation stated on the cover of this Official Statement who holds that
Discount Obligation to maturity will realize no gain or loss upon the retirement of that Discount Obligation.
Certain of the Obligations as indicated on the inside front cover of this Official Statement (the "Premium
Obligarions"), were offered and will be sold at an "issue price" in excess of their stated redemption price at maturity.
Tl�at excess constitutes obligation premium. The issue price of a Premium Obligarion is the initial offering price to
the public (other than bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers)
at which a substantial amount of the Premium Obligarions of the same maturity is sold pursuant to that offering. For
federal income tax purposes, obligation premium is amortized over the period to maturity of a Premium Obligarion,
based on the yield to maturity of that Premium Obligation (or, in the case of a Premium Obligation callable prior to
its stated maturity, the amortizarion period and yield may be required to be determined on the basis of an earlier call
date tl�at results in the lowest yield on tl�at Premium Obligation), compounded semiannually (or over a shorter
permitted compounding interval selected by the owner). No portion of tl�at obligation premium is deductible by the
owner of a Premium Obligation. For purposes of determining the owner's gain or loss on the sale, redemption
(including redemption at maturity) or other disposition of a Premium Obligation, the owner's taY basis in the
Premium Obligarion is reduced by the amount of obligation premium that accrues during the period of ownership.
As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a
Premium Obligarion for an amount equal to or less than the amount paid by the owner for tl�at Premium Obligarion.
A purchaser of a Premium Obligation in the inirial public offering at the price for tl�at Premium Obligation stated on
the cover of this Official Statement who holds that Premium Obligarion to maturity (or, in the case of a callable
Premium Obligation, to its earlier call date that results in the lowest yield on that Premium Obligation) will realize
no gain or loss upon the retirement of that Premium Obligarion.
Owners of Discount and Premium Obligations should consult their own taY advisors as to the determinarion for
federal income taY purposes of the amount of Original Issue Discount or obligarion premium properly accruable in
any period with respect to the Discount or Premium Obligarions and as to other federal taY consequences, and the
treatment of Original Issue Discount and obligation premium for purposes of state and local taxes on, or based on,
income.
Information Reporting and Backup Withholding
Interest paid on bonds such as the Obligarions is subject to informarion reporting to the Internal Revenue Service.
This reporting requirement does not affect the excludability of interest on the Obligations from gross income for
federal income taY purposes. However, in conjunction with that information reporting requirement, the Code
subjects certain non-corporate owners of Obligations, under certain circumstances, to "backup withholding" at the
rates set forth in the Code, with respect to payments on the Obligations and proceeds from the sale of Obligations.
Any amount so withheld would be refunded or allowed as a credit against the federal income tax of such owner of
Obligarions. This withholding generally applies if the owner of Obligations (i) fails to furnish the payor such
owner's social security number or other taxpayer identification number ("TIN"), (ii) furnished the payor an incorrect
TIN, (iii) fails to properly report interest, dividends, or other "reportable payments" as defined in the Code, or (iv)
under certain circumstances, fails to provide the payor or such owner's securities broker with a certified statement,
signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup
withholding. Prospective purchasers of the Obligations may also wish to consult with their taY advisors with respect
to the need to furnish certain taxpayer informarion in order to avoid backup withholding.
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RATING
Standard & Poor's Financial Services, LLC ("S&P") has assigned the rating of "_" to the Obligarions. An
eaplanarion of the significance of a rating assigned by S&P may be obtained from S&P at 55 Water Street, New
York, New York 10004. Such rating, if assigned, may be revised downward or withdrawn entirely by S&P, if, in its
respecrive judgment, circumstances so warrant. Any downward revision or withdrawal of such rating may have an
adverse effect on the market price or marketability of the Obligations. The Town has covenanted in its conrinuing
disclosure undertaking that it will file norice of any formal change in any rating relating to the Obligarions. See
"CONTINUING DISCLOSURE" and APPENDIX F—"FORM OF CONTINUING DISCLOSURE
UNDERTAKING" herein.
UNDERWRITING
The Obligarions will be purchased by the Undenvriter at an aggregate purchase price of $ , pursuant to
an obligation purcl�ase contract (the "Obligation Purchase Contrac�') entered into by and between the Town and the
Underwriter. If the Obligations are sold to produce the yields shown on the inside front cover page hereof, the
Underwriter's compensarion will be $ The Obligarion Purchase Contract provides that the
Underwriter will purchase all of the Obligations so offered if any are purchased. The Underwriter may offer and sell
the Obligations to certain dealers (including dealers deposiring bonds into unit investment trusts) and others at prices
higher or yields lower than the public offering prices or yields stated on the inside front cover page hereof. The
initial offering yields set forth on the inside front cover page may be changed, from time to time, by the Underwriter.
POLITICAL CONTRIBUTIONS
To the best of its knowledge, the Undenvriter has not made political contributions, other than those, if any,
permitted under applicable securities regularions, to any person who sought a seat on the Town Council at its last
election or, to the best of their knowledge, any prior elecrion.
RELATIONSHIP AMONG PARTIES
Special Counsel and counsel to the Underwriter have and continue to represent the Underwriter with respect to
financings other than for the Town and will conrinue to do so if requested in the future. Special Counsel and
counsel to the Undenvriter have also previously acted as special counsel with respect to other obligations
underwritten by the Underwriter and will conrinue to do so if requested in the future.
CONTINUING DISCLOSURE
The Town, as the obligated enrity with respect to the Obligations, has covenanted for the benefit of certain owners of
the Obligarions to provide certain financial information and operaring data relaring to the Town by not later than
Febri�ar�� 1 in each year commencing February 1, 2014 (the "Annual Reports"), and to provide notices of the
occurrence of certain enumerated events (the "Norices of Listed Events"). The Annual Reports, the Norices of
Listed Events and any other required filing will be filed by the Town with the Municipal Securities Rulemaking
Board (the "MSRB") through the MSRB's Electronic Municipal Market Access system, each described in
APPENDIX F—"FORM OF CONTINUING DISCLOSURE UNDERTAKING." The form of the undertaking, the
specific nature of the informarion to be contained in the Annual Reports and the Notices of Listed Events is set forth
in APPENDIX F. These covenants will be made in order to assist the Undenvriter in complying with the Securities
and Exchange Commission Rule 15c2-12(b)(5) (the "Rule"). A failure by the Town to comply with these covenants
must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities
dealer before recommending the purchase or sale of the Obligations in the secondary market. Consequently, such a
failure may adversely affect the transferability and liquidity of the Obligarions and their market price. Also pursuant
to Arizona Law, the ability of the Town to comply with such covenants is subject to annual appropriation of funds
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Regular Council Meeting - June 4, 2013 - Page 51 of 296
sufficient to provide for the costs of compliance with such covenants. Should the Town not comply with such
covenants due to a failure to appropriate for such purpose, the Town has covenanted to provide notice of such fact to
the MSRB. Absence of continuing disclosure, due to non-appropriation or otherwise, could adversely affect the
Obligarions and specifically their market price and transferability.
The Town has been in compliance with all e�sting continuing disclosure undertakings in all material respects over
the last five years.
FINANCIAL STATEMENTS
The financial statements of the Town for the period ended June 30, 2012, a copy of which are included in
APPENDIX C—"TOWN OF MARANA, ARIZONA — AUDITED ANNUAL FINANCIAL STATEMENTS FOR
THE FISCAL YEAR ENDED J[JNE 30, 2012" of this Official Statement, includes the Town's financial statements
for the fiscal year ended June 30, 2012 that were audited by Henry & Horne, LLP, Certified Public Accountants, to
the eatent indicated in its report thereon. The Town has not requested the consent of Henry & Horne, LLP to
include its report and Henry & Horne, LLP has performed no procedures subsequent to rendering its report
on the financial statements. Representatives of the Town are not aware of any facts tl�at would make such audited
financial statements misleading.
THE FINANCIAL STATEMENTS INCLUDED IN APPENDIX C OF THIS OFFICIAL STATEMENT ARE
CURRENT AS OF THEIR DATE ONLY AND MAY NOT REPRESENT THE CURRENT FINANCIAL
CONDTTION OF THE TOWN.
CERTIFICATION CONCERNING OFFICIAL STATEMENT
The documents delivered in connection with the issuance of the Obligarions will include a certificate to the effect
tl�at, to the knowledge of appropriate representatives of the Town after appropriate review, the statements contained
in this Official Statement relating to the Town were at the time of the sale, and at the time of delivery of the
Obligarions, true, correct and complete in all material respects and were not misleading and did not omit matters
which, in light of the circumstances under which they are made, would make such statements not misleading.
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CONCLUDING STATEMENT
The summaries or descriptions of provisions in the Purchase Agreement and the Trust Agreement contained herein
and all references to other materials not purporting to be quoted in full are only brief outlines of certain provisions
thereof and do not constitute complete statements of such provisions and do not summarize all the pertinent
provisions of such documents.
All projecrions, forecasts and other information in this Official Statement involving matters of opinion, whether or
not expressly so stated, are intended as such and not as representarions of fact. This Official Statement is not to be
construed as a contract or agreement between the Town and the purchasers or holders of any of the Obligations.
The attached APPENDICES A through G are integral parts of this Official Statement and must be read together with
all of the foregoing statements.
This Official Statement has been prepared on direction of the Town and l�as been approved by and executed for and
on behalf of the Town by its authorized representarive indicated below.
TOWN OF MARANA, ARIZONA
�
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Mayor
Regular Council Meeting - June 4, 2013 - Page 53 of 296
APPENDIX A
TOWN OF MARANA, ARIZONA -
GENERAL ECONOMIC AND DEMOGRAPHIC INFORMATION
The following information concerning the Town is for background information only. No attempt has been made to
determine what part, if any, of the data presented is applicable to the Town; consequently, no representafion is
made as to the relevance of the data to the Town or the Obligations. THE OBLIGATIONS WILL BE PAYABLE
ONLY FROM AND SECIIRED BY THE AMOIINTS DESCRIBED IINDER THE HEADING "SECIIRITY
FOR AND SOIIRCES OF PAYMENT OF THE OBLIGATIONS." THE OBLIGATIONS WILL NOT BE A
GENERAL OBLIGATION OF THE TOWN.
General
The Town is located one mile north of the border of the City of Tucson, Arizona ("Tucson"), and just south of the
northern border of Pima County, Arizona (the "County"). The Town encompasses an approximate area of 300
square miles and sits at an elevation of 2,055 feet above sea level. The Town was incorporated in 1977.
POPULATION STATISTICS
Town of
Marana
Pima
County
State of
Arizona
2012 Estimate (a) 36,957
2010 Census 34,961
2000 Census 13,556
1990 Census 2,187
1980 Census 1,674
1970 Census 1,154
990,380
980,263
843,746
666,957
531,443
351,667
6,498,569
6,392,017
5,130,632
3,665,339
2,716,546
1,775,399
(a) Data as ofJuly 2012.
Source: Arizona Department of Commerce, Population Starisrics Unit and the U.S. Census Bureau.
Municipal Government and Organization
The Town operates under the Council-Manager form of government. The Mayor and six council members are
elected at large for staggered four-year terms. The Town Council appoints a Town Manager who l�as full
responsibility for carrying out council policies and administering Town operarions. Funcrions of government and
operarion are provided by a staff of approximately 365 full-time employees. The Town provides police services and
water to its residents.
Tucson Electric Power Corporarion and Trico Electric Cooperative provide electricity to the Town's residents.
Southwest Gas Corporation provides natural gas. Water is provided by the Town, as well as certain public and
private providers. Sewer services are provided by the County. Telephone services are provided by CenturyLink.
Waste disposal and sanitation services are provided by various private disposal companies.
Economy
The economy of the Town and the area surrounding the Town has historically been dominated by agricultural
activiries. Though agriculture is still a large contributor to the economy, commercial, retail and industrial elements
are becoming large contributors. The Town's agricultural elements include a variety of irrigated crops.
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The commercial elements of the economy have developed due to the growth of the Town and the growth of Tucson.
The Town has become a retail trade center for suburban northern Tucson and the rural outlying areas surrounding
the Town. Also, the Town's proximity between Phoenix and Tucson has attracted business. Many residents
commute from the Town to the Tucson metropolitan area for employment as well.
The following table is a partial list of major employers within the Town.
Employer
Marana Unified School District No. 6
Wal-Mart
Marana Aerospace Solurions, Inc.
Town of Marana
Sargent Controls & Aerospace
FLSmidth Krebs
Fry's Food and Drug
Marana Health Center
Coca-Cola Bottling
Comcast of Arizona
Costco Wholesale
Trico Electric Cooperative Inc.
Home Depot
Lowe's
Asarco LLC
Target
MAJOR EMPLOYERS
Town of Marana, Arizona
Description
Education
Retail
Air center
Government
Aerospace manufacturing
Separation equipment and manufacturing
Grocery
Healthcare
Food and beverage distriburion
Telecommunications
Retail warehouse
Electric utility
Retail home improvement
Retail home improvement
Copper refining and smelting
Retail
Appro�mate
Number of
Employees
1,800
450
400
300
255
250
240
195
170
150
130
130
125
125
115
100
Source: 2013 Hoover's Inc. and the Town's Comprehensive Annual Financial Report for the fiscal year ended
June 30, 2012.
The following table illustrates the unemployment averages for the Town, the County, the State and the United
States.
UNEMPLOYMENT AVERAGES
Calendar Town of
Year Marana
2013 (a) 6.0%
2012 6.1
2011 7.6
2010 8.0
2009 7.6
2008 5.1
Pima
County
6.9%
7.3
8.3
8.7
8.3
5.6
State of
Arizona
7.9%
8.3
92
9.5
9.1
5.9
United States
of America
(a) Data as through March 2013.
7.7%
8.1
8.9
9.7
9.3
5.8
Source: Arizona Office of Unemployment and Popularion Starisrics, in cooperakon with the U.S. Department of
Labor, Bureau of Labor Starisrics.
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Regular Council Meeting - June 4, 2013 - Page 55 of 296
Commerce
The Town is home to numerous retail establishments that accommodate the needs of the Town's growing
popularion. See "EXCISE TAX REVENUES AND STATE SHARED REVENUES – TABLE 3–
TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS BY INDUSTRY CLASSIFICATION" and "—
TABLE 5– HISTORICAL AND PROJECTED EXCISE TAX REVENUES AND STATE SHARED REVENUES
COLLECTIONS" in this Official Statement.
Education
Primary educarion in the Town is provided by the Marana Unified School District's 11 public elementary schools,
one intermediate school, two junior high schools and three high schools. Pima Community College and The
University of Arizona offer undergraduate educarion and graduate programs.
Transportation
Industry, business and residents benefit from the transportation provided by Interstate 10, linking the Town with
Tucson and the City of Phoenix, Arizona. The Marana Northwest Regional Airport and the Pinal Air Park each
have two runways and are within close pro�mity to the Town. Residents have access to the Tucson Internarional
Airport located in Tucson for internarional, national, regional and local air service. Within Tucson are also
passenger bus lines traveling narional, regional and local routes.
Tourism
Many recreational opportuniries are within an hour's drive of the Town. Picacho Peak State Park, site of Arizona's
only Civil War battle, is 15 miles north. The Town's camping, picnic areas and nature trails are noted for colorful
spring wildflowers. In the Santa Catalina Mountains is Catalina State Park, 20 miles east of the Town. Saguaro
National Monument (west portion) is a few miles south of the Town. Within the monument is the world famous
Arizona - Sonora Desert Museum with native wildlife exhibits and Old Tucson Studios. Other attractions include
Biosphere II, Kitt Peak, Pima Air Museum, and the San Xavier Mission.
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APPENDIX B
TOWN OF MARANA, ARIZONA -
FINANCIAL DATA
THE OBLIGATIONS WILL BE PAYABLE ONLY FROM AND SECIIRED BY THE AMOIINTS DESCRIBED
IINDER THE HEADING "SECIIRITY FOR AND SOIIRCES OF PAYMENT OF THE OBLIGATIONS." THE
OBLIGATIONS WILL NOT BE A GENERAL OBLIGATION OF THE TOWN.
Current Year Statistics (For Fiscal Year 2012/13)
Town of Marana, Arizona
General Obligarion Bonds Outstanding
Excise Tax Revenue and State Shared Revenue-Secured
Obligarions Outstanding and to be Outstanding
Improvement Bonds Outstanding
Water Revenue-Secured Obligarions Outstanding
Primary Assessed Valuarion
Secondary Assessed Valuation
Esrimated Net Full Cash Value
Estimated Fiscal Year 2013/14 Statistics
Town of Marana, Arizona
Esrimated Primary Assessed Valuarion
Esrimated Secondary Assessed Valuation
Esrimated Net Full Cash Value
* Subject to change.
(a) Includes the Obligations and is net of the Obligations Being Refunded.
None
$ 74,330,000 * (a)(b)
20,171,000
4,602,000
429,422,251 (c)
435,484,019 (c)
3,429,239,696 (d)
$ 409,126,871 (c)(e)
413,392,695 (c)(e)
3,273,180,132 (d)(e)
(b) Net of the approximate principal amount of $3, 000, 000 of the Corporafion's Municipal Facilifies Revenue
Bonds, Series 2008A being paid off on July 1, 2013.
(c) State property taxes are divided into two categories: primary and secondary. Secondary property taxes are
those taxes and assessments imposed to pay principal and interest on bonded indebtedness and certain other
obligations, those imposed for special districts other than school districts and those imposed to exceed a
budget, expenditure or tax limitafion pursuant to voter approval. Primary property taxes are all ad valorem
taxes other than secondary property taxes. Annual increases in the valuafion of certain types of property for
primary property tax purposes and the amount of primary property taxes which may be levied in any year
are subject to certain limitafions. These limitafions do not apply with respect to secondary property taxes.
See "PROPERTY TAXES — Ad T�alorem Taxes — Property Tax Assessment Rafios" for the method of
determination of such categories.
(d) Esfimated net full cash value is the total market value of the property less net exempt property within the
Town.
(e) Estimated. Although the final official valuations are not expected to differ materially from the estimated
valuations, the valuations are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County no later than August 19, 2013.
Source: State and County Abstract of the Assessment Roll, Arizona Departtiient of Revenue, Property Tax Rates
andAssessed Values, Arizona TaY Research Association and Assessor of the County.
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STATEMENTS OF BONDED INDEBTEDNESS
General Obligation Bonds Outstanding
Town of Marana, Arizona
None
Excise Tax Revenue Obligations Outstanding and to be Outstanding
Town of Marana, Arizona and Town of Marana Municipal Development Corporation
Total General Obligation Bonds Outstanding
Final
Maturity
Issue Original Date
Series Amount J( ulY 1)
1997 (a)
2003 (a�
2004 (a�
2008A (a�
2008B (a)
$8,175,000
19,700,000
8,675,000
31,090,000
8,700,000
2022
2028
2025
2028
2028
Balance
Outstanding
$ 2,550,000
14,83 5,000
6,025,000
28,140,000
6,165,000
Less:
Obligations
Being
Refunded*
($14,160,000)
Balance
Outstanding
and to be
Outstanding*
$ 2,550,000
675,000
6,025,000
28,140,000
3,165,000 (b)
Tota1 Excise Tax Revenue and State SY�ared Revenue-Secured Obligations Outstanding $ 40,555,000 *
Plus: The Obligations 33,775,000 *
Tota1 Net Excise Tax Revenue and State SY�ared Revenue Obligations Outstanding and to be Outstanding $ 74,330,000 *
* Subject to change.
(a) The Corporafion's Municipal Facilifies Revenue Bonds are payable from payments made by the Town
pursuant to leases entered into between the Town of Marana Municipal Development Corporafion as lessor
and the Town as lessee.
(b) Net of the approximate principal amount of $3, 000, 000 of the Corporafion's Municipal Facilifies Revenue
Bonds, Series 2008A being paid off on July 1, 2013.
Total Improvement Bonds, Outstanding (a)
Issue
Date
12/28/2006
Final
Maturity
Original Date Balance
Amount Description (January 1) Outstanding
$25,774,000 Tangerine Farms Road Improvement District 2026 $ 20,171,000
Total Improvement Bonds Outstanding
$ 20,171,000
(a) Improvement district bonded debt is payable from special assessments levied on the property benefited by the
financed improvements. Such bonds are a contingent liability of the Town to the extent of any delinquent
assessments.
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Total Water Revenue-Secured Obligations Outstanding (a)
Town of Marana, Arizona
Is sue
Series
2009
Original
Amount
Final
Maturity
Date
(Januaty 1)
Balance
Outstanding
$5,250,000
2029
Total Water Revenue-Secured Obligations Outstanding
$ 4,602,000
$ 4,602,000
(a) Represents funds borrowed under Loan Agreements with the Water Infrastructure Finance Authority of
Arizona.
Direct Bonded Debt, Legal Limitation and Unused Borrowing Capacity
Town of Marana, Arizona
The Arizona Consritution provides that the general obligation bonded indebtedness for a municipality for general
municipal purposes may not exceed six percent of the secondary assessed valuarion of the taYable property in tl�at
municipality. In addition to the six percent limitation for general municipal purpose bonds, municipalities may issue
general obligarion bonds up to an addirional twenty percent of the secondary assessed valuation for supplying water,
artificial light, or sewers, and for the acquisition and development of land for open space preserves, parks,
playgrounds and recrearional faciliries and public safety, law enforcement, transportarion and fire and emergency
services facilities.
Fiscal Year 2012/13 (a)
General Murucipal Purpose Bonds
6% Lunitation
$ 26,129,041
Direct General Obligation Bonds
Outstanding
Unused 6% Borrowing
Capacity
$ 26,129,041
Water, Light, Sewer, Open Space, Park and Public
Safety, Law Enforcement, Transportation and Fire
and Emergency Services Facilities Bonds
20% Lunitation
Direct General Obligation Bonds
Outstanding
Unused 20% Borrowing
Capacity
(a) See table entitled "SecondaryAssessed T�aluation byProperty Classification" herein.
I:�
$ 87,096,803
$ 87,096,803
Regular Council Meeting - June 4, 2013 - Page 59 of 296
Estimated Fiscal Year 2013/14 (a)(b)
General Murucipal Purpose Bonds
6% Lunitation $ 24,803,561
Direct General Obligation Bonds
Outstanding
Unused 6% Borrowing
Capacity
(a)
��
Source
$ 24,803,561
Water, Light, Sewer, Open Space, Park and Public
Safety, Law Enforcement, Transportation and Fire
and Emergency Services Facilities Bonds
20%Lunitation $ 82,678,539
Direct General Obligation Bonds
Outstanding
Unused 20% Borrowing
Capacity
$ 82,678,539
See table entitled "SecondaryAssessed T�aluation byProperty Classification" herein.
Estimated. Although the final official valuations are not expected to differ materially from the estimated
valuations, the valuations are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County no later than August 19, 2013.
. State and County Abstract of the Assessment Roll, Arizona Departtiient of Revenue and Property Tax
Rates andAssessed T�alues, Arizona TaY Research Association.
Direct and Overlapping General Obligation Bonded Debt
Town of Marana, Arizona
Overlapping Jurisdiction
State of Arizona
Pima County
Pima County Community College District
Avra Valley Fire District
Northwest Fire District
Gladden Farms Community Facilities District
Flowing Wells Unified School District No. 8
Marana Unified School District No. 6
Town of Marana
Net Direct and Overlapping General Obligation Bonded Debt
I:�!
[Ralios to be updatedJ
General
Obligation
Bonded
Debt (b)
None
$456,145,000
1,355,000
291,000
31,590,000
8,550,000
22,370,000
48,745,000
None
Proportion Applicable
to the Town (a)
Approxirriate Net Debt
Percent Amount
0.77 % None
5.33 $ 24,312,529
5.33 72,222
2.83 8,23 5
41.48 13,103,532
100.00 8,550,000
100.00 22,370,000
55.08 26,848,746
100.00
None
$ 95,265,263
Regular Council Meeting - June 4, 2013 - Page 60 of 296
(a) Proporfion applicable to the Town is computed on the rafio of secondary assessed valuafion for 2012/13.
(b) Does not include outstanding principal amounts of cerfificates of parficipafion, revenue obligafions, loan
obligations, improvement bonds, or other debt not secured by ad valorem property taxes. Includes total
stated principal amount of general obligation bonds outstanding, however, does not include presently
authorized but unissued general obligation bonds of such jurisdictions which may be issued in the future as
indicated in the following table. Additional bonds may be authorized by voters within overlapping
jurisdicfions pursuant to future elecfions.
Overlapping Jurisdicfion
Pima County
Avra T�alley Fire District [To be updaxedJ
Gladden Farms Community Facilifies Disfrict
Marana Unified School DisfrictNo. 6
Town ofMarana
General Obligation Bonds
Authorized but Unissued
$78, 681, 000
4,135, 000
59, 570, 000
14, 325, 000
None
Also does not include the obligation of the Central Arizona Water Conservation District ("CAWCD ) to the
United States Department of the Interior (the `Department of the Interior'), for repayment of certain capital
costs for construction of the Central Arizona Project ("CAP'), a major reclamation project that has been
substantially completed by the Department of the Interior. The obligation is evidenced by a master contract
between CAWCD and the Department of the Interior. In April 2003, the United States and CAWCD agreed
to settle litigation over the amount of the construction cost repayment obligation, the amount of the respective
obligafions for payment of the operafion, maintenance and replacement costs and the applicafion of certain
revenues and credits against such obligations and costs. Under the agreement, CAWCD's obligation for
substantially all of the CAP features that have been constructed so far will be set at $1.646 billion, which
amount assumes (but does not mandate) that the United States will acquire a total of 667,724 acre feet of
CAP water for federal purposes. The United States will complete unfinished CAP construction work related
to the water supply system and regulatory storage stages of CAP at no additional cost to CAWCD. Of the
$1.646 billion repayment obligation, 73% will be interest bearing and the remaining 27% will be non-interest
bearing. These percentages will be fixed for the entire 50 year repayment period, which commenced October
l, 1993. CAWCD is a multi-county water conservation district having boundaries coterminous with the
exterior boundaries ofArizona's Maricopa, Pima and Pinal Counfies. It was formed for the express purpose
of paying administrative costs and expenses of the CAP and to assist in the repayment to the United States of
the CAP capital costs. Repayment will be made from a combination of power revenues, subcontract revenues
(i. e., agreements with municipal, industrial and agricultural water users for delivery of CAP water) and a tax
levy against all taxable property within CAWCD's boundaries. At the date of this Official Statement, the tax
levy is limited to 14 cents per $100 of secondary assessed valuafion, of which 10 cents is being levied. (See
Secfions 48-3715 and 48-3715. 02, Arizona Revised Statutes.) There can be no assurance that such levy limit
will not be increased or removed at any time during the life of the contract.
Source: The various entities and Property Tax Rates and Assessed T�alues, Arizona TaY Research Association,
State and County Abstract of the Assessment Roll, Arizona Departtnent of Revenue and Assessor of the
County.
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Direct and Overlapping General Obligation Bonded Debt Ratios
Town of Marana, Arizona
Net Direct General Obligation Bonded Debt
Net Direct and Overlapping General
Obligarion Debt
Per Capita
Bonded Debt
Population
at 36,957
None
$2,577.73
As % of
Town's
2012/13
Secondary
Assessed
Valuation
None
21.88%
As % of
Town's
2012/13
Esrimated
Net Full Cash
Value
None
2.78%
Source: Property Tax Rates and Assessed T�alues, Arizona TaY Research Association, State and County Abstract
of the Assessment Roll, Arizona Department of Revenue and the Arizona Department of Commerce,
Population Starisrics Unit and the U. S. Census Bureau.
Other Long-Term Obligations
Town of Marana, Arizona
The Town does not currently have any capital lease-purchase agreements or other long-term obligations in effect.
RETIREMENT SYSTEM
Retirement Benefits
The Town contributes to the plans described below and as referenced in Note 10 in APPENDIX C—"TOWN OF
MARANA, ARIZONA — AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
J[JNE 30, 2012." Benefits are established by State statute and generally provide retirement, death, long-term
disability, survivor and health insurance premium benefits.
The Arizona State Retirement System ("ASRS"), a cost-sharing mulriple employee defined benefit plan in which
the Town participates, has reported increases in its unfunded liabilities. The most recent annual reports for the
ASRS may be accessed at: htt�s://www.azasrs.�ov/web/FinancialReports.do.
The board for the ASRS previously adopted contribution rates for fiscal years 2011/12, 2012/13 and 2013/14. For
the fiscal year ended June 30, 2012, acrive plan members were required by statute to contribute at the actuarially
determined rate of 10.74 percent (10.50 percent retirement and 0.24 percent long-term disability) of the members'
annual covered payroll. For fiscal year 2012/13 (beginning July 1, 2012), active plan members were required by
statute to contribute at the actuarially determined rate of 11.14 percent (10.90 percent retirement and 024 percent
long-term disability) of the members' annual covered payroll. For fiscal year 2013/14 (beginning July 1, 2013),
active ASRS plan members will be required by statute to contribute at the actuarially determined rate of 11.54%
(11.30% retirement pension and health insurance and 024% long-term disability) of the members' annual covered
payroll, with additional increases currently scheduled through fiscal year 2017/18.
Enacted State legislation made changes to how the ASRS operates, effecrive July 1, 2011, which includes requiring
employers to pay an alternative contribution rate for retired members of the ASRS that return to work, changing the
age at which an employee can retire without penalty based upon years of service, limiring permanent increases in
retirement benefits and establishing a Defined Contriburion and Retirement Study Committee (as defined in the
legislarion) that will review the feasibility and cost to cl�anging the current defined benefit plan to a defined
contribution plan.
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The ASRS has reported increases in its unfunded liabiliries. [The effect of the increase in the ASRS' unfunded
liabilities on the Town, or on the Town's and its employees' future annual contribution to the ASRS, are projected to
increase in future years.]
The Arizona Public Safety Personnel Retirement System ("PSPRS"), an agent, multiple employer defined pension
plan and an agent, multiple employer defined benefit health insurance premium plan in which the Town participates,
has reported increases in its unfunded liabiliries. The PSPRS has reported increases in its unfunded liabiliries. The
most recent annual reports for the PSPRS may be accessed at:
http annual r�ts�psprs The effect of the increase in the
PSPRS's unfunded liabiliries is expected to result in significantly increased contriburions by the Town and its
employees, however the specific impact on the Town and its employee's future annual contributions to the PSPRS,
cannotbe determined at this time.
For the year ended June 30, 2012, active PSPRS members were required by statute to contribute 8.65 percent of the
members' annual covered payroll, and the participating State agencies were required to contribute at the actuarially
determined rates for their portion of the plan of 16.06 to 84.55 percent, as applicable, the aggregate of such
employee and employer contributions being the total actuarially required amount. The health insurance premium
portion of the contribution was set at 1.34 to 5.53 percent of covered payroll.
The Correcrions Officers Retirement Plan ("CORP"), an agent mulriple-employer defined benefit plan that covers
certain State employees whose primary duties require direct inmate contact, for which the State Legislature
establishes and may amend acrive plan members' and the State's contriburion rates, has reported increases in its
unfunded liabiliries. The most recent annual reports for the CORP may be accessed at:
http://www.bsprs.com/svscor�/Annualreborts/catoAnnualr�tsCORP.htm. The effect of the increase in the CORP's
unfunded liabilities is expected to result in increased contriburions by the State and its employees, however the
specific impact on the State, or on the State's and its employees' future annual contriburions to the CORP, cannot be
determined at this time.
For the year ended June 30, 2012, active CORP members were required by statues to contribute 8.41 percent of the
members' annual covered payroll, and the participating State agencies were required to contribute at the actuarially
determined rates for their portion of the plan of 7.88 to 8.39 percent, as applicable, the aggregate of such employee
and employer contriburions being the total actuarially required amount. The health insurance premium portion of
the contribution rate was actuarially set at 127 to 1.53 percent of covered payroll.
The Elected Officials Retirement Plan (EORP), a cost sharing multiple-employer defined benefit plan that covers
State elected officials and judges, for which the State Legislature establishes and may amend acrive plan members'
contribution rate, has reported increases in its unfunded liabilities. The most recent annual reports for the EORP
may be accessed at http://www.bs�rs.com/s�r�/AnnuaIReborts/catoannualr�tsEORP.htm.
The Town also contributes to the Volunteer Firefighters' Relief and Pension Fund (the "VFRPF"), a defined
contribution plan which provides pensions to volunteer firefighters only. The VFRPF is administered by State
statute, requiring both the employee and the Town to make contributions equal to 5.00% of the employee's
compensation. Some monies are also received from the State. After 20 years of service as a volunteer firefighter, he
or she is entitled to a monthly pension determined by the board of trustees of the VFRPF in an amount not to exceed
$400. If the volunteer firefighter resigns before completing 20 years of service, he or she is entitled to a refund of
his or her contributions only, but not to the Town's contributions, amounts received from the State or earnings on
any contributions. The authority to establish and amend plan benefit provisions rests with the Town Council. For
the fiscal year ended June 30, 2012, the payroll for employees covered by VFRPF required no contributions.
The Government Accounting Standards Board adopted Government Accounring Standards Board Statement
Number 68, Accounfing and Financial Reporfing for Pensions ("GASB 68"), which, beginning with fiscal years
starting after June 15, 2014, requires cost-sharing employers to report their "proportionate share" of the plan's net
pension liability in their government-wide financial statements. GASB 68 will also require that the cost-sharing
employer's pension expense component include its proportionate share of the plan's pension expense, the net effect
of annual changes in the employer's proportionate share and the annual differences between the employer's actual
contriburions and its proportionate share. The Town's employees participate in the pension plan provided by the
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Regular Council Meeting - June 4, 2013 - Page 63 of 296
State. Both the Town and each covered employee contribute to the State plan. The new reporting requirements
imposed by GASB 68 will change the financial statements of the Town, but what the specific effect will be in
unknown at this time.
Other Post-Employment Retirement Benefits
Pursuant to Government Accounting Standards Board Statement Number 45, Accounfing by Employers for Post-
Employment Benefits Other than Pensions ("GASB 45"), the Town is required to report the actuarially accrued cost
of post-employment benefits, other than pension benefits ("OPEB"), such as health and life insurance for current
and future retirees. GASB 45 requires that such benefits be recognized as current costs over the working lifetime of
employees and, to the eatent such costs are not pre-funded, requires the reporting of such costs as a financial
statement liability.
The Town currently does not offer any OPEB. The Town's employees, their spouses and survivors may be eligible
for certain retiree health care benefits under health care programs provided by the State. Employees on long-term
disability and their spouses also may qualify for reriree health care benefits through the State. Such individuals may
obtain the health care benefits offered by the State by paying 100% of the applicable health care insurance premium,
net of any subsidy provided by the State. The benefits are available to all retired participants in the State's health
care program. The Town does not currently make payments for OPEB costs for such retirees.
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Regular Council Meeting - June 4, 2013 - Page 64 of 296
GENERAL FUND
Below are the Town general fund revenues, expenditures and changes in fund balance for the budgeted fiscal year
2013/14, projected figures for fiscal year 2012/13 and audited fiscal years 2007/08 through and including 2011/12.
THIS INFORMATION IS NOT INTENDED TO INDICATE FUTURE OR CONTINUING TRENDS OF
THE FINANCIAL AFFAIRS OF THE TOWN.
General Fund
Town of Marana, Arizona
Proposed
Audited Projected Budgeted
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 (a) 2013/14 (a)
FUNDBALANCEATBEGINNINGOFYEAR $21,090,899 $20,183,840 $14,484,412 $15,091,576 $16,377,638 $18,297,562 $ 19,356,832
REVENUES
Town sales tax
Intergo�rnmental
Licenses, fees and perxnits
Fines, forfeitures and penalties
Charges for services
Lease income
Contributions
In�stment income
Other
TOTAL REVENUES
ADNS"INIENTS
Transfersin
Transfers out
Prior period adjustment
TOTAL FUNDS AVAILABLE FOR
EXPENDTTURES
EXPENDTTURES
Current:
General go�rnxnent
Public safety
Hi�ways and streets
Health and welfare
Economic and community de�lopment
Culture andrecreation
Capital outlay
TOTAL EXPEI�IDITURES
Fi JND BALANCE AT END OF YEAR
$19,651,082 $17,674,072 $19,437,875 $20,512,419 $21,597,158 $ 20,080,948 $ 19,498,321
7,531,634 7,401,235 6,465,491 5,724,962 6,944,530 7,650,056 8,244,233
2,307,878 1,932,797 2,150,360 2,502,494 2,720,872 3,829,676 3,194,225
716,983 692,514 641,484 537,680 558,393 668,541 625,000
979,797 705,758 621,415 430,084 455,852 405,012 396,701
987,107 543,298 554,833 647,163 91,580 125,000 125,000
60,788 38,474 59,202 5,211 183,030 109,802 116,525
569,125 289,180 93,965 74,348 59,388 100,000 100,000
387,187 283,337 720,931 608,638 633,696 332,334 379,570
$33,191,581 $29,560,665 $30,745,556 $31,042,999 $33,244,499 $33,301,368 $ 32,679,575
$ - $ - $ 304,594 $ - $ - $ - $ -
(2,096,763) (3,133,764) (2,430,075) (2,667,794) (2,951,103) (2,839,259) (2,774,552)
(230,925) - - - - - -
$51,954,792 $46,610,741 $43,104,487 $43,466,781 $46,671,034 $48,759,671 $ 49,261,855
$ 8,239,993 $ 8,465,154 $ 8,309,412 $ 9,046,341 $ 8,177,503 $ 7,263,101 $ 9,199,456
10,181,339 10,849,085 9,724,369 8,987,481 10,248,140 10,867,447 11,528,864
2,303,668 2,354,147 1,263,028 1,282,571 1,791,721 1,900,828 2,015,635
129,757 112,949 75,342 59,668 - - -
4,537,988 4,318,036 4,424,243 4,090,462 4,092,036 4,341,219 4,603,423
3,266,690 3,664,641 3,309,101 2,551,556 2,603,702 2,762,253 2,929,090
3,111,517 2,362,317 907,416 1,071,064 1,460,370 2,267,991 1,128,555
$31,770,952 $32,126,329 $28,012,911 $27,089,143 $28,373,472 $29,402,839 $ 31,405,023
$20,183,840 $14,484,412 $15,091,576 $16,377,638 $18,297,562 $ 19,356,832 $ 17,856,832
(a) Projected figures for fiscal year 2012/13 and proposed budgeted figures for fiscal year 2013/14 are
unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are `forward-
looking" statements which should be considered with an abundance of caution.
Does not include reimbursement of certain legal and engineering costs associated with the acquisition of the
New Projects.
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NOTE: The following daxa and other information are given as background concerning the Town. Ilnder no
circumstances will the Obligalions be payable from ad valorem property taxes of the Town.
Secondary Assessed Valuation by Property Classification
Town of Marana, Arizona
Estimated
2013/14 2012/13 2011/12 2010/11 2009/10
Secondary Secondary Secondary Secondary Secondary
Assessed Assessed Assessed Assessed Assessed
Class Valuation (a) Valuation Valuation Valuation Valuation
Commercial, Industrial, Utilities & Mines $ 123,166,731 $ 127,979,410 $ 126,747,544 $ 129,286,204 $ 127,071,944
Agricultural and Vacant 48,949,007 59,028,722 74,055,428 99,817,165 112,112,160
Residential (owner occupied) 204,335,943 213,124,609 230,074,112 253,105,543 266,091,861
Residential (rental) 35,600,563 34,055,616 24,599,411 26,295,482 25,809,941
Railroad 1,284,121 1,235,599 1,143,072 1,136,860 1,114,211
Certain Government
Property Improvements 56,330 60,063 61,306 58,673 55,557
Totals* $ 413,392,695 $ 435,484,019 $ 456,680,873 $ 509,699,927 $ 532,255,674
* Totals may not add due to rounding.
(a) Estimated. Although the final official valuations are not expected to differ materially from the estimated
valuations, the valuations are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County no later than August 19, 2013.
Source: State and County Abstract of the Assessment Roll, Arizona Departtiient of Revenue and Property Tax
Rates andAssessed T�alues, Arizona TaY Research Association.
Estimated Net Full Cash Valuation
Town of Marana, Arizona
Estimated
Fiscal Net Full Cash
Year Valuation (a)
2013/14 (b)
2012/13
2011/12
2010/11
2009/10
2008/09
$ 3,273,180,132
3,429,239,696
3,600,514,419
4,010,175,655
4,176,951,678
4,184,198,308
(a) The estimated net full cash value is the total market value of property within the Town less the estimated
exemptproperty within the Town.
(b) Estimated. Although the final official valuations are not expected to differ materially from the estimated
valuations, the valuations are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County no later than August 19, 2013.
Source: State and County Abstract of the Assessment Roll, Arizona Departtiient of Revenue, Property Tax Rates
andAssessed Values, Arizona TaY Research Associarion and Finance Department of the County.
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APPENDIX C
TOWN OF MARANA, ARIZONA
AUDITED ANNUAL FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2012
The following audited annual financial statements are for the fiscal year ended June 30, 2012. These are the most
recent financial statements available to the Town. These financial statements are not current and may not represent
the current financial condirion of the Town.
Such audited financial statements are the most recent available for the Town, are not current and, therefore,
must be considered with an abundance of caution. The Town has not requested the consent of Henry &
Horne, LLP, Certified Public Accountants to include its report herein, and Henry & Horne, LLP has
performed no procedures subsequent to rendering its report on the financial statements.
Regular Council Meeting - June 4, 2013 - Page 67 of 296
APPENDIX D
SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS
DEFINITIONS OF CERTAIN TERMS
In addirion to the terms defined elsewhere herein, the following terms shall, for all purposes of the Trust
Agreement and the Purchase Agreement have the following meanings:
"Acquisirion Fund" means the fund of that name established pursuant to the Trust Agreement.
"Additional Revenue Obli�ations" means any addirional obligarions which may hereafter be issued or
incurred by the Town (or any financing conduit acting on behalf of the Town) having a lien upon and payable from
Excise TaY Revenues and State Shared Revenues on a parity with, and in compliance with the terms of, the Purchase
Agreement.
"Annual Debt Service Requirement" means the amount to be paid in any Fiscal Year with respect to the
Prior Lease and the Parity Obligation during such Fiscal Year.
"Certificates of Completion" means the notice of completion, filed with the Trustee by the Town
Representative, staring that the Properry has been acquired.
"Complerion Date" means the date on which the Certificate of Complerion is filed with the Trustee by the
Town Representative.
" Debt Service Covera�e means the amount of Excise TaY Revenues and State Shared Revenues for the
most recently completed Fiscal Year divided by the MaYimum Annual Debt Service.
"Debt Service Reserve Fund" means the fund of that name established pursuant to the Trust Agreement.
"Defeasance Obli�ations" are those obligations described in the Trust Agreement by such term.
"Depositorv Trustee" means any bank or trust company, which may include the Trustee, designated by the
Town, with a combined capital and surplus of least Fifty Million Dollars ($50,000,000) and subject to supervision or
examination by federal or State of Arizona authority.
"Event of Defaul�' means an event of default under the Purchase Agreement as described under the
subheading "THE PURCHASE AGREEMENT — Default Remedies Upon Default."
"MaYimum Annual Debt Service" means, for any Fiscal Year, the greatest Annual Debt Service
Requirement for the then-current or any succeeding fiscal year of the Town.
"Outstandin�," refers to Obligations issued in accordance with the Trust Agreement, excluding. (i)
Obligarions which l�ave been exchanged or replaced, or delivered to the Trustee for credit against a mandatory
prepayment installment (ii) Obligations which have been paid; (iu) Obligations which have become due and for the
payment of which moneys have been duly provided to the Trustee; and (iv) Obligations for which there have been
irrevocably set aside with a Depository Trustee sufficient moneys or obligarions pernutted by the Purcl�ase
Agreement and the Trust Agreement bearing interest at such rates and with such maturities as will provide sufficient
funds to pay the principal of and premium, if any, and interest represented by such Obligations provided, however,
tl�at if principal represented by any such Obligations is to be prepaid, the Town sl�all have taken all action necessary
to prepay such Obligations and norice of such prepayment sl�all l�ave been duly mailed in accordance with the
procedures under which such Obligarions were issued or irrevocable instructions so to give such norices shall have
been given to the Trustee.
D-1
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"Owner" or any similar term, when used with respect to an Obligation means the person in whose name
such Obligation shall be registered.
"Paritv Obli�ations" means the Purchase Agreement and any Additional Revenue Obligations.
"Pavment Fund" means the fund by that name established pursuant to the Trust Agreement.
"Prior Lease" means the Amended and Restated Town Lease and Series 1992 Town Lease, dated as of
October 1, 1997, as amended by the First Amendment to Amended and Restated Town Lease and Series 1992 Town
Lease, dated as of January 1, 2000, the Combined Operarions Center Property Ground Lease and Second
Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of April 1, 2002, and the
Third Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1,
2003, and supplemented by the First Supplement to Amended and Restated Town Lease and Series 1992 Town
Lease, dated as of February 1, 2000, the Second Supplement to Amended and Restated Town Lease and Series 1992
Town Lease, dated as of September 1, 2003, the Third Supplement to Amended and Restated Town Lease and
Series 1992 Town Lease, dated as of August 1, 2004, and the Fourth Supplement to Amended and Restated Town
Lease and Series 1992 Town Lease, dated as of August 1, 2008 by and between the Town and the Corporation.
"Reserve Requirement" means, at the time of the deposit to the Debt Service Reserve Fund then required,
the MaYimum Annual Debt Service, provided, however, that such amount shall not exceed the least of (a) ten
percent (10%) of the net proceeds of the Obligations at the time of original delivery, (b) the greatest amount to be
paid in any subsequent Fiscal Year with respect to the Obligarions at the time of original delivery or (c) one hundred
twenty-five percent (125%) of the average annual debt service at the rime of original delivery with respect to the
Obligarions.
"Town Representative" means the Town Manager, the Finance & Budget Director or any other person
authorized by the Town Manager or the Mayor and Council to act on behalf of the Town with respect to the Trust
Agreement.
THE TRUST AGREEMENT
The following, in addirion to the information under the headings "THE OBLIGATIONS" and "SECURITY
FOR AND SOURCES OF PAYMENT OF TH EOBLIGATIONS," is a summary of certain provisions of the Trust
Agreement to which document, in its entirety, reference is hereby made for a more complete description of its terms.
Acquisition Fund. The Trustee will pay the costs to acquire the Projects and refinance portions of the
Prior Lease. Amounts in the Acquisition Fund will be used to pay principal of and interest on the Obligations if
sufficient funds are otherwise available to make such payments when due. On the Completion Date, subject to the
limitations in the Trust Agreement, all remaining moneys in the Acquisition Fund shall be transferred to the
Payment Fund and applied by the Trustee to the Payments due from the Town on the neat succeeding Interest
Payment Date with respect to the Obligations.
Debt Service Reserve Fund. The Trustee will deposit in to the Debt Service Reserve Fund amounts paid
pursuant to the Purchase Agreement as described under the subheading "SECURITY FOR AND SOURCES OF
PAYMENT OF THE OBLIGATIONS — Reserve Fund." Commencing on the fifteenth (15th) business day of the
month following a payment made from the Debt Service Reserve Fund, the Trustee will deposit into the Debt
Seivice Reseive Fund pursuant to the Purchase Agreement one-twelfth (1/12) of the amount required to restore the
Debt Service Reserve Fund to an amount equal to the Reserve Requirement. Amounts in the Debt Service Reserve
Fund will be withdrawn (i) on the fourth (4th) business day immediately preceding any payment date for the
Obligarions and used solely for the purpose of paying the scheduled interest on or principal of the Obligations in the
event that no money of the Town is made available therefor pursuant to the Purcl�ase Agreement or (ii) otherwise for
the retirement of all Obligations then Outstanding. The Trustee will withdraw the amount of any excess from such
fund and deposit it to the Payment Fund.
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Pavment Fund. The Payment Fund will also be established by the Trustee. The moneys in the Payment
Fund will be applied by the Trustee solely to pay principal, interest and premium, if any, represented by the
Obligarions.
Seuarate Funds. Moneys and investments properly paid into and held in the funds established under the
Trust Agreement will not be subject to the claims of the owners of the Additional Revenue Obligations, and the
Owners of the Obligations shall l�ave no claim or lien upon any moneys or investments properly paid into and held
in the funds and accounts established under the proceedings for the Additional Revenue Obligations.
Protection of Lien. The Trustee and the Town will not make or create or suffer to be made or created any
assignment or lien having priority or preference over the assignment and lien of the Trust Agreement, and no
obligations the payment of which is secured by a superior or equal claim on or interest in property or revenues
pledged will be issued or delivered by either except in lieu of, or upon transfer of registrarion or exchange of, any
Obligarion.
Investments Authorized; Allocation of Earnings. Upon order of the Town, moneys held by the Trustee
will be invested and re-invested in certain investments pernutted by the Trust Agreement having the highest yield
reasonably obtainable. The Trustee may purchase from, or sell to, itself or any affiliate, as principal or agent,
investments and may invest in funds to which the Trustee or any of its affiliates provide services as an investment
advisor. The Trustee may act as purchaser or agent in the making or disposing of any investment.
Any income, profit or loss on such investments will be deposited in or charged to the respective funds from
which such investments were made, and any interest on any deposit of funds will be deposited in the fund from
which such deposit was made, except as otherwise provided. At the direcrion of the Town, any such income, profit
or interest will be applied if necessary to pay any rebate due with respect to the Obligation pursuant to the Internal
Revenue Code.
Auuointment of the Trustee. The Town will maintain as the Trustee a bank or trust company with a
combined capital and surplus of at least $50,000,000, and subject to supervision or examination by federal or State
authority so long as any of the Obligarions are Outstanding. If such bank or trust company publishes a report of
condirion at least annually pursuant to law or to the requirements of any supervising or examining authority, then the
combined capital and surplus of such bank or trust company will be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
Liabilitv of the Trustee; Standard of Care. Except with respect to its authority and power generally and
authorization to execute the Trust Agreement, the recitals of facts, covenants and agreements in the Trust Agreement
and the Obligations will be taken as statements, covenants and agreements of the Town, and the Trustee will assume
no responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of the
Trust Agreement or of the Obligarions or will incur any responsibility in respect thereof, other than in connection
with the duties or obligations in the Trust Agreement or in the Obligations assigned to or imposed upon them,
respecrively. Prior to the occurrence of an Event of Default, or after the rimely cure of an Event of Default, the
Trustee will perform only such duries as are specifically set forth in this Trust Agreement. After the occurrence of an
Event of Default, the Trustee will exercise such of the rights and powers vested in it, and use the same degree of
care and skill in such exercise, as a prudent indenture trustee would exercise under the circumstances in the conduct
of the affairs of the Trustee.
Merger or Consolidation. Any company into which the Trustee may be merged or converted or with
which it may be consolidated or any company resulting from any merger, conversion or consolidarion to which it
shall be a party or any company to which the Trustee may sell or transfer all or substanrially all of its corporate trust
business, provided that such company shall be eligible as described hereinabove, shall be the successor to the
Trustee without the execurion or filing of any paper or further act, anything herein to the contrary notwithstanding.
Protection and Rights of the Trustee. The Trustee will be protected and will incur no liability in acring or
proceeding in good faith upon any document which it shall in good faith believe to be genuine and to have been
passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the
provisions of the Trust Agreement, and the Trustee will be under no duty to make any investigarion or inquiry as to
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any statements contained or matters referred to in any such document, but may accept and rely upon the same as
conclusive evidence of the truth and accuracy of such statements. The Trustee will not be bound to recognize any
person as an Owner of any Obligation or to take any acrion at the request thereof unless such Obligarion will be
deposited with the Trustee and satisfactory evidence of the ownership of such Obligarion will be furnished to the
Trustee. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel will
be full and complete authorizarion and protecrion in respect of any action taken or suffered by it in good faith.
Whenever in the administrarion of its duries under the Trust Agreement, the Trustee deems it necessary or
desirable that a matter be proved or established prior to taking or suffering any action thereunder, such matter
(unless other evidence in respect thereof be specifically prescribed) will be deemed to be conclusively proved and
established by the certificate of the appropriate representative of the Town and such certificate will be full warranty
to the Trustee for any action taken or suffered under the provisions of the Trust Agreement upon the faith thereof,
but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such
addirional evidence as to it may seem reasonable.
The Trustee may become the Owner of the Obligations with the same rights it would have if it were not the
Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the Town with the same rights it
would have if it were not the Trustee; and may act as a depository for and permit any of its officers or directors to
act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of
Obligations, whether or not such committee shall represent the Owners of the majority in principal amount of the
Obligarions then Outstanding.
The Trustee will not be answerable for the exercise of any discretion or power under the Trust Agreement
or for anything whatever in connection with the funds established thereunder, except only for its own willful
misconduct or negligence.
No provision in the Trust Agreement will require the Trustee to risk or expend its own funds or otherwise
incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.
The Trustee will not be required to take notice or be deemed to have notice of an Event of Default, except
for nonpayment of amounts due under the Trust Agreement or the Purcl�ase Agreement, unless the Trustee has
actual notice thereof or is specifically notified in writing of such default by the Town or the Owners of at least
twenty-five percent (25%) in aggregate principal amount of the Obligarions then Outstanding.
The Town will from time to time, as agreed upon between the Town and the Trustee, pay to the Trustee
reasonable compensation for its services, including an hourly rate based fee after an Event of Default and will
reimburse the Trustee for all its advances and expenditures, including but not limited to advances to, and reasonable
fees and expenses of, independent appraisers, accountants, consultants, counsel, agents and attorneys-at-law or other
eaperts employed by it in the exercise and performance of its powers and duties.
Removal of the Trustee. The Trustee may be removed by the Town (if not in default) or by the Owners of
a majority in aggregate principal amount of the Obligarions.
The Trustee may also resign effecrive upon the appointment of a successor Trustee by the Town.
Amendments Permitted. The Trust Agreement and the Purchase Agreement may be modified or amended
at any time by a supplemental or amending agreement which will become effective upon the written consent of the
Owners of a majority in aggregate principal amount of the Obligarions then Outstanding, exclusive of certain
disqualified Obligarions. No such modification or amendment will (1) eatend or have the effect of eatending the
final payment of principal represented by any Obligation or reducing the interest rate represented thereby or
eatending the time of payment of interest, or reducing the amount of principal thereof, without the express consent
of the Owner of such Obligarion, or (2) reduce or have the effect of reducing the percentage of Obligarions required
for the affirmative vote or written consent to an amendment or modification of the Trust Agreement or the Purchase
Agreement, or (3) modify any of the rights or obligations of the Trustee without its written assent thereto.
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For the purpose of any supplemental agreement to make any amendment which may be made upon consent
of the Owners of a majority of the Obligations pursuant to the Trust Agreement.
The Trust Agreement and the Purchase Agreement may be modified or amended at any rime by a
supplemental or amending agreement, without the consent of any Owners, but only (1) to provide for additions or
modificarions to the Projects, (2) to add to the covenants and agreements of any parry, other covenants to be
observed, or to surrender any right or power reserved in the Trustee (for its own behalt) or the Town, (3) to secure
addirional revenues or provide additional security or reserves for payment of the Obligarions, (4) to comply with the
requirements of any state or federal securities laws or the Trust Indenture Act of 1939, as from time to time
amended, if required by law or regularion la�vfi�lly issued thereunder, (5) to provide for the appointment of a
successor trustee pursuant to the terms of the Trust Agreement, (6) to preserve the exclusion of interest represented
by the Obligations from gross income for purposes of federal or State income taYes and to preserve the power of the
Town to continue to issue bonds or other obligarions the interest on which is likewise exempt from federal and State
income taYes, (7) to cure, correct or supplement any ambiguous or defecrive provision in the Trust Agreement or the
Purchase Agreement, (8) with respect to rating matters, or (9) in regard to questions arising under the Trust
Agreement or under the Purchase Agreement, as the parties to the Trust Agreement or the Purchase Agreement may
deem necessary or desirable and which will not adversely affect the interests of the Owners of the Obligations. Any
such supplemental or amending agreement will become effective upon execution and delivery by the parties to the
Trust Agreement or the Purcl�ase Agreement.
Procedure for Amendment With Written Consent of Obligation Owners. A copy of the proposed
supplemental or amending agreement, together with a consent request, must be mailed to each Owner of an
Obligarion, but failure to mail copies of such supplemental or amending agreement and request does not affect the
validity of the supplemental or amending agreement when assented to by a majority in principal amount of the
Obligarions then Outstanding (exclusive of Obligarions then disqualified). The supplemental or amending agreement
will not become effecrive unril the required Owners have consented and the Trustee has mailed norice to the Owners
of the Obligations stating in substance that such supplemental or amending agreement has been consented to by the
Owners of the required percentage of Obligarions and will become effecrive (but failure to mail copies of said norice
shall not affect the validity of such supplemental or amending agreement or consents thereto).
Disqualified Obligations. Obligations owned or held by or for the account of the Town or by any person
directly or indirectly controlled by, or under direct or indirect common control with the Town (except any
Obligarions held in any pension or retirement fund) will not be deemed Outstanding for the purpose of any vote,
consent, waiver or other action or any calcularion of Outstanding Obligations provided for in the Trust Agreement,
and will not be enritled to vote upon, consent to, or take any other action provided therein.
No Liabilitv of the Town for the Trustee Performance. The Town will have no obligation or liability to
any of the other parties or to the Owners with respect to the performance by the Trustee of any duty imposed upon it
under the Trust Agreement
Remedies Uuon Default; No Acceleration. If an Event of Default shall happen, then and in each and
every such case during the continuance of such Event of Default, the Trustee may, or upon request of the Owners of
a majority in aggregate principal amount of the Obligations then Outstanding and receiving indemnity satisfactory to
it shall, exercise one or more of the remedies granted pursuant to the Purchase Agreement provided, however, that
notwithstanding anything in the Trust Agreement or in the Purchase Agreement to the contrary, there will be no
right under any circumstances to accelerate the payment dates of the Obligations or otherwise to declare any of the
Payments not then past due or in default to be immediately due and payable.
Auulication of Funds. All moneys received by the Trustee pursuant to any right given or acrion taken
pursuant to the provisions of the Trust Agreement or the Purchase Agreement shall be applied by the Trustee in the
order following, in the case of the Obligations, upon presentarion of the several Obligarions, and the stamping
thereon of the payment if only partially paid, or upon the surrender thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee and then of the Obligarion Owners in
declaring such Event of Default, including reasonable compensarion to its or their agents, attorneys and counsel and
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Second, to the payment of the whole amount then owing and unpaid with respect to the Obligarions and,
with interest on the overdue principal and installments of interest at the rate of twelve percent (12%) per annum (but
such interest on overdue installments of interest shall be paid only to the ea�tent funds are available therefor
following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys
shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Obligations, then to the
payment of such principal and interest without preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such
principal and interest.
Institution of Legal Proceedings. If one or more Events of Default shall happen and be continuing, the
Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal
amount of the Obligations then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed
to protect or enforce its rights or the rights of the Owners of Obligarions by a suit in equity or acrion at law for the
specific performance of any covenant or agreement contained in the Trust Agreement.
Power of the Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an
Event of Default, shall have taken any action, it will have full power, in the exercise of its discretion for the best
interests of the Owners of the Obligations, with respect to the continuance, or disposal of such action; provided,
however, that the Trustee will not discontinue, or otherwise dispose of any litigation, without the consent of a
majority in aggregate principal amount of the Obligarions Outstanding.
Limitation on Obligation Owners' Right to Sue. No Owner of any Obligarion will have the right to
institute any action, for any remedy, unless (a) such Owner shall l�ave previously given to the Trustee written notice
of the occurrence of an Event of Default (b) the Owners of at least a majority in aggregate principal amount of all
the Obligations then Outstanding shall l�ave made written request upon the Trustee to exercise the powers granted or
to institute such action, in its own name; (c) said Owners shall have tendered to the Trustee reasonable indemnity;
and (d) the Trustee shall have not complied with such request for a period of sixry (60) days.
No one or more Owners of Obligations will have any right in any manner whatever by their action to
enforce any right under the Trust Agreement, except in the manner therein provided, and all proceedings with
respect to an Event of Default will be pursued in the manner therein provided and for the equal benefit of all Owners
of the Outstanding Obligations.
The right of any Owner of any Obligation to receive payment of said Owner's proportionate interest in the
Payments as the same become due, or to institute suit for the enforcement of such payment, will not be impaired or
affected without the consent of such Owner.
Defeasance. If and when all Outstanding Obligarions shall be paid and discharged in anyone or more of the
following ways:
(a) by paying or causing to be paid the principal and interest represented by such Obligations
Outstanding, as and when the same become due and payable;
(b) by depositing with a Depository Trustee, in trust for such purpose, at or before the payment date
therefor, money which, together with the amounts then on deposit in the Payment Fund is fully sufficient to payor
cause to be paid all principal and interest represented by such Obligarions Outstanding; or
(c) by deposiring with a Depository Trustee, in trust for such purpose, any Defeasance Obligations
which are non-callable in such amount as shall be certified to the Trustee and the Town by a narional firm of
certified public accountants acceptable to both the Trustee and the Town, as being fully sufficient, together with the
interest to accrue thereon and moneys then on deposit in the Payment Fund together with the interest to accrue
thereon, to pay and discharge or cause to be paid and discharged all principal and interest represented by such
Obligarions at their respecrive payment dates;
notwithstanding that any Obligations shall not have been surrendered for payment, all obligations of the Trustee and
the Town with respect to all Outstanding Obligations will cease and terminate, except only the obligarion of the
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Trustee to payor cause to be paid, from funds deposited pursuant to paragraphs (b) or (c) above and paid to the
Trustee by the Depository Trustee, to the Owners of the Obligarions not so surrendered and paid all sums due with
respect thereto, and in the event of deposits pursuant to paragraphs (b) or (c), the Obligarions will conrinue to
represent direct and proportionate interests of the Owners thereof in such funds.
If any Obligarion or portion thereof will not mature within sixry (60) days of the deposit referred to in
paragraphs (b) or (c) above, the Trustee shall give norice of such deposit by first class mail to the Owners.
No Obligarion may be so provided for based on prepayment unless the Trustee l�as mailed irrevocable
notice of prepayment for such Obligations or the Town l�as given the Trustee irrevocable instrucrions to prepay such
Obligarions.
THE PURCHASE AGREEMENT
The following, in addition to the information under the headings "INTRODUCTORY STATEMENT" and
"SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS," is a summary of certain provisions
of the Purchase Agreement to which document, in its entirety, reference is hereby made for a more complete
description of its terms.
Purchase/Sale. Pursuant to the Purchase Agreement, the Town will sell and convey any interest it has in
the Exisring Projects to the Trustee, and the Trustee, in turn, will sell and convey to the Town, and the Town will
buy and accept from the Trustee, the E�sting Projects.
Pavments. The obligation of the Town to make the Payments will be limited to amounts from Excise TaY
Revenues and State Shared Revenues. The Town will receive a credit against amounts due with respect to the
Payments and to replenish the Debt Seivice Fund equal to any amounts held and available in the Payment Fund and
the Debt Service Fund, respecrively.
The obligarions of the Town to make the Payments from the sources described and to perform and observe
the other agreements contained in the Purchase Agreement will be absolute and unconditional and will not be
subject to any defense or any right of set-off, abatement, counterclaim, or recoupment arising out of any breach of
the Trustee of any obligarion to the Town or otherwise, or out of indebtedness or liability at any time owing to the
Town by the Trustee. Until such time as all of the Payments shall have been fully paid or provided for, the Town (i)
will not suspend or disconrinue the Payments, (ii) will perform and observe all other agreements contained in the
Purchase Agreement, and (iu) will not terminate the Purchase Agreement for any cause.
Providing for Pavment. The Town may provide for the payment of any of the Payments in anyone or
more of the following ways:
(a) by paying such Payment as and when the same becomes due and payable at its scheduled due date
or on a date on which it can be prepaid;
(b) by depositing the with a Depository Trustee, in trust for such purposes, money which, together
with the amounts then on deposit with the Trustee and available for such Payment is fully sufficient to make, or
cause to be made, such Payment at its scheduled due date or on a date on which it can be prepaid; or
(c) by deposiring with a Depository Trustee, in trust for such purpose, any Defeasance Obligations
which are non-callable, in such amount as shall be certified by a national firm of certified public accountants
acceptable to the Trustee and the Town as being fully sufficient, together with the interest to accrue thereon and
moneys then on deposit with the Trustee and available for such Payment, to make, or cause to be made, such
Payment at its scheduled due date or on a date on which it can be prepaid.
Upon any partial prepayment of a Payment, each installment of interest which shall thereafter be payable as a part of
the subsequent Payments shall be reduced, taking into account the interest rate or rates on the Obligations remaining
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outstanding after the partial prepayment, so that the interest remaining payable as a part of the subsequent Payments
shall be sufficient to pay the interest on such outstanding Obligations when due.
Default; Remedies Uuon Default.
(i) Upon (A) the nonpayment of the whole or any part of certain amounts due pursuant to the
Purchase Agreement at the time when the same are to be paid as provided in the Purchase Agreement or the Trust
Agreement, (B) the violation by the Town of any other covenant or provision of the Purchase Agreement or the
Trust Agreement, (C) the occurrence of an event of default with respect to the Prior Lease or any Additional
Revenue Obligations, or (D) the insolvency or bankruptcy of the Town as the same may be defined under any law of
the United States of America or the State of Arizona, or any voluntaty or involuntaty acrion of the Town or others to
take advantage of, or to impose, as the case may be, any law for the relief of debtors or creditors, including a petirion
for reorganization, and
(ii) if such default has not been cured (A) in the case of nonpayment of such amounts as
required under the Purchase Agreement or the Trust Agreement on the due date, or the nonpayment of principal and
interest due with respect to the Prior Lease or any Additional Revenue Obligations on their due dates; (B) in the case
of the breach of any other covenant or provision of the Trust Agreement or the Purchase Agreement not cured within
sixry (60) days after notice in wriring from the Trustee specifying such default and (C) in the case of any default
under the Prior Lease or any Additional Revenue Obligarions after any norice and passage of time provided for
under the proceedings under which such obligations were issued then,
(iu) subject to the limitations of the Trust Agreement, the Trustee may take whatever acrion at
law or in equity, including the remedy of specific performance, may appear necessary or desirable to collect such
amounts payable by the Town under the Trust Agreement or the Purchase Agreement then due (but not the
Payments and such other amounts accruing), or to enforce performance and observance of any pledge, obligation,
agreement, or covenant of the Town under the Trust Agreement or the Purchase Agreement and with respect to the
Excise TaY Revenues, without norice and without giving any bond or surety to the Town or anyone claiming under
the Town, have a receiver appointed of the amounts of the Excise TaY Revenues which are pledged to the payment
of amounts due thereunder, with such powers as the court making such appointment sl�all confer (and the Town will
irrevocably consent to such appointment); provided, however, that under no circumstances may the Payments be
accelerated.
The obligarions of the Town under the Purchase Agreement, including, without limitation, its obligarion to pay the
Payments, will survive any acrion brought, and the Town will continue to pay the Payments and perform all other
obligations provided in the Purchase Agreement provided, however, that the Town will be credited with any
amount received by the Trustee.
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APPENDIX E
FORM OF APPROVING LEGAL OPINION
DRAFT
[LETTERHEAD OF GREENBERG TRAURIG, LLP]
[Closing Date]
Wells Fargo Bank, N.A.
Re: Pledged Excise TaY Revenue and Revenue Refunding Obligations, Series 2013
Representing Proportionate Interests of the Owners Thereof in Purchase Price Payments
to be Made by Town of Marana, Arizona, to Wells Fargo Bank, N.A., as Trustee
We have examined the transcript of proceedings (the "Transcrip�') relaring to the execurion and
delivery by Wells Fargo Bank, N.A (the "Trustee") of the Pledged Excise TaY Revenue and Revenue Refunding
Obligarions, Series 2013 (the "Obligations"), pursuant to a First Trust Agreement, dated as of June 1, 2013 (the
"Trust Agreement"), between the Trustee and Town of Marana, Arizona (the "Town"). Each of the Obligarions is
an undivided, participating, proportionate interest in certain payments to be made by the Town pursuant to a First
Purchase Agreement, dated as of June 1, 2013 (the "Purchase Agreement"), between the Trustee as seller and the
Town as buyer to finance certain projects for the Town. In addirion, we have examined such other proceedings,
proofs, instruments, certificates and other documents as well as such other materials and such matters of law as we
have deemed necessary or appropriate for the purposes of the opinions rendered herein below.
In such an examinarion, we have examined originals (or copies certified or otherwise idenrified to
our sarisfaction) of the foregoing and have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as
copies and the accuracy of the statements contained in such documents. As to any facts material to our opinion, we
have, when relevant facts were not independently established, relied upon the aforesaid documents contained in the
Transcript. We have also relied upon the opinions of the Town Attorney delivered even date herewith as to the
matters provided therein.
opinion:
Based upon such examination, we are of the opinion that, under the law existing on the date of this
1. The Obligations, the Trust Agreement and the Purchase Agreement are legal, valid,
binding and enforceable in accordance with their respective terms, except that the binding effect and enforceability
thereof and the rights thereunder are subject to applicable bankruptcy, insolvency, reorganizarion, moratorium and
other laws in effect from time to time affecting the rights of creditors generally; except to the extent that the
enforceability thereof and the rights thereunder may be limited by the application of general principles of equity and,
as to the Trust Agreement, except to the eatent that the enforceability of the indemnification provisions thereof may
be affected by applicable securities laws.
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Wells Fargo Bank, N.A.
Page 2
2. The obligations of the Town pursuant to the Purchase Agreement with respect to payment
of principal and interest with respect to the Obligations are solely from the revenues and other moneys pledged and
assigned pursuant to the Trust Agreement to secure such payments. Those revenues and other moneys include
payments required to be made by the Town pursuant to the Purchase Agreement, and the obligation of the Town to
make those payments is secured by a limited pledge of amounts from "Excise TaY Revenues" and "State Shared
Revenues" as described in, and provided by, the Purchase Agreement. Such payments are not secured by an
obligation or pledge of any moneys raised by taYation other than the specified taYes; the Obligations do not
represent or constitute a debt or pledge of the general credit of the Town and the Purchase Agreement, including the
obligation of the Town to make the payments required thereunder, does not represent or constitute a debt or pledge
of the general credit of the Town.
3. (a) Subject to the assumption stated in the last sentence of this paragraph, the
portion of each payment made by the Town pursuant to the Purchase Agreement, denominated and comprising
interest with respect to the Obligations and received by the beneficial owners of the Obligations (the "Interest
Portion"), is excludable from the gross income of the beneficial owners thereof for federal income taY purposes.
Furthermore, the Interest Portion is not an item of taY preference for purposes of the federal alternative minimum taY
imposed on individuals and corporarions; however the Interest Portion is taken into account in deternuning adjusted
current earnings for purposes of compuring the alternative minimum taY imposed on certain corporarions. (We
eapress no opinion regarding other federal taY consequences resulting from the receipt or accrual of the Interest
Portion on, or ownership or disposition of, the Obligations.) The Internal Revenue Code of 1986, as amended (the
"Code"), includes requirements which the Town must continue to meet after the execurion and delivery of the
Obligarions in order that the Interest Portion not be included in gross income for federal income taY purposes. The
failure of the Town to meet these requirements may cause the Interest Portion to be included in gross income for
federal income taY purposes retroactive to their date of issuance. The Town has covenanted in the Purchase
Agreement to take the actions required by the Code in order to maintain the exclusion from gross income for federal
income taY purposes of the Interest Portion. In rendering the opinion expressed in this paragraph, we have assumed
continuing compliance with the taY covenants referred to hereinabove that must be met after the execution and
delivery of the Obligations in order that the Interest Portion not be included in gross income for federal taY purposes.
(b) Assuming the Interest Portion is so excludable for federal income taY purposes,
the Interest Portion is exempt from income taYation under the laws of the State of Arizona. (We eapress no opinion
regarding other State taY consequences resulting from the receipt or accrual of the such interest on, or ownership or
disposition of, the Obligarions.)
Our opinion represents our legal judgment based upon our review of the law and the facts we
deem relevant to render such opinion and is not a guarantee of a result. This opinion is given as of the date hereof,
and we assume no obligation to review or supplement this opinion to reflect any facts or circumstances that may
hereafter come to our attention or any changes in law that may hereafter occur.
Respectfully submitted,
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APPENDIX F
FORM OF CONTINUING DISCLOSURE UNDERTAKING
DRAFT
$33,775,000*
TOWN OF MARANA, ARIZONA
PLEDGED EXCISE TAX REVENUE AND
REVENUE REFUNDING OBLIGATIONS,
SERIES 2013
[Closing Date]
(CUSIP Base No.: )
CONTINUING DISCLOSURE UNDERTAHING
This Continuing Disclosure Undertaking (this "Undertaking") is executed and delivered by Town
of Marana, Arizona (the "Town"), in connecrion with the execution and delivery of $33,775,000* principal amount
of Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013, Representing Proportionate
Interests of the Owners Thereof in Purchase Price Payments to be Made by Town of Marana, Arizona, to Wells
Fargo Bank, N.A., as trustee (the "Obligations"). The Obligations are being executed and delivered pursuant to a
First Trust Agreement, dated as of June 1, 2013 (the "TrustAgreemenP'), by and between the Town and Wells Fargo
Bank, N.A., as trustee (the "Trustee"). The Town covenants and agrees as follows:
1. Definitions. In addition to those defined hereinabove, the terms set forth below shall
have the following meanings in this Undertaking unless the conteat clearly otherwise requires:
Exhibitl
Annual Financial Information means the financial information and operating data set forth in
Annual Financial Information Disclosure means the dissemination of disclosure concerning
Annual Financial Informarion and the dissemination of the Audited Financial Statements as set forth in Secrion 4.
Audited Financial Statements means the audited financial statements of the Town prepared
pursuant to the standards and as described in Exhibitl.
Commission means the Securiries and Exchange Commission.
Dissemination Agent means any agent designated as such in writing by the Town and which has
filed with the Town a written acceptance of such designation, and such agent's successors and assigns.
F.MMA means the Electronic Municipal Market Access system of the MSRB. Informarion
regarding submissions to EMMA is available at http://emma.msrb.org.
Exchange Act means the Securiries Exchange Act of 1934, as amended.
* Subject to change. F-1
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Final Official Statement means the Final Official Statement relating to the Obligations, dated
, 2013.
GAAP means generally accepted accounring principles, as applied to governmental units as
modified by the laws of the State.
Listed Event means the occurrence of events set forth in Exhibitll
in Section 5.
Listed Events Disclosure means dissemination of disclosure concerning a Listed Event as set forth
MSRB means the Municipal Securities Rulemaking Board.
Participating Underwriter means each broker, dealer or municipal securities dealer acting as an
underwriter in the primary offering of the Obligations.
Purchase Agreement means the First Purchase Agreement, dated as of June 1, 2013, by and
between the Town and the Trustee, in its separate capacity as "Seller."
Exchange Act.
Rule means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
State means the State of Arizona.
2. Purpose of this Undertaking. This Undertaking is executed and delivered by the Town as
of the date set forth below, for the benefit of the beneficial owners of the Obligarions and in order to assist the
Participating Underwriter in complying with the requirements of the Rule. The Town represents that it will be the
only obligated person with respect to the Obligations at the time the Obligations are delivered to the Participating
Underwriter and that no other person is expected to become so committed at any time after such delivery of the
Obligarions.
follows:
3. CUSIP Number/Final Official Statement. The CUSIP Numbers of the Obligations are as
CUSIl' Na Maturi . t�
4. Annual Financial Informafion Disclosure. Subject to Section 8 of this Undertaking, the
Town shall disseminate its Annual Financial Information and its Audited Financial Statements, if any (in the form
and by the dates set forth in Exhibit�, through EMMA.
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If any part of the Annual Financial Informarion can no longer be generated because the operations
to which it is related have been materially changed or disconrinued, the Town will disseminate a statement to such
effect as part of its Annual Financial Information for the year in which such event first occurs.
If any amendment is made to this Undertaking, the Annual Financial Informarion for the year in
which such amendment is made shall contain a narrative description of the reasons for such amendment and its
impact on the type of informarion being provided.
5. Listed Events Disclosure. Subject to Section 8 of this Undertaking, the Town shall
disseminate in a timely manner, but in not more than ten (10) business days, its Listed Events Disclosure through
ENIMA. Notwithstanding the foregoing, notice of oprional or unscheduled redemption of any of the Obligations or
defeasance of any Obligations need not be given under this Undertaking any earlier than the notice (if any) of such
redemprion or defeasance is given to the owners of the Obligations pursuant to the terms of the Obligarions.
Whether events subject to the standard "material" would be material shall be determined under applicable federal
securities laws.
6. Consequences of Failure of the Town to Provide Information. The Town shall give
notice in a rimely manner through ENIMA of any failure to provide Annual Financial Informarion Disclosure when
the same is due hereunder.
In the event of a failure of the Town to comply with any provision of this Undertaking, the
beneficial owner of any Obligarion may seek mandamus or specific performance by court order, to cause the Town
to comply with its obligations under this Undertaking. A default under this Undertaking shall not be deemed an
event of default under the Purcl�ase Agreement or the Trust Agreement, and the sole remedy available to such
owners of the Obligations under this Undertaking in the event of any failure of the Town to comply with this
Undertaking shall be an action to compel performance.
7. Amendments; Waiver. Notwithstanding any other provision of this Undertaking, the
Town by certified resolution or ordinance authorizing such amendment or waiver, may amend this Undertaking, and
any provision of this Undertaking may be waived only if:
(a) The amendment or waiver is made in connection with a cl�ange in circumstances
tl�at arises from a change in legal requirements, change in law, or change in the identity, nature, or status of
the Town, or type of business conducted;
(b) This Undertaking, as amended or affected by such waiver, would have complied
with the requirements of the Rule at the time of the primary offering, after taking into account any
amendments or interpretarions of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver does not materially impair the interests of the
beneficial owners of the Obligations, as determined by parties unaffiliated with the Town (such as the
Trustee) or by approving vote of the owners of the Obligations pursuant to the Trust Agreement at the rime
of the amendment.
The Annual Financial Informarion containing amended operating data or financial informarion
resulting from such amendment or waiver, if any, shall explain, in narrative form, the reasons for the amendment or
waiver and the impact of the change in the type of operating data or financial informarion being provided. If an
amendment or waiver is made specifying GAAP to be followed in preparing financial statements and such changes
are material, the Annual Financial Information for the year in which the change is made shall present a comparison
between the financial statements or information prepared on the basis of the new accounting principles. Such
comparison shall include a qualitarive discussion of the differences in the accounting principles and the impact of
the change in the accounting principles in the presentation of the financial informarion in order to provide
informarion to investors to enable them to evaluate the ability of the Town to meet its obligations. To the eatent
reasonably feasible, such comparison also shall be quanritative. If the accounting principles of the Town change or
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the fiscal year of the Town changes, the Town shall file a notice of such change in the same manner as for a norice
of Listed Event.
8. Termination of Undertaking. This Undertaking shall be terminated hereunder if the
Town shall no longer have liability for any obligation on or relating to repayment of the Obligarions under the Trust
Agreement.
9. Dissemination Agent. The Town may, from time to time, appoint or engage a
Disseminarion Agent to assist it in carrying out its obligations under this Undertaking, and may discharge any such
Agent, with or without appoinring a successor Disseminarion Agent.
10. Additional Information. Nothing in this Undertaking shall be deemed to prevent the
Town from disseminating any other information, using the means of dissemination set forth in this Undertaking or
any other means of communicarion, or including any other information in any Annual Financial Informarion
Disclosure or norice of occurrence of a Listed Event, in addirion to tl�at which is required by this Undertaking. If the
Town chooses to include any information from any document or notice of occurrence of a Listed Event in addition
to tl�at which is specifically required by this Undertaking, the Town shall have no obligation under this Undertaking
to update such informarion or include it in any future Annual Financial Information Disclosure or Listed Events
Disclosure.
11. Beneficiaries. This Undertaking has been executed in order to assist the Participaring
Underwriter in complying with the Rule; however, this Undertaking shall inure solely to the benefit of the Town, the
Disseminarion Agent, if any, and the beneficial owners of the Obligarions, and shall create no rights in any other
person or entity.
12. Recordkeeping. The Town shall maintain records of all Annual Financial Information
Disclosure and Listed Events Disclosure including the content of such disclosure, the names of the enriries with
whom such disclosure was filed and the date of filing such disclosure.
13. Assignment. The Town shall not transfer obligations under the First Purchase Agreement
unless the transferee agrees to assume all obligations of the Town under this Undertaking or to execute an
undertaking meeting the requirements of the Rule.
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14. Governing Law. This Undertaking shall be governed by the laws of the State. To the
eatent applicable by provision of law, this Undertaking is subject to cancellarion pursuant to Secrion 38-511,
Arizona Revised Statutes, as amended, the provisions of which are incorporated herein by the reference.
Dated: [Closing Date]
TOWN OF MARANA, ARIZONA
By..............................................................................................
Mayor
ATTEST:
.....................................................................................
Town Clerk
ACKNOWLEDGED FOR PURPOSES OF
SECTION 11(c) OF THE PURCHASE
AGREEMENT BY WELLS FARGO BANK,
N.A., AS TRUSTEE
By................................................................................
Title: ..................................................................
ATTACHMENTS:
E�ibit I- Annual Financial Informarion and Timing and Audited Financial Statements
E�ibit II - Events for Which Listed Events Disclosure Is Required
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ExxisiT I
ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED
FINANCIAL STATEMENTS
"Annual Financial Information" means financial informarion and operating data of the type
contained in the Final Official Statement in TABLE 3-"TRANSACTION PRIVILEGE (SALES) TAX
COLLECTION BY INDUSTRY CLASSIFICATION" and TABLE 5-"HISTORICAL AND PROJECTED
EXCISE TAX REVENUES AND STATE SHARED REVENUES" (actual results for most recently completed
fiscal year only).
All or a portion of the Annual Financial Information and the Audited Financial Statements as set
forth below may be included by reference to other documents which have been submitted through ENIMA or filed
with the Commission. If the informarion included by reference is contained in a final official statement, the final
official statement must be available from the MSRB. The Town shall clearly idenrify each such item of information
included by reference.
Annual Financial Informarion exclusive of Audited Financial Statements will be provided through
EMMA by February 1 of each year, commencing February 1, 2014, 210 days after the last day of the Town's fiscal
year. Audited Financial Statements as described below should be filed at the same time as the Annual Financial
Informarion. If Audited Financial Statements are not available when the Annual Financial Information is filed,
unaudited financial statements shall be included, to be followed up by Audited Financial Statements when available.
Audited Financial Statements will be prepared according to GAAP. Audited Financial Statements
will be provided through EMMA within 30 days after availability to the Town.
If any cl�ange is made to the Annual Financial Informarion as permitted by Section 4 of the
Agreement, the Town will disseminate a notice of such change as required by Section 4, including changes in fiscal
year or GAAP.
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ExxisiT II
EVENTS FOR WHICH LISTED EVENTS DISCLOSURE IS REQUIRED
1. Principal and interest payment delinquencies.
2. Non-payment related defaults, if material.
3. Unscheduled draws on debt service reserves reflecring financial difficulties.
4. Unscheduled draws on credit enhancements reflecring financial difficulries.
5. Substiturion of credit or liquidity providers, or their failure to perform.
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of
taYability, Notices of Proposed Issue (IRS Form 5701-TEB) or other notices or determinarions, in each
case, with respect to the taY status of the security, or other Listed Events affecting the taY status of the
security.
7. Modifications to the rights of security holders, if material.
8. Bond calls, if material, or tender offers.
9. Defeasances.
10. Release, substitution or sale of properry securing repayment of the securities, if material.
11. Rating changes.
12. Bankruptcy, insolvency, receivership or similar events of the Town, being if any of the following occur:
the appointment of a receiver, fiscal agent or similar officer for the Town in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under State or federal law in which a court or governmental
authority has assumed jurisdicrion over substantially all of the assets or business of the Town, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession
but subject to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganizarion, arrangement or liquidation by a court or governmental authority
having supervision or jurisdiction over substanrially all of the assets or business of the Town.
13. The consummarion of a merger, consolidarion or acquisition involving the Town or the sale of all or
substantially all of the assets of the Town, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an acrion or the termination of a definirive agreement relaring to any
such acrions, other than pursuant to its terms, if material.
14 Appointment of a successor or conditional trustee or the change of name of a trustee, if material.
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APPENDIX G
BOOK-ENTRY-ONLY SYSTEM
The Depository Trust Company ("DTC"), New York, New York, will act as securiries depository for the
Obligarions. The Obligarions will be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One
fully-registered Obligation certificate will be issued for each payment of each series of the Obligations, each in the
aggregate principal amount of such payment, and will be deposited with DTC.
DTC, the world's largest securiries depository, is a limited-purpose trust company organized under the New York
Banking Law, a"banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a"clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a"clearing agency" registered pursuant to the provisions of Secrion 17A of the Securiries Excl�ange Act of
1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's
participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic computerized book-
entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement
of securiries certificates. Direct Participants include both U.S. and non-U.S. securiries brokers and dealers, banks,
trust companies, clearing corporarions, and certain other organizarions. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporarion ("DTCC"). DTCC is the holding company for DTC, National Securiries
Clearing Corporation and FiYed Income Clearing Corporation, all of which are registered clearing agencies. DTCC
is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both
U. S. and non-U. S. securiries brokers and dealers, banks, trust companies, and clearing corporarions that clear
through or maintain a custodial relarionship with a Direct Participant, either directly or indirectly ("Indirect
Participants" and together with the Direct Participants, the "Participants"). DTC has a Standard & Poor's rating of
"AA+." The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission.
More information about DTC can be found at www.dtcc.com.
Purchases of the Obligations under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Obligarions on DTC's records. The ownership interest of each actual purchaser of each
Obligarion (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their purcl�ase. Beneficial Owners are,
however, expected to receive written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Obligations are to be accomplished by entries made on the
books of Direct and Indirect Participants acting on bel�alf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Securities, except in the event tl�at use of the book-entry system
for the Obligarions is discontinued.
To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or
such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Obligations; DTC's records reflect only the idenrity of the Direct Participants to whose
accounts such Securiries are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of norices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Obligarions may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments
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to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee
holding the Obligations for their benefit l�as agreed to obtain and transmit norices to Beneficial Owners. In the
alternarive, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies
of notices be provided directly to them.
Redemprion norices shall be sent to DTC. If less than all of the Obligations within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor Cede & Ca (nor any other DTC nominee) will consent or vote with respect to Obligations unless
authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC
mails an Omnibus Proay to the Town as soon as possible after the record date. The Omnibus Proay assigns Cede &
Co.'s consenting or voring rights to those Direct Participants to whose accounts Obligations are credited on the
record date (identified in a lisring attached to the Omnibus Proay).
Redemprion proceeds, distriburions, and dividend payments on the Obligarions will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail informarion from the Town on payable
date in accordance with their respecrive holdings shown on DTC's records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary pracrices, as is the case with securiries held for the
accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant
and not of DTC, the Trustee or the Town, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representarive of DTC) is the responsibility of the Town or the
Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant,
to a remarketing agent, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the
Participant's interest in the Obligations, on DTC's records, to a remarketing agent. The requirement for physical
delivery of Obligarions in connecrion with an optional tender or a mandatory purchase will be deemed sarisfied
when the ownership rights in the Obligations are transferred by Direct Participants on DTC's records and followed
by a book-entry credit of tendered Obligations to a remarketing agent's DTC account.
DTC may discontinue providing its services as depository with respect to the Obligations at any time by giving
reasonable norice to the Town or the Trustee. Under such circumstances, in the event tl�at a successor depository is
not obtained, Obligarion certificates are required to be printed and delivered.
The Town may decide to disconrinue use of the system of book-entry-only transfers through DTC (or a successor
securiries depository). In that event, Obligarion certificates will be printed and delivered to DTC.
The information in this secrion concerrring DTC and DTC's book-entry system has been obtained from sources tl�at
the Town believes to be reliable, but none of the Town, the Underwriter or their agents and counsel take
responsibility for the accuracy thereof.
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DRAFT
OS/19/12
06/13/12
04/03/13
OS/08/13
FIRST PURCHASE AGREEMENT
by and between
WELLS FARGO BANK, N.A.,
as Seller
and
THE TOWN OF MARANA, ARIZONA,
as Purchaser
Dated as of 1, 2013
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TABLE OF CONTENTS
Pa�e
Section1. Term and Payments .....................................................................................................2
Section 2. Pledge; Limited Obligations . ......................................................................................3
Section 3. Surplus and Deficiency of Revenues from Excise Taxes and State Shared
Revenues...................................................................................................................4
Section 4. Parity Lien Obligations ...............................................................................................4
Section 5. Town Control over Revenue Collection .....................................................................4
Section 6. Certain Matters with Respect to Projects ....................................................................5
Section 7. Providing for Payment ................................................................................................6
Section8. Term of Agreement .....................................................................................................6
Section 9. Default; Remedies Upon Default ................................................................................7
Section10. Assignment . ................................................................................................................8
Section 11. Federal Law Provisions ...............................................................................................8
Section 12. Covenant as to Conflict of Interest; Other Statutory Restrictions ............................12
Section13. Miscellaneous . ..........................................................................................................13
(i)
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FIRST PURCHASE AGREEMENT
THIS FIRST PURCHASE AGREEMENT, dated as of 1, 2013 (this
"Agreement"), by and between the TOWN OF MARANA, ARIZONA, a municipal corporation
under the laws of the State of Arizona ("Town"), as purchaser hereunder, and WELLS FARGO
BANK, N.A., a national banking association ("Trustee"), in its capacity as trustee under the First
Trust Agreement, dated as of even date herewith (the "Trust Agreement"), by and between
Trustee and Town and seller hereunder,
WITNESSETH:
WHEREAS, the Mayor and Common Council of Town have determined that it
will be beneficial for the citizens of Town for Town to finance the costs of the New Projects (as
such term and all other undefined terms used herein are defined in the Trust Agreement) and
refinance the lease purchase of the Existing Project; and
WHEREAS, for such purposes, the Mayor and Common Council of Town
requested that Trustee sell and execute and deliver the Obligations and the Trustee has, as
described in the Trust Agreement, caused deposits to be made to the Acquisition Fund and the
Costs of Issuance Fund and amounts to be paid to the trustee for the bonds secured by the lease
purchase so refinanced as provided in the Trust Agreement; and
WHEREAS, Town is a municipal corporation duly incorporated and validly
existing under the laws of the State; the Constitution and the laws of the State authorize Town to
enter into this Agreement and the transactions contemplated by this Agreement; Town has duly
authorized and executed this Agreement; this Agreement is a lawful, valid and binding obligation
of Town, enforceable against Town in accordance with its terms; all required procedures for
execution and performance of this Agreement, including publication of notice, public hearing or
competitive bidding if applicable, have been or will be complied with in a timely manner; the
Payments will be paid when due out of funds which are legally available for such purposes;
neither the execution and delivery of this Agreement or the Trust Agreement, nor the fulfillment
of or compliance with the terms and conditions hereof or thereof nor the consummation of the
transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms,
conditions or provisions of any restriction or any agreement or instrument to which Town is now
a party or by which Town is bound, or constitutes a default under any of the foregoing or results
in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the
property or assets of Town; Town has disclosed in writing to Trustee all facts that do or will
materially adversely affect the properties, operations or financial condition of Town and that any
financial statements, notices or other written statements provided by Town to Trustee pursuant
hereto will not contain any untrue statement of a material fact or omit any material fact necessary
to make such statements or information not misleading and the Projects comply with all
applicable environmental laws, rules and regulations (including, without limitation, all federal,
state and local laws) and with Title III of the Americans with Disabilities Act and the regulations
issued thereunder by the United States Department of Justice concerning accessibility of places
of public accommodation and commercial facilities if and to the extent such Act and regulations
apply to the Proj ects; and
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WHEREAS, Trustee has full legal authority and is duly empowered to enter into
this Agreement and has taken all actions necessary to the execution and delivery hereof;
NOW THEREFORE, PURSUANT TO LAW AND FOR AND 1N
CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, IT IS
HEREBY AGREED AS FOLLOWS:
Section 1. Term and Pavments.
(a) Trustee hereby sells and conveys to Town, and Town hereby buys
and accepts from Trustee, the New Projects. In order to refinance the costs of the Existing
Project which have not been paid to date pursuant to the terms hereof, Town sells and conveys
any interests it has in the Existing Proj ect to Trustee, without warranty, for the sum of $10.00
and other valuable consideration had and received. For the amounts payable pursuant hereto
(including the Payments), Trustee in turn hereby sells and conveys back to Town, without
warranty, and Town hereby purchases from Trustee, any interests Trustee has in the Existing
Project. (Town acknowledges that the right of Trustee to sell the Existing Project arises out of
the deposit for the benefit of Town with the trustee for the bonds secured by the lease purchase
which financed the Existing Project and that it is receiving good and valuable consideration from
both such sales.)
(b) Trustee shall have no further obligation to provide funds for the
New Projects, and Town shall be entitled to sole and exclusive possession of the Projects.
(c) As the purchase price, Town shall pay the Payments to Trustee.
(The Interest Portion is interest for purposes of the Code.) This Agreement shall be deemed and
construed to be a"net purchase agr�eement," and the Payments shall be an absolute net return to
Trustee, free and clear of any expenses or charges whatsoever, except as otherwise specifically
provided herein.
Town shall further also pay to Trustee (1) on the July 15 following the Fiscal Year in which the
Debt Service Coverage is less than two (2) times and each January 15 and July 15 thereafter, an
amount equal to one tenth (1/10) of the amount required to fund and maintain the Debt Service
Reserve Fund in an amount equal to the Reserve Requirement until such time as the amount on
deposit in the Debt Service Reserve Fund shall equal the Reserve Requirement and (2) on the
fifteenth (15th) day of each month, following a payment made on the Obligations from the Debt
Service Reserve Fund, an amount equal to one-twelfth (1/12) of the amount which, when added
to the balance then in the Debt Service Reserve Fund, shall be equal to the Reserve Requirement.
The Debt Service Coverage for each Fiscal Year shall be calculated by the Town Representative
and certified to the Trustee by the Town Representative prior to or on the January 15 following
such Fiscal Year.
Town shall further also pay to Trustee its fees and expenses in accordance with the provisions of
the Trust Agreement.
Town shall further also pay all amounts necessary for compliance with the Continuing
Disclosure Undertaking.
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(d) The obligation of Town to pay the amounts described in paragraph
(c) hereof (including the Payments) from the sources described herein and to comply with the
other provisions hereof shall be absolute and unconditional and shall not be subject to any
defense or any right of set-off, abatement, counterclaim, or recoupment arising out of any breach
of Trustee by any obligation to Town or otherwise, or out of indebtedness or liability at any time
owing to Town by Trustee. Until such time as all of the payments described in paragraph (c)
hereof (including the Payments) shall have been fully paid or provided for, Town (i) shall not
suspend or discontinue the same, (ii) shall comply with the other provisions hereof and (iii) shall
not terminate this Agreement for any cause, including, without limiting the generality of the
foregoing, failure of Trustee or any other person to acquire the Proj ects, the occurrence of any
acts or circumstances that may constitute failure of consideration, eviction or constructive
eviction, destruction of or damage to the Proj ects or the taking by eminent domain of title to or
temporary use of any or all of the Projects, commercial frustration of purpose, abandonment of
the Projects by Town, any change in the tax or other laws of the United States of America or of
the State or any political subdivision of either or any failure of Trustee to perform and observe
any agreement, whether express or implied, or any duty, liability or obligation arising out of or
connected with the Trust Agreement or this Agreement. Nothing contained in this Section shall
be construed to release Trustee from the performance of any of the agreements on its part herein
or in the Trust Agreement contained and in the event Trustee shall fail to perform any such
agreements on its part, Town may institute such action against Trustee as Town may deem
necessary to compel performance so long as such action does not abrogate the obligations of
Town contained in the first sentence of this paragraph.
(e) Any of the payments described in paragraph (c) hereof (including
the Payments) due on a day which is not a Business Day may be made on the next Business Day
and will be deemed to have been made on the date due.
in writing to Town.
(f) Amounts payable to Trustee shall be paid by the means specified
Section 2. Pled�e; Limited Obli at� ions.
(a) Excise Tax Revenues and State Shared Revenues are hereby
irrevocably pledged by Town to the payment of all amounts described in Section 1(c) hereof
(including the Payments), and payments of such amounts shall be secured, subject only to the
paramount and first pledge and lien for the Prior Lease, on parity with the pledge and lien hereby
granted by Town for the payment and security of any Additional Revenue Obligations.
Notwithstanding the right to do so pursuant to the Prior Lease, Town shall not cause the issuance
or incurrence of "Additional Obligations" (as such term is defined in the Prior Lease.) Town
shall make said payments from Excise Tax Revenues and State Shared Revenues (first making
the Payments and thereafter making the other required payments). All of such payments are
coequal as to the pledge of and lien on Excise Tax Revenues and State Shared Revenues and
share ratably, without preference, priority or distinction, as to the source or method of payment
from Excise Tax Revenues and State Shared Revenues or security therefor.
(b) Town shall remit to Trustee from Excise Tax Revenues and State
Shared Revenues all amounts due under this Agreement in the amounts and at the times and for
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the purposes as required herein. The obligation of Town to make payments of any amounts due
under this Agreement, including amounts due after default or termination hereof, is limited to
payment from Excise Tax Revenues and State Shared Revenues and shall under no
circumstances constitute a general obligation or a pledge of the full faith and credit of Town, the
State or any of its political subdivisions, or require the levy of, or be payable from the proceeds
of, any ad valorem property taxes.
(c) Town may, at the sole option of Town, make payments due
pursuant to Section 1 hereof from its other funds as permitted by law and as Town shall
determine from time to time, but Trustee acknowledges that it has no claim hereunder to such
other funds. No part of the purchase price payable pursuant to this Agreement shall be payable
out of any ad valorem property taxes imposed by Town or from bonds or other obligations, the
payment of which Town's general taxing authority is pledged, unless (i) the same shall have
been duly budgeted by Town according to law, (ii) such payment or payments shall be within the
budget limitations of the statutes of the State and (iii) any such bonded indebtedness or other
obligation is within the debt limitations of the Constitution of the State.
Section 3. Surplus and Deficiencv of Revenues from Excise Taxes and State
Shared Revenues. Subj ect to the rights with respect to the Prior Lease, Excise Tax Revenues and
State Shared Revenues in excess of amounts, if any, required to be deposited with or held by
Trustee for payments due under this Agreement shall constitute surplus revenues and may be
used by Town for any lawful purpose for the benefit of Town, including the payment of
obligations to which Excise Tax Revenues and State Shared Revenues may from time to time be
pledged on a basis subordinate hereto. If at any time the moneys in the funds held for payment
of amounts due under this Agreement are not sufficient to make the deposits and transfers
required, any such deficiency shall be made up from the first moneys thereafter received and
available for such transfers under the terms of this Agreement and, with respect to payment from
Excise Tax Revenues and State Shared Revenues, pro rata, as applicable, with amounts due with
respect to any Additional Revenue Obligations, and the transfer of any such sum or sums to said
fund as may be necessary to make up any such deficiency shall be in addition to the then-current
transfers required to be made pursuant hereto.
Section 4. Paritv Lien Obli at� ions. Additional Revenue Obligations may be
incurred but only if Excise Tax Revenues plus State Shared Revenues, when combined
mathematically for such purpose only, in the most recently completed Fiscal Year, shall have
amounted to at least two (2) times the Maximum Annual Debt Service.
Section 5. Town Control over Revenue Collection.
(a) To the extent permitted by applicable law, Excise Tax Revenues
shall be retained and maintained so that the amounts received from Excise Tax Revenues plus
State Shared Revenues, when combined mathematically for such purpose only, all within and for
the most recently completed Fiscal Year, shall have been equal to at least two (2) times the
Annual Debt Service for the current Fiscal Year. If Excise Tax Revenues plus State Shared
Revenues for any such Fiscal Year shall not have been equal to at least one and one-quarter
(1.25) times the Annual Debt Service for the current Fiscal Year or if at any time it appears that
Excise Tax Revenues plus State Shared Revenues will not be sufficient to meet such
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requirements, Town shall, to the extent permitted by applicable law, impose new exactions of the
type of the excise taxes which will be part of the excise taxes or increase the rates for the excise
taxes currently imposed fully sufficient at all times, after making allowance for contingencies
and errors, in each Fiscal Year in order that (i) Excise Tax Revenues plus State Shared Revenues
will be sufficient to meet all current requirements hereunder and (ii) Excise Tax Revenues plus
State Shared Revenues will be reasonably calculated to attain the level as required by the first
sentence of this paragraph.
(b) The Excise Tax Revenue Fund established in connection with the
Prior Lease is hereby expanded to provide for the purposes of this Agreement and, after paying
therefrom amounts for the purposes described in the Prior Lease and herein, such Fund may be
reduced to zero, including by transferring any such balance to the General Fund of Town.
Section 6. Certain Matters with Respect to Projects.
(a) Except with respect to its power and authority to enter into this
Agreement and to perform its covenants hereunder, Trustee has made and makes no
representation or warranty, express or implied, and assumes no obligation with respect to the
title, merchantability, condition, quality or fitness of the Projects for any particular purpose or
the conformity of the Projects to any plans, specifications, construction contract, purchase order,
model or sample, or as to their design, construction, delivery, installation, construction oversight
and operation or their suitability for use by Town after completion. All such risks shall be borne
by Town without in any way excusing Town from its obligations under this Agreement, and
Trustee shall not be liable to Town for any damages on account of such risks. Except with
respect to any acts by Trustee which are not undertaken at the request of Town or with the prior
approval of Town, Town waives all claims against Trustee growing out of the acquisition of the
Projects. Trustee shall have no liability to Town for any failure of any contractor to perform any
contract or other undertaking with respect to the Proj ects in any respect. Trustee shall have no
obligation to obtain or insure compliance with any required permits or approval procedures with
respect to the Proj ects. In the event of any defect in any item of the Proj ects or other claim with
respect to the Projects, recourse of Town shall be against the contractors, manufacturers,
suppliers, etc. of the Proj ects and, where applicable, the person selling the property to Trustee,
and not against Trustee. For such purpose, Trustee hereby assigns and transfers to Town the
right, title and interest of Trustee in and to all representations, warranties, guarantees and service
agreements relating to the New Projects made or entered into by Trustee and by any contractor,
manufacturers, suppliers, etc. of the New Projects. Trustee further designates Town as its
attorney-in-fact granting to Town the right to initiate and take all actions necessary to enforce
any and all construction contracts and all such warranties and service agreements. Trustee is
entering into this Agreement solely as Trustee, shall not be personally liable hereunder and shall
be afforded the same rights, protections, immunities and indemnities acting hereunder as
afforded to it as Trustee under the Trust Agreement. Notwithstanding anything to the contrary
herein, at no time shall the Trustee be listed in the chain of title to the Projects.
(b) Trustee hereby irrevocably appoints Town as its sole and exclusive
agent to act for and on behalf of Trustee in acquiring the New Proj ects and refinancing the costs
of the Existing Project. As such agent, Town shall have full authority to do all things necessary
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to bring about the financing of the New Projects and refinancing the costs of the Existing Project.
Trustee shall not be liable, responsible or accountable for the acts of Town as its agent
hereunder, and Town hereby assumes all responsibility for the performance of such duties.
Should any shortfall or deficiency occur in the Acquisition Fund, the Town shall immediately
pay such amounts to Trustee for deposit in the applicable Acquisition Fund.
(c) Notwithstanding any other terms or provisions of this Agreement,
the interest of Trustee in the Projects is solely in its capacity as Trustee for the purpose of
facilitating the financing or refinancing of the Proj ects, and Trustee shall not have the power,
authority or obligation to assume any responsibility for the overall management or maintenance
of the Projects, including, without limitation, any day-to-day decision-making or operational
aspects of the Projects.
Section 7. Providin f� or Pavment. Town may provide for the payment of any
of the Payments in any one or more of the following ways:
(a) by paying such Payment as provided herein as and when the same
becomes due and payable at its scheduled due date pursuant to Section 1 hereof or on a date on
which it can be prepaid;
(b) by depositing with a Depository Trustee, in trust for such purposes,
money which, together with the amounts then on deposit with Trustee and available for such
Payment is fully sufficient to make, or cause to be made, such Payment at its scheduled due date
or on a date on which it can be prepaid or
(c) by depositing with a Depository Trustee, in trust for such purpose,
any Government Obligations which are noncallable, in such amount as shall be certified to
Trustee and Town, by a national firm of certified public accountants acceptable to both Trustee
and Town, as being fully sufficient, together with the interest to accrue thereon and moneys then
on deposit with Trustee and available for such Payment, to make, or cause to be made, such
Payment at its scheduled due date or on a date on which it can be prepaid.
Upon any partial prepayment of a Payment, each installment of interest which shall thereafter be
payable as a part of the subsequent Payments shall be reduced, taking into account the interest
rate or rates on the Obligations remaining outstanding after the partial prepayment so that the
interest remaining payable as a part of the subsequent Payments shall be sufficient to pay the
interest on such outstanding Obligations when due.
Section 8. Term of A�reement. This Agreement shall not terminate so long
as any payments are due and owing pursuant to the Obligations. Subject to Section 7 hereof,
upon full payment or provision for payment and in consideration of the timely payment of all of
the amounts described in Section 1(c) hereof (including the Payments) and provided that Town
has performed all the covenants and agreements required by Town to be performed, this
Agreement shall cease and expire. The obligations of Town under this Agreement, including,
without limitation, its obligation to pay the Payments, shall survive any action brought as
provided in the next Section hereof, and Town shall continue to pay the Payments and perform
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all other obligations provided in this Agreement; provided, however, that Town shall be credited
with any amount received by Trustee pursuant to actions brought under the next Section hereof.
Section 9. Default; Remedies Upon Default.
(a) (i) Upon (A) the nonpayment of the whole or any part of any
of the amounts described in Section 1(c) hereof (including the Payments) at the time
when the same are to be paid as provided herein or in the Trust Agreement, (B) the
violation by Town of any other covenant or provision of this Agreement or the Trust
Agreement, (C) the occurrence of an event of default with respect to the Prior Lease or
any Additional Revenue Obligations or (D) the insolvency or bankruptcy of Town as the
same may be defined under any law of the United States of America or the State, or any
voluntary or involuntary action of Town or others to take advantage of, or to impose, as
the case may be, any law for the relief of debtors or creditors, including a petition for
reorganization, and
(ii) if such default has not been cured (A) in the case of
nonpayment of any of the amounts described in Section 1(c) hereof (including the
Payments) as required hereunder or under the Trust Agreement on the due date or the
nonpayment of principal or interest due with respect to the Prior Lease or any Additional
Revenue Obligations on their due dates; (B) in the case of the breach of any other
covenant or provision of the Trust Agreement or this Agreement not cured within sixty
(60) days after notice in writing from Trustee specifying such default and (C) in the case
of any other default under any of the Prior Lease or any Additional Revenue Obligations
after any notice and passage of time provided for under the proceedings under which such
obligations were issued then,
(iii) subj ect to the limitations of the Trust Agreement and the
Continuing Disclosure Undertaking Trustee may take whatever action at law or in
equity, including the remedy of specific performance, may appear necessary or desirable
to collect the Payments and any other amounts payable by Town under the Trust
Agreement or this Agreement then due (but not the Payments and such other amounts
accruing), or to enforce performance and observance of any pledge, obligation,
agreement or covenant of Town under the Trust Agreement or this Agreement, and with
respect to Excise Tax Revenues and State-Shared Revenues, without notice and without
giving any bond or surety to Town or anyone claiming under Town, have a receiver
appointed of Excise Tax Revenues and State Shared Revenues which are pledged to the
payment of amounts due hereunder, with such powers as the court making such
appointment shall confer (and Town does hereby irrevocably consent to such
appointment); provided, however, that under no circumstances may the Payments be
accelerated.
Each right, power and remedy of Trustee provided for in this Agreement shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy provided for herein, or,
unless prohibited by the terms hereof, now or hereafter existing at law or in equity or by statute
or otherwise, in any jurisdiction where such rights, powers and remedies are sought to be
enforced, and the exercise or beginning of the exercise by Trustee of any one or more of the
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rights, powers or remedies provided for herein or now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or later exercise by either party of any
or all of such other rights, powers or remedies. The failure to insist upon strict performance of
any of the covenants or agreements herein set forth shall not be considered or taken as a waiver
or relinquishment for the future of the rights of Trustee to insist upon a strict compliance by
Trustee with all the covenants and conditions hereof. Town shall, upon not less than 10 days'
prior request by Trustee, execute, acknowledge and deliver to Trustee a statement in writing
certifying that this Agreement is unmodified and in full force and effect (or, if this Agreement
has been modified, that it is in full force and effect except as modified, and stating the
modification), and the dates to which the amounts payable hereunder have been paid in advance,
if any.
(b) Trustee shall in no event be in default in the performance of any of
its obligations hereunder unless and until Trustee shall have failed to perform such obligation
within 30 days or such additional time as is reasonably required to correct any such default after
notice by Town properly specifying wherein Trustee has failed to perform any such obligation.
No default by Trustee shall relieve Town of its obligations to make the various payments herein
required, so long as any of the Obligations remain outstanding; however, Town may exercise any
other remedy available at law or in equity to require Trustee to remedy such default so long as
such remedy does not interfere with or endanger the payments required to be made to Trustee
under the Trust Agreement.
Section 10. Assi�nment.
(a) Except as otherwise provided herein, Town shall not assign,
transfer, pledge or hypothecate or otherwise dispose of this Agreement or any interest therein
and any assignment in contravention hereof shall be void.
(b) Subject to the terms of the Trust Agreement, all and every part of
the right, title and interest in and to this Agreement and all payments of any kind due or which
become due to Trustee hereunder are sold, pledged, assigned and transferred pursuant to the
Trust Agreement.
Section 11. Federal Law Provisions
(a) (i) No direction for the making of any investment or other use
of the proceeds of any of the Obligations shall be made which would cause the Obligations to be
"arbitrage bonds" as that term is defined in section 148 (or any successor provision thereto) of
the Code or "private activity bonds" as that term is defined in section 141 (or any successor
provision thereto) of the Code, and the requirements of such sections and related regulations of
the Code shall be complied with throughout the term of the Obligations. (Particularly, Town
shall be the owner of the Projects for federal income tax purposes. Town shall not enter into any
management or service contract with any entity other than a governmental entity for the
operation of any portion of the Projects unless the management or service contract complies with
the requirements of Revenue Procedure 97-13 or such other authority as may control at the time
or any lease or other arrangement with any entity other than a governmental entity that gives
such entity special legal entitlements with respect to any portion of the Projects). Also, the
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payment of principal and interest with respect to the Obligations shall not be guaranteed (in
whole or in part) by the United States or any agency or instrumentality of the United States. The
proceeds of the Obligations, or amounts treated as proceeds of the Obligations, shall not be
invested (directly or indirectly) in federally insured deposits or accounts, except to the extent
such proceeds may be so invested for an initial temporary period until needed for the purpose for
which the Obligations are being executed and delivered, may be so used in making investments
in a bona fide debt service fund or may be invested in obligations issued by the United States
Treasury. Town shall comply with the procedures and covenants contained in any arbitrage
rebate provision or separate agreement executed in connection with the execution and delivery of
the Obligations (initially those in subsection (b)) for so long as compliance is necessary in order
to maintain the exclusion from gross income for federal income tax purposes of the Interest
Portion. In consideration of the purchase and acceptance of the Obligations by the owners from
time to time thereof and of retaining such exclusion and as authorized by Title 35, Chapter 3,
Article 7, Arizona Revised Statutes, Town shall, and the appropriate officials of Town are hereby
directed, to take all action required to retain such exclusion or to refrain from taking any action
prohibited by the Code which would adversely affect in any respect such exclusion.
(ii) (A) Town shall take all necessary and desirable steps, as
determined by the Mayor and Common Council of Town, to comply with the requirements
hereunder in order to ensure that the Interest Portion is excluded from gross income for federal
income tax purposes under the Code; provided, however, compliance with any such requirement
shall not be required in the event Town receives a Special Counsel's Opinion that either
compliance with such requirement is not required to maintain the exclusion from gross income of
the Interest Portion or compliance with some other requirement will meet the requirements of the
Code. In the event Town receives such a Special Counsel's Opinion, the parties agree to amend
this Agreement to conform to the requirements set forth in such opinion.
(B) If for any reason any requirement hereunder is not
complied with, Town shall take all necessary and desirable steps, as determined by Town, to
correct such noncompliance within a reasonable period of time after such noncompliance is
discovered or should have been discovered with the exercise of reasonable diligence and Town
shall pay any required interest or penalty under hereinafter described Regulations section
1.148-3(h) with respect to the Code.
(C) The procedures required by any arbitrage rebate
provision or separate agreement executed in connection with the issuance of the Obligations
shall be complied with for so long as compliance is necessary pursuant to the Code.
(b) (i) Undefined terms used in this subsection shall have the
meanings given to them in the Code and Regulations.
(ii) Unless an exception available pursuant to the Regulations
applies as indicated in a Special Counsel's Opinion or a written statement of an expert consultant
employed pursuant to paragraph (vii) hereof, within 60 days after the end of each Bond Year,
Town shall cause the Rebate Requirement to be calculated and shall pay to the United States of
America:
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(A) not later than 60 days after the end of the fifth Bond
Year and every fifth Bond Year thereafter, an amount which, when added to the future value of
all previous Rebate Payments with respect to the Obligations (determined as of such
Computation Date), is equal to at least 90% of the sum of the Rebate Requirement (determined
as of the last day of such Bond Year) plus the future value of all previous Rebate Payments with
respect to the Obligations (determined as of the last day of such Bond Year); and
(B) not later than 60 days after the retirement of the last
Obligation, an amount equal to 100% of the Rebate Requirement (determined as of the date of
retirement of the last Obligation).
Each Rebate Payment required to be made under this Section shall be filed on or before the date
such payment is due, with the Internal Revenue Service at the appropriate location and with
required forms and other materials, currently by addressing it to IRS Service Center, Ogden,
Utah 84201, and accompanying it with IRS Form 8038-T.
(iii) No Nonpurpose Investment shall be acquired for an amount
in excess of its fair market value. No Nonpurpose Investment shall be sold or otherwise
disposed of for an amount less than its fair market value.
(iv) For purposes of paragraph (iv), whether a Nonpurpose
Investment has been purchased or sold or disposed of for its fair market value shall be
determined as follows:
(A) The fair market value of a Nonpurpose Investment
generally shall be the price at which a willing purchaser would purchase the Nonpurpose
Investment from a willing seller in a bona fide arm's length transaction. Fair market value shall
be determined on the date on which a contract to purchase or sell the Nonpurpose Investment
becomes binding.
(B) Except as provided in Subsection (vi) or (vii), a
Nonpurpose Investment that is not of a type traded on an established securities market, within the
meaning of Code section 1273, is rebuttably presumed to be acquired or disposed of for a price
that is not equal to its fair market value.
(C) If a United States Treasury obligation is acquired
directly from or sold or disposed of directly to the United States Treasury, such acquisition or
sale or disposition shall be treated as establishing the fair market value of the obligation.
(v) The purchase price of a certificate of deposit that has a
fixed interest rate, a fixed payment schedule and a substantial penalty for early withdrawal is
considered to be its fair market value if the yield on the certificate of deposit is not less than:
(A) the yield on reasonably comparable direct
obligations of the United States; and
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(B) the highest yield that is published or posted by the
provider to be currently available from the provider on reasonably comparable certificates of
deposit offered to the public.
(vi) A guaranteed investment contract shall be considered
acquired and disposed of for an amount equal to its fair market value if:
(A) A bona fide solicitation in writing for a specified
guaranteed investment contract, including all material terms, is timely forwarded to all potential
providers. The solicitation must include a statement that the submission of a bid is a
representation that the potential provider did not consult with any other potential provider about
its bid, that the bid was determined without regard to any other formal or informal agreement
that the potential provider has with Town or any other person (whether or not in connection with
the Obligations), and that the bid is not being submitted solely as a courtesy to Town or any
other person for purposes of satisfying the requirements in the Regulations that Town receive
bids from at least one reasonably competitive provider and at least three providers that do not
have a material financial interest in the Obligations.
(B) All potential providers have an equal opportunity to
bid, with no potential provider having the opportunity to review other bids before providing a
bid.
(C) At least three reasonably competitive providers (i.e.
having an established industry reputation as a competitive provider of the type of investments
being purchased) are solicited for bids. At least three bids must be received from providers that
have no material financial interest in the Obligations (e.g., a lead underwriter within 15 days of
the issue date of the Obligations or a financial advisor with respect to the investment) and at least
one of such three bids must be from a reasonably competitive provider. If Town uses an agent to
conduct the bidding the agent may not bid.
(D) The highest-yielding guaranteed investment
contract for which a qualifying bid is made (determined net of broker's fees) is purchased.
(E) The determination of the terms of the guaranteed
investment contract takes into account as a significant factor the reasonably expected deposit and
drawdown schedule for the amounts to be invested.
(F) The terms for the guaranteed investment contract
are commercially reasonable (i.e. have a legitimate business purpose other than to increase the
purchase price or reduce the yield of the guaranteed investment contract).
(G) The provider of the investment contract certifies the
administrative costs (as defined in Regulations section 1.148-5(e)) that it pays (or expects to pay)
to third parties in connection with the guaranteed investment contract.
(H) Town retains until three years after the last
outstanding Obligation is retired, (1) a copy of the guaranteed investment contract, (2) a receipt
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or other record of the amount actually paid for the guaranteed investment contract, including any
administrative costs paid by Town and a copy of the provider's certification described in (G)
above, (3) the name of the person and entity submitting each bid, the time and date of the bid,
and the bid results and (4) the bid solicitation form and, if the terms of the guaranteed investment
contract deviate from the bid solicitation form or a submitted bid is modified, a brief statement
explaining the deviation and stating the purpose of the deviation.
(vii) Such experts and consultants shall be employed by Town to
make, as necessary, any calculations in respect of rebates to be made to the United States of
America in accordance with section 148(f) of the Code with respect to the Obligations.
(c) Town shall comply with and carry out all of the provisions of the
Continuing Disclosure Undertaking, dated even date with the date of original execution and
delivery of the Obligations (the "Continuing Disclosure Agreement"), provided that such costs of
compliance shall be payable solely from the Excise Tax Revenues and the State Shared
Revenues. Notwithstanding any other provision of this Agreement, failure of Town to comply
with the Continuing Disclosure Agreement shall not be considered an event of default; however,
the Trustee may (and, at the request of the original purchaser of the Obligations or the owners of
at least 25% aggregate principal amount in outstanding Obligations and receipt of indemnity to
its satisfaction, shall) take such actions as may be necessary and appropriate, including seeking
specific performance by court order, to cause Town to comply with its obligations under this
Section. The Trustee is not responsible for monitoring or verifying compliance by the Town
with the Continuing Disclosure Agreement.
Section 12. Covenant as to Conflict of Interest; Other Statutorv Restrictions
(a) To the extent applicable by provision of law, Trustee
acknowledges that this Agreement is subject to cancellation pursuant to Section 38-511, Arizona
Revised Statutes, the provisions of which are incorporated herein and which provides that Town
may within three (3) years after its execution cancel any contract (including this Agreement)
without penalty or further obligation made by Town if any person significantly involved in
initiating, negotiating securing drafting or creating the contract on behalf of Town is at any time
while the contract or any extension of the contract 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. The cancellation shall be effective when written notice is
received by all other parties to the contract unless the notice specifies a later time. Trustee
covenants not to employ as an employee, an agent or, with respect to the subject matter of this
Agreement, a consultant, any person significantly involved in initiating, negotiating, securing,
drafting or creating this Agreement on behalf of Trustee within three years from the execution of
this Agreement, unless a waiver of Section 38-511, Arizona Revised Statutes, is provided by
Town. No basis exists for Town to cancel this Agreement pursuant to Section 38-511, Arizona
Revised Statutes, as of the date hereof.
(b) To the extent applicable under Section 41-4401, Arizona Revised
Statutes, Trustee shall comply with all federal immigration laws and regulations that relate to its
employees and its compliance with the "e-verify" requirements under Section 23-214(A),
Arizona Revised Statutes. The breach by Trustee of the foregoing shall be deemed a material
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breach of this Agreement and may result in the termination of the services of Trustee by Town.
Town retains the legal right to randomly inspect the papers and records of Trustee to ensure that
Trustee is complying with the above-mentioned warranty. Trustee shall keep such papers and
records open for random inspection during normal business hours by Town. Trustee shall
cooperate with the random inspections by Town including granting Town entry rights onto its
property to perform such random inspections and waiving its respective rights to keep such
papers and records confidential.
(c) Pursuant to Sections 35-391.06 and 35-393.06, Arizona Revised
Statutes, Trustee does not have a scrutinized business operation in Sudan or Iran. For the
purpose of this subsection, the term "scrutinized business operations" shall have the meanings set
forth in Section 35-391 and 35-393, Arizona Revised Statutes, as applicable. If Town
determines that Trustee submitted a false certification, Town may impose remedies as provided
by law including terminating the services of Trustee.
Section 13. Miscellaneous.
(a) No covenant or obligation herein to be performed by Town may be
waived except by the written consent of Trustee, and a waiver of any such covenant or obligation
or a forbearance to invoke any remedy on any occasion shall not constitute or be treated as a
waiver of such covenant or obligation as to any other occasion and shall not preclude Trustee
from invoking such remedy at any later time prior to the cure by Town of the condition giving
rise to such remedy.
(b) This Agreement shall be construed and governed in accordance
with the laws of the State in effect from time to time.
(c) The recitals set forth at the beginning of this Agreement are
incorporated in this Agreement by this reference. This Agreement constitutes the entire
agreement between the parties and shall not be modified, waived, discharged, terminated,
amended, supplemented, altered or changed in any respect except by a written document signed
by both Trustee and Town, subject to the restrictions with regard thereto provided by the Trust
Agreement.
(d) Any term or provision of this Agreement found to be prohibited by
law or unenforceable or which would cause this Agreement to be invalid, prohibited by law or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability without,
to the extent reasonably possible, causing the remainder of this Agreement to be invalid,
prohibited by law or unenforceable.
(e) The captions set forth herein are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
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(f) Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their respective heirs, successors, assigns
and personal representatives, as the case may be. Any person or entity acquiring any interest in
or to the right, title or interest of Trustee herein shall be and have the rights of a third party
beneficiary hereunder.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be regarded as an original and all of which shall constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Trustee:
WELLS FARGO BANK, N.A., as seller
B y-------------------
Printed Name:
Title:
Town:
TOWN OF MARANA, ARIZONA, a municipal
corporation under the laws of the State of Arizona,
as purchaser
B y-----------�
Mayor
ATTEST:
I�
Town Clerk
330263594.1-5/13/2013
IS
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SCHEDULE
Payment Total
Date Principal Interest Pavment
O1/O1/14
07/O1/14
O1/O1/15
07/O1/15
O1/O1/16
07/O1/16
O1/O1/17
07/O1/17
O1/O1/18
07/O 1/ 18
O1/O1/19
07/O1/19
O 1/O 1/20
07/O 1/20
O1/O1/21
07/O 1/21
O 1/O 1/22
07/O 1/22
O 1/O 1/23
07/O 1/23
O 1/O 1/24
07/O 1/24
O 1/O 1/25
07/O 1/25
O 1/O 1/26
07/O 1/26
O 1/O 1/27
07/O 1/27
O1/O1/28
07/O 1/28
O 1/O 1/29
07/O 1/29
O1/O1/30
07/O 1/30
Total
Page 1 of Schedule
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DRAFT
OS/19/12
06/13/12
04/03/13
OS/08/13
FIRST TRUST AGREEMENT
by and between
WELLS FARGO BANK, N.A.,
as Seller
and
THE TOWN OF MARANA, ARIZONA,
as Purchaser
Dated as of 1, 2013
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TABLE OF CONTENTS
Pa�e
ARTICLE I
DEFINITIONS
Section 1.1.
Section 2.1.
Section 2.2.
Section 2.3.
Section 2.4.
Section 2.5.
Section 2.6.
Section 2.7.
Section 2.8.
Section 2.9.
Section 2.10
Section 2.11
Section 2.12
Section 2.13
Section 2.14
Section 3.1.
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 5.1.
Section 5.2.
Section 5.3.
Section 5.4.
Section 5.5.
Defi niti on s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
SPECIAL REVEN UE OBLIGATIONS
Authorization of the Obligations ................................................................... 15
Date; Interest Accrual .................................................................................... 15
Payment Amounts and Dates and Interest Rates ........................................... 15
Interest on Obligations ................................................................................... 15
Form............................................................................................................... 16
Execution....................................................................................................... 16
Book-Entry Only System ............................................................................... 16
Applicationof Proceeds ................................................................................. 17
Transfer and Exchange . ................................................................................. 17
Obligations Mutilated, Lost, Destroyed or Stolen ......................................... 17
Payment. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 18
Execution of Documents and Proof of Ownership . ....................................... 19
Obligation ........................................................................................ 20
Payment of Unclaimed Amounts ................................................................... 20
ARTICLE III
APPLICATION OF PROCEEDS RECENED BY TRUSTEE;
ACQUISITION FUND
Establishment and Application of Acquisition Fund . .................................... 20
ARTICLE IV
PREPAYMENT OF OBLIGATIONS
Prepayment Provisions ................................................................................... 21
Selection of Obligations for Prepayment ....................................................... 21
Notice of Prepayment; Effect ......................................................................... 22
Partial Prepayment of Obligation ................................................................... 23
ARTICLE V
PAYMENT FUND; DEBT SERVICE RESERVE FUND
Trustee's Rights in Purchase Agreement ....................................................... 23
Establishment and Application of Payment Fund .......................................... 23
Establishment and Application of Debt Service Reserve Fund . .................... 24
Transfers of Investment Earnings to Payment Fund ...................................... 24
Surplus........................................................................................................... 25
(i)
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TABLE OF CONTENTS
(continued)
Pa�e
ARTICLE VI
MONEYS 1N FUNDS; 1NVESTMENT; CERTAIN TAX COVENANTS
Section6.1. Held in Trust .................................................................................................. 25
Section 6.2. Investments Authorized ................................................................................. 25
Section6.3. Accounting ..................................................................................................... 25
Section 6.4. Allocation of Earnings ................................................................................... 25
Section 6.5. Valuation and Disposition of Investments ..................................................... 26
Section 6.6. Limitation of Investment Yield ...................................................................... 26
Section 6.7. Other Tax Covenants ..................................................................................... 26
ARTICLE VII
THE TRUSTEE
Section 7.1. Appointment of Trustee ................................................................................. 27
Section 7.2. Liability of Trustee; Standard of Care ........................................................... 27
Section 7.3. Merger or Consolidation ................................................................................ 27
Section 7.4. Protection and Rights of the Trustee .............................................................. 27
Section 7.5. Compensation of Trustee ............................................................................... 30
Section 7.6. Removal and Resignation of Trustee . ............................................................ 30
Section 7.7. Appointment of Agent ................................................................................... 31
Section7.8. Commingling ................................................................................................. 31
Section7.9. Records .......................................................................................................... 31
ARTICLE VIII
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 8.1. Amendments Permitted .................................................................................. 31
Section 8.2. Procedure for Amendment With Written Consent of Obligation
Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2
Section 8.3. Disqualified Obligations ................................................................................ 33
Section 8.4. Effect of Supplemental Trust Agreement ...................................................... 33
Section 8.5. Endorsement or Replacement of Obligations Delivered After
Amendments .................................................................................................. 34
Section 8.6. Amendatory Endorsement of Obligations ..................................................... 34
ARTICLE IX
COVENANTS, NOTICES
Section 9.1. Compliance With and Enforcement of Purchase Agreement ........................ 34
Section 9.2. Observance of Laws and Regulations ............................................................ 34
Section 9.3. Recordation and Filing ................................................................................... 34
Section 9.4. Further Assurances ......................................................................................... 35
Section 9.5. Notification to the Town of Failure to Make Payments ................................ 35
Section9.6. Business Days ................................................................................................ 35
(ii)
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TABLE OF CONTENTS
(continued)
Pa�e
ARTICLE X
LINIITATION OF LIABILITY
Section 10.1. Limited Liability of the Town ........................................................................ 35
Section 10.2. No Liability of the Town for Trustee Performance ....................................... 35
Section 10.3. Indemnification of the Trustee ....................................................................... 35
Section 10.4. Opinion of Counsel ........................................................................................ 36
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS
Section 11.1. Seller's Rights held in Trust .......................................................................... 37
Section 11.2. Remedies Upon Default; No Acceleration .................................................... 37
Section 11.3. Application of Funds ...................................................................................... 37
Section 11.4. Institution of Legal Proceedings .................................................................... 38
Section11.5. Non-waiver .................................................................................................... 38
Section 11.6. Power of Trustee to Control Proceedings ...................................................... 38
Section 11.7. Limitation on Obligation Owners' Right to Sue ............................................ 38
ARTICLE XII
MISCELLANEOUS
Section 12.1.
Section 12.2.
Section 12.3.
Section 12.4.
Section 12.5.
Section 12.6.
Section 12.7.
Section 12.8.
Section 12.9.
Section 12.10
Section 12.11
Defeasance. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 3 9
Notices........................................................................................................... 40
Incorporation of State Statutes ....................................................................... 40
GoverningLaw .............................................................................................. 41
Binding Effect and Successors ....................................................................... 41
Execution in Counterparts .............................................................................. 41
Destruction of Cancelled Obligations ............................................................ 41
Headings ........................................................................................................ 42
Parties Interested Herein ................................................................................ 42
Waiverof Notice ............................................................................................ 42
Severability of Invalid Provisions .................................................................. 42
EXHIBIT A - FORM OF OBLIGATION
EXHIBIT B - FORM OF PAYMENT REQUEST FORM
EXHIBIT C - FORM OF REIMBURSEMENT REQUEST FORM
�
�
(iii)
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FIRST TRUST AGREEMENT
THIS FIRST TRUST AGREEMENT, dated as of 1, 2013 (together
with any duly authorized, executed and delivered supplement thereto, this "Trust Agreement"),
by and between WELLS FARGO BANK, N.A., a national banking association, as trustee, or any
successor thereto acting as trustee pursuant to this Trust Agreement and in its capacity as
"Seller" pursuant to the hereinafter described Purchase Agreement (the "Trustee"), and THE
TOWN OF MARANA, ARIZONA, a municipal corporation under the laws of the State of
Arizona (the "Town");
WITNESSETH:
WHEREAS, the Mayor and Common Council of the Town have determined that
it will be beneficial to the citizens of the Town to finance the costs of the assets being acquired
pursuant to the Intergovernmental Settlement Agreement entered into by and between Pima
County, Arizona, and the Town and certain improvements thereto (the "New Proj ects") and to
refinance the lease purchase of a project which is the subject of the herein defined Prior Lease,
specifically a portion of the new municipal complex (the "Existing Project" and, with the New
Proj ects, the "Proj ects"); and
WHEREAS, for such purposes, the Mayor and the Council of the Town requested
that the Trustee sell and execute and deliver Pledged Excise Tax Revenue and Revenue
Refunding Obligations, Series 2013, in the principal amount of $ ,000 (the "Obligations"),
and the Trustee has, as described in this Trust Agreement, caused deposits to be made to the
Acquisition Fund (as such term and all other terms not otherwise defined hereinabove are
hereinafter defined) and amounts to be paid to the trustee for bonds secured by the Prior Lease as
provided herein;
NOW, THEREFORE, in consideration for the Obligations executed, delivered
and Outstanding under this Trust Agreement; the acceptance by the Trustee of the trusts created
herein; the purchase and acceptance of the Obligations by the Owners, and to secure the payment
of principal and interest (to the extent provided herein) represented by the Obligations, the rights
of the Owners of the Obligations and the performance and the observance of the covenants and
conditions contained in the Obligations, the Purchase Agreement and herein, and the
performance and the observance of all of the covenants and conditions contained therein, the
Town absolutely and irrevocably pledges and assigns to the Trustee, and the Trustee hereby
declares an irrevocable trust and acknowledges its acceptance of all right, title and interest in and
to the following described trust estate, which shall be administered by the Trustee according to
the provisions of this Trust Agreement and for the equal and proportionate benefit of the Owners
of Obligations:
A. All right, title and interest of Seller in, under and pursuant to the
Purchase Agreement, the Payments and any other amounts payable by the Town under the
Purchase Agreement and the present and continuing right to (i) make claim for, collect or cause
to be collected, receive or cause to be received all such revenues, receipts and other sums of
money payable or receivable thereunder, (ii) to bring acts and proceedings thereunder or for the
Regular Council Meeting - June 4, 2013 - Page 109 of 296
enforcement of such rights, and (iii) to do any and all other things which the Seller is or may
become entitled to do thereunder;
B. Amounts on deposit from time to time in the funds created
pursuant hereto, subject to the provisions of this Trust Agreement permitting the application
thereof for the purposes and on the terms and conditions set forth herein; and
C. Any and all other real or personal property of any kind from time
to time hereafter by delivery or by writing of any kind specifically conveyed, pledged, assigned
or transferred, as and for additional security hereunder for the Obligations, by Seller or by
anyone on its behalf or with its written consent, in favor of the Trustee, which is hereby
authorized to receive any and all such property at any and all times and to hold and apply the
same subject to the terms hereof,
TO HAVE AND TO HOLD, all and singular, the trust estate, including all
additional property which by the terms hereof has or may become subject to the encumbrance of
this Trust Agreement, unto the Trustee and its successors and assigns, forever, subject, however,
to the rights of the Town, its successors and assigns, under the Purchase Agreement;
IN TRUST, however, for the equal and proportionate benefit and security of the
Owners from time to time of the Obligations executed and delivered hereunder and Outstanding,
none of the Obligations being entitled to priority or distinction one over the other in the
application of the Excise Tax Revenues and the State Shared Revenues pledged by the Purchase
Agreement to the Payments, regardless of the delivery of any of the Obligations prior to the
delivery of any other of the Obligations, or regardless of the time or times principal represented
by any Obligations are paid or are subj ect to prepayment with respect to principal represented
thereby, all of the Obligations being co-equal as to the pledge of and lien on the Excise Tax
Revenues and the State Shared Revenues pledged for the Payments thereof and sharing ratably,
without preference, priority or distinction, as to the source or method of payment from the Excise
Tax Revenues or the State Shared Revenues or security therefor and conditioned, however, that
if the Town shall well and truly pay or cause to be paid fully and promptly when due all
indebtedness, liabilities, obligations and sums at any time secured hereby, including interest and
attorneys' fees, and shall promptly, faithfully and strictly keep, perform and observe or cause to
be kept, performed and observed all of its covenants, warranties and agreements contained herein,
this Trust Agreement shall be and become void and of no further force and effect; otherwise, the
same shall remain in full force and effect, and upon the trust and subj ect to the covenants and
conditions hereafter set forth. For such purposes, the Town and the Trustee hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions In addition to the terms defined in the first
paragraph hereof and in the Recitals hereto and in the Purchase Agreement and unless the
context otherwise requires, the terms defined in this Section shall, for all purposes of this Trust
Agreement, have the meanings herein specified.
"Acquisition Fund" means the fund by that name established pursuant to
Article III and held by the Trustee.
"Additional Revenue Obli�ations" means any additional obligations which
may hereafter be issued or incurred by the Town (or any financing conduit acting on behalf of
the Town) having a lien upon and payable from the Excise Tax Revenues and the State Shared
Revenues on a parity with, and in compliance with the terms of, the Purchase Agreement.
"Annual Debt Service" means the amount to be paid in any Fiscal Year
with respect to the Prior Lease and the Parity Obligations for payment of principal and interest
requirements.
"Authorized Denominations" means $5,000 of principal represented by
the Obligations of a series due on a specific payment date or integral multiples thereof.
`Bond Year" means each one-year period beginning on the day after the
expiration of the preceding Bond Year. The first Bond Year shall begin on the date of issue of
the Obligations and shall end on the date selected by the Town, provided that the first Bond Year
shall not exceed one calendar year. The last Bond Year shall end on the date of retirement of the
last Obligation.
`Bond Yield" means the discount rate that produces a present value equal
to the Issue Price of all unconditionally payable payments of principal, interest and fees for
qualified guarantees within the meaning of Regulations section 1.148-4(f) and amounts
reasonably expected to be paid as fees for qualified guarantees in connection with the applicable
series of the Obligations as determined under Regulations section 1.148-4(b), recomputed if
required by Regulations section 1.148-4(b)(4) or 4(h)(3). Bond Yield shall . The present value
of all such payments shall be computed as of the date of issue of the Obligations and using
semiannual compounding on the basis of a 360-day year.
"Business Dav" means any day of the week other than a Saturday, Sunday
or a day which shall be in the State a legal holiday or a day on which the Trustee is authorized or
obligated by law or executive order to close or a day on which the Federal Reserve is closed as
modified by the effect of Section 9.6.
"Certificate of Completion" means the notice of completion, filed with the
Trustee by the Town Representative, stating that the New Projects have been acquired.
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"Closin� Date" means the day when the Obligations, duly executed by the
Trustee, are delivered to the original purchaser thereof.
"Code" means the Internal Revenue Code of 1986, as amended.
References to the Code and Sections thereof include applicable regulations and temporary
regulations thereunder and any successor provisions to those Sections, regulations or temporary
regulations and any applicable regulations or temporary regulations issued pursuant to the
Internal Revenue Code of 1954.
"Completion Date" means the date on which the Certificate of Completion
is filed with the Trustee by the Town Representative.
"Continuin� Disclosure Undertaking" means the Continuing Disclosure
Undertaking dated the date of the Obligations, by the Town.
"Corporate Trust Office" means the office of the Trustee designated in
Section 12.2 or any successor corporate trust office.
" Debt Service Covera�e means the amount of the Excise Taxes Revenues
plus the State Shared Revenues for the most recently completed Fiscal Year divided by the
Maximum Annual Debt Service.
" Debt Service Reserve Fund means the fund of that name established
pursuant to Article V and held by the Trustee.
"Defaulted Interest" has the meaning provided in Section 2.11(d).
"Defeasance Obli at� ions" means, to the extent permitted by law, (1) cash,
(2) non-callable direct obligations of the United States of America ("Treasuries"), (3) evidences
of ownership of proportionate interests in future interest and principal payments on Treasuries
held by a bank or trust company as custodian, under which the owner of the investment is the
real party in interest and has the right to proceed directly and individually against the obligor and
the underlying Treasuries are not available to any person claiming through the custodian or to
whom the custodian may be obligated, (4) pre-refunded municipal obligations rated "AAA" and
"Aaa" by S&P and Moody's, respectively, (5) securities eligible for "AAA" defeasance under
then-existing criteria of S&P or (6) any combination of the foregoing.
"Depositorv Trustee" means any bank or trust company, which may
include the Trustee, designated by the Town, with a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or examination by federal or State of
Arizona authority.
"Desi�nated Office" means the office designated as such by the Trustee in
writing to the Town.
"DTC" means The Depository Trust Company, a limited purpose trust
company organized under the laws of the State of New York, and its successors and assigns.
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"Electronicallv" means with respect to notice, one transmitted through a
timesharing terminal, computer network or facsimile machine, if operative as between any two
parties, or if not operative, by telephone (promptly confirmed in writing).
" Event of Default means an event of default under the Purchase
Agreement as provided in Section 9 thereof.
"Excise Tax Revenues" means revenues from the Town sale taxes, license
and permit fees and fines and forfeitures which the Town now collects; provided that the Mayor
and Common Council of the Town may impose other transaction privilege taxes in the future, the
uses of revenue from which will be restricted, at the discretion of such Council.
"Financin� Documents" means this Trust Agreement and the Purchase
Agreement.
"Fiscal Year" means the fiscal year of the Town, currently the period
7uly 1 through 7une 30.
"Government Obli at� ions" means direct noncallable obligations of, or
direct noncallable obligations of the timely payment of the principal of and interest on, which is
fully and unconditionally guaranteed by, the United State of America.
" Gross Proceeds means:
(i) any amounts actually or constructively received by Town
from the sale of the applicable series of the Obligations but excluding amounts used to pay
accrued interest on the Obligations within one year of the date of issuance of the Obligations;
(ii) transferred proceeds of the applicable series of the
Obligations under Regulations section 1.148-9;
(iii) any amounts actually or constructively received from
investing amounts described in (i), (ii) or this (iii) and
(iv) replacement proceeds of the applicable series of the
Obligations within the meaning of Regulations section 1.148-1(c). Replacement proceeds
include amounts reasonably expected to be used directly or indirectly to pay debt service on the
applicable series of the Obligations, pledged amounts where there is reasonable assurance that
such amounts will be available to pay principal or interest on the applicable series of the
Obligations in the event the Town or the Trustee encounters financial difficulties and other
replacement proceeds within the meaning of Regulations section 1.148-1(c)(4). Whether an
amount is Gross Proceeds is determined without regard to whether the amount is held in any
fund or account established under this Trust Agreement.
"Independent Counsel" means an attorney duly admitted to the practice of
law before the highest court of the state in which such attorney maintains an office and who is
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not an employee of the Town or the Trustee and which may include the counsel giving a Special
Counsel's Opinion.
"Interest Pavment Date" means each January 1 and July 1, while the
principal represented by any Obligations are Outstanding provided that, pursuant to Section 9.6,
if any such day is not a Business Day, any payment due on such date may be made on the next
Business Day, without additional interest and with the same force and effect as if made on the
specified date for such payment.
"Interest Portion" means the amounts of each of the Payments in the
column in the Schedule attached to the Purchase Agreement designated "Interest," denominated
as and comprising interest pursuant to the Purchase Agreement and received by the Owners of
the Obligations.
"Investment PropertX" means any security, obligation (other than a tax-
exempt bond within the meaning of Code section 148(b)(3)(A)), annuity contract or investment-
type property within the meaning of Regulations section 1.148-1(b).
"IRS" means the United States Treasury, Internal Revenue Service.
"Issue Price" means the initial offering price to the public (not including
bond houses and brokers, or similar persons or organizations acting in the capacity of
underwriters of wholesalers) at which price a substantial amount of the applicable series of the
Obligations was sold, less any bond insurance premium and reserve surety bond premium. Issue
price shall be determined as provided in Regulations section 1.148-1(b).
"Market Value" means the indicated bid value of the investment or
investments to be valued as shown in The Wall Street Journal or any publication having general
acceptance as a source of valuation of the same or similar types of securities or any securities
pricing service available to or used by the Trustee and generally accepted as a source of
valuation.
"Maximum Annual Debt Service" means, for any Fiscal Year, the greatest
Annual Debt Service for the then-current or any succeeding Fiscal Year.
"Moodv's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors and assigns, and, if
such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Town by notice to the Trustee.
"Nonpurpose Investment" means any Investment Property acquired with
Gross Proceeds and which is not acquired to carry out the governmental purposes of the
Obligations.
"Notification" shall have the meaning provided in Section 10.3.
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"Outstandin�" refers to Obligations issued in accordance with this Trust
Agreement, excluding (i) Obligations which have been exchanged or replaced, or delivered to
the Trustee for credit against a mandatory prepayment installment with respect to principal
represented thereby, (ii) Obligations which have been paid; (iii) Obligations which have become
due and for the payment of which moneys have been duly provided to the Trustee; and
(iv) Obligations for which there have been irrevocably set aside with a Depository Trustee
sufficient moneys or obligations permitted hereby and by the Purchase Agreement bearing
interest at such rates and with such maturities as will provide sufficient funds to pay the principal,
interest and premium, if any, represented by such Obligations, provided, however, that if
principal represented by any such Obligations is to be prepaid, the Town shall have taken all
action necessary to prepay such Obligations and notice of such prepayment shall have been duly
mailed in accordance with the proceedings under which such Obligations were issued or
irrevocable instructions so to give such notice shall have been given to the Trustee.
"Owner" or any similar term, when used with respect to an Obligation
means the person in whose name such Obligation shall be registered.
Revenue Obligations.
"Paritv Obli at� ions" means the Purchase Agreement and any Additional
"Pavment Fund" means the fund by that name established pursuant to
Article V hereof and held by the Trustee.
attached hereto.
"Pavment Request Form" means the form set forth in Exhibit B which is
"Pavments" means the "Payments" required to be paid by the Town
pursuant to Section 1(c) of the Purchase Agreement and as set forth in the Schedule to the
Purchase Agreement, subject to the provisions of Section 5.2(b).
permitted by law:
"Permitted Investments" means any of the following, to the extent
L (A) Cash (fully insured by the Federal Deposit Insurance
Corporation), (B) Direct obligations (other than an obligation subject to variation in
principal repayment) of the United States of America ("U. S. Treasury Obligations"),
(C) obligations fully and unconditionally guaranteed as to timely payment of principal
and interest by the United States of America, (D) obligations fully and unconditionally
guaranteed as to timely payment of principal and interest by any agency or
instrumentality of the United States of America when such obligations are backed by the
full faith and credit of the United States of America, or (E) evidences of ownership of
proportionate interests in future interest and principal payments on obligations described
above held by a bank or trust company as custodian, under which the owner of the
investment is the real party in interest and has the right to proceed directly and
individually against the obligor and the underlying government obligations are not
available to any person claiming through the custodian or to whom the custodian may be
obligated.
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Regular Council Meeting - June 4, 2013 - Page 115 of 296
2. Federal Housing Administration debentures.
3. The listed obligations of government-sponsored agencies
which are not backed by the full faith and credit of the United States of America:
A. Federal Home Loan Mortgage Corporation
(FHLMC or "Freddie Mac") Participation Certificates (excluded are stripped
mortgage securities which are purchased at prices exceeding their principal
amounts) and Senior debt obligations;
B. Farm Credit Banks (formerly Federal Land Banks,
Federal Intermediate Credit Banks and Banks for Cooperatives) Consolidated
system-wide bonds and notes;
C. Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations and
D. Federal National Mortgage Association (FNMA or
"Fannie Mae") Senior debt obligations and Mortgage-backed securities (excluded
are stripped mortgage securities which are purchased at prices exceeding the
portion of their unpaid principal amounts).
4. Unsecured certificates of deposit, including those placed by
a third party pursuant to an agreement between the Trustee and the Town, time deposits,
and bankers' acceptances (having maturities of not more than 365 days) of any bank,
including the Trustee or any of its affiliates, the short-term obligations of which are rated
"A-1+" or better by S&P and "Prime-1" or better by Moody's.
5. Deposits the aggregate amount of which are fully insured
by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and
surplus of at least $15 million.
6. Commercial paper (having original maturities of not more
than 270 days) rated "A-1+" or better by S&P and "Prime-1" or better by Moody's.
7. Money market mutual funds rated "AAm" or "AAm-G" or
higher by S&P or, if rated by Moody's, "Prime-1" or better by Moody's, including,
without limitation any mutual fund for which the Trustee or an affiliate of the Trustee
serves as investment manager, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that the Trustee or an affiliate of the
Trustee receives fees from funds for services rendered, the Trustee collects fees for
services rendered pursuant to this Trust Agreement, which fees are separate from the fees
received from such funds and services performed for such funds and pursuant to this
Trust Agreement may at times duplicate those provided to such funds by the Trustee or
an affiliate of the Trustee.
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8. "State Obligations", which means:
A. Direct general obligations of any state of the United
States of America or any subdivision or agency thereof to which is pledged the
full faith and credit of a state, the unsecured general obligation debt of which is
rated "A3" by Moody's and "A" by S&P, or higher, or any obligation fully and
unconditionally guaranteed by any state, subdivision or agency whose unsecured
general obligation debt is so rated;
B. Direct general short-term obligations of any state
agency or subdivision or agency thereof described in (A) above and rated "A-1+"
or better by S&P and "MIG-1" by Moody's and
C. Special Revenue Bonds (as defined in the United
States Bankruptcy Code) of any state, state agency or subdivision described in (B)
above and rated "AA-" or better by S&P and "Aa-3" or better by Moody's.
9. Pre-refunded municipal obligations rated "AAA" by S& P
and "Aaa" by Moody's meeting the following requirements:
A. The municipal obligations are not subj ect to
redemption prior to maturity or the trustee for the municipal obligations has been
given irrevocable instructions concerning their call and redemption and the issuer
of the municipal obligations has covenanted not to redeem such municipal
obligations other than as set forth in such instructions;
B. The municipal obligations are secured by cash or
United States Treasury Obligations which may be applied only to payment of the
principal of, interest and premium on such municipal obligations;
C. The principal of and interest on the United States
Treasury Obligations (plus any cash in the escrow) has been verified by the report
of independent certified public accountants to be sufficient to pay in full all
principal of, interest, and premium, if any, due and to become due on the
municipal obligations ("Verification");
D. The cash or United States Treasury Obligations
serving as security for the municipal obligations are held by an escrow agent or
trustee in trust for owners of the municipal obligations;
E. No substitution of a United States Treasury
Obligation shall be permitted except with another United States Treasury
Obligation and upon delivery of a new Verification and
F. The cash or United States Treasury Obligations are
not available to satisfy any other claims, including those by or against the trustee
or escrow agent.
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10. Repurchase agreements: With any domestic bank, or
domestic branch of a foreign bank, the long term debt of which is rated at least "A-" by
S&P and "A-3" by Moody's; or any broker-dealer with "retail customers" or a related
affiliate thereof which broker-dealer has, or the parent company (which guarantees the
provider) of which has, long-term debt rated at least "A-" by S&P and "A-3" by Moody's,
which broker-dealer falls under the jurisdiction of the Securities Investors Protection
Corporation; or any other entity rated "A-" or better by S&P and "A-3" for better by
Moody's (each a "Provider"), provided that:
A. Permitted collateral shall include U.S. Treasury
Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no
collateralized mortgage obligations shall be permitted for these providers), and
collateral levels must be at least 102% of the total principal when the collateral
type is U.S. Treasury Obligations, 103% of the total principal when the collateral
type is GNMA's and 104% of the total principal when the collateral type is
FNMA and FHLMC ("Collateral");
B. The Trustee or a third party acting solely as agent
therefore or for the Town (the "Custodian") has possession of the Collateral or the
Collateral has been transferred to the Custodian in accordance with applicable
state and federal laws (other than by means of entries on the transferor's books)
and such Collateral shall be marked to market;
C. The Collateral shall be marked to market on a daily
basis and the Provider or the Custodian shall send monthly reports to the Trustee,
the Town setting forth the type of Collateral, the Collateral percentage required
for that Collateral type, the market value of the collateral on the valuation date
and the name of the Custodian holding the Collateral;
D. The repurchase agreement shall state and an opinion
of counsel shall be rendered at the time such Collateral is delivered that the
Custodian has a perfected first priority security interest in the Collateral, any
substituted Collateral and all proceeds thereof and
E. The repurchase agreement shall provide that if
during its term the Provider's rating by either Moody's or S&P is withdrawn or
suspended or falls below "A-" by S&P or "A-3" by Moody's, as appropriate, the
provider must, notify the Town and the Trustee within five (5) days of receipt of
such notice. Within ten (10) days of receipt of such notice, the Provider shall
either: provide a written guarantee acceptable to the Town, post Collateral or
assign the agreement to a Provider. If the Provider does not perform a remedy
within ten (10) Business Days, the Provider shall, at the direction of the Trustee
(who shall give such direction if so directed by the Town) repurchase all
Collateral and terminate the repurchase agreement, with no penalty or premium to
the Town or the Trustee.
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11. Investment agreements with a domestic or foreign bank or
corporation, the long-term debt of which, or, in the case of a guaranteed corporation the
long-term debt, or, in the case of a monoline financial guaranty insurance company,
claims paying ability, of the guarantor is rated at least "AA-" by S&P and "Aa3" by
Moody's (each an "Eligible Provider"); provided that:
A. Interest payments are to be made to the Trustee at
times and in amounts as necessary to pay debt service (or, if the investment
agreement is the Acquisition Fund, construction draws) on the Obligations;
B. The invested funds are available for withdrawal
without penalty or premium, at any time upon not more than seven days' prior
notice; the Trustee and the Town hereby agree to give or cause to be given notice
in accordance with the terms of the investment agreement so as to receive funds
thereunder with no penalty or premium paid;
C. The Eligible Provider shall send monthly reports to
the Trustee and the Town setting forth the balance the Town or the Trustee has
invested with the Eligible Provider and the amounts and dates of interest accrued
and paid by the Eligible Provider;
D. The investment agreement shall state that is an
unconditional and general obligation of the Eligible Provider, and is not
subordinated to any other obligation of, the provider thereof or, if the Eligible
Provider is a bank, the agreement or the opinion of counsel shall state that the
obligation of the Eligible Provider to make payments thereunder ranks pari passu
with the obligations of the Eligible Provider to its other depositors and its other
unsecured and unsubordinated creditors;
E. The Town and the Trustee shall receive an opinion
of domestic counsel to the Eligible Provider that such investment agreement is
legal, valid, binding and enforceable against the provider in accordance with its
terms;
F. The Town and the Trustee shall receive an opinion
of foreign counsel to the Eligible Provider (if applicable) that the investment
agreement has been duly authorized, executed and delivered by the Eligible
Provider and constitutes the legal, valid and binding obligation of the Eligible
Provider, enforceable against the Eligible Provider in accordance with its terms,
the choice of law of the state set forth in the investment agreement is valid under
that country's laws and a court in such country would uphold such choice of law,
and any judgment rendered by a court in the United States would be recognized
and enforceable in such country;
during its term:
G. The investment agreement shall provide that if
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(1) the Eligible Provider's rating by either S&P
or Moody's falls below "AA-" or "Aa3," the provider shall, at its option, within
ten (10) days of receipt of publication of such downgrade, either (A) provide a
written guarantee acceptable to the Town, (B) post Eligible Collateral (as
hereinafter defined) with the Town, the Custodian free and clear of any third party
liens or claims, or (C) assign the agreement to an Eligible Provider, or (D) repay
the principal of and accrued but unpaid interest on the investment;
(2) the Eligible Provider's rating by either S&P
or Moody's is withdrawn or suspended or falls below "A-" or "A-3", the Eligible
Provider must, at the direction of the issuer or the trustee (who shall give such
direction if so directed by the Town), within ten (10) days of receipt of such
direction, repay the principal of and accrued but unpaid interest on the investment,
in either case with no penalty or premium to the issuer or trustee;
H. In the event the Eligible Provider is required to
collateralize, permitted collateral shall include U. S. Treasury Obligations, or
senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage
obligations shall be permitted for these providers) and collateral levels must be
102% of the total principal when the collateral type is U.S. Treasury Obligations,
103% of the total principal when the collateral type is GNMA's and 104% of the
total principal when the collateral type is FNMA and FHLMC ("Eligible
Collateral"). In addition, the Eligible Collateral shall be marked to market on a
daily basis and the provider or Custodian shall send monthly reports to the
Trustee and the Town setting forth the type of collateral, the collateral percentage
required for that collateral type, the market value of the collateral on the valuation
date and the name of the Custodian holding the Eligible Collateral;
I. The investment agreement shall state and an
opinion of counsel shall be rendered, in the event Eligible Collateral is required to
be pledged by the Eligible Provider under the terms of the investment agreement,
at the time such Eligible Collateral is delivered, that the Custodian has a perfected
first priority security interest in the Eligible Collateral, any substituted collateral
and all proceeds thereof and
J. The investment agreement must provide that if
during its term: the Eligible Provider shall default in its payment obligations, the
Eligible Provider's obligations under the investment agreement shall, at the
direction of the Town or the Trustee (who shall give such direction if so directed
by the Town), be accelerated and amounts invested and accrued but unpaid
interest thereon shall be repaid to the Town or the Trustee, as appropriate, and the
Eligible Provider shall become insolvent, not pay its debts as they become due, be
declared or petition to be declared bankrupt, etc., the Eligible Provider's
obligations shall automatically be accelerated and amounts invested and accrued
but unpaid interest thereon shall be repaid to the Town or the Trustee, as
appropriate.
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12. Interests in the Local Government Investment Pool
established pursuant to Arizona Revised Statutes Section 35-326.
" Prior Lease means the Amended and Restated Town Lease and Series
1992 Town Lease, dated as of October 1, 1997, as amended by the First Amendment to
Amended and Restated Town Lease and Series 1992 Town Lease, dated as of January 1, 2000,
the Combined Operations Center Property Ground Lease and Second Amendment to Amended
and Restated Town Lease and Series 1992 Town Lease, dated as of April 1, 2002, and the Third
Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of
September 1, 2003, and supplemented by the First Supplement to Amended and Restated Town
Lease and Series 1992 Town Lease, dated as of February 1, 2000, the Second Supplement to
Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003,
the Third Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated
as of August 1, 2004, and the Fourth Supplement to Amended and Restated Town Lease and
Series 1992 Town Lease, dated as of August 1, 2008 by and between the Town and the Town of
Marana Municipal Property Corporation.
"Project Costs" means, with respect to the New Projects, all architectural,
engineering soils, survey, archaeology, demolition, construction management fees, development
fees, contingencies and other related costs of installation, construction and other matters
necessary for the New Projects and all costs incurred by Trustee or the Town with respect to the
transaction to which this Trust Agreement pertains.
"Purchase A�reement" means the First Purchase Agreement, dated as of
1, 2013, by and between the Trustee, as seller, and the Town, as purchaser.
"Rebate Pavment" means any payment within the meaning of Regulations
section 1.148-3(d)(1) with respect to a Nonpurpose Investment.
"Rebate Requirement" means, for each Bond Year and for the applicable
series of the Obligations, at any time the excess of the future value of all Receipts over the future
value of all Rebate Payments. For purposes of calculating the Rebate Requirement the Bond
Yield shall be used to determine the future value of Receipts and Rebate Payments in accordance
with Regulations section 1.148-3(c). The Rebate Requirement is zero for any Nonpurpose
Investment meeting the requirements of a rebate exception under section 148(�(4) of the Code or
Regulations section 1.148-7.
"Re ceipt " means any receipt within the meaning of Regulations section
1.148-3(d)(2) with respect to a Nonpurpose Investment.
"Re�ular Record Date" means the close of business on the fifteenth day of
the month preceding each Interest Payment Date.
"Re�ulations" means the sections 1.148-1 through 1.148-11 and section
1.150-1 of the regulations of the United States Department of the Treasury promulgated under
the Code, including and any amendments thereto or successor regulations.
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"Reimbursement Request Form" means the form set forth in Exhibit C
attached hereto.
"Reserve Requirement" means, at the time of the deposit to the Debt
Service Reserve Fund then required, the Maximum Annual Debt Service; provided, however,
that such amount shall not exceed the least of (a) ten percent (10%) of the net proceeds of the
Obligations at the time of original delivery, (b) the greatest amount to be paid in any subsequent
Fiscal Year with respect to the Obligations at the time of original delivery or (c) one hundred
twenty-five percent (125%) of the average annual debt service at the time of original delivery.
"Responsible Officer" means, when used with respect to the Trustee, the
president, any vice president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any senior associate, any associate or any other officer of
the Trustee within the Corporate Trust Office customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office because of such person's
knowledge of and familiarity with the particular subj ect and having direct responsibility for the
administration of this Trust Agreement.
"S&P" means Standard & Poor's Financial Services, LLC, a limited
liability company organized and existing under the laws of the State of New York, its successors
and assigns, and, if such company shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Town by notice to the Trustee.
"Securities DepositorX" means a"clearing agency" (securities depository)
registered under Section 17A of the Securities Exchange Act of 1934, as amended.
"SLGS" means Time Deposit United States Treasury Securities, State and
Local Government Series.
"Special Counsel's Opinion" means an opinion signed by an attorney or
firm of attorneys of nationally recognized standing in the field of law relating to municipal bonds
selected by the Town.
"Special Record Date" has the meaning provided in Section 2.11(d).
" State " means the State of Arizona.
" State Shared Revenues means revenues from amounts allocated or
apportioned to the Town by the State, any political subdivision thereof or any other
governmental unit or agency, except the share of the Town of any taxes which by State law, rule
or regulation must be expended for other purposes, such as motor vehicle fuel taxes.
"Town Representative" means the Town Manager, the Town Finance
Director or any other person authorized by the Town Manager or the Mayor and Common
Council to act on behalf of the Town with respect to this Trust Agreement.
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Words importing persons include firms, associations and corporations, and the
singular and plural forms of words shall be deemed interchangeable wherever appropriate.
ARTICLE II
SPECIAL REVEN UE OBLIGATIONS
Section 2.1. Authorization of the Obli�ations. The Trustee is hereby
authorized and directed to execute and deliver to the original purchaser thereof, the Obligations,
evidencing proportionate ownership interests in the Payments. In no event shall the Obligations
be deemed liabilities, debts or obligations of the Trustee.
Section 2.2. Date; Interest Accrual. Each Obligation shall be dated the
Closing Date, and interest represented thereby shall be payable from such date or from the most
recent Interest Payment Date to which interest has previously been paid or made available for
payment with respect to the Outstanding Obligations.
Section 2.3. Pavment Amounts and Dates and Interest Rates The
Obligations shall be in Authorized Denominations. Principal represented by the Obligations
shall be payable on the dates and in the principal amounts, and interest represented thereby shall
be computed at the rates, as shown below:
Maturity Date Principal Interest
�July 1) Amount Rates
2014 $ , 000 %
2015 ,000
2016 ,000
2017 ,000
2018 ,000
2019 ,000
2020 ,000
2021 ,000
2022 ,000
2023 ,000
2024 ,000
2025 ,000
2026 ,000
2030 ,000
Section 2.4. Interest on Obli�ations. Interest represented by the Obligations
shall be payable semiannually on January 1 and July 1 of each year commencing 1,
20� to and including the date of payment or prepayment of the amount of principal represented
by the Obligations. Said interest shall represent the portion of the Payments designated as
interest and coming due during the six-month period preceding each Interest Payment Date with
respect to the Obligations. The proportionate share of the portion of the Payments designated as
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interest with respect to any Obligation shall be computed by multiplying the portion of Payments
designated as principal with respect to such Obligation by the rate of interest applicable to such
Obligation (on the basis of a 360-day year of twelve 30-day months).
Section 2.5. Form. The Obligations shall be in fully registered, certificated
form. The form of the Obligations shall be substantially in the form set forth in Exhibit A hereto.
Section 2.6. Execution. The Obligations shall be executed by and in the
name of the Trustee by the manual signature of an authorized representative of the Trustee. If
any representative whose signature appears on any Obligation ceases to be such representative
before the Closing Date, such signature shall nevertheless be as effective as if the representative
had remained in office until the Closing Date. Any Obligation may be executed on behalf of the
Trustee by such person as at the actual date of the execution of such Obligation shall be the
proper authorized representative of the Trustee although at the nominal date of such Obligation
such person shall not have been such authorized representative of the Trustee. No Obligation
shall be valid or become obligatory for any purpose or shall be entitled to any security or benefit
under this Trust Agreement unless and until executed and delivered by the Trustee. The
execution by the Trustee of any Obligation shall be conclusive evidence that the Obligation so
executed has been duly authorized and delivered hereunder and is entitled to the security and
benefit of this Trust Agreement.
Section 2.7. Book-Entrv Onlv Svstem. The Trustee and the Town may from
time to time enter into, and discontinue, an agreement with a Securities Depository which is the
Owner of the Obligations, to establish procedures with respect to the Obligations not inconsistent
with the provisions of this Trust Agreement; provided, that, notwithstanding any other provisions
of this Trust Agreement, any such agreement may provide that different provisions for notice to
the Securities Depository may be set forth herein and that a legend shall appear on each
Obligation so long as the Obligations are subject to such agreement. With respect to Obligations
registered in the name of a Securities Depository (or its nominee), neither the Trustee nor the
Town shall have any obligation to any of its members or participants or to any person on behalf
of whom an interest is held in the Obligations. It is hereby acknowledged that the Town and the
Trustee intend to enter into an agreement with DTC in connection with the execution and
delivery of the Obligations, and while such agreement is in effect, the procedures established
therein shall apply to the Obligations notwithstanding any other provisions of this Trust
Agreement to the contrary. As long as DTC is the Securities Depository with respect to the
Obligations, the Trustee shall be a"DTC Direct Participant." The Trustee shall not have any
responsibility or obligation to DTC participants or the persons for whom they act as nominees
with respect to the Obligations regarding accuracy of any records maintained by DTC or DTC
participants, the payments by DTC or DTC participants of any amount in respect of principal,
interest or premium, if any, represented by the Obligations, any notice which is permitted or
required to be given to or by Owners hereunder (except such notice as is required to be given by
the Town to the Trustee or to DTC), or any consent given or any other action taken by DTC as
Owner.
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Section 2.8. Application of Proceeds. The proceeds received by the Trustee
from the sale of the Obligations shall forthwith be applied by the Trustee as follows, in the
following order of priority:
(1) $ shall be deposited in the Payment Fund,
(2) $ shall be paid to Wells Fargo Bank, N.A., as the
trustee pursuant to Section 10.02 of the Trust Indenture, dated as of October 1,
1997, to discharge all of the remaining bonds secured by the Series 2003
Supplemental Trust Indenture, dated as of September 1, 2003 and
(3) the balance shall be deposited in the Acquisition Fund.
Section 2.9. Transfer and Exchange.
(a) Any Obligation may, in accordance with its terms, be transferred
upon the registration books for the Obligation required to be kept pursuant to the provisions of
Section 2.13 by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such Obligation for cancellation, accompanied by delivery of a
written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any
Obligation or Obligations shall be surrendered for transfer, the Trustee shall execute and deliver
a new Obligation or Obligations in fully registered form of the series and same payment date and
interest rate and for a like aggregate payment amount.
(b) Obligations may be exchanged at the Designated Office for a like
aggregate payment amount of Obligations of Authorized Denominations of the same series and
same payment date and interest rate. In connection with any such exchange or transfer of
Obligations, the Owner requesting such exchange or transfer shall, as a condition precedent to
the exercise of the privilege of making such exchange or transfer, remit to the Trustee an amount
sufficient to pay any tax or other governmental charge required to be paid, other than one
imposed by the Town (which will not be payable by the Trustee), or any fee or expense of the
Trustee or the Town with respect to such exchange or transfer.
(c) The Trustee may, but shall not be obligated to, exchange or
register the transfer of an Obligation (i) if principal represented by the Obligation is to be prepaid,
in whole or in part, or (ii) during a period of fifteen (15) days preceding the giving of a notice of
prepayment. If an Obligation subject to such prepayment is to be transferred after having been
selected for prepayment, any notice of prepayment which has been given to the transferor shall
be binding on the transferee and a copy of the notice of prepayment shall be delivered by the
Trustee to the transferee along with the duly registered Obligation or Obligations.
Section 2.10. Obli�ations Mutilated, Lost, Destroved or Stolen. If any
Obligation shall become mutilated, the Trustee, at the expense of the Owner of said Obligation,
shall execute and deliver a new Obligation of like series and tenor and payment date and amount
in exchange and substitution for the Obligation so mutilated, but only upon surrender to the
Trustee of the Obligation so mutilated. Any mutilated Obligation so surrendered to the Trustee
shall be cancelled by it and redelivered to, or upon the order of, the Owner of such Obligation. If
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any Obligation shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may
be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an
indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner of
such Obligation, shall execute and deliver a new Obligation of like series and tenor and payment
date and amount and numbered as the Trustee shall determine in lieu of and in substitution for
the Obligation so lost, destroyed or stolen. The Trustee may require payment of an appropriate
fee for each new Obligation delivered under this Section and of the expenses which may be
incurred by the Trustee in carrying out the duties under this Section. Any Obligation issued
under the provisions of this Section in lieu of any Obligation alleged to be lost, destroyed or
stolen shall be equally and proportionately entitled to the benefits of this Trust Agreement with
all other Obligations secured by this Trust Agreement. The Trustee shall not be required to treat
both the original Obligation and any replacement Obligation as being Outstanding for the
purpose of determining the principal amount of Obligations which may be executed and
delivered hereunder or for the purpose of determining any percentage of Obligations Outstanding
hereunder, but both the original and replacement Obligation shall be treated as one and the same.
Notwithstanding any other provision of this Section, in lieu of delivering a new Obligation for an
Obligation which has been mutilated, lost, destroyed or stolen, and which has become due, the
Trustee may make payment with respect to such Obligation upon receipt of the aforementioned
indemnity.
Section 2.11. Pavment.
(a) Payment of interest due represented by any Obligation on any
Interest Payment Date shall be made to the person appearing on the registration books for the
Obligation maintained by the Trustee as the Owner thereof as of the Regular Record Date
immediately preceding such Interest Payment Date, such interest to be paid by check mailed on
the date due by first class mail to such Owner at the address thereof as it appears on such
registration books, payable in lawful money of the United States of America.
(b) The principal and premium, if any, represented by any Obligations
shall be payable in lawful money of the United States of America upon surrender when due at
the Designated Office.
(c) Interest and, if satisfactory arrangements for surrender are made
with the Trustee, principal and premium, if any, payable to any Securities Depository or to any
Owner of $1,000,000 or more in principal amount of Obligations shall be paid by wire transfer in
immediately available funds to an account in the United States of America if the Owner makes a
written request of the Trustee at least twenty (20) days before the Interest Payment Date
specifying the account address. The notice may provide that it shall remain in effect for
subsequent payments until otherwise requested in a subsequent written notice.
(d) Any interest represented by any Obligation which is payable on,
but is not punctually paid or duly provided for on, any Interest Payment Date ("Defaulted
Interest") shall forthwith cease to be payable to the Owner on the relevant Regular Record Date
solely by virtue of such Owner having been such Owner. Such Defaulted Interest shall
thereupon be paid, together with interest thereon at the same rate per annum as such Defaulted
Interest, by the Trustee (out of funds provided to it by the Town) to the persons in whose names
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such Obligations are registered at the close of business on a special record date for the payment
of such portion of Defaulted Interest as may then be paid from the sources herein provided (the
"Special Record Date"). When the Trustee has funds available to pay the Defaulted Interest and
interest thereon, the Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest and interest thereon which shall be not more than fifteen (15) nor less than ten (10) days
prior to the date of the proposed payment by the Trustee. The Trustee shall promptly cause
notice of the proposed payment of such Defaulted Interest and interest thereon and the Special
Record Date therefor to be mailed, first class postage prepaid, to each Owner of an Obligation at
his address as it appears in the registration books by the Trustee for the Obligation not less than
ten (10) days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and interest thereon and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest and interest thereon shall be paid to the persons in whose
names the Obligation are registered on such Special Record Date.
Section 2.12. Execution of Documents and Proof of Ownershib.
(a) Any request, direction, consent, revocation of consent or other
instrument in writing required or permitted by this Trust Agreement to be signed or executed by
Obligation Owners may be in any number of concurrent instruments of similar tenor, and may be
signed or executed by such Owners in person or by their attorneys or agents appointed by an
instrument in writing for that purpose, or by any bank, trust company or other depository for
such Obligations. Proof of the execution of any such instrument, or of any instrument appointing
any such attorney or agent, and of the ownership of Obligations shall be sufficient for any
purpose of this Trust Agreement (except as otherwise herein provided), if made in the following
manner:
(1) The fact and date of the execution by any Owner or the
attorney or agent thereof of any such instrument and of any instrument appointing any
such attorney or agent, may be proved by a certificate, which need not be acknowledged
or verified, of an officer of any bank or trust company located within the United States of
America, or of any notary public, or other officer authorized to take acknowledgments of
deeds to be recorded in such jurisdictions, that the persons signing such instruments
acknowledged the execution thereof. Where any such instrument is executed by an
officer of a corporation or association or a member of a partnership on behalf of such
corporation, association or partnership, such certificate shall also constitute sufficient
proof of his authority.
(2) The fact of the ownership of Obligations by any person and
the amount, the payment date and the numbers of such Obligations and the date of his
holding the same be proved on the registration books maintained pursuant to Section 2.13.
(b) Nothing contained in this Article II shall be construed as limiting
the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the
matters herein stated which the Trustee may deem sufficient. Any request or consent of the
Owner of any Obligation shall bind every future Owner of the same Obligation in respect of
anything done or suffered to be done by the Trustee in pursuance of such request or consent.
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Section 2.13. Obli�ation Re�ister. The Trustee will keep or cause to be kept,
at the Designated Office, sufficient books for the registration and transfer of each series of the
Obligations which shall at all times during regular business hours on any Business Day be open
to inspection by the Town and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on said books, Obligations as hereinbefore provided.
Section 2.14. Pavment of Unclaimed Amounts. In the event any check for
payment of interest represented by an Obligation is returned to the Trustee unendorsed or is not
presented for payment within two (2) years from its payment date or any Obligation is not
presented for payment of principal when due, including because of prepayment, if funds
sufficient to pay such interest or principal due upon such Obligation shall have been made
available to the Trustee for the benefit of the Owner thereof, it shall be the duty of the Trustee to
hold such funds, without liability for interest thereon, for the benefit of the Owner of such
Obligation who shall thereafter be restricted exclusively to such funds for any claim of whatever
nature relating to such Obligation or amounts due thereunder. The obligation of the Trustee to
hold such funds shall continue for two years and six months (subject to applicable escheat laws)
following the date on which such interest or principal payment became due, whether on the date
due or the date fixed for prepayment, or otherwise, at which time the Trustee shall surrender such
unclaimed funds so held to the Town, whereupon any claim of whatever nature by the Owner of
such Obligation arising under such Obligation shall be made upon the Town.
ARTICLE III
APPLICATION OF PROCEEDS RECENED BY TRUSTEE;
ACQUISITION FUND
Section 3.1. Establishment and A�lication of Acquisition Fund.
(a) The Trustee shall establish a special trust fund designated as the
"Town of Marana Series 2013 Acquisition Fund" (herein referred to as the "Acquisition Fund"),
shall keep such fund separate and apart from all other funds and moneys held by it and shall
administer such fund as provided in this Trust Agreement.
(b) (1) Upon receipt of a duly executed, applicable Payment Request
Form, the Trustee shall remit to the payee designated in the Payment Request Form, the amount
requested to be paid in such Payment Request Form for Project Costs within three (3) Business
Days following submission of such Payment Request Form. Notwithstanding the foregoing, the
Trustee shall apply moneys on deposit in the Acquisition Fund to reimburse the Town for any
Project Costs with respect to the Projects incurred or advanced by the Town within three (3)
Business Days of receipt of a duly executed Reimbursement Request Form.
(2) On the Completion Date, the Trustee shall transfer any
remaining amounts in the Acquisition Fund to the Payment Fund to be applied o� to the
Payments due from the Town on the next succeeding Interest Payment Date and the Acquisition
Fund shall be closed.
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(3) Any amount remaining in the Acquisition Fund upon the
occurrence of an Event of Default shall not be disbursed as provided in this Section, but shall be
immediately transferred to the Payment Fund and used o� to pay principal and interest
represented by the Obligations.
ARTICLE IV
PREPAYMENT OF OBLIGATIONS
Section 4.1. Prepavment Provisions.
(a) Principal represented by the Obligations payable before or on July
1, 2023, is not subject to prepayment. Principal represented by the Obligations payable on or
after July 1, 2024, is subject to prepayment in such order and from such principal amount
payable selected by the Town and by lot within such principal amount by such methods as may
be selected by the Trustee (or if held in book-entry form in any manner acceptable to DTC) from
prepayments made by the Town pursuant to Section 7 of the Purchase Agreement, in whole or in
part on any date on or after July 1, 2023, at a price equal to the principal amount thereof to be
prepaid, together with accrued interest to the date fixed for prepayment, but without premium.
(b) Principal represented by the Obligations payable on July 1, 20 ,
shall be prepaid on July 1 of the years indicated and in the amounts indicated at a price equal to
the amount thereof plus interest accrued to the date of prepayment, but without premium:
Year Prepaid
20
20
20
Principal Amount Prepaid
$ ,000
,000
,000
Whenever Obligations subj ect to mandatory prepayment are purchased, prepaid (other than
because of mandatory prepayment) or are delivered by the Town to the Trustee for cancellation,
the principal amount of the Obligations represented thereby so retired shall satisfy and be
credited against the mandatory prepayment therefor in any order specified by the Town.
(c) For purposes of any prepayment of less than all of the Taxed
Obligations payable in any year, the particular Taxed Bonds to be prepaid will be selected by the
Trustee on a pro rata basis.
Section 4.2. Selection of Obli�ations for Prepavment. Principal represented
by the Obligations shall be prepaid only in the amounts of $5,000 of principal represented by
each or integral multiples thereof. The Town shall, at least forty-five (45) days prior to the
prepayment date, notify the Trustee of such prepayment date and of the payment dates of the
Obligations and the payment amount of principal represented by the Obligations due on any such
payment date to be prepaid on such date. For the purposes of any prepayment of less than all of
the Obligations payable on a single payment date, if the Obligations are not held in a book-entry-
only system as described in Section 2.7, the particular Obligations or portions of Obligations
payable on the date(s) selected to be prepaid shall be selected by the Trustee by lot in accordance
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with its standard procedures not more than forty-five (45) nor less than thirty (30) days prior to
the prepayment date by such selection methods as the Trustee shall in its sole discretion deem
appropriate and fair; provided, however, that such selection methods shall provide for the
selection of Obligations or portions thereof for prepayment in principal amounts of $5,000 or
integral multiples thereof such that any $5,000 Obligation or $5,000 portion of an Obligation
payable on the date selected shall be as likely to be called for prepayment as any other such
$5,000 Obligation or $5,000 portion thereof. The Trustee shall promptly notify the Town in
writing of the Obligations so selected for prepayment, and the Town will provide the Trustee
within thirty (30) days a recomputed payment schedule for the Purchase Agreement.
Notwithstanding the foregoing the Securities Depository for Obligations held in a book-entry-
only system shall select the Obligations for prepayment from Obligations maturing in a given
year according to its stated procedures. While the Town intends that allocations be made in
accordance with the foregoing proportional provisions, the selection of Taxed Obligations for
prepayment shall be subject to practices and procedures of the Securities Depository as in effect
from time to time.
Section 4.3. Notice of Prepavment; Effect.
(a) The Trustee shall cause notice of any prepayment hereunder, other
than payment at maturity, to be mailed to the Owners of all of the Obligations to be prepaid at
the addresses appearing in the Register kept for such purpose pursuant to Section 2.13. Each
such notice shall (1) be sent no more than 60 nor less than 30 calendar days prior to the
prepayment date, (2) identify the Obligations to be prepaid (specifying the CUSIP numbers, if
any, assigned to the Obligations), (3) specify with respect to the Obligations being prepaid their
date of issue, their final payment date, their prepayment date and their prepayment price, (4) set
forth the name, address and telephone number of the person from whom information pertaining
to the prepayment may be obtained, and (5) state that on the prepayment date the Obligations to
be prepaid will be payable at the Designated Office, that from that date interest will cease to
accrue and that no representation is made as to the accuracy or correctness of the CUSIP
numbers printed therein or on the Obligations. No defect affecting any Obligation, whether in
the notice of prepayment or the delivery thereof (including any failure to mail such notice), shall
affect the validity of the prepayment proceedings for any other Obligations.
(b) If at the time of mailing of notice of an optional prepayment of
principal represented by Obligations, there has not been deposited with the Trustee moneys or
Defeasance Obligations sufficient to prepay all Obligations subj ect to such prepayment and the
requirements of (e) below are not satisfied, then such notice shall state that the prepayment is
conditional upon the deposit of moneys or Defeasance Obligations sufficient for the prepayment
with the Trustee and satisfaction of such requirements not later than the opening of business on
the prepayment date, and such notice will be of no effect and such Obligations shall not be
prepaid unless such moneys or Defeasance Obligations are so deposited and such requirements
in (e) below are met.
(c) Any notice of prepayment shall be mailed by first class mail,
postage prepaid; provided that any notice of prepayment given to any Owner of $1,000,000 or
more in aggregate principal amount of Obligations also shall be transmitted electronically. A
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certificate of the Trustee shall conclusively establish the mailing or delivery of any such notice
for all purposes.
(d) Notice having been mailed in the manner provided in (b) above,
the Obligations and portions thereof, principal which is represented thereby, shall become due
and payable on the prepayment date, and upon presentation and surrender of such Obligation at
the place or places specified in that notice, shall be paid at the prepayment price, plus interest
accrued to the prepayment date.
(e) If the money or Governmental Obligations for the prepayment of
all of the portion of principal represented by the Obligations to be prepaid, together with interest
accrued thereon to the prepayment date, is held by the Trustee on the prepayment date, so as to
be available therefor on that date, then from and after the prepayment date such principal thereof
to be prepaid shall cease to bear interest, and, the Obligations or portion thereof represented
thereby no longer shall be considered to be Outstanding hereunder. If those moneys shall not be
so available on the prepayment date, such principal shall continue to bear interest, until paid, at
the same rate as they would have borne otherwise.
(f) All moneys deposited in the Payment Fund and held by the Trustee
for the prepayment of such portions of principal represented by particular Obligations shall be
held in trust for the account of the Owners of such Obligations and shall be paid to them,
respectively, upon presentation and surrender of those Obligations.
Section 4.4. Partial Prepavment of Obli a� tion. Upon surrender of any
Obligation, the principal portion of which has been prepaid in part only, the Trustee shall execute
and deliver to the Owner thereof, at the expense of the Town, a new Obligation or Obligations of
Authorized Denominations equal in aggregate payment amount to the unpaid portion of the
Obligation surrendered and due on the same payment date.
ARTICLE V
PAYMENT FUND; DEBT SERVICE RESERVE FUND
Section 5.1. Trustee's Ri�hts in Purchase A�reement The Trustee holds in
trust hereunder all of its rights and duties in the Purchase Agreement, including but not limited to
all of the rights to receive and collect all of the Payments and all other amounts required to be
deposited in the Payment Fund and the Debt Service Reserve Fund pursuant to the Purchase
Agreement or pursuant hereto. All of the Payments and such other amounts to which the Seller
may at any time be entitled shall be paid directly to the Trustee in trust, and all of the Payments
collected or received by the Trustee shall be held by the Trustee in trust hereunder in the
Payment Fund and the Debt Service Reserve Fund for the benefit of the Owners.
Section 5.2. Establishment and A�plication of Pavment Fund.
(a) The Trustee shall establish a special trust fund designated as the
"Series 2013 Pledged Revenue Obligations Payment Fund" (herein referred to as the "Payment
Fund"). So long as any Obligations are Outstanding the Town shall have no beneficial right or
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interest in the Payment Fund or the moneys deposited therein, except only as provided in this
Trust Agreement, and such moneys shall be used and applied by the Trustee as hereinafter set
forth.
(b) Not less than ten (10) Business Days prior to each Interest
Payment Date, the Trustee shall notify the Town of the amount required to be paid, after taking
into account amounts which will be transferred to the Payment Fund in accordance herewith, on
or before such Interest Payment Date, so that a sufficient amount will then be on deposit for both
principal and interest represented by the Obligations then due. All amounts received by the
Trustee as Payments pursuant to the Purchase Agreement or as transfers pursuant hereto shall be
deposited in the Payment Fund.
(c) All amounts in the Payment Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the principal, interest and premium, if any,
represented by the Obligations as the same shall become due and payable, in accordance with the
provisions of Articles II and IV.
Section 5.3. Establishment and A�plication of Debt Service Reserve Fund.
(a) The Trustee shall establish a special trust fund designated as the
"Series 2013 Pledged Revenue Obligations Debt Service Reserve Fund" (herein referred to as
the "Debt Service Reserve Fund"). So long as any Obligations are Outstanding, the Town shall
have no beneficial right or interest in the Debt Service Reserve Fund or the moneys deposited
therein, except only as provided in this Trust Agreement, and such moneys shall be used and
applied by the Trustee as hereinafter set forth.
(b) (1) The Trustee shall deposit into the Debt Service Reserve
Fund amounts paid pursuant to Section 1 of the Purchase Agreement.
(2) Amounts in the Debt Service Reserve Fund shall be
withdrawn and transferred to the Payment Fund (i) on any payment date for the Obligations and
used solely for the purpose of paying scheduled interest or principal represented by the
Obligations in the event that no money of the Town is made available therefor pursuant to the
Purchase Agreement or (ii) otherwise for the retirement of all of the Obligations then
Outstanding.
(3) If immediately before any transfer described in Section 5.3
the amount in the Debt Service Reserve Fund exceeds an amount equal to the Reserve
Requirement and if the Town is not then in default under the Purchase Agreement, the Trustee
shall transfer the amount to the Payment Fund.
Section 5.4. Transfers of Investment Earnin�s to Pavment Fund With the
same limitation described in Section 3.1(b)(3), except as otherwise directed by the Town, the
Trustee shall, on or before the next Interest Payment Date occurring on July 1, transfer any
income or profit on the investment of moneys in the funds hereunder to the Payment Fund.
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Section 5.5. Sur lus. Any surplus remaining in any of the funds created
hereunder, after prepayment and payment or provision for prepayment and payment of all
Obligations, including accrued interest and prepayment premium, if any, and payment of any
applicable fees, expenses or indemnities to the Trustee, or provision for such prepayment and
payment having been made to the satisfaction of the Trustee, shall be withdrawn by the Trustee
and remitted to the Town. Amounts held in the Acquisition Fund shall not be used for such
purpose without a Special Counsel's Opinion that such action shall not adversely affect the
Direct Payments.
ARTICLE VI
MONEYS 1N FUNDS; 1NVESTMENT; CERTAIN TAX COVENANTS
Section 6.1. Held in Trust. The moneys and investments held by the Trustee
under this Trust Agreement are irrevocably held in trust for the benefit of the Owners of the
Obligations and for the purposes herein specified, and such moneys, and any income or interest
earned thereon, shall be expended only as provided in this Trust Agreement and shall not be
subject to levy or attachment or lien by or for the benefit of any creditor of the Town or any
Owner of the Obligations.
Section 6.2. Investments Authorized. Upon written order of the Town
Representative and subj ect to the limitations provided herein, moneys held by the Trustee
hereunder shall be invested and reinvested by the Trustee, to the maximum extent practicable in
Permitted Investments having the highest yield reasonably obtainable. The Town Representative
shall direct such investment in specific Permitted Investments. Such investments, if registrable,
shall be registered in the name of the Trustee and shall be held by the Trustee. The Trustee may
purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this
Section. Such investments and reinvestments shall be made giving full consideration to the time
at which funds are required to be available. The Trustee may act as purchaser or agent in the
making or disposing of any investment. The Trustee shall have no obligation to invest and
reinvest any cash held by it hereunder in the absence of timely and specific written direction
from the Town Representative. In no event shall the Trustee be liable for the selection of
investments. The Trustee may conclusively rely upon such written direction from the Town
Representative as to both the suitability and legality of the directed investments. The Town
acknowledges that regulations of the Comptroller of the Currency grant the Town the right to
receive brokerage confirmations of the security transactions as they occur, at no additional cost.
To the extent permitted by law, the Town specifically waives compliance with 12 Code of
Federal Regulations 12 and hereby notifies the Trustee that no brokerage confirmations need be
sent relating to the security transactions as they occur.
Section 6.3. Accountin�. The Trustee shall furnish to the Town, not less
than semiannually, an accounting (which may be in the form of its customary statement) of all
investments made by the Trustee. The Trustee shall not be responsible or liable for any loss
suffered in connection with any investment of funds made by it in accordance with Section 6.2.
Section 6.4. Allocation of Earnin�s. Any income, profit or loss on such
investments shall be deposited in or charged to the respective funds from which such investments
were made, and any interest on any deposit of funds shall be deposited in the fund from which
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such deposit was made, except as otherwise provided herein. At the direction of the Town
Representative, any such income, profit or interest shall be transferred and applied if necessary to
pay amounts due pursuant to section 148 of the Code.
Section 6.5. Valuation and Disposition of Investments. For the purpose of
determining the amount in any fund, all Permitted Investments credited to such fund shall be
valued at Market Value. The Trustee may sell or present for redemption, any Permitted
Investment so purchased by the Trustee whenever it shall be necessary in order to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to
which such Permitted Investment is credited, and the Trustee shall not be liable or responsible
for any loss resulting from such investment.
Section 6.6. Limitation of Investment Yield In the event the Town is of the
opinion that it is necessary to restrict or limit the yield on the investment of any amounts paid to
or held by the Trustee hereunder in order to avoid the Obligations, or any of them, being
considered "arbitrage bonds" within the meaning of section 148 of the Code, the Town
Representative may issue to the Trustee a written certificate to such effect (along with
appropriate instructions), in which event the Trustee will take such action as is instructed so to
restrict or limit the yield on such investment in accordance with the specific instructions
contained in such certificate, irrespective of whether the Trustee shares such opinion.
Section 6.7. Other Tax Covenants. In consideration of the acceptance and
execution of the Purchase Agreement by the Trustee and the purchase by the Owners of the Tax-
Exempt Obligations, from time to time, and in consideration of retaining the exclusion of the
portion of each Payment denominated as and comprising interest pursuant to the Purchase
Agreement and received by the Owners of the Tax-Exempt Obligations for federal income tax
purposes, the Town shall, from time to time, neither take nor fail to take any action, which action
or failure to act is within its power and authority and would result in such portion of each such
Payment becoming subject to inclusion in gross income for federal income tax purposes under
either laws existing on the date of execution of the Purchase Agreement or such laws as they
may be modified or amended or tax laws later adopted. The Town shall comply with such
requirement(s) and will take any such action(s) as are necessary to prevent such portion of each
such Payment from becoming subject to inclusion in gross income for federal income tax
purposes. Such requirements may include but are not limited to making further specific
covenants; making truthful certifications and representations and giving necessary assurances;
complying with all representations, covenants and assurances contained in certificates or
agreements required by any Special Counsel's Opinion; to pay to the United States of America
any required amounts representing rebates of arbitrage profits relating to the Obligations; filing
forms, statements and supporting documents as may be required under the federal tax laws;
limiting the term of and yield on investments made with moneys held pursuant to this Trust
Agreement and limiting the use of the proceeds of the Obligations and property financed thereby.
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ARTICLE VII
THE TRUSTEE
Section 7.1. Appointment of Trustee. The Town hereby authorizes and
directs the Trustee to, and the Trustee shall, execute and deliver the Purchase Agreement, as
Seller, and receive all moneys required to be deposited with the Trustee hereunder and shall
allocate, use and apply the same as provided in this Trust Agreement. The Town shall maintain
as the Trustee a bank or trust company with a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000), and subject to supervision or examination by federal or State
authority, so long as any of the Obligations are Outstanding. If such bank or trust company
publishes a report of condition at least annually pursuant to law or to the requirements of any
supervising or examining authority above referred to then for the purpose of this Section the
combined capital and surplus of such bank or trust company shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published.
Section 7.2. Liabilitv of Trustee; Standard of Care. Except with respect to its
authority and power generally and authorization to execute this Trust Agreement, the recitals of
facts, covenants and agreements herein, in the Purchase Agreement and in the Obligations shall
be taken as statements, covenants and agreements of the Town, and the Trustee assumes no
responsibility for the correctness of the same, or makes any representations as to the validity
hereof or sufficiency of this Trust Agreement, the Purchase Agreement or of the Obligations or
shall incur any responsibility in respect hereof or thereof, other than in connection with the duties
or obligations herein or in the Obligations assigned to or imposed upon them, respectively. Prior
to the occurrence of an Event of Default, or after the timely cure of an Event of Default, the
Trustee shall perform only such duties as are specifically set forth in this Trust Agreement and
no implied obligations or covenants should be read into this Trust Agreement against the Trustee.
After the occurrence of an Event of Default, the Trustee shall exercise such of the rights and
powers vested in it, and use the same degree of care and skill in such exercise, as a prudent
person would exercise under the circumstances in the conduct of the affairs of the Trustee.
Section 7.3. Mer�er or Consolidation. Any company into which the Trustee
may be merged or converted or with which it may be consolidated or any company resulting
from any merger, conversion or consolidation to which it shall be a party or any company to
which the Trustee may sell or transfer all or substantially all of its corporate trust business,
provided that such company shall be eligible under Section 7.1, shall be the successor to the
Trustee without the execution or filing of any paper or further act, anything herein to the contrary
notwithstanding.
Section 7.4. Protection and Ri�hts of the Trustee.
(a) The Trustee shall be protected and shall incur no liability in acting
or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver,
certificates, statements, affidavit, voucher, bond, requisition or other paper or document which it
shall in good faith believe to be genuine and to have been passed or signed by the proper board
or person or to have been prepared and furnished pursuant to any of the provisions of this Trust
Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any
statements contained or matters referred to in any such instrument, but may accept and rely upon
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the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall
not be bound to recognize any person as an Owner of any Obligation or to take any action at his
request unless such Obligation shall be deposited with the Trustee and satisfactory evidence of
the ownership of such Obligation shall be furnished to the Trustee. The Trustee may consult
with counsel with regard to legal questions, and the advice or opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken or suffered by it
hereunder in good faith in accordance therewith.
(b) Whenever in the administration of its duties under this Trust
Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) shall be deemed to be conclusively proved
and established by the certificate of the Town Representative and such certificate shall be full
warranty to the Trustee for any action taken or suffered under the provisions of this Trust
Agreement upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept
other evidence of such matter or may require such additional evidence as to it may seem
reasonable.
(c) The Trustee may become the Owner of the Obligations with the
same rights it would have if it were not Trustee; may acquire and dispose of other bonds or
evidence of indebtedness of the Town with the same rights it would have if it were not the
Trustee and may act as a depository for and permit any of its officers or directors to act as a
member of, or in any other capacity with respect to, any committee formed to protect the rights
of Owners of Obligations, whether or not such committee shall represent the Owners of the
maj ority in principal amount of the Obligations then Outstanding.
(d) The recitals, statements and representations by the Town contained
in this Trust Agreement, the Purchase Agreement or in the Obligations shall be taken and
construed as made by and on the part of the Town and not by the Trustee, and the Trustee does
not assume, and shall not have, any responsibility or obligation for the correctness of any thereof.
(e) The Trustee may execute any of the trusts or powers hereof and
perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall
be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the
Trustee shall not be answerable for the default or misconduct of any such attorney, agent, or
receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise
of any discretion or power under this Trust Agreement or for anything whatever in connection
with the funds and accounts established hereunder, except only for its own willful misconduct or
gross negligence.
(f) No provision in this Trust Agreement shall require the Trustee to
risk or expend its own funds or otherwise incur any financial liability (including, without
limitation, any and all environmental liability) in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.
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(g) The Trustee shall not be accountable for the use or application by
the Town or any other party of any funds which the Trustee has released in accordance with the
terms of this Trust Agreement.
(h) The Trustee makes no representation or warranty, express or
implied, as to the title, value, design, compliance with specifications or legal requirements,
quality, durability, operation, condition, merchantability or fitness for any particular purpose or
fitness for the use contemplated by the Town of the Projects. In no event shall the Trustee be
liable for incidental, indirect, special or consequential damages in connection with or arising
from the Purchase Agreement or this Trust Agreement for the acquisition of the Proj ects.
(i) Notwithstanding any provision in this Trust Agreement or the
Purchase Agreement to the contrary, the Trustee shall not be required to take notice or be
deemed to have notice of an Event of Default, except an Event of Default under
Section 9(a)(i)(A) of the Purchase Agreement, unless a Responsible Officer of the Trustee has
actual notice thereof or is specifically notified in writing of such default by the Town or the
Owners of at least twenty-five percent (25%) in aggregate principal amount of all Obligations
then Outstanding.
(j) The Trustee agrees to accept and act upon instructions of directions
pursuant to this Trust Agreement sent by unsecured email, facsimile transmission or other similar
unsecured electronic methods, provided, however, that, the Trustee shall have received an
incumbency certificate listing persons designated to give such instructions or directions and
containing specimen signatures of such designated persons, which such incumbency certificate
shall be amended and replaced whenever a person is to be added or deleted from the listing. If
the Town elects to give the Trustee email or facsimile instructions (or instructions by a similar
electronic method) and the Trustee in its discretion elects to act upon such instructions, the
Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not
be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's
reliance upon and compliance with such instructions notwithstanding such instructions conflict
or are inconsistent with a subsequent written instruction. The Town agrees to assume all risks
arising out of the use of such electronic methods to submit instructions and directions to the
Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions,
and the risk of interception and misuse by third parties.
(k) The Trustee shall not be liable to the parties hereto or deemed in
breach or default hereunder if and to the extent its performance hereunder is prevented by reason
of force majeure. The term "force majeure" means an occurrence that is beyond the control of
the Trustee and could not have been avoided by exercising due care. Force majeure shall include
acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar
occurrences.
(1) The Trustee shall have no responsibility or liability with respect to
any information, statements or recitals in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of those Obligations.
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(m) The permissive right of the Trustee to do things enumerated in this
Trust Agreement shall not be construed as a duty, and the Trustee shall not be answerable for
other than its gross negligence or willful default. The Trustee shall not be required to give any
bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of
the Proj ects.
(n) Before taking any action under this Trust Agreement relating to an
Event of Default or in connection with its duties under this Trust Agreement other than making
payments of principal and interest represented by the Obligations as they become due, the
Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all
expenses to which it may be put and to protect it against all liability, including but not limited to,
any liability arising directly or indirectly under any federal, state or local statute, rule, law or
ordinance related to the protection of the environment or hazardous substances and except
liability which is adjudicated, to have resulted from its gross negligence or willful default in
connection with any action so taken.
(o) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Owners of not less
than a maj ority in aggregate principal amount of the Obligations then outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Trust Agreement.
Section 7.5. Compensation of Trustee. The Town shall from time to time,
pursuant to a fee schedule agreed to between the Town and the Trustee (which schedule may be
amended in writing), pay to the Trustee reasonable compensation for its services, including but
not limited to advances to, and reasonable fees and expenses of, independent appraisers,
accountants, consultants, counsel, agents and attorneys-at-law or other experts employed by it in
the exercise and performance of its powers and duties hereunder. When the Trustee incurs
expenses or renders services after the occurrence of an Event of Default, such expenses and the
compensation for such services are intended to constitute expenses of administration under any
federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor
relief law.
Section 7.6. Removal and Resi�nation of Trustee
(a) The Town (but only if no Event of Default has occurred and is
continuing) or the Owners of a maj ority in aggregate principal amount of all Obligations
Outstanding, at any time upon thirty (30) days' prior written notice, and for any reason, may
remove the Trustee and any successor thereto, but any such successor shall be a bank or trust
company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or examination by federal or State
authority. If such bank or trust company publishes a report of condition at least annually,
pursuant to law or the requirements of any supervising or examining authority above referred to,
then, for the purposes of this Section, the combined capital and surplus of such bank or trust
company shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
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(b) The Trustee may at any time resign by giving written notice to the
Town. Upon receiving such notice of resignation, the Town shall promptly appoint a successor
trustee by an instrument in writing; provided, however, that in the event that the Town does not
appoint a successor trustee within thirty (30) days following receipt of such notice of resignation
or its giving notice of removal, the retiring Trustee may petition the appropriate court having
jurisdiction to appoint a successor trustee. Any resignation or removal of the Trustee and
appointment of a successor trustee shall become effective upon acceptance of appointment by the
successor trustee. The Trustee and the Town shall execute any documents reasonably required to
effect the transfer of rights and obligations of the Trustee to the successor trustee subject,
however, to the terms and conditions herein set forth, including, without limitation, the right of
the predecessor Trustee to be paid and reimbursed in full for its reasonable charges and expenses
(including reasonable fees and expenses of its counsel) and the indemnification under Sections
7.4 and 10.3. Upon such acceptance, the successor trustee shall mail notice thereof to the
Owners of the Obligations at their respective addresses set forth on the registration books for the
Obligations maintained pursuant to Section 2.13.
Section 7.7. Appointment of A�ent. The Trustee may appoint an agent or
agents to exercise any of the powers, rights or remedies granted to the Trustee under this Trust
Agreement and to hold title to property or to take any other action which may be desirable or
necessary.
Section 7.8. Commingling. The Trustee may commingle any of the funds
held by it pursuant to this Trust Agreement in a separate fund or funds for investment purposes
only; provided, however, that all funds or accounts held by the Trustee hereunder shall be
accounted for separately notwithstanding such commingling by the Trustee.
Section 7.9. Records. The Trustee shall keep complete and accurate records
of all moneys received and disbursed under this Trust Agreement, which shall be available for
inspection by the Town, or any of its agents, at any time, upon reasonable prior notice, during
regular business hours. The Trustee shall provide the Town Representative with semiannual
reports of funds transactions and balances.
ARTICLE VIII
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 8.1. Amendments Permitted
(a) This Trust Agreement and the rights and obligations of the Owners
of the Obligations and the Purchase Agreement and the rights and obligations of the parties
thereto, may be modified or amended at any time by a supplemental or amending agreement
which shall become effective when the written consent of the Owners of a majority in aggregate
principal amount of all Obligations then Outstanding, exclusive of Obligations disqualified as
provided in Section 8.3, shall have been filed with the Trustee. No such modification or
amendment shall adversely affect the Direct Payments or (1) extend or have the effect of
extending the final payment of principal represented by any Obligation or reducing the interest
represented thereby or extending the time of payment of interest, or reducing the amount of
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principal thereof or reducing any premium payable upon the prepayment thereof, without the
express consent of the Owner of such Obligation, or (2) reduce or have the effect of reducing the
percentage of Obligations required for the affirmative vote or written consent to an amendment
or modification of this Trust Agreement or the Purchase Agreement, or (3) modify any of the
rights or obligations of the Trustee without its written assent thereto. Any such supplemental or
amending agreement shall become effective as provided in Section 8.2.
(b) This Trust Agreement and the rights and obligations of the Owners
of the Obligations, and the Purchase Agreement and the rights and obligations of the parties
thereto, may be modified or amended at any time by a supplemental or amending agreement,
without the consent of any such Owners, but only (1) to provide for additions or modifications to
the Projects, (2) to add to the covenants and agreements of any party, other covenants to be
observed, or to surrender any right or power herein reserved to the Trustee (for its own behal�
or the Town, (3) to secure additional revenues or provide additional security or reserves for
payment of the Obligations, (4) to comply with the requirements of any state or federal securities
laws or the Trust Indenture Act of 1939, as from time to time amended, if required by law or
regulation lawfully issued thereunder, (5) to provide for the appointment of a successor trustee
pursuant to the terms hereof, (6) to preserve the exclusion of interest represented by the
Obligations from gross income for purposes of federal or State income taxes and to preserve the
power of the Town to continue to issue bonds or incur other obligations the interest on which is
likewise exempt from federal and State income taxes, (7) to cure, correct or supplement any
ambiguous or defective provision contained herein or therein, (8) with respect to rating matters
or (9) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may
deem necessary or desirable and which shall not materially, adversely affect the interests of the
Owners of the Obligations as evidenced by a Special Counsel Opinion delivered by the Town to
the Trustee. Any such supplemental or amending agreement shall become effective upon
execution and delivery by the parties hereto or thereto as the case may be. The Trustee may rely
upon the Special Counsel's Opinion as conclusive evidence that any such supplemental or
amending agreement complies with this Section.
Owners.
Section 8.2. Procedure for Amendment With Written Consent of Obli�ation
(a) This Trust Agreement and the Purchase Agreement may be
amended by supplemental or amending agreement as provided in this Section in the event the
consent of the Owners of the Obligations is required pursuant to Section 8.1. A copy of such
supplemental or amending agreement, together with a request to the Owners of the Obligation
for their consent thereto, shall be mailed by the Trustee to each Owner of an Obligation at the
address thereof as set forth on the registration books for the Obligations maintained pursuant to
Section 2.13, but failure to mail copies of such supplemental or amending agreement and request
shall not affect the validity of the supplemental or amending agreement when assented to as
provided in this Section 8.2.
(b) Such supplemental or amending agreement shall not become
effective unless there shall be filed with the Trustee the written consent of the Owners of a
maj ority in principal amount of all Obligations then Outstanding (exclusive of Obligations
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disqualified as provided in Section 8.3) and a notice shall have been mailed as hereinafter in this
Section provided. The consent of an Owner of an Obligation shall be effective only if
accompanied by proof of ownership of the Obligations for which such consent is given, which
proof shall be such as is permitted by Section 2.12. Any such consent shall be binding upon the
Owner of the Obligation giving such consent and on any subsequent Owner (whether or not such
subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner
giving such consent or a subsequent Owner by filing such revocation with the Trustee prior to
the date when the notice hereinafter in this Section provided for has been mailed.
(c) After the Owners of the required percentage of Obligations shall
have filed their consents to such supplemental or amending agreement, the Trustee shall mail a
notice to the Owners of the Obligations in the manner hereinbefore provided in this Section for
the mailing of such supplemental or amending agreement of the notice of adoption thereof,
stating in substance that such supplemental or amending agreement has been consented to by the
Owners of the required percentage of Obligations and will be effective as provided in this
Section (but failure to mail copies of said notice shall not affect the validity of such supplemental
agreement or consents thereto). A record, consisting of the papers required by this Section to be
filed with the Trustee, shall be conclusive proof of the matters therein stated. Such supplemental
or amending agreement shall become effective upon the mailing of such last-mentioned notice,
and such supplemental or amending agreement shall be deemed conclusively binding upon the
parties hereto and the Owners of all Obligations after such filing, except in the event of a final
decree of a court of competent jurisdiction setting aside such consent in a legal action or
equitable proceeding for such purpose commenced within sixty (60) days.
Section 8.3. Disqualified Obli�ations. Obligations owned or held by or for
the account of the Town or by any person directly or indirectly controlled by, or under direct or
indirect common control with the Town (except any Obligations held in any pension or
retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent, waiver or
other action or any calculation of Outstanding Obligations provided for in this Trust Agreement
and shall not be entitled to vote upon, consent to, or take any other action provided for in this
Trust Agreement; provided, however, that in determining whether the Trustee shall be protected
in relying upon any such approval or consent of an Owner, only Obligations which a Responsible
Officer of the Trustee actually knows to be owned or held by the Town, or by any person directly
or indirectly controlled by, or under direct or indirect common. control with the Town (except
any Obligations held in any pension or retirement fund) shall be deemed not to be Outstanding
unless all Obligations are so owned, in which case such Obligations shall be considered
Outstanding for the purpose of such determination.
Section 8.4. Effect of Su�lemental Trust A�reement. From and after the
time any supplemental or amending agreement becomes effective pursuant to this Article VIII,
this Trust Agreement or the Purchase Agreement, as the case may be, shall be deemed to be
modified and amended in accordance therewith, the respective rights, duties and obligations of
the parties hereto or thereto and all Owners of Obligations Outstanding, as the case may be, shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any supplemental or amending
agreement shall be deemed to be part of the terms and conditions of this Trust Agreement or the
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Purchase Agreement, as the case may be, for any and all purposes. The Trustee may require
each Owner, before his consent provided for in this Article VIII shall be deemed effective, to
reveal whether the Obligations as to which such consent is given are disqualified as provided in
Section 8.3.
Section 8.5. Endorsement or Replacement of Obli�ations Delivered After
Amendments. The Trustee may determine that Obligations delivered after the effective date
of any action taken as provided in this Article shall bear a notation, by endorsement or otherwise,
in form approved by the Trustee, as to such action. In that case, upon demand of the Owner of
any Obligation Outstanding at such effective date and presentation of his Obligation for the
purpose at the office of the Trustee, a suitable notation shall be made on such Obligation. The
Trustee may determine that the delivery of substitute Obligations, so modified as in the opinion
of the Trustee is necessary to conform to such Obligation Owners' action, which substitute
Obligations shall thereupon be prepared, executed and delivered. In that case, upon demand of
the Owner of any Obligation then Outstanding, such substitute Obligation shall be exchanged at
the Designated Office of the Trustee, without cost to such Owner, for an Obligation of the same
character then Outstanding, upon surrender of such Outstanding Obligation.
Section 8.6. Amendatorv Endorsement of Obli�ations. The provisions of
this Article shall not prevent any Obligation Owner from accepting any amendment or
supplement as to the particular Obligations held thereby, provided that proper notation thereof is
made on such Obligations.
ARTICLE IX
COVENANTS, NOTICES
Section 9.1. Compliance With and Enforcement of Purchase A�reement.
The Town shall perform all obligations and duties imposed on it under the Purchase Agreement
and shall not do or permit anything to be done, or omit or refrain from doing anything, in any
case where any such act done or permitted to be done, or any such omission of or refraining from
action, would or might be an Event of Default. The Town, immediately upon receiving or giving
any notice, communication or other document in any way relating to or affecting any such action
will deliver the same, or a copy thereof, to the Trustee.
Section 9.2. Observance of Laws and Re�,ulations The Town shall well and
truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter
imposed on it by contract, or prescribed by any law of the United States of America, or of the
State, or by any officer, board or commission having jurisdiction or control, as a condition of the
continued enjoyment of any and every right, privilege or franchise now owned or hereafter
acquired by the Town, including its right to exist and carry on business as a political subdivision,
to the end that such rights, privileges and franchises shall be maintained and preserved, and shall
not become abandoned, forfeited or in any manner impaired.
Section 9.3. Recordation and Filin� The Town shall file this Trust
Agreement (or a memorandum thereof or a financing statement with respect thereto), and all
such documents as may be required by law (and shall take all further actions which may be
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necessary or be reasonably required by the Trustee), all in such manner, at such times and in
such places as may be required by law in order fully to preserve, protect and perfect the security
of the Trustee and the Owners.
Section 9.4. Further Assurances. The Trustee (at the reasonable request of
the Town) and the Town shall make, execute and deliver any and all such further resolutions,
instruments and assurances as may be reasonably necessary or proper to carry out the intention
or to facilitate the performance of this Trust Agreement and the Purchase Agreement and for the
better assuring and confirming unto the Owners the rights and benefits provided herein.
Section 9.5. Notification to the Town of Failure to Make Pavments The
Trustee shall notify the Town of any failure by the Town to make any Payment or other payment
required under the Purchase Agreement to be made to the Trustee, in writing and within one (1)
Business Day of any such failure. Such notice shall not be a prerequisite for the occurrence of an
Event of Default.
Section 9.6. Business Davs. Except as otherwise required herein, if this
Trust Agreement or the Purchase Agreement requires any party to act on a specific day and such
day is not a Business Day, such party need not perform such act until the next succeeding
Business Day, and such act shall be deemed to have been performed on the day required.
ARTICLE X
LINIITATION OF LIABILITY
Section 10.1. Limited Liabilitv of the Town. Except for the payment of
Payments from the Excise Tax Revenues and the State Shared Revenues when due in accordance
with the Purchase Agreement and the performance of the other covenants and agreements of the
Town contained in the Purchase Agreement and herein, the Town shall have no pecuniary
obligation or liability to any of the other parties or to the Owners with respect to this Trust
Agreement or the terms, execution, delivery or transfer of the Obligations or the distribution of
Payments to the Owners by the Trustee.
Section 10.2. No Liabilitv of the Town for Trustee Performance The Town
shall have no obligation or liability to any of the other parties or to the Owners with respect to
the performance by the Trustee of any duty imposed upon it under this Trust Agreement.
Section 10.3. Indemnification of the Trustee
(a) To the extent permitted by law, the Town shall indemnify and save
the Trustee and its officers, directors, agents and employees, harmless for, from and against all
claims, losses, costs, expenses, liability and damages, including legal fees and expenses, arising
out o£: (1) the use, maintenance, condition or management of, or from any work or thing done
on, the Proj ects or any portion thereof or interest therein by the Town; (2) any breach or default
on the part of the Town in the performance of any of its obligations under this Trust Agreement
and any other agreement made and entered into for purposes of the Proj ects or any interest
therein; (3) any act of negligence of the Town or of any of its agents, contractors, servants,
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employees or licensees with respect to the Projects; (4) any act of negligence of any assignee of,
or purchaser from, the Town or of any of its or their agents, contractors, servants, employees or
licensees with respect to the Proj ects; (5) the acquisition of the Proj ects or any interest therein;
(6) the actions of any other party, including but not limited to the operation or use of the Proj ects
or interest therein by the Town; (7) the ownership of the Proj ects or interest therein, (8) the
exercise and performance by the Trustee of its powers and duties hereunder, under the Purchase
Agreement or the Obligations or in connection with any document or transaction contemplated
herewith or therewith, or (9) any untrue statement or alleged untrue statement of any material
fact or omission or alleged omission to state a material fact necessary to make the statements
made, in light of the circumstances under which they were made, not misleading in any official
statement or other offering circular utilized in connection with the sale of the Obligations,
including the costs and expenses of defending itself against any claim of liability arising under
this Trust Agreement. No indemnification will be made under this Section or elsewhere in this
Trust Agreement for willful misconduct, gross negligence or breach of duty under this Trust
Agreement by the Trustee, or by its officers, agents, employees, successors or assigns. As
security for the payment of amounts due under Section 7.5 and this Section, the Trustee shall be
secured under this Trust Agreement by a lien prior to that for the Obligations. The obligations of
the Town hereunder for indemnification under this Section shall remain valid and binding
notwithstanding, and shall survive, the payment or prepayment of principal represented by the
Obligations or resignation or removal of the Trustee or the termination of this Trust Agreement.
(b) Promptly after determining that any event or condition which
requires or may require indemnification by the Town hereunder exists or may exist, or after
receipt of notice of the commencement of any action in respect of which indemnity may be
sought hereunder, the Trustee shall notify the Town in writing of such circumstances or action
(the "Notification"). Failure to give such notification shall not affect the right of the Trustee to
receive the indemnification provided for herewith. Upon giving of the Notification, the Trustee
shall cooperate fully with the Town in order that the Town may defend, compromise or settle any
such matters or actions which may result in payment by the Town hereunder. The Town shall
give the Trustee notice of its election within fifteen (15) days after receiving the Notification
whether the Town, at its sole cost and expense, shall represent and defend the Trustee in any
claim or action which may result in a request for indemnification hereunder. If the Town timely
gives the notice that it will represent and defend the Trustee thereafter, the Trustee shall not
settle or compromise or otherwise interfere with the defense or undertakings of the Town
hereunder. The Town shall not settle or compromise any claim or action against the Trustee
without the written approval of the Trustee, except to the extent that the Town shall pay all losses
and the Trustee shall be fully released from such claim or action. If the Town either fails to
timely give its notice or notifies the Trustee that the Town will not represent and defend the
Trustee, the Trustee may defend, settle, compromise or admit liability as it shall determine in the
reasonable exercise of its discretion, at the expense of the Town. In the event the Town is
required to and does indemnify the Trustee as herein provided, the rights of the Town shall be
subrogated to the rights of the Trustee to recover such losses or damages from any other person
or entity.
Section 10.4. Opinion of Counsel. Before being required to take any action,
the Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which
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opinion shall be made available to the other parties hereto upon request, or a verified certificate
of any party hereto, or both, concerning the proposed action. If it does so in good faith, the
Trustee shall be absolutely protected in relying thereon.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS
Section 11.1. Seller's Ri�hts held in Trust. As provided herein, the Trustee
holds in trust hereunder all of the Seller's rights in and to the Purchase Agreement, including
without limitation all of the Seller's rights to exercise such rights and remedies conferred on the
Seller pursuant to the Purchase Agreement as may be necessary or convenient to enforce
payment of the Payments and any other amounts required to be deposited in the Payment Fund
and enforcement of the pledge of the Excise Revenues and the State Shared Revenues for the
payment of the Obligations.
Section 11.2. Remedies Upon Default; No Acceleration. If an Event of
Default shall happen, then and in each and every such case during the continuance of such Event
of Default, the Trustee may, or upon request of the Owners of a maj ority in aggregate principal
amount of the Obligations then Outstanding and receiving indemnity satisfactory to it shall,
exercise one or more of the remedies granted pursuant to the Purchase Agreement; provided,
however, that notwithstanding anything herein or in the Purchase Agreement to the contrary,
there shall be no right under any circumstances to accelerate the payment dates of the
Obligations or otherwise to declare any of the Payments not then past due or in default to be
immediately due and payable.
Section 11.3. Application of Funds. All moneys received by the Trustee
pursuant to any right given or action taken pursuant to the provisions of this Article XI or
Section 9 of the Purchase Agreement shall be applied by the Trustee in the order following, in
the case of the Obligations, upon presentation of the several Obligations, and the stamping
thereon of the payment if only partially paid, or upon the surrender thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee and
then of the Obligation Owners in declaring such Event of Default, including reasonable
compensation to its or their agents, attorneys and counsel and
Second, to the payment of the whole amount then owing and unpaid with
respect to the Obligations and, with interest on the overdue principal and installments of
interest at the rate of twelve percent (12%) per annum (but such interest on overdue
installments of interest shall be paid only to the extent funds are available therefor
following payment of principal and interest and interest on overdue principal, as
aforesaid), and in case such moneys shall be insufficient to pay in full the whole amount
so owing and unpaid with respect to the Obligations, then to the payment of such
principal and interest without preference or priority of principal over interest, or of
interest over principal, or of any installment of interest over any other installment of
interest, ratably to the aggregate of such principal and interest.
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Section 11.4. Institution of Le�al Proceedin�s If one or more Events of
Default shall happen and be continuing, the Trustee in its discretion may, and upon the written
request of the Owners of a maj ority in aggregate principal amount of all Obligations then
Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or
enforce its rights or the rights of the Owners of Obligations by a suit in equity or action at law for
the specific performance of any covenant or agreement contained herein.
Section 11.5. Non-waiver. Except as otherwise provided in this Article, the
Obligation Owners have the right to institute suit to enforce and collect the Payments as provided
in the Purchase Agreement. No delay or omission of the Trustee or of any Owner of any of the
Obligations to exercise any right or power arising upon the happening of any Event of Default
shall impair any such right or power or shall be construed to be a waiver of any such Event of
Default or an acquiescence therein, and every power and remedy given by this Article to the
Trustee or the Owners of Obligations may be exercised from time to time and as often as shall be
deemed expedient by the Trustee or the Obligation Owners.
Section 11.6. Power of Trustee to Control Proceedin�s In the event that the
Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial
proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or
upon the request of the Owners of a majority in aggregate principal amount of the Obligations
then Outstanding it shall have full power, in the exercise of its discretion for the best interests of
the Owners of the Obligations, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee
shall not discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation
pending at law or in equity, without the consent of a maj ority in aggregate principal amount of
the Obligations Outstanding.
Section 11.7. Limitation on Obli�ation Owners' Ri�ht to Sue.
(a) No Owner of any Obligation issued hereunder shall have the right
to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this
Trust Agreement, unless (1) such Owner shall have previously given to the Trustee written
notice of the occurrence of an Event of Default hereunder, (2) the Owners of at least a maj ority
in aggregate principal amount of all Obligations then Outstanding shall have made written
request upon the Trustee to exercise the powers hereinbefore granted or to institute such action,
suit or proceeding in its own name; (3) said Owners shall have tendered to the Trustee indemnity
satisfactory to it against the costs, expenses, and liabilities to be incurred in compliance with
such request and (4) the Trustee shall have refused or omitted to comply with such request for a
period of sixty (60) days after such written request shall have been received by, and said tender
of indemnity shall have been made to, the Trustee.
(b) Such notification, request, tender of indemnity and refusal or
omission are hereby declared, in every case, to be conditions precedent to the exercise by any
Owner of Obligations of any remedy hereunder; it being understood and intended that no one or
more Owners of Obligations shall have any right in any manner whatever by his or their action to
enforce any right under this Trust Agreement, except in the manner herein provided, and that all
proceedings at law or in equity with respect to an Event of Default shall be instituted, had and
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maintained in the manner herein provided and for the equal benefit of all Owners of the
Outstanding Obligations.
(c) The right of any Owner of any Obligation to receive payment of
said Owner's proportionate interest in the Payments as the same become due, or to institute suit
for the enforcement of such payment, shall not be impaired or affected without the consent of
such Owner, notwithstanding the foregoing provisions of this Section or any other provision of
this Trust Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Defeasance.
(a) If and when any Outstanding Obligation or portion thereof shall be
paid and discharged in any one or more of the following ways:
(1) By paying or causing to be paid the principal, interest and
premium, if any, represented by such Obligations Outstanding as and when the same become
due and payable;
(2) By depositing with a Depository Trustee, in trust for such
purpose, at or before the payment date therefor, money which, together with the amounts then on
deposit in the Payment Fund is fully sufficient to pay or cause to be paid all principal, interest
and premium, if any, due represented by such Outstanding Obligations; or
(3) By depositing with a Depository Trustee, in trust for such
purpose, any Defeasance Obligations which are noncallable in such amount as shall be certified
to the Trustee and the Town in a report (the "Verification") by an independent firm of nationally
recognized certified public accountants acceptable to the Trustee and the Town, as being fully
sufficient, together with the interest to accrue thereon and moneys then on deposit in the
Payment Fund together with the interest to accrue thereon, to pay and discharge or cause to be
paid and discharged all principal, interest and premium, if any represented by such Obligations at
their respective payment or prepayment dates, which deposit may be made in accordance with
the provisions of Section 7 of the Purchase Agreement;
notwithstanding that any Obligations shall not have been surrendered for payment, all
obligations of the Trustee and the Town with respect to such Outstanding Obligations shall cease
and terminate, except only the obligation of the Trustee to pay or cause to be paid, from funds
deposited pursuant to subsections (2) or (3) of this Section and paid to the Trustee by the
Depository Trustee, to the Owners of the Obligations not so surrendered and paid all sums due
with respect thereto, and in the event of deposits pursuant to subsections (2) or (3), the
Obligations shall continue to represent direct and proportionate interests of the Owners thereof in
such funds.
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(b) Any funds held by the Trustee, at the time of one of the events
described in paragraph (a) of this Section, which are not required for the payment to be made to
Owners or for the payment of any other amounts due and payable by the Town hereunder or
under the Purchase Agreement, shall be paid over to the Town.
(c) Any Obligation or portion thereof in Authorized Denominations
may be paid and discharged as provided in this Section; provided however, that if principal
represented by any such Obligation is to be prepaid, notice of such prepayment shall have been
given in accordance with the provisions hereof or the Town shall have submitted to the Trustee
instructions to be irrevocable as to the date upon which such Obligation or portion thereof is to
be prepaid and as to the giving of notice of such prepayment; and provided further, that if any
such Obligation or portion thereof will not be payable within sixty (60) days of the deposit
referred to in subsections (2) or (3) of this Section, the Trustee shall give notice of such deposit
by first class mail to the Owners.
(d) No Obligation may be provided for as described in this Section if,
as a result thereof, or of any other action in connection with which the provisions for payment of
such Obligation is made, the interest payable on any Obligation is thereby made includable in
gross income for federal income tax purposes. The Trustee, the Depository Trustee, and the
Town may rely upon a Special Counsel's Opinion to the effect that the provisions of this
subsection will not be breached by so providing for the payment of any Obligations.
Section 12.2. Notices. All written notices to be given under this Trust
Agreement shall be given by overnight delivery or courier or by mail or personal delivery to the
party entitled thereto at its address set forth below, or at such address as the party may provide to
the other party in writing from time to time. Notice shall be effective upon deposit in the United
States of America mail, postage prepaid or, in the case of personal delivery, upon delivery to the
address set forth below:
If to the Town: Town of Marana, Arizona
11555 West Civic Center Drive
Marana, Arizona 85653
Attention: Town Manager
If to the Trustee: Wells Fargo Bank, N.A.
101 North First Avenue, Suite 1600
Phoenix, Arizona 85003
Attention: Corporate Trust Services (LM-AZ-X16P)
Section 12.3. Incorporation of State Statutes.
(a) As required by the provisions of Section 38-511, Arizona Revised
Statutes, notice is hereby given that the Town may, within three years after its execution, cancel
any contract, without penalty or further obligation, made by the Town if any person significantly
involved in initiating, negotiating securing drafting or creating the contract on behalf of the
Town is, at any time while the contract or any extension of the contract is in effect, an employee
or agent of any other party to the contract in any capacity or a consultant to any other party of the
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contract with respect to the subject matter of the contract. The cancellation shall be effective
when written notice is received by all other parties to the contract unless the notice specifies a
later time. The Trustee covenants not to employ as an employee, an agent or, with respect to the
subject matter of this Trust Agreement, a consultant, any person significantly involved in
initiating, negotiating securing drafting or creating this Trust Agreement on behalf of the Town
within three years from the execution of this Trust Agreement, unless a waiver of Section 38-511,
Arizona Revised Statutes, is provided by the Town. No basis exists for the Town to cancel this
Trust Agreement pursuant to Section 38-511, Arizona Revised Statutes, as of the date hereof.
(b) To the extent applicable under Section 41-440, Arizona Revised
Statutes, the Trustee shall comply with all federal immigration laws and regulations that relate to
its employees and its compliance with the "e-verify" requirements under Section 23-214(A),
Arizona Revised Statutes. The breach by the Trustee of the foregoing shall be deemed a material
breach of this Trust Agreement and may result in the termination of the services of the Trustee.
The Town retains the legal right to randomly inspect the papers and records of the Trustee to
ensure that the Trustee is complying with the above-mentioned warranty. The Trustee shall keep
such papers and records open for random inspection during normal business hours by the Trustee.
The Trustee shall cooperate with the random inspections by the Town including granting the
Town entry rights onto its property to perform such random inspections and waiving its
respective rights to keep such papers and records confidential.
(c) Pursuant to Sections 35-391.06 and 35-393.06, Arizona Revised
Statutes, the Trustee does not have a scrutinized business operation in Sudan or Iran. For the
purpose of this Section the term "scrutinized business operations" shall have the meanings set
forth in Section 35-391 and 35-393, Arizona Revised Statutes, as applicable. If the Town
determines that the Trustee submitted a false certification, the Town may impose remedies as
provided by law including terminating the services of the Trustee.
Section 12.4. Governin� Law. This Trust Agreement shall be construed and
governed in accordance with the laws of the State.
Section 12.5. Bindin� Effect and Successors. This Trust Agreement shall be
binding upon and inure to the benefit of the parties and their respective successors and assigns.
Whenever in this Trust Agreement either the Town or the Trustee is named or referred to, such
reference shall be deemed to include successors or assigns thereof, and all the covenants and
agreements in this Trust Agreement contained by or on behalf of the Town or the Trustee shall
bind and inure to the benefit of the respective successors and assigns thereof whether so
expressed or not.
Section 12.6. Execution in Counterparts. This Trust Agreement may be
executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same Trust Agreement.
Section 12.7. Destruction of Cancelled Obli at� ions. Whenever in this Trust
Agreement provision is made for the surrender to or cancellation by the Trustee and the delivery
to the Town of any Obligations, the Trustee may destroy such Obligations and deliver a
certificate of such destruction to the Town instead.
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Section 12.8. Headin�s. The headings or titles of the several Articles and
Sections hereof, and any table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not affect the meaning, construction or effect of this Trust
Agreement. All references herein to "Articles", "Sections", and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Trust Agreement; and the words "herein",
"hereofl', "hereunder" and other words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or subdivision hereof.
Section 12.9. Parties Interested Herein. Nothing in this Trust Agreement or
the Obligations, expressed or implied, is intended or shall be construed to confer upon, or to give
or grant to, any person or entity, other than the Town, the Trustee and the Owners, any legal or
equitable right, remedy or claim under or by reason of this Trust Agreement or any covenant,
condition or stipulation hereof, and all covenants, stipulations, provisions and agreements in this
Trust Agreement contained by and on behalf of the Town shall be for the sole and exclusive
benefit of the Town, the Trustee and the Owners of the Obligations.
Section 12.10. Waiver of Notice. Whenever in this Trust Agreement the giving
of notice by mail or otherwise is required, the giving of such notice may be waived in writing by
the person entitled to receive such notice and in any case the giving or receipt of such notice
shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 12.11. Severabilitv of Invalid Provisions. In case any one or more of
the provisions contained in this Trust Agreement or in the Obligations shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or
unenforceability shall not affect any other provision of this Trust Agreement, and this Trust
Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein. The parties hereto hereby declare that they would have entered into this
Trust Agreement and each and every other section, paragraph, sentence, clause or phrase hereof
and authorized the delivery of the Obligations pursuant thereto irrespective of the fact that any
one or more sections, paragraphs, sentences, clauses or phrases of this Trust Agreement may be
held illegal, invalid or unenforceable.
[Remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of the day
and year first above written.
WELLS FARGO BANK, N.A., as Trustee
By...........................................................................
PrintedName : ..................................................
Title: ..................................................
TOWN OF MARANA, ARIZONA
By..........................................................................
Mayor
ATTEST:
........................................................................
Town Clerk
330263641.1-5/13/2013
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EXHIBIT A
(Form of Obligation)
Number: R-
Principal Amount: $ ...................
Unless this Obligation is presented by an authorized representative of The Depository Trust
Company of New York, a New York corporation ("DTC"), to the Trustee (or any successor
registrar) for registration of transfer, exchange, or payment, and any Obligation issued is
registered in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), any transfer, pledge, or other use hereof for
value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof,
Cede & Co., has an interest herein. *
PLEDGED EXCISE TAX REVEN UE AND
REVENUE REFUNDING OBLIGATION, SERIES 2013
Evidencing a Proportionate Interest of the Owner
Hereof in Payments to be Made by
THE TOWN OF MARANA, ARIZONA
to
... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .....
as Trustee
Interest Rate
....%
Maturitv Date
July 1, 20....
Dated Date:
, 2013
CUSIl':
REGISTERED OWNER: CEDE & CO.*
PRINCIl'AL AMOUNT: .......................................................................................... DOLLARS
THIS IS TO CERTIFY THAT the registered owner identified above, or registered
assigns, as the registered owner of this Pledged Excise Tax Revenue and Revenue Refunding
Obligation, Series 2013 (this "Obligation") is the owner of an undivided, participatory,
proportionate interest in the right to receive certain "Payments" under and defined in that certain
First Purchase Agreement, dated as of 1, 2013 (the "Purchase Agreement"), by and
between ...................................... (the "Trustee"), and the Town of Marana, Arizona, a
municipal corporation under the laws of the State of Arizona (the "Town"), which Payments and
other rights and interests under the Purchase Agreement are held by the Trustee in trust under
that certain First Trust Agreement, dated as of , 2013 (the "Trust Agreement"), by and
* Included only while DTC is the Securities Depository.
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between the Town and the Trustee. The Trustee maintains a corporate trust office for payment
and transfer of this Obligation (the "Designated Office").
The registered owner of this Obligation is entitled to receive, subject to the terms
of the Purchase Agreement, on the payment date set forth above, the principal amount set forth
above, representing a portion of the payments due designated as principal coming due and to
receive semiannually on January 1 and July 1 of each year commencing 1, 20_ (the
"Interest Payment Dates"), until payment in full of said portion of principal or prepayment prior
thereto, the registered owner's proportionate share of the payments designated as interest coming
due during the period commencing on the last date on which interest was paid and ending on the
day prior to the Interest Payment Date or, if no interest has been paid, from the Dated Date
specified above. Said interest is the result of the multiplication of said principal by the interest
rate per annum set forth above. Interest shall be calculated on the basis of a 360-day year
composed of twelve (12) months of thirty (30) days each.
Said amounts representing the registered owner's share of the Payments
designated as interest are payable in lawful money of the United States of America by check
mailed when due by first class mail by the Trustee to the registered owner in whose name this
Obligation is registered at the close of business on the fifteenth (15th) day of the calendar month
next preceding the Interest Payment Date at the address thereof as it appears on the registration
books for the Obligations maintained by the Trustee. Said amounts representing the registered
owner's share of the Payments designated as principal are payable when due upon surrender of
this Obligation at the Designated Office. Principal, interest or premium, if any, payable to any
owner of $1,000,000 or more in principal amount of the series of obligations of which this
Obligation is a part (the "Obligations") may be paid by wire transfer in immediately available
funds to an account in the United States of America if the owner makes a written request of the
Trustee at least twenty (20) days before the date of payment specifying the account address. The
notice may provide that it shall remain in effect for subsequent payments until otherwise
requested in a subsequent written notice.
The Trustee has no obligation or liability to the registered owners of the
Obligations for the payment of interest or principal represented by the Obligations. The
Trustee's sole obligations are to administer, for the benefit of the registered owners of the
Obligations, the various funds and accounts established pursuant to the Trust Agreement. (The
recitals, statements, covenants and representations made in this Obligation shall be taken and
construed as made by and on the part of the Town, and not by the Trustee, and the Trustee does
not assume, and shall not have, any responsibility or obligation for the correctness of any thereof.)
This Obligation has been executed and delivered by the Trustee pursuant to the
terms of, and for the purposes described in, the Trust Agreement. The Town is authorized to
enter into the Purchase Agreement and the Trust Agreement under the laws of the State of
Arizona and by resolution of the Mayor and Common Council of the Town adopted
1, 2013 (the "Resolution"). Reference is hereby made to the Purchase Agreement and the Trust
Agreement (copies of which are on file at the Designated Office) for further definitions, the
terms, covenants and provisions pursuant to which the Obligations are delivered, the rights
thereunder of the registered owners of the Obligations, the terms under which the Trust
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Agreement or the Purchase Agreement may be modified or supplemented, the rights, duties and
immunities of the Trustee and the security for, and the rights and obligations of the Town under
the Purchase Agreement (including with respect to certain obligations secured on a senior lien
basis by, and to be secured on a parity with, the security for the Payments and to certain
limitations on such security), to all of the provisions of which Purchase Agreement and Trust
Agreement the registered owner of this Obligation, by acceptance hereof, assents and agrees.
(To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions
of the Trust Agreement and the Purchase Agreement may be amended by the parties thereto with
the written consent of the owners of a majority in aggregate principal represented by all
Obligations then outstanding and may be amended without such consent under certain
circumstances but in no event such that the interests of the owners of the Obligations are
adversely affected, provided that no such amendment shall impair the right of any owner to
receive in any case such owner's proportionate share of any Payment thereof in accordance with
such owner's Obligation.)
The obligation of the Town to make the Payments does not represent or constitute
a general obligation of the Town for which the Town is obligated to levy or pledge any form of
taxation nor does the obligation to make the Payments under the Purchase Agreement constitute
an indebtedness of the Town, the State of Arizona or any of its political subdivisions within the
meaning of any constitutional or statutory debt limitation or restriction or otherwise.
Neither the Trustee nor the registered owners of the Obligations shall have any
right under any circumstances to accelerate the payment date of the Obligations or otherwise
declare any of the Payments not then past due or in default to be immediately due and payable.
(This Obligation represents an interest in a limited obligation of the Town (as described herein),
and no member of the Mayor and Common Council, officer or agent, as such, past, present or
future, of the Town shall be personally liable for the payment hereo£)
The Obligations are executed and delivered only in fully registered form in
denominations of $5,000 of principal represented by the Obligations due on a specific payment
date or integral multiples thereof. The Obligations shall not be transferable or exchangeable,
except as provided in the Trust Agreement.
This Obligation may be exchanged for an Obligation or Obligations of like series
and aggregate payment amount in authorized denominations having the same maturity date and
interest rate.
This Obligation is transferable by the registered owner hereof, in person or by his
attorney duly authorized in writing, at the Designated Office, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Trust Agreement and upon
surrender and cancellation of this Obligation. Upon such transfer a new Obligation or
Obligations, of authorized denomination or denominations, for the same series and aggregate
principal amount will be delivered to the transferee in exchange therefor. The Town and the
Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes,
whether or not this Obligation shall be overdue, and the Town and the Trustee shall not be
affected by any notice to the contrary.
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The Trustee may require a registered owner, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes or governmental charges
required by law in connection with the exchange or transfer.
The Trustee may, but shall not be obligated to, exchange or register the transfer of
this Obligation (i) if this Obligation has been selected for prepayment, in whole or in part, or
(ii) during a period of fifteen (15) days preceding the giving of a notice of prepayment. If this
Obligation is transferred after having been selected for prepayment, any notice of prepayment
which has been given to the transferor shall be binding on the transferee, and a copy of the notice
of prepayment shall be delivered by the Trustee to the transferee along with the duly registered
Obligation or Obligations.
The registered owner of this Obligation shall have no right to enforce the
provisions of the Trust Agreement or the Purchase Agreement or to institute any action to
enforce the covenants thereof, or to take any action with respect to a default thereunder or
hereunder, or to institute, appear in or defend any suit or other proceedings with respect thereto,
except as provided in the Trust Agreement.
Principal represented by the Taxed Obligations payable before or on July 1, 2023,
is not subject to prepayment. Principal represented by the Taxed Obligations payable on or after
July 1, 2024, is subject to prepayment in such order and from such principal amounts payable as
may be selected by the Town, in whole or in part on any date on or after July 1, 2023, at a price
equal to the principal amount to be prepaid, together with accrued interest to the date fixed for
prepayment but without premium.
Principal represented by the Taxed Obligations payable on July 1, 2030, shall be
prepaid on July 1 of the years indicated and in the principal amounts indicated at a price equal to
the amount thereof plus interest accrued to the date of prepayment, but without premium:
Year Prepaid
20
20
20
Principal Amount Prepaid
$ ,000
,000
,000
This Obligation shall not be entitled to any security or benefit under the Trust
Agreement until executed by the Trustee.
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IN WITNESS WHEREOF, this Obligation has been executed and delivered by
the Trustee, acting pursuant to the Trust Agreement.
Date of Execution : ......................................
... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .....
as Trustee
By............................................................................
Authorized Representative
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AS SIGNNIENT
FOR VALLTE RECENED, the undersigned ...................................... (the "Transferor"),
hereby sells, assigns and transfers unto ...................................... (the "Transferee"), whose
address is ............................................................................ and whose social security number (or
other federal tax identification number) is
PLEASE 1NSERT SOCIAL SECURITY OR OTHER
IDENTIFYING N UMBER OF TRANSFEREE
......................................................................
......................................................................
the within certificate and all rights thereunder, and hereby irrevocably constitutes and
appoints ...................................... as attorney to register the transfer of the within certificate on
the books kept for registration and registration of transfer thereof, with full power of substitution
in the premises.
Date: .....................................................
SIGNATURE(S) GUARANTEED BY:
......................................................................... ............................................................................
Firm or Bank NOTICE: No transfer will be registered and no
new certificate will be issued in the name of
......................................................................... the Transferee, unless that signature(s) to this
Authorized Signature assignment correspond(s) with the name as it
appears on the face of the within certificate in
Signature(s) guaranteed by a guarantor every particular, without alteration or
institution participating in the Securities enlargement or any change whatever and
Transfer Agents Medallion Program or other name, address and the Social Security Number
guarantee program acceptable to the Trustee or or federal employee identification number of
Registrar the Transferee is supplied
The following abbreviations when used in the inscription on the face of the within certificate,
shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as j oint tenants with right of
survivorship and not as tenants in common
LTNIF GIFT/TRANS MIN ACT - ................................. Custodian for .................................
(Cust.) (Minor)
under Uniform Gifts/Transfers to Minors Act of .................................
(State)
Additional abbreviations may also be used though not in list above.
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I�►.�:II:�Y1�:�
(Form of Payment Request Form)
Pavment Request Form
Application No. ..........
The Trustee is hereby requested to pay from the "Acquisition Fund" established
by the First Trust Agreement, dated as of 1, 2013 (the "Trust Agreement"), between
the Town of Marana, Arizona (the "Town"), and ................................................, as
trustee (the "Trustee") to the person or corporation designated below as "Payee," the sum set
forth below such designation, in payment of the Project Costs (as such term and other undefined
terms used herein are defined in the Trust Agreement) with respect to the New Proj ects described
below. The amount shown below is due and payable under a purchase order or contract with
respect to such costs described below and has not formed the basis of any prior request for
payment.
Payee: ..................................................................................
Address or Wiring Instructions : .........................................................................
Amount: .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .
Description of costs or portion thereof authorized to be paid to the
Payee: ......................................................................
The Town acknowledges that it has received and inspected items related to such
costs and has found each item thereof so described to be in good condition, in conformity with
the Town's specifications and satisfactory for the Town's purposes and in accordance with the
applicable purchase order or contract. Notwithstanding anything herein to the contrary, the Town
shall not be deemed to have waived or released the Payee from any liability or obligation to the
Town in the event the Town's acknowledgment herein is discovered to be inaccurate in any
respect as to any item described above.
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By execution of this Payment Request Form, the Town requests and approves the
payment of the amount stated above to Payee set forth above.
DATED : ......................... 20....
Town Representative
Please forward payment to Payee at the following address:
:
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EXHIBIT C
(Form of Reimbursement Request Form)
Reimbursement Request Form
Application No. ..........
The Trustee is hereby requested to pay from the "Acquisition Fund" established
by the Trust Agreement, dated as of 1, 2013 (the "Trust Agreement"), between the
Town of Marana, Arizona (the "Town"), and ..................................................., as
trustee (the "Trustee"), to the Town, the sum set forth below as reimbursement of (all/a portion)
of the Project Costs (as such term and other undefined terms used herein are defined in the Trust
Agreement) with respect to the New Projects described below. Payment of the amount, shown
below was made by the Town on ........................... 20........, as evidenced
by ............................. attached hereto, as full/partial payment
of .......................................................... also attached hereto. The amount shown
below was paid by the Town and has not formed the basis of any prior request for payment.
The Town acknowledges that it has received and has inspected items related to
such costs and has found each item thereof so described to be in good condition, in conformity
with the Town's specifications and satisfactory for the Town's purposes. Notwithstanding
anything herein to the contrary, the Town shall not be deemed to have waived or released any
entity named on the attached documentation, from any liability or obligation to the Town in the
event the Town's acknowledgment herein is discovered to be inaccurate in any respect as to any
item described below.
Amount .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .
Description of costs or portion thereof for which reimbursement is hereby
requested:
DATED : ................................... 20....
................................................................................
Town Representative
Dated Received : ...................................... 20....
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TOWN OF MARANA, ARIZONA
$33,775,000
PLEDGED EXCISE TAX REVEN UE AND
REVENUE REFUNDING OBLIGATIONS,
SERIES 2013
OBLIGATION PURCHASE AGREEMENT
June 17, 2013
Mayor and Common Council
Town of Marana, Arizona
11555 West Civic Drive
Marana, Arizona 85653
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (the
"Underwriter"), acting on its own behalf, offers to enter into the following agreement (this
"Obligation Purchase Agreement") with the Town of Marana, Arizona (the "Issuer"), which,
upon the written acceptance by the Issuer of this offer, shall be binding upon the Issuer and upon
the Underwriter. This offer is made subject to the written acceptance hereof by the Issuer on or
before 5:00 p.m., Mountain Standard Time, on the date indicated above and shall be subject to
withdrawal by the Underwriter upon notice delivered to the Issuer at any time prior to the
acceptance hereof by the Issuer. (Terms not otherwise defined in this Obligation Purchase
Agreement shall have the same meanings set forth in the Official Statement (as such term is
defined herein)).
1. Purchase and Sale of the Obli at� ions.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein, the Underwriter shall purchase from
Wells Fargo, N.A., as trustee (the "Trustee"), and the Issuer shall cause the Trustee to sell and
execute and deliver to the Underwriter, all, but not less than all, of the Issuer's Pledged Excise
Tax Revenue and Revenue Refunding Obligations, Series 2013 in the principal amount of
$33,775,000.00 (the "Obligations"), at the aggregate purchase price of $ (which
represents the aggregate principal amount of the Obligations, plus [net] original issue premium
of $ , less underwriter's compensation of $ ).
(b) Inasmuch as this purchase and sale represents a negotiated
transaction, the District further acknowledges and agrees that: (i) the transaction contemplated by
this Obligation Purchase Agreement is an "arm's length," commercial transaction between the
Issuer and the Underwriter in which the Underwriter is acting solely as a principal and is not
acting as a municipal advisor, financial advisor or fiduciary to the Issuer, (ii) the Underwriter has
not assumed any advisory or fiduciary responsibility to the Issuer with respect to the transaction
TS2:dlh 1938847.2 5/10/2013
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contemplated hereby and the discussions, undertakings and procedures leading thereto
(irrespective of whether the Underwriter has provided other services or is currently providing
other services to the Issuer on other matters); (iii) the Underwriter is acting solely in its capacity
as underwriter for its own accounts and not as agent or fiduciary to the Issuer, (iv) the only
obligations the Underwriter has to the Issuer with respect to the transaction contemplated hereby
expressly are set forth in this Obligation Purchase Agreement; and (v) the Issuer has consulted its
own legal, accounting tax, and other advisors, as applicable, to the extent it has deemed
appropriate. The Issuer also hereby acknowledges that Greenberg Traurig, LLP, "Special
Counsel," has represented the Underwriter in financing transactions for other political
subdivisions and hereby waives any conflict of interest that may exist as a result of such
representation.
(c) The Obligations shall (i) be dated, (ii) mature on the dates and in
the principal amounts, (iii) bear interest at the rates payable commencing , 20 , and
semiannually thereafter on each January 1 and July 1, and (iv) be subject to redemption, all as set
forth on the respective Schedules hereto. The terms of the Obligations shall be as otherwise
described in, and shall be executed and delivered by the Trustee pursuant to, a Trust Agreement,
to be dated as of , 20_ (the "Trust Agreement"), substantially in the form
previously submitted to the Underwriter with only such changes therein as shall be mutually
agreed upon between the Underwriter and the Issuer. The Obligations represent undivided
proportionate interests in a Purchase Agreement, to be dated as of , 20_ (the
"Purchase Agreement"), between the Issuer and the Trustee, as seller.
2. Public Offerin�. The Underwriter shall make a bona fide public offering
of all of the Obligations at prices not to exceed the public offering prices set forth on the
Schedule hereto and may subsequently change such offering prices without any requirement of
prior notice. The Underwriter may offer and sell any portion of the Obligations to certain dealers
(including dealers depositing the Obligations into investment trusts) and others at prices lower
than the public offering prices stated on the Schedules hereto.
3. The Official Statement
(a) The Preliminary Official Statement, dated , 20_
(the "Preliminary Official Statement"), relating to the Obligations, including the cover page, the
inside front cover page and appendices thereto, has been prepared for use in connection with the
public offer, sale and distribution of the Obligations by the Underwriter, and the Issuer hereby
ratifies the use by the Underwriter prior to the date hereof of the Preliminary Official Statement
in connection with the public offering of the Obligations. The Issuer hereby deems, as of its
date, the Preliminary Official Statement "final" (except for permitted omissions) by the Issuer for
purposes of Section (b)(1) of Section 240.15c2-12, General Rules and Regulations, Securities
Exchange Act of 1934, as amended (the "Rule").
(b) The Issuer shall deliver or cause to be delivered to the Underwriter
within seven (7) business days after the acceptance by the Issuer of this Obligation Purchase
Agreement and, in the event the Closing (as such term is hereinafter defined) is held less than
seven (7) business days from the date hereof, upon request of the Underwriter, in sufficient time
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to accompany any confirmation requesting payment from any customers of the Underwriter, a
reasonable number of copies of the Final Official Statement, dated of even date herewith (the
"Official Statement" but if the Official Statement shall be amended prior to the date of delivery
of the Obligations, the term "Official Statement" shall refer to such document as amended),
relating to the Obligations, including the cover page, the inside front cover page and appendices
thereto, which shall be determined on behalf of the Issuer by the Finance Director of the Issuer to
be a"final official statement" for purposes of Sections (b)(3) and (4) of the Rule by his execution
thereof, the Final Official Statement to 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
Obligation Purchase Agreement and with such other changes and amendments to the date thereof
as have been accepted by the Underwriter.
(c) The Official Statement shall be prepared for use in connection with
the public offering, sale and distribution of the Obligations by the Underwriter, and the Issuer
hereby authorizes the Official Statement and the information therein contained and the Town
Documents (as such term is hereinafter defined) to be used by the Underwriter in connection
with the public offering and sale of the Obligations.
(d) The Issuer shall not adopt any amendment to the Official
Statement to which, after having been furnished with a copy, the Underwriter shall object in
writing or which shall be disapproved by herein defined Special Counsel or the Underwriter.
(e) As of the date of acceptance hereof by the Issuer and until twenty-
five (25) days after the original execution and delivery of the Obligations, the statements and
information in the Official Statement shall be, and the statements and information in the
Preliminary Official Statement, as of its date were, true, correct and complete in all material
respects, and the statements and information in the Official Statement will not, and the
statements and information in the Preliminary Official Statement as of its date did not, include
any untrue statement of a material fact or omit to state any material fact necessary in order to
make such statements and information, in light of the circumstances under which they will be or
were made, not misleading in any material respect.
(f) If, after the date of this Obligation Purchase Agreement and until
25 days after the original execution and delivery of the Obligations, any fact or event occurs
which might or would cause the Official Statement, as then supplemented or amended, to contain
any 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, not misleading or if it is necessary to amend
the Official Statement to comply with law, the Issuer shall notify the Underwriter and provide
the Underwriter with such information as it may from time to time request, and if, in the opinion
of the Underwriter such fact or event requires preparation and publication of an amendment to
the Official Statement, the Issuer shall forthwith prepare and furnish, at the expense of the Issuer
(in a form and manner approved by the Underwriter), a reasonable number of copies of
amendments to the Official Statement so that the statements in the Official Statement as so
amended will 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 not misleading or so that
the Official Statement will comply with law. If such notifications shall be subsequent to the
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Closing the Issuer shall furnish such legal opinions, certificates, instruments and other
documents as the Underwriter may deem necessary to evidence the truth and accuracy of such
amendment to the Official Statement.
4. Representations and Warranties and A�reements of the Issuer. The
undersigned, on behalf of the Issuer, but not individually, hereby represents and warrants to and
covenants with the Underwriter that:
(a) The Issuer is a municipal corporation duly incorporated and validly
existing under the laws of the State of Arizona (the "State"), and has full and legal right, power
and authority, and at the date of the Closing shall have full legal right, power and authority under
the resolution of the Mayor and Town Council of the Issuer authorizing the sale and execution
and delivery of the Obligations adopted on May 22, 2013 (the "Resolution"), (i) to enter into,
execute and deliver this Obligation Purchase Agreement; the Purchase Agreement; the Trust
Agreement; a written undertaking by the Issuer to provide ongoing disclosure about the Issuer
for the benefit of certain owners of the Obligations as required under paragraph (b)(5) of the
Rule in form and substance satisfactory to the Underwriter (the "Undertaking"), which shall be
substantially in the form described in the Official Statement, with such changes as may be agreed
to in writing by the Underwriter; a depository trust agreement, to be dated as of June 1, 2013 (the
"Depository Trust Agreement"), by and between the Issuer and [will we have a Depository
Trustee"J, as depository trustee (the "Depository Trustee") and all documents required
hereunder and thereunder to be executed and delivered by the Issuer (this Obligation Purchase
Agreement, the Purchase Agreement, the Resolution, the Trust Agreement, the Undertaking, the
Depository Trust Agreement and the other documents referred to in this clause (i) hereinafter
referred to as the "Town Documents"), (ii) to cause the sale and execution and delivery of the
Obligations to the Underwriter as provided herein, (iii) to carry out and consummate the
transactions contemplated by the Town Documents and the Official Statement, (iv) to construct
and operate the Projects (as such term is defined in the Purchase Agreement) and (v) to approve,
execute and authorize the use and distribution, as applicable, of the Preliminary Official
Statement and the Official Statement, and the Issuer has complied, and shall at the Closing be in
compliance in all respects, with all applicable provisions of law and the Town Documents as
they pertain to such transactions;
(b) By all necessary official action prior to or concurrently with the
acceptance hereof, the Mayor and Council of the Issuer have duly authorized all necessary action
to be taken for (i) the adoption of the Resolution and the execution and delivery and sale of the
Obligations, (ii) the approval, execution and delivery of, and the performance by the Issuer of the
obligations on its part, contained in the Obligations and the Town Documents and (iii) the
consummation by it of all other transactions contemplated by the Official Statement, the Town
Documents and any and all such other agreements and documents as may be required to be
executed, delivered and/or received by the Issuer in order to carry out, give effect to and
consummate the transactions contemplated herein and in the Official Statement, and the
Resolution (A) authorizes the execution and delivery of the Town Documents and the
Obligations as well as the approval, execution and authorization of the use and distribution of the
Preliminary Official Statement and the Official Statement and the selling of the Obligations to
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the Underwriter, (B) has been duly and validly adopted by the Issuer and (C) is in full force and
effect;
(c) This Obligation Purchase Agreement has been duly executed and
delivered by the Issuer, and the other of the Town Documents (when the other of the Town
Documents are executed and delivered by the other parties thereto) constitute legal, valid and
binding obligations of the Issuer, enforceable in accordance with their respective terms, subject
to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of
equity relating to or affecting the enforcement of creditors' rights; the Obligations, when
executed and delivered and paid for in accordance with the Trust Agreement and this Obligation
Purchase Agreement, shall constitute legal, valid and binding obligations entitled to the benefits
of the Trust Agreement and enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws and principles of equity relating to
or affecting the enforcement of creditors' rights and upon the execution and delivery of the
Obligations as aforesaid, the Purchase Agreement and the Trust Agreement shall provide, for the
benefit of the holders from time to time of the Obligations, the legally valid and binding pledge
of and lien they purport to create as set forth in the Purchase Agreement and the Trust
Agreement;
(d) The Issuer is not in breach of or default in any material respect
under any applicable constitutional provision, law or administrative regulation of the State or the
United States or any applicable judgment or decree or any loan agreement, indenture, bond, note,
resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is
or any of its property or assets are otherwise subject; no event has occurred and is continuing
which constitutes or with the passage of time or the giving of notice, or both, would constitute a
default or event of default by the Issuer under any of the foregoing or the Town Documents and
the execution and delivery of the Obligations, the Town Documents and the adoption of the
Resolution and compliance with the provisions on the part of the Issuer contained therein shall
not conflict with or constitute a breach of or default under any constitutional provision,
administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the Issuer is a party or to which the Issuer is or to which
any of its property or assets are otherwise subject nor shall any such execution, delivery,
adoption or compliance result in the creation or imposition of any lien, charge or other security
interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer
to be pledged to secure the Obligations or under the terms of any such law, regulation or
instrument, except as provided by the Obligations and the Town Documents;
(e) All authorizations, approvals, licenses, permits, consents, orders
and other matters of any governmental authority, legislative body, board, agency or commission
having jurisdiction of the matter which are required for the due authorization, or which would
constitute a condition precedent to or the absence of which would materially adversely affect the
due performance by the Issuer, of its obligation under the Town Documents and the Obligations
have been duly obtained or, with respect to the acquisition and construction of the Project, the
Issuer has no reason to believe they shall not be obtained, except for such approvals, consents
and orders as may be required under the "blue sky" or securities laws of any jurisdiction in
connection with the offering and sale of the Obligations and including particularly, but not by
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way of limitation, all reports required to be filed by the Issuer pursuant to Section 35-501,
Arizona Revised Statutes, as amended, and, except as otherwise indicated in the Official
Statement, the Issuer has been and is in material compliance with all prior continuing disclosure
undertakings undertaken by it pursuant to the Rule;
(f) The Obligations and the Town Documents conform to the
descriptions thereof contained in the Official Statement, and the proceeds of the sale of the
Obligations shall be applied as described in the Official Statement;
(g) There is no legislation, action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, government agency, public board or
body, pending or threatened against the Issuer (i) affecting the existence of the Issuer or the titles
of its officers to their respective offices; or (ii) affecting or seeking to prohibit, restrain or enj oin
the sale or execution and delivery of the Obligations or the levy, collection and pledge of Excise
Tax Revenues and State Shared Revenues (each as described in the Official Statement) or the
construction and operation of the Project; or (iii) in any way contesting or affecting the validity
or enforceability of the Obligations or the Town Documents, or contesting the exclusion from
gross income of interest on the Obligations for State income tax purposes or of interest on the
Obligations for federal income tax purposes; or (iv) contesting in any way the completeness or
accuracy of the Preliminary Official Statement or the Official Statement or any supplement or
amendment thereto; or (v) contesting the formation or powers of the Issuer or any authority for
the sale and execution and delivery of the Obligations, the adoption of the Resolution or the
execution and delivery of the Town Documents; or (vi) which, if decided adversely to the Issuer,
would have a materially adverse effect on the financial condition of the Issuer or (vii) is there
any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the
validity or enforceability of the Obligations or the Town Documents;
(h) The Issuer has not granted a lien on, made a pledge of or agreed to
apply the Excise Tax Revenues, State Shared Revenues and other moneys payable under the
Purchase Agreement, except as provided or permitted in the Purchase Agreement or as described
in the Official Statement;
(i) Unless the Official Statement is amended or supplemented
pursuant to paragraph (f) of Section 3 of this Obligation Purchase Agreement, at all times
subsequent to the acceptance by the Issuer hereof, during the period up to and including the date
of the Closing, the Official Statement, as of its date, did not, as of the date hereof, does not and,
hereafter, shall not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, misleading;
(j) The Issuer shall apply, or cause to be applied, the proceeds from
sale of the Obligations as provided in and subject to all of the terms and provisions of the Town
Documents and shall not take or omit to take any action which action or omission will adversely
affect exclusion from gross income for federal income tax purposes or for State income tax
purposes of the interest on the Obligations;
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(k) The Issuer shall furnish such information and execute such
instruments and take such action in cooperation with the Underwriter as the Underwriter may
reasonably request (i) to (A) qualify the Obligations for offer and sale under the "blue sky" or
other securities laws and regulations of such States and other jurisdictions in the United States as
the Underwriter may designate and (B) determine the eligibility of the Obligations for
investment under the laws of such States and other jurisdictions and (ii) to continue such qual-
ifications in effect so long as required for the distribution of the Obligations (provided, however,
that the Issuer shall not be required to qualify as a foreign corporation or to file any general or
special consents to service of process under the laws of any jurisdiction) and shall advise the
Underwriter immediately of receipt by the Issuer of any notification with respect to the
suspension of the qualification of the Obligations for sale in any jurisdiction or the initiation or
threat of any proceeding for that purpose;
(1) The audited financial statements of the Issuer contained in the
Official Statement fairly present the financial position and results of operations and changes in
fund balances of the Issuer as of the dates and for the periods therein set forth; the Issuer has no
reason to believe that such financial statements have not been prepared in accordance with
generally accepted accounting principles consistently applied; since June 30th of the last fiscal
year presented in the audited financial statements of the Issuer included in the Official Statement,
the Issuer has not incurred any material liabilities, direct or contingent, nor has there been any
material adverse change in the financial position, results of operations or condition, financial or
otherwise, of the Issuer that is not described in the Official Statement, whether or not arising
from transactions in the ordinary course of business and prior to the Closing there will be no
adverse change of a material nature in such financial position, results of operations or condition,
financial or otherwise, of the Issuer;
(m) The Issuer is not a party to any contract or agreement or subject to
any restriction, the performance of or compliance with which may have a material adverse affect
on the financial condition, operations or prospects of the Issuer or ability of the Issuer to comply
with all the requirements set forth in the Official Statement, the Resolution, the Town
Documents or the Obligations;
(n) Prior to the Closing the Issuer will not offer or issue any bonds,
notes or other obligations for borrowed money or incur any material liabilities, direct or
contingent, payable from or secured by any of the revenues or assets which will secure the
Obligations without the prior approval of the Underwriter;
(o) The representations of the Issuer set forth herein and in the
Resolution and the Town Documents are, as of the date hereof, true and correct, and between the
date hereof and the date of the Closing the Issuer shall not take any action that will cause the
representations and warranties made herein to be untrue as of the date of the Closing; and
(p) The officers and officials of the Issuer executing the Official
Statement, the Resolution, the Town Documents and the Obligations and the officers and
officials of the Issuer listed on the certificate of the Issuer to be delivered at the Closing have
been or will have been duly appointed and are or will be qualified to serve as such officers and
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officials of the Issuer, and any certificate, signed by any official of the Issuer authorized to do so
in connection with the transactions contemplated by this Obligation Purchase Agreement shall be
deemed a representation and warranty by the Issuer to the Underwriter as to the statements made
therein.
5. Closin�.
(a) At 8:00 a.m. Mountain Standard Time, on ,
20� or at such other time and date as shall have been mutually agreed upon by the Issuer and
the Underwriter (the "Closing"), the Issuer shall, subject to the terms and conditions hereof,
cause the Trustee to provide for the execution and delivery of the Obligations to or on behalf of
the Underwriter, duly executed, together with the other documents hereinafter mentioned, and
the Underwriter shall, subj ect to the terms and conditions hereof, accept such delivery and pay
the purchase price of the Obligations as set forth in Section 1 of this Obligation Purchase
Agreement by a certified or bank cashier's check or checks or wire transfer payable in
immediately available funds to the Trustee. Payment for the Obligations as aforesaid shall be
made at the offices of Special Counsel or such other place as shall have been mutually agreed
upon by the Issuer and the Underwriter.
(b) Delivery of the Obligations shall be made through The Depository
Trust Company, New York, New York, including, if provided for by the Underwriter, a"Fast
Automated Securities Transfer." The Obligations shall be delivered in definitive fully registered
form, bearing CUSIP numbers without coupons, all as provided in the Trust Agreement, and
shall be made available to the Underwriter at least one business day before the Closing for
purposes of inspection.
6. Closin� Conditions. The Underwriter has entered into this Obligation
Purchase Agreement in reliance upon the representations, warranties, covenants and agreements
of the Issuer contained herein and in reliance upon the representations, warranties, covenants and
agreements to be contained in the documents and instruments to be delivered at the Closing and
upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as
of the date of the Closing. Accordingly, the obligations of the Underwriter under this Obligation
Purchase Agreement to purchase, to accept delivery of and to pay for the Obligations shall be
conditioned upon the performance by the Issuer of its obligations to be performed hereunder and
under such documents and instruments at or prior to the Closing and shall also be subject to the
following additional conditions, including the delivery by the Issuer of such documents as are
enumerated herein, in form and substance reasonably satisfactory to the Underwriter:
(a) The representations and warranties of the Issuer and the Trustee
contained herein and in the Resolution and the Town Documents shall be true, complete and
correct on the date hereof and on and as of the date of the Closing as if made on the date of the
Closing;
(b) The Issuer and the Trustee shall have performed and complied with
all covenants, agreements and conditions required by the Town Documents to be performed or
complied with by it prior to or at the Closing;
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(c) At the date of the Closing (i) the Town Documents and the
Obligations shall be in full force and effect in the form heretofore approved by the Underwriter
and shall not have been amended or modified; (ii) the Official Statement shall not have been
amended or supplemented, except in any such case as may have been agreed to by the
Underwriter and (iii) all actions of the Issuer required to be taken by the Issuer shall be
performed in order for Special Counsel and Gust Rosenfeld, P.L.C., as counsel to the
Underwriter ("Counsel to the Underwriter") to deliver their respective opinions referred to
hereafter;
(d) At the date of the Closing, all official action of the Issuer relating
to the Obligations and the Town Documents shall be in full force and effect and shall not have
been amended, modified or supplemented;
(e) At or prior to the Closing, the Town Documents shall have been
duly executed and delivered by the Issuer and the Trustee shall have duly executed and delivered
the Obligations;
(f) At the date of the Closing, there shall not have occurred any
change or any development involving a prospective change in the Proj ect, in the condition,
financial or otherwise, or in the revenues or operations of the Issuer, from that set forth in the
Official Statement that, in the judgment of the Underwriter, is material and adverse and that
makes it, in the judgment of the Underwriter, impractical to market the Obligations on the terms
and in the manner contemplated in the Official Statement;
(g) At the date of the Closing, no "event of default" shall have
occurred or be existing under the Town Documents nor shall any event have occurred which,
with the passage of time or the giving of notice, or both, shall constitute an event of default under
the Town Documents;
(h) The Issuer shall not have failed to pay principal or interest when
due on any of its outstanding obligations for borrowed money;
(i) All steps to be taken, all instruments and other documents to be
executed and all other legal matters in connection with the transactions contemplated by this
Obligation Purchase Agreement shall be reasonably satisfactory in legal form and effect to the
Underwriter;
(j) At or prior to the Closing, the Underwriter shall have received two
copies of the transcript of all proceedings of the Issuer relating to the execution and delivery of
the Obligations, certified, as necessary, by appropriate officials of the Issuer, including but not
limited to, the following opinions, certificates and other documents:
(1) An unqualified approving opinion of Greenberg Traurig
LLP as special counsel (" Special Counsel") as to the Obligations, dated the date of the Closing,
addressed to the Issuer and substantially in the form included in the Official Statement;
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(2) The supplemental opinion of Special Counsel, dated the
date of the Closing addressed to the Underwriter and substantially in the form attached hereto as
Exhibit A;
(3) An opinion of the Town Attorney that the Town (i) is duly
incorporated and validly existing as a municipal corporation and political subdivision under the
Constitution and laws of the State of Arizona, (ii) has duly adopted the Resolution and (iii) the
adoption and approval of the Resolution and compliance with the respective provisions thereof
under the circumstances contemplated thereby does not and will not in any material respect
conflict with or constitute on the part of the Town a breach of or default under any agreement or
other instrument to which the Town is a party, ordinance, administrative regulation, court order
or consent decree to which the Town is subject;
(4) An opinion of the Town Attorney that, based on an
investigation of the records of the Superior Court of Pima County and the United States District
Court, District of Arizona, Tucson Division, there is no action, suit, proceeding inquiry or
investigation by or before any court, governmental agency, public board or body pending or, to
his knowledge (upon due inquiry), threatened (i) in any way affecting the powers of the Issuer,
the existence of the Issuer or the title to office of any of the officials of the Issuer, (ii) seeking to
restrain or enjoin the sale or execution and delivery of the Obligations, or the levy, collection and
pledge of the Excise Tax Revenues and State Shared Revenues to be levied to pay the principal
of and interest on the Obligations, (iii) in any way contesting or affecting the validity or
enforceability of the Obligations, the Town Documents or any agreements entered into in
connection therewith, (iv) contesting in any way the completeness or accuracy of the Official
Statement, (v) which may adversely affect the Issuer or its properties or (vi) questioning the
exclusion from gross income of interest on the Obligations for federal income tax purposes or for
State income tax purposes; nor, to the best knowledge of such counsel, is there any reasonable
basis therefor;
(5) An opinion of the Counsel to the Underwriter dated the
date of the Closing addressed to the Underwriter and substantially in the form attached hereto as
Exhibit B;
(6) A certificate, dated the date of Closing and signed by the
Mayor, the Town Clerk and the Finance Director of the Issuer, to the effect that to the best of
their knowledge (i) the representations and warranties of the Issuer contained herein are true and
correct in all material respects on and as of the date of the Closing with the same effects if made
on the date of the Closing (ii) there is no action, suit, proceeding inquiry or investigation by or
before any court, governmental agency, public board or body pending or threatened in any way
affecting the existence of the Issuer or the titles of its officials to their respective positions, or
seeking to restrain or to enj oin the sale or delivery of the Obligations, or the levy and collection
of the Excise Tax Revenues imposed and levied or to be imposed and levied to pay all the
principal of and interest on the Obligations, or the imposition thereof, or in any way contesting or
affecting the validity or enforceability of the Obligations or the Town Documents, or contesting
in any way the completeness or accuracy of the Official Statement or the exclusion from gross
income of interest on the Tax-Exempt Obligations for federal income tax purposes or State
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income tax purposes, or contesting the powers of the Issuer or its authority with respect to the
Obligations or the Town Documents and (iii) the Issuer has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing;
(7) A certificate, dated the date of the Closing and signed by the
Finance Director of the Issuer, to the effect that to the best of his knowledge (i) the Official
Statement does 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 light of the
circumstances under which they were made, not misleading (ii) the financial statements of the
Issuer contained in the Official Statement fairly present the financial position and results of
operations and changes in fund balances of the Issuer as of the dates and for the periods therein
set forth and the Issuer has no reason to believe that such financial statements have not been
prepared in accordance with generally accepted accounting principles consistently applied;
(iii) since June 30 of the last fiscal year presented in the audited financial statements of the Issuer
included in the Official Statement, the Issuer has not incurred any material liabilities, direct or
contingent, nor has there been any material adverse change in the result of operations or financial
condition of the Issuer that is not described in the Official Statement, whether or not arising from
transactions in the ordinary course of business, nor are there any deficits in any fund of the Issuer
except as disclosed in the Official Statement; (iv) no event affecting the Issuer has occurred since
the date of the Official Statement that should be disclosed in the Official Statement for the
purpose of which it is to be used or which it is necessary to disclose therein with respect to the
Issuer in order to make the statement or information therein in the light of the circumstances
under which they were made or set forth not misleading in any material respect; (v) the Issuer is
in compliance with the financial requirements contained in the Prior Lease as defined in the
Trust Agreement and Purchase Agreement, and other than contained in Section 1 of the Purchase
Agreement, there are no incurrence test coverage requirements applicable to the Obligations; and
(vi) the Issuer is not otherwise in default under the Prior Lease;
(8) A specimen of the Obligations;
(9) A certified copy of the Resolution;
(10) A counterpart original of the Official Statement manually
executed on behalf of the Issuer by the Finance Director of the Town;
(11) A non-arbitrage certificate with respect to the Obligations
of the Issuer in form and substance satisfactory to Special Counsel;
(12) The filing copy of the Information Return Form 8038-G
(IRS) for the Obligations and of the Report Relating to Bond and Security Issuance (Arizona
Department of Revenue) for the Obligations;
(13) An executed copy of each of the Town Documents;
(14) Certificates and receipts, dated the date of Closing, signed
by an authorized representative of the Trustee and the Depository Trustee and in form and
substance satisfactory to Special Counsel and the Underwriter;
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(15) A certificate or certificates, dated the date of the Closing,
signed by an authorized representative of the Trustee and in form and substance satisfactory to
Special Counsel and the Underwriter, in which such official to the best of his/her knowledge
after due investigation states that (i) the representations and warranties of the Trustee contained
in the Trust Agreement and the Purchase Agreement are true and correct in all material respects
as of the date of the Closing, the Trustee has duly executed and delivered the Trust Agreement
and the Purchase Agreement and the Trustee has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under the Trust Agreement and the Purchase
Agreement at or prior to the Closing and (ii) no litigation is pending or threatened against the
Trustee before any judicial, quasi judicial or administrative forum (A) to restrain or enjoin the
performance by the Trustee of its obligations and duties under the Trust Agreement and the
Purchase Agreement, (B) in any way contesting or affecting any authority for, or the validity of,
the Obligations or the applications of the proceeds of the Obligations or (C) in any way
contesting the existence or corporate trust powers of the Trustee, together with evidence of the
authority of the Trustee to execute and deliver, as applicable, the Trust Agreement, the Purchase
Agreement and the Obligations and an incumbency certificate;
(16) Such additional opinions, letters, certificates, instruments
and other comments as the Underwriter may reasonably deem necessary to satisfy conditions to
the execution and delivery of the Obligations and to evidence the truth and accuracy as of the
Closing or prior to such time, of the representations, warranties and covenants of the Issuer and
the due performance or satisfaction by the Issuer of all agreements then to be performed and all
conditions then to be satisfied by the Issuer.
(All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Obligation Purchase Agreement shall be deemed to be in compliance with the
provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter.)
If the Issuer shall be unable to satisfy the conditions to the obligations of the
Underwriter to purchase, to accept delivery of and to pay for the Obligations contained in this
Obligation Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept
delivery of and to pay for the Obligations shall be terminated for any reason permitted by this
Obligation Purchase Agreement, this Obligation Purchase Agreement shall terminate and neither
the Underwriter nor the Issuer shall be under any further obligation hereunder, except that the
respective obligations of the Issuer and the Underwriter set forth in Section 8(c) hereof shall
continue in full force and effect.
7. Termination. The Underwriter shall have the right to cancel its obligation
to purchase the Obligations if, between the date of this Obligation Purchase Agreement and the
Closing the market price or marketability of the Obligations shall be materially adversely
affected, in the sole judgment of the Underwriter, by the occurrence of any of the following:
(a) Legislation shall be enacted by or introduced in the Congress of
the United States or recommended to the Congress for passage by the President of the United
States, or the Treasury Department of the United States or the Internal Revenue Service or any
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member of the Congress or the State legislature or favorably reported for passage to either House
of the Congress by any committee of such House to which such legislation has been referred for
consideration, a decision by a court of the United States or of the State or the United States Tax
Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press
release, statement or other form of notice by or on behalf of the Treasury Department of the
United States, the Internal Revenue Service or other governmental agency shall be made or
proposed, the effect of any or all of which would be, directly or indirectly, to affect the tax status
of the Town, its securities (including the Obligations) or the interest thereon, or any tax
exemption granted or authorized by the Internal Revenue Code of 1986, as amended, or the
statutes of the State of Arizona;
(b) Legislation introduced in or enacted (or resolution passed) by the
Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an
order, ruling, regulation (final, temporary, or proposed), press release or other form of notice
issued or made by or on behalf of the Securities and Exchange Commission, or any other
governmental agency having jurisdiction of the subject matter, to the effect that obligations of
the general character of the Obligations, including any or all underlying arrangements, are not
exempt from registration under or other requirements of the 1933 Act, or that the Trust
Agreement is not exempt from qualification under or other requirements of the Trust Indenture
Act of 1939, or that the issuance, offering, or sale of obligations of the general character of the
Obligations, including any or all underlying arrangements, as contemplated hereby or by the
Official Statement or otherwise, is or would be in violation of the federal securities law as
amended and then in effect;
(c) Any state "blue sky" or securities commission or other
governmental agency or body shall have withheld registration, exemption or clearance of the
offering of the Obligations as described herein, or issued a stop order or similar ruling relating
thereto;
(d) A general suspension of trading in securities on the New York
Stock Exchange or the American Stock Exchange, the establishment of minimum prices on
either such exchange, the establishment of material restrictions (not in force as of the date
hereof) upon trading securities generally by any governmental authority or any national
securities exchange, or a general banking moratorium declared by federal, State of New York, or
State officials authorized to do so;
(e) The New York Stock Exchange or other national securities
exchange or any governmental authority, shall impose, as to the Obligations or as to obligations
of the general character of the Obligations, any material restrictions not now in force, or increase
materially those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of, the Underwriter;
(f) Any amendment to the federal or State Constitution or action by
any federal or State court, legislative body, regulatory body, or other authority materially
adversely affecting the tax status of the Issuer, its property, income securities (or interest
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thereon), or the validity or enforceability of the Issuer's pledge of any portion of the Excise Tax
Revenues or State Shared Revenues;
(g) Any event occurring or information becoming known which, in
the judgment of the Underwriter, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official Statement
contains any untrue statement of material fact or omits 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;
(h) There shall have occurred since the date of this Obligation
Purchase Agreement any materially adverse change in the affairs or financial condition of the
Issuer;
(i) 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 or escalation of hostilities or a national or international calamity or crisis,
financial or otherwise;
(j) Any fact or event shall exist or have existed that, in the
Underwriter's judgment, requires or has required an amendment of or supplement to the Official
Statement;
(k) There shall have occurred any suspension or downgrading or any
notice shall have been given of (i) any intended or potential suspension or downgrading or
(ii) any review or possible change that does not indicate a possible upgrade, in the rating
accorded any of the Issuer's obligations (including the rating to be accorded the Obligations);
(1) United States Treasury Certificate of Indebtedness, Notes or
Bonds-State and Local Government Series or acceptable open market securities shall be
unavailable for purchase and/or delivery in the amounts, maturities and prices or yields required
pursuant to the Depository Trust Agreement; or
(m) The purchase of and payment for the Obligations by the
Underwriter, or the resale of the Obligations by the Underwriter, on the terms and conditions
herein provided shall be prohibited by any applicable law, governmental authority, board, agency
or commission.
8. Expenses.
(a) The Underwriter shall be under no obligation to pay, and the Issuer
shall pay, any expenses incident to the performance of the obligations of the Issuer hereunder,
including, but not limited to (i) the cost of preparation and printing of the Obligations, the
Preliminary Official Statement, the Official Statement, the Resolution and the Town Documents
in reasonable quantities and all other documents (other than as set forth in the next succeeding
paragraph) prepared in connection with the transactions contemplated hereby, (ii) the fees and
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disbursements of Special Counsel, the Trustee, the Depository Trustee, the Verification Agent
and Counsel to the Underwriter, (iii) the fees and disbursements of any other engineers,
accountants, and other experts, consultants or advisers retained by the Issuer, (iv) the fees for
bond ratings and of DTC, and (v) reasonable miscellaneous, normally occurring "out-of-pocket"
expenses incurred by the Underwriter in connection with the sale and execution and delivery of
the Obligations.
(b) The Underwriter shall pay (i) all advertising expenses in
connection with the public offering of the Obligations and (ii) all other expenses incurred by it in
connection with the public offering of the Obligations.
(c) If this Obligation Purchase Agreement shall be terminated by the
Underwriter because of any failure or refusal on the part of the Issuer to comply with the terms
or to fulfill any of the conditions of this Obligation Purchase Agreement or if for any reason the
Issuer shall be unable to perform its obligations under this Obligation Purchase Agreement, the
Issuer shall reimburse the Underwriter for all "out-of-pocket" expenses (including the fees and
disbursements of Counsel to the Underwriter) reasonably incurred by the Underwriter in
connection with this Obligation Purchase Agreement or the offering contemplated hereunder.
9. Notices. Any notice or other communication to be given to the Issuer
under this Obligation Purchase Agreement may be given by delivering the same in writing at the
address set forth on the first page of this Obligation Purchase Agreement to the attention of the
Finance Director, and any notice or other communication to be given to the Underwriter under
this Obligation Purchase Agreement may be given by delivering the same in writing to Stifel,
Nicolaus & Company, Incorporated, Suite 280, 2555 East Camelback Road, Phoenix, Arizona
85016, Attention: B. Mark Reader, Managing Director.
10. Parties in Interest. This Obligation Purchase Agreement as heretofore
specified shall constitute the entire agreement between us and is made solely for the benefit of
the Issuer and the Underwriter (including successors or assigns of the Underwriter) and no other
person shall acquire or have any right hereunder or by virtue hereof. This Obligation Purchase
Agreement may not be assigned by the Issuer. All of the representations, warranties and
agreements of the Issuer contained in this Obligation Purchase Agreement shall remain operative
and in full force and effect, regardless of (i) any investigations made by or on behalf of the
Underwriter, (ii) delivery of and payment for the Obligations pursuant to this Obligation
Purchase Agreement and (iii) any termination of this Obligation Purchase Agreement.
11. Effectiveness. This Obligation Purchase Agreement shall become effective
upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such
acceptance.
12. Choice of Law. This Obligation Purchase Agreement shall be governed
by and construed in accordance with the law of the State of Arizona.
13. Severabilitv. If any provision of this Obligation Purchase Agreement shall
be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in
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any particular case in any jurisdiction or jurisdictions or in all jurisdictions because it conflicts
with any provisions of any Constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid, inoperative
or unenforceable in any other case or circumstance or of rendering any other provision or
provisions of this Obligation Purchase Agreement invalid, inoperative or unenforceable to any
extent whatever.
14. Business Dav. For purposes of this Obligation Purchase Agreement,
"business day" means any day on which the New York Stock Exchange is open for trading.
15. Section Headin�s. Section headings have been inserted in this Obligation
Purchase Agreement as a matter of convenience of reference only, and it is agreed that such
section headings are not a part of this Obligation Purchase Agreement and will not be used in the
interpretation of any provisions of this Obligation Purchase Agreement.
16. Counterparts. This Obligation Purchase Agreement may be executed in
several counterparts each of which shall be regarded as an original (with the same effect as if the
signatures thereto and hereto were upon the same document) and all of which shall constitute one
and the same document.
17. Notice Concernin� Cancellation of Contracts. 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 Issuer) or any department or agency of either
may, within three (3) years after its execution, cancel any contract, without penalty or further
obligation, made by the State, its political subdivisions or any of the departments or agencies of
either if any person significantly involved 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, any time while the contract or any extension of the contract is in effect, an employee
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 executive 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 Issuer 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 Obligation Purchase Agreement and covenants that it shall take no action which would
result in a violation of such Section.
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If you agree with the foregoing, please sign the enclosed counterpart of this
Obligation Purchase Agreement and return it to the Underwriter. This Obligation Purchase
Agreement shall become a binding agreement between you and the Underwriter when at least the
counterpart of this letter shall have been signed by or on behalf of each of the parties hereto.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By
Name: B. Mark Reader
Title: Managing Director
Time of Execution: , 2013 at PM (MST)
THE TOWN OF MARANA, ARIZONA
By.
Printed Name:
Title:
ATTEST:
Town Clerk
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SCHEDULE A
TOWN OF MARANA, ARIZONA
$33,775,000
PLEDGED EXCISE TAX REVEN UE AND
REVENUE REFUNDING OBLIGATIONS,
SERIES 2013
Maturity Date
Jul 1
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$
Dated the Date of Their Initial Authentication and Delivery
Principal
Amount
Interest
Rate
% Term Obligation due July 1, 2030 — Yield
%
Yield
Optional Prepayment of Obligations. The principal represented by the Obligations maturing on
or before July 1, 2023 are not subject to call for prepayment prior to maturity. The Obligations
maturing on or after July 1, 2024 are subj ect to call for prepayment prior to maturity, at the
option of the Town, in whole or in part, on any date on or after July 1, 2023, by the payment of a
prepayment price equal to the principal amount of each Obligation called for prepayment plus
accrued interest to the date fixed for prepayment, but without premium.
Mandatory Prepayment of the Obligations. The Obligations maturing on July 1, 2030 (the
"Term Obligation") will be subject to mandatory prepayment and will be prepaid on July 1 of the
respective years set forth below and in the amounts set forth below, by payment of a prepayment
price equal to the principal amount of the Term Obligation then called for prepayment plus the
interest accrued to the date fixed for prepayment, but without premium, as follows:
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Term Obligation due July 1, 2030*
Prepayment
Date Principal
(Julv 1) Amount
20
20
20
20
20
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EXHIBIT A
[Letterhead of Greenberg Traurig, LLP]
[Form of Supplemental Opinion]
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Stifel, Nicolaus & Company, Incorporated
Page 2
I � I: :
[Letterhead of Gust Rosenfeld, P.L.C.]
20
Stifel, Nicolaus & Company, Incorporated
Phoenix, Arizona
Re: Town of Marana, Arizona Pledged Excise Tax Revenue and Revenue
Refunding Obligations, Series 2013
This opinion is rendered pursuant to the Obligation Purchase Agreement, dated
, 20_ (the "Obligation Purchase Agreement"), between you and the Town
of Marana, Arizona (the "Town"), relating to your purchase of the Town of Marana, Arizona
$33,775,000 Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013
dated even date herewith (the "Obligations"), and as counsel to you solely for your use in
connection with your purchase of the Obligations. For such purpose, we have examined the
Official Statement, dated , 20_ (the "Official Statement"), relating to the
Obligations as well as certain other documents, including certificates, opinions and records, and
made certain investigations concerning applicable laws as we considered to be appropriate for
the purpose of rendering this opinion. For such purpose, we have assumed the authenticity of all
original documents and the conformity to original documents of all copies of documents, the
accuracy and completeness of all certificates and records as to factual matters, the authenticity of
all signatures on documents and the legal capacity of signers to execute the documents. In
addition to reviewing the documents referenced above, we have also participated in telephone
conferences with your representatives and representatives of the Town and Special Counsel
concerning the contents of the Official Statement and related matters. We have also relied upon
certifications of the Town, the opinion of , as the Town Attorney, and the
opinions of Special Counsel delivered on this date in connection with the execution and delivery
of the Obligations.
While we have not undertaken to verify independently, and are not expressing any
view upon, and do not assume responsibility for, the accuracy, completeness or fairness of the
contents of the Official Statement, we are not aware at present of any information that came to
our attention in the course of our performance of the services referred to herein that leads us to
believe that the Official Statement, at its date or as of this date, contained or contains,
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Stifel, Nicolaus & Company, Incorporated
Page 3
respectively, any untrue statement of a material fact or omitted or omits, respectively, to state
any material fact necessary in order to make the statements made in the Official Statement, in
light of the circumstances under which they were made, not misleading. We express no view as
to (a) any information included in Appendix C to the Official Statement or under the heading
"LITIGATION" in the Official Statement, (b) any information relating to The Depository Trust
Company, New York, New York, or the status of the interest to be paid on the Obligations for
federal or State income tax purposes or (c) any financial, technical or statistical data included or
incorporated by reference in the Official Statement.
This opinion is furnished solely for your benefit and may not, without our prior
express written consent, be relied upon by any other person or entity.
Respectfully submitted,
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ll 555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Frank Cassidy, Town Attorney
Strategic Plan Focus Area:
Not Applicable
Item B 1
Subject: Resolution No. SSCFD 2013-02: [Marana Town Council acting as the Saguaro Springs Community
Facilities District Board of Directors]: A resolution of the Board of Directors of Saguaro Springs
Community Facilities District approving and authorizing the execution and delivery of a District
Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District)
Discussion:
This item seeks approval of the same District Development, Financing Participation and Intergovernmental
Agreement for Saguaro Springs Community Facilities District that is the subject a previous item on tonight's
agenda. The previous item considered the approval of the agreement by the Town Council acting on behalf of the
Town of Marana. This item considers the approval of the agreement by the Town Council acting as the Board of
Directors of the Saguaro Springs Community Facilities District on behalf of the District.
If approved, this item will pave the way toward the eventual consideration of the sale of District bonds to finance
public infrastructure for the benefit of the property located within the Saguaro Springs Community Facilities
District in a manner consistent with the Town of Marana's CFD policies and the terms of the agreement itself.
Financial Impact:
The district development, financing participation, and intergovernmental agreement is intended to limit the
District's financial obligations relative to public infrastructure to be acquired by the District, and to take all
prudent precautions in an effort to hold District secondary taxes to $2.80 per $100 of assessed valuation.
ATTACH M E NTS:
Name: Description: Type:
� SSCFD 2013-
02 v 1 DISTRICT RESOLUTION.docx SSCFD Reso 2013-02
Staff Recommendation:
Resolution
District staff recommends adoption of Resolution No. SSCFD 2013-02, approving and authorizing the District
Chairman to execute the District Development, Financing Participation and Intergovernmental Agreement on
behalf of the Saguaro Springs Community Facilities District.
Suggested Motion:
I move to adopt Resolution No. SSCFD 2013-02.
Regular Council Meeting - June 4, 2013 - Page 183 of 296
RESOLUTION NO. SSCFD 2013-02
(SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT)
A RESOLUTION OF THE BOARD OF DIRECTORS OF SAGUARO
SPRINGS COMMCJNITY FACILITIES DISTRICT APPROVING
AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND
INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS
COMMCJNITY FACILITIES DISTRICT)
BE IT RESOLVED BY THE DISTRICT BOARD OF SAGUARO SPRINGS
COMMUNITY FACILITIES DISTRICT as follows:
1. Findings
a. On September 4, 2007, the Mayor and Common
Council of the Town of Marana, Arizona (hereinafter called the
"Municipality"), adopted Resolution No. 2007- which, among other
things, ordered and declared formation of Saguaro Springs Community
Facilities District (hereinafter called the "District").
b. The District is a special purpose district for
purposes of Article IX, Section 19, Constitution of Arizona, a tax
levying public improvement district for the purposes of Article XIII,
Section 7, Constitution of Arizona, and a municipal corporation for
all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5,
Arizona Revised Statutes, as amended, and, except as otherwise pro-
vided in Section 48-708(B), Arizona Revised Statutes, as amended, is
considered to be a municipal corporation and political subdivision of
the State of Arizona, separate and apart from the Municipality.
c. Pursuant to Title 48, Chapter 4, Article 6,
Arizona Revised Statutes (hereinafter referred to as the "Act"), and
Regular Council Meeting - June 4, 2013 - Page 184 of 296
Section 9-500.05, Arizona Revised Statutes, the Municipality, the
District and Marana 670 Holdings, LLC (hereinafter called "Holdings")
and D.R. Horton, Inc. (hereinafter called "Horton") are entering into
a"development agreement" to specify, among other things, conditions,
terms, restrictions and requirements for public infrastructure (as
such term is defined in the Act) and the financing of public
infrastructure and subsequent reimbursements or repayments over time.
d. With regard to the property which makes up the
real property included within the District, the District and Holdings
determined to specify some of such matters in such an agreement,
particularly matters relating to the acquisition or construction of
certain public infrastructure by the District, the acceptance by the
Municipality or other appropriate political subdivisions and the
reimbursement or repayment of Holdings with respect thereto, all
pursuant to the Act.
e. Pursuant to the Act and Title 11, Chapter 7,
Article 3, Arizona Revised Statutes, the District and the Municipality
may enter into an "intergovernmental agreement" with one another for
joint or cooperative action for services and to jointly exercise any
powers common to them and for the purposes of the planning, design,
inspection, ownership, control, maintenance, operation or repair of
public infrastructure.
f. Pursuant to the Act, the District may also enter
into an agreement with Holdings with respect to the advance of moneys
for public infrastructure purposes and the repayment of such advances
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and to obtain credit enhancement for, and process disbursement and
investment of proceeds of, the hereinafter-described Bonds.
g. There has been placed on file with the District
Clerk of the District and presented to the district board of the
District (hereinafter called the "District Board") in connection with
the purposes hereof a District Development, Financing Participation
and Intergovernmental Agreement (Saguaro Springs Community Facilities
District), to be dated as of June 1, 2013 (hereinafter referred to as
the "Development Agreement"), by and among the Municipality, the
District, Holdings and Horton.
2. Authorization and Approval of Development Agreement
a. The Development Agreement is hereby approved in
substantially the form submitted herewith, with such changes,
additions, deletions, insertions and omissions, if any, as the
Chairperson of the Board of Directors of the District, with the advice
of the District Manager and the District Counsel, shall authorize, the
execution and delivery of the Development Agreement to be conclusive
evidence of the propriety of such document and the authority of the
person or persons executing the same.
b. Completion of Development Agreement The Dis-
trict Manager or his or her designee is hereby authorized to complete
the Development Agreement by including the appropriate materials as
necessary therein.
c. Execution of Development Agreement The Chair-
person of the Board of Directors of the District, with the advice of
the District Manager and the District Counsel, is hereby authorized
3
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and directed to execute, and the District Clerk to attest, the
Development Agreement on behalf of the District.
3. No Liability of or for the Municipality Neither the
Municipality nor the State of Arizona or any political subdivision of
either (other than the District) shall be directly, indirectly or
morally liable or obligated for the payment or repayment of any
indebtedness, liability, cost, expense or obligation of the District,
and neither the credit nor the taxing power of the Municipality, the
State of Arizona or any political subdivision of either (other than
the District) shall be pledged therefor.
4. Severability; Amendment
a. If any section, paragraph, clause or provision of
this Resolution shall for any reason be held to be invalid or unen-
forceable, the invalidity or unenforceability of such section, para-
graph, clause or provision shall not affect any of the remaining pro-
visions of this Resolution.
b. All resolutions or parts thereof inconsistent
herewith are hereby waived to the extent only of such inconsistency.
5. Effective Date
This Resolution shall be effective immediately.
0
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PASSED by the District Board of Saguaro Springs Community
Facilities District this 4th day of June, 2013.
......................................
Chairperson, District Board, Saguaro
Springs Community Facilities District
ATTEST:
................................
District Clerk, Saguaro Springs
Community Facilities District
APPROVED AS TO FORM:
................................
District Counsel, Saguaro
Springs Community Facilities
District
* * *
330754634.1-5/13/2013
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ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Jocelyn Bronson
Strategic Plan Focus Area:
Not Applicable
Item B 2
Subject: Resolution No. 2013-051: Relating to Boards, Commissions and Committees; re-appointing
John Soper and Joe Reilly to the District Board of the Dove Mountain Resort Community
Facilities District
Discussion:
Pursuant to the Amended and Restated Development Agreement and Intergovernmental Agreement
(Red Hawk Canyon), the District Manager for the Dove Mountain Resort Community Facilities District
is petitioning the Council to approve the re-appointments of John Soper and Joe Reilly. These board
members' terms are set to expire in June, 2013.
ATTACHMENTS:
Name: Description: Type:
� Resolution 2013-
051 Dove Mnt CFD reappts..DOC Resolution 2013-051
Staff Recommendation:
Resolution
Staff recommends adoption of Resolution No. 2013-051, approving the District Manager's re-
appointments.
Suggested Motion:
I move to adopt Resolution No. 2013-051, approving and authorizing the re-appointments of John Soper
and Joe Reilly to the District Board of the Dove Mountain Resort Community Facilities District.
Regular Council Meeting - June 4, 2013 - Page 189 of 296
MARANA RESOLUTION NO. 2013-051
RELATING TO BOARDS, COMMISSIONS AND COMMITTEES; APPROVING AND
AUTHORIZING THE RE-APPOINTMENTS OF JOHN SOPER AND JOE REILLY TO THE
BOARD OF DIRECTORS OF DOVE MOUNTAIN RESORT COMMUNITY FACILITIES
DISTRICT
WHEREAS the Town Council, upon forming the Dove Mountain Resort Community
Facilities district, appointed the initial board of directors; and
WHEREAS the Town Council is responsible for subsequent appointments to the board of
directors; and
WHEREAS two directors of Dove Mountain Resort Community Facilities District have
terms which will expire in June 2013; and
WHEREAS the developer, through the Community Facilities District's district manager, has
petitioned the Council to re-appoint John Soper and Joe Reilly to additional four-year terms.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, that John Soper and Joe Reilly shall be reappointed to the board
of directors of the Dove Mountain Resort Community Facilities District for additional four-year
terms.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 4 th day of June, 2013.
Mayor Ed Honea
ATTEST:
APPROVED AS TO FORM:
Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney
Marana Resolution 2013-051
Regular Council Meeting - June 4, 2013 - Page 190 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: John Kmiec, Utilities Director
Strategic Plan Focus Area:
Community
Strategic Plan Focus Area - Additional Information:
Initiative 1: Secure all necessary water resources and infrastructure.
Item A 1
Subj ect: Resolution No. 2013-055: Relating to Utilities; Authorizing Town staff to seek out
acquisition of additional water resources.
Discussion:
The Marana Utilities Department is actively pursuing renewable water resources to meet the long term
water supply needs for the community for which it serves. Water that may be available in the future may
include re-allocations of Municipal & Industrial CAP water, re-allocation of Non-Indian Agriculture
Priority CAP water, purchase and transfer of long term storage credits, and effluent entitlements. A
process currently undertaken by the Utilities Department is an application with the Arizona Department
of Water Resources to acquire a re-allocation of Non-Inidan Agriculture Priority CAP water. The intent
of this resolution is to provide community support for the continued efforts to acquire additional water
supplies for the future.
Financial Impact:
The Utilities Department will be responsible for providing the necessary funding for any purchase or
acquisition of water within an approved budgetary process. If additional water resources are able to be
secured and the authorized departmental budget is not sufficient, staff will seek Council authorization
prior to any commitment to purchase additional water resources.
ATTACHMENTS:
Name: Description: Type:
� Resolution 2013-
055 Water Resources 052413.doc Resolution 2013-055
Staff Recommendation:
Resolution
Staff recommend adoption of Resolution No. 2013-055, authorizing the Town Staff to seek out
acquisition of additional water resources.
Suggested Motion:
I move to adopt Resolution No. 2013-055
Regular Council Meeting - June 4, 2013 - Page 191 of 296
MARANA RESOLUTION NO. 2013-055
RELATING TO UTILITIES; AUTHORIZING TOWN STAFF TO SEEK OUT ACQUISITION
OF ADDITIONAL WATER RESOURCES
WHEREAS the Marana Utilities Department provides water and wastewater services
within respective defined/designated service areas; and
WHEREAS the Marana Utilities Department currently has a Central Arizona Proj ect
(CAP) water allocation of 1,528 acre-feet per year; and
WHEREAS the Marana Utilities Department is tasked with developing a water resources
portfolio that will support the current and future water supply needs of the community for which
it serves; and
WHEREAS the Mayor and Council of the Town of Marana find that this resolution is in
the best interests of the Town of Marana and its citizens.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, as follows:
SECTION 1. The Marana Utilities Department is authorized to seek out and participate in
resource acquisitions that will contribute to the long term sustainability of the Town's water
resource portfolio consistent with the planning projections of the Town and the Town's Strategic
Plan, in order to maintain the Town's Assured Water Supply designation from the Arizona
Department of Water Resources.
SECTION 2. Water acquisitions the Marana Utilities Department may seek may include,
but are not limited to, re-allocations of M&I CAP water, re-allocation of Non-Indian Agriculture
Priority CAP water, purchase and transfer of long term storage credits, and acquisition of
effluent entitlements.
SECTION 3. Any financial undertaking pursuant to this resolution shall be consistent
with the adopted Town of Marana budget.
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona,
this 4 th day of June, 2013.
Mayor Ed Honea
ATTEST:
Jocelyn C. Bronson, Town Clerk
Resolution No. 2013-055
APPROVED AS TO FORM:
Frank Cassidy, Town Attorney
5/22/2013 6:41 PM F7C
Regular Council Meeting - June 4, 2013 - Page 192 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To:
From:
Mayor and Council
Jocelyn Bronson, Town Clerk
Strategic Plan Focus Area:
Not Applicable
Item A 2
Subj ect: Resolution No. 2013-056: Relating to Elections; declaring and adopting the results of the
general election held on May 21, 2013.
Discussion:
Pursuant to A.R.S. Section 16-642, the governing body of a city or town must meet to canvass the votes
after a primary and/or general election. This must be done not less than six days nor more than 20 days
after an election. The Official Canvass for the May 21, 2013 general election is attached.
ATTACHMENTS:
Name:
� Resolution 2013-
056 Adoptinq results of qeneral election
(00034224).doc
� 5-21-
2013 Town of Marana Official Canvass.pc
Staff Recommendation:
Description:
Resolution 2013-056
Official Canvass
Type:
Resolution
Backup Material
Staff recommends Council approval of the Official Canvass of the vote for the general election held on
May 21, 2013.
Suggested Motion:
I move to adopt Resolution No. 2013-056, declaring and adopting the results of the general election held
on May 21, 2013.
Regular Council Meeting - June 4, 2013 - Page 193 of 296
MARANA RESOLUTION NO. 2013-056
RELATING TO ELECTIONS; DECLARING AND ADOPTING THE RESULTS OF THE
TOWN OF MARANA GENERAL ELECTION HELD ON MAY 21, 2013
WHEREAS the Town of Marana, Pima County, Arizona did hold a general election on
the 21 day of May 2013 for a ballot question regarding the Alternative Expenditure Limitation
(Home Rule Option); and
WHEREAS the election returns have been presented to and have been canvassed by the
Town Council.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, as follows:
SECTION 1. That the total number of ballots cast at said general election, as confirmed
by the Pima County Elections Department, was 4,689.
SECTION 2. That the total number of ballots rejected at said general election, as
confirmed by the Pima County Elections Department, was 0.
SECTION 3. That the votes cast for and against the ballot measure were as follows:
Question 1
A resolution proposing an alternative expenditure limitation for the Town of Marana
YES — 3,061 NO — 1,617
SECTION 4. That it is hereby found, determined and declared of record, that the
measure did receive more than one-half of the total number of valid votes cast, and the measure
is ratified and approved.
SECTION 5. This resolution shall be in full force and effect immediately upon its
adoption.
Marana Resolution 2013-056 Page 1 of 2
Regular Council Meeting - June 4, 2013 - Page 194 of 296
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona,
this 4th day of June, 2013.
ATTEST:
Mayor Ed Honea
APPROVED AS TO FORM:
Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney
Marana Resolution 2013-056 Page 2 of 2
Regular Council Meeting - June 4, 2013 - Page 195 of 296
r% p8 '�.
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ELECTIONS DEPARTMENT
PIMA COUNTY GOVERNMENT
6550 S. COUNTRY CLUB ROAD, TUCSON, AZ 85756
(520) 724-6830 FAX (520) 724-6870
May 24, 2013
In accordance with Arizona Revised Statutes, Title16, I hereby certify the enclosed tabulation
is a full, true and correct copy of the Returns of the General Election held pursuant to Arizona
Constitution and Arizona Revised Statutes Title 9 and 16 in and for The Town of Marana, Pima
County, Arizona on May 21, 2013. This tabulation includes all mail ballots.
Respectfully submitted,
� f�� •
,� h ' - . - e _ -
Pima County Elections
Regular Council Meeting - June 4, 2013 - Page 197 of 296
CANVASS INFORMATION
TOWN OF MARANA
MAY 21, 2013
MAIL BALLOTS PROCESSED
4689 Ballots Processed and Counted
0 Ballots Rejected
Regular Council Meeting - June 4, 2013 - Page 198 of 296
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Regular Council Meeting - June 4, 2013 - Page 203 of 296
Election Summary Report �ate:osi24i1�
130521pimaconsolidated �� Pa�e:i of1
g
Summary For TOWN OF MARANA, All Counters, All Races
Registered Voters 19962 - Cards Cast 4689 23.49%
Num. Report Precinct 6- Num. Reporting 6 100.00%
TOWN OF MARANA QUESTION 1(Vote for 1)
Number of Precincts
Precincts Reporting
Vote For
Times Counted (Reg. Voters 19962)
Total Votes
Times Blank Voted
Times Over Voted
Number Of Under Votes
YES
NO
Polling
6
6
1
0
0
0
0
0
0
0
Early
6
6
1
4689
4678
11
0
0
3061
1617
PRO V
6
6
1
0
0
0
0
0
0
0
Total
6
6 100.0 % ''
1
4689 23.5 % ''
4678
11
0
0
3061 65.43% ''
1617 34.57% �'���
Regular Council Meeting - June 4, 2013 - Page 204 of 296
��: :
� ����I ��,� .
� w.
N� �� : i �+� *•-:,,
�
Regular Council Meeting - June 4, 2013 - Page 205 of 296
Statement of Votes Cast
130521pimaconsolidated
SOVC For TOWN OF MARANA, All Co
TURN OUT I
All Races
Date:05/24/13
Time:15:10:53
Page:l of 2
Reg. Voters Cards Cast %
Turnout
Jurisdiction Wide
10-01
Polling
Early
Provisional
Total
10-02
Polling
Early
10-03
Polling
Early
Provisional
Total
10-04
Polling
Early
Provisional
Total
10-05
Polling
Early
Provisional
Total
10-06
Polling
Early
Provisional
Total
Total
Polling
Early
Provisional
Total
3327
3327
3327
3327
3254
3254
3254
3254
3330
3330
3330
3330
3264
3264
3264
3264
3531
3531
3531
3531
3256
3256
3256
3256
19962
19962
19962
19962
0 0.00
704 21.16
0 0.00
704 21.16
0 0.00
625 19.21
0 0.00
625 19.21
0 0.00
627 18.83
0 0.00
627 18.83
0 0.00
940 28.80
0 0.00
940 28.80
0 0.00
795 22.51
0 0.00
795 22.51
0 0.00
998 30.65
0 0.00
998 30.65
0 0.00
4689 23.49
0 0.00
4689 23.49
Regular Council Meeting - June 4, 2013 - Page 206 of 296
Jurisdiction Wide
10-01
Polling
Early
Provisional
Total
10-02
Polling
Early
Provisional
Total
10-03
Polling
Early
Provisional
Total
10-04
Polling
Early
Provisional
Total
10-05
Polling
Early
Provisional
Total
10-06
Polling
Early
Provisional
Total
Total
Polling
Early
Provisional
Total
Statement of Votes Cast
130521pimaconsolidated
SOVC For TOWN OF MARANA, All Counters, All Races
TOWN OF MARANA QUESTION 1(Vote for 1)
Reg. Voters Times Total Votes Times Times Number YES NO
Counted Blank Over Of
Voted Voted Under
Votes
3327 0 0 0 0 0 0 -
3327 704 704 0 0 0 445 63.21%
3327 0 0 0 0 0 0 -
3327 704 704 0 0 0 445 63.21%
3254 0 0 0 0 0 0 -
3254 625 622 3 0 0 397 63.83%
3254 0 0 0 0 0 0
3254 625 622 3 0 0 397 63.83%
3330 0 0 0 0 0 0 -
3330 627 623 4 0 0 412 66.13%
3330 0 0 0 0 0 0 -
3330 627 623 4 0 0 412 66.13%
3264 0 0 0 0 0 0 -
3264 940 939 1 0 0 652 69.44%
3264 0 0 0 0 0 0
3264 940 939 1 0 0 652 69.44%
3531 0 0 0 0 0 0 -
3531 795 792 3 0 0 510 64.39%
3531 0 0 0 0 0 0 -
3531 795 792 3 0 0 510 64.39%
3256 0 0 0 0 0 0 -
3256 998 998 0 0 0 645 64.63%
3256 0 0 0 0 0 0
3256 998 998 0 0 0 645 64.63%
19962 0 0 0 0 0 0 -
19962 4689 4678 11 0 0 3061 65.43%
19962 0 0 0 0 0 0
19962 4689 4678 11 0 0 3061 65.43%
Date:05/24/13
Time:15:10:53
Page:2 of 2
0
259 36.79
0
259 36.79
0
225 36.17
0
225 36.17
0
211 33.87
0
211 33.87
0
287 30.56
0
287 30.56
0
282 35.61
0
282 35.61
0
353 35.37
0
353 35.37
0
1617 34.57
0
1617 34.57
Regular Council Meeting - June 4, 2013 - Page 207 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Frank Cassidy, Town Attorney
Strategic Plan Focus Area:
Community
Strategic Plan Focus Area - Additional Information:
Initiative 4: Develop diverse housing opportunities for residents of all income levels
Item A 3
Subject: Resolution No. 2013-057: Relating to development; approving and authorizing the
execution and delivery of a District Development, Financing Participation and
Intergovernmental Agreement (Saguaro Springs Community Facilities District) and declaring
an emergency
Discussion:
The Town of Marana formed the Saguaro Springs Community Facilities District on September 4, 2007
with the adoption of Marana Resolution No. 2007-152, which also approved and authorized the
execution and delivery of a district development, financing participation, and intergovernmental
agreement for the new CFD. The CFD was formed at the request of Saguaro Reserve, LLC, an Empire
Land entity, and KB Home Tucson, Inc. KB Home Tucson declined to sign the 2007 district
development, financing participation, and intergovernmental agreement, and it was never consummated.
The Saguaro Springs Community Facilities District covers the development project now known as
Saguaro Bloom, owned by Marana 670 Holdings LLC, an Arizona limited liability company controlled
by Grayhawk Development. Marana 670 has requested the approval and execution of a new district
development, financing participation, and intergovernmental agreement in substantially the same form
as the 2007 agreement. Marana 670 has sold a block of developed lots to homebuilder D.R. Horton Inc.,
which is also a party to the agreement.
D.R. Horton is completing construction of homes in Saguaro Bloom. The parties would prefer to have
the district development, financing participation, and intergovernmental agreement in place before
homes are sold to individual buyers.
Among other things, the agreement explains the relative rights and responsibilities of the parties
concerning the sale of CFD bonds to fund public infrastructure benefiting property within the CFD
boundaries. Approval of the agreement will clear the way to begin the sale of bonds and the assessment
of property in the District in an amount not anticipated to exceed $2.80 per $100 of assessed value, as
provided in the agreement and per the Town's CFD policy. This amount includes a Saguaro Springs
CFD operations and maintenance tax of $0.30 per $100 of assessed value, which has been assessed
against the property in the District since the CFD was formed.
Financial Impact:
Regular Council Meeting - June 4, 2013 - Page 208 of 296
The district development, financing participation, and intergovernmental agreement is intended to shield
the Town from direct financial obligations relative to the Saguaro Springs CFD to the maximum extent
practicable. Despite this, all Town of Marana CFDs impose some obligations and contingent liabilities
on the Town. Town staff believes that the benefits of quality development outweigh these obligations
and contingencies.
ATTACHMENTS:
Name:
Description:
Type:
� Resolution 2013-
057 Council Saquaro Sprinqs CFD DA Resolution 2013-057
(00034158).docx
� #2409935v12 iManaqe -
CFD Development Aqreement.docx
Staff Recommendation:
Saguaro Springs CFD DA IGA
Resolution
Backup Material
Staff recommends adoption of Marana Resolution No. 2013-057. Staff also recommends that the
resolution be adopted with an emergency clause, so that it may be effective immediately upon adoption,
to ensure that it is operative before home sales begin.
Suggested Motion:
I move to adopt Marana Resolution No. 2013-057, and declaring an emergency.
Regular Council Meeting - June 4, 2013 - Page 209 of 296
MARANA RESOLUTION NO. 2013-057
RELATING TO DEVELOPMENT; APPROVING AND
AUTHORIZING THE EXECUTION AND DELIVERY OF A
DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND
INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS
COMMCJNITY FACILITIES DISTRICT) AND DECLARING AN
EMERGENCY
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE TOWN
OF MARANA, ARIZONA, as follows:
1. Findings
a. Pursuant to Title 48, Chapter 4, ArtiCle 6,
Arizona Revised Statutes (hereinafter referred to as the "Act") and
Section 9-500.05, Arizona Revised Statutes, the Town of Marana,
Arizona, an incorporated municipality of the State of Arizona
(hereinafter called the "Municipality"), Saguaro Springs Community
Facilities District (hereinafter called the "District"), Marana 670
Holdings, LLC (hereinafter called "Holdings") and D.R. Horton, Inc.
(hereinafter called "Horton") are entering into a"development
agreement" to specify, among other things, conditions, terms,
restrictions and requirements for "public infrastructure" (as such
term is defined in the Act) and the financing of public infrastructure
and subsequent reimbursements or repayments over time.
b. With regard to the real property included within
the boundaries of the District, the Municipality and Holdings
determined to specify some of such matters in such an agreement,
particularly matters relating to the acquisition or construction of
i�l
Regular Council Meeting - June 4, 2013 - Page 210 of 296
certain public infrastructure by the District, the acceptance thereof
by the Municipality and the reimbursement or repayment of Saguaro
Springs with respect thereto, all pursuant to the Act.
c. Pursuant to the Act and Title 11, Chapter 7,
Article 3, Arizona Revised Statutes, as amended, the District, and the
Municipality may enter into an "intergovernmental agreement" with one
another for joint or cooperative action for services and to jointly
exercise any powers common to them and for the purposes of the plan-
ning, design, inspection, ownership, control, maintenance, operation
or repair of public infrastructure.
d. Pursuant to the Act, the District may also enter
into an agreement with Holdings with respect to the advance of moneys
for public infrastructure purposes and the repayment of such advances
and to obtain credit enhancement for, and process disbursement and
investment of proceeds of, general obligation bonds of the District to
be hereafter issued.
e. There has been presented to us in connection with
the purposes hereof a District Development, Financing Participation
and Intergovernmental Agreement (Saguaro Springs Community Facilities
District), to be dated as of June 1, 2013 (hereinafter referred to as
the "Development Agreement"), by and among the Municipality, the
District, Holdings and Horton.
2. Authorization and Approval of Development Agreement
The Development Agreement is hereby approved in substantially the form
submitted herewith, with such changes, additions, deletions, inser-
tions and omissions, if any, as the Mayor of the Municipality, with
i�d
Regular Council Meeting - June 4, 2013 - Page 211 of 296
the advice of the Town Manager of the Municipality and the Town Attor-
ney of the Municipality, shall authorize, the execution and delivery
of the Development Agreement to be conclusive evidence of the propri-
ety of such document and the authority of the persons or persons
executing the same. The Mayor of the Municipality, with the advice of
the Town Manager of the Municipality and the Town Attorney of the
Municipality, is hereby authorized and directed to execute, and the
Town Clerk of the Municipality to attest and deliver, the Development
Agreement on behalf of the Municipality.
3. No Liability of or for the Municipality Neither the
Municipality nor the State of Arizona or any political subdivision of
either (other than the District) shall be directly, indirectly or
morally liable or obligated for the costs of the public infrastructure
contemplated by the General Plan and the Development Agreement nor for
the payment or repayment of any indebtedness, liability, cost, expense
or obligation of the District, and neither the credit nor the taxing
power of the Municipality, the State of Arizona or any political sub-
division of either (other than the District) shall be pledged there-
for.
4. Effect of Resolution
a. If any section, paragraph, clause or provision of
this Resolution shall for any reason be held to be invalid or
unenforceable, the invalidity or unenforceability of such section,
paragraph, clause or provision shall not affect any remaining
provisions of this Resolution.
A-3
Regular Council Meeting - June 4, 2013 - Page 212 of 296
b. All resolutions or parts thereof inconsistent
herewith are hereby waived to the extent only of such inconsistency.
5. Emergency Clause The immediate operation of the pro-
visions of this Resolution is necessary to the orderly development of
property within the Municipality and the resulting preservation of the
public peace, health and safety, an EMERGENCY is hereby declared to
exist. This Resolution shall be in full force and effect from and
after its passage, adoption and approval by us, as required by law,
and is hereby exempted from the referendum provision of the constitu-
tion and laws of the State of Arizona pursuant to Section 19-142(B),
Arizona Revised Statutes, as amended, and any applicable provision of
the Code or any ordinances of the Municipality.
* * *
i�!
Regular Council Meeting - June 4, 2013 - Page 213 of 296
PASSED by the Mayor and Common Council of the Town of
Marana, Arizona, this 4th day of June, 2013.
......................................
Mayor, Town of Marana, Arizona
ATTEST:
................................
Town Clerk, Town of Marana,
Arizona
APPROVED AS TO FORM:
................................
Town Attorney, Town of Marana,
Arizona
REVIEWED BY:
................................
Town Manager, Town of Marana,
Arizona
* * *
330754671.1-5/13/2013
���
Regular Council Meeting - June 4, 2013 - Page 214 of 296
When recorded, please return to:
Michael Cafiso, Esq.
Greenberg Traurig, LLP
Suite 700
2375 East Camelback Road
Phoenix, Arizona 85016
DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND
INTERGOVERNMENTAL AGREEMENT
(SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT)
ARTICLE I
ARTICLE II
ARTICLE III
ARTICLE IV
ARTICLE V
ARTICLE VI
ARTICLE VII
ARTICLE VIII
ARTICLE IX
ARTICLE X
SIGNATURES
DEFINED TERMS; MISCELLANEOUS MATTERS RELATING TO
USE THEREOF .......................................... 5
CONSTRUCTION OF PROJECTS BY THE DISTRICT;
ACQUISITION OF PLANS AND SPECIFICATIONS ............. 12
CONSTRUCTION OF ACQUISITION PROJECTS BY THE
OWNER; CERTAIN MATTERS RELATED TO PLANS AND
SPECIFICATIONS ...................................... 15
ACQUISITION OF ACQUISITION PROJECTS FROM THE
OWNER ............................................... 19
FINANCING OF COSTS OF PROJECTS AND PLANS AND
SPECIFICATIONS ...................................... 21
MATTERS RELATING TO THE BONDS AND OTHER
OBLIGATIONS OF THE DISTRICT ......................... 26
ACCEPTANCE BY THE MUNICIPALITY ...................... 31
INDEMNIFICATION ..................................... 31
PAYMENT OF CERTAIN EXPENSES AND COSTS ............... 36
MISCELLANEOUS ....................................... 38
................................................... 55
EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY ................. A-1
EXHIBIT B FORM OF CERTIFICATE OF ENGINEERS FOR
CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT .... B-1
EXHIBIT C FORM OF CONVEYANCE OF SEGMENT OF
ACQUISITION PROJECT ............................ C-1
EXHIBIT D FORM OF DISCLOSURE STATEMENT ...................... D-1
EXHIBIT E LEGAL DESCRIPTION OF HORTON PROPERTY .............. E-1
Regular Council Meeting - June 4, 2013 - Page 215 of 296
THIS DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND
INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS COMMUNITY FACILITIES
DISTRICT), dated as of June 1, 2013 (hereinafter referred to as this
"Agreement"), by and among the Town of Marana, Arizona, a municipality
duly incorporated and validly existing pursuant to the laws of the
State of Arizona (hereinafter referred to as the "Municipality");
Saguaro Springs Community Facilities District, a community facilities
district formed by the Municipality, and duly organized and validly
existing, pursuant to the laws of the State of Arizona (hereinafter
referred to as the "District"); Marana 670 Holdings, LLC, a limited
liability company duly incorporated and validly existing pursuant to
the laws of the State of Arizona, and having an interest in certain
property within the boundaries of the District (hereinafter referred
to as the "Owner"), and D. R. Horton, Inc., a corporation duly
organized and validly existing pursuant to the laws of the State of
Delaware, and having an interest in certain property within the
boundaries of the District (hereinafter referred to as "Builder");
W I T N E S S E T H:
WHEREAS, pursuant to Title 48, Chapter 4, Article 6,
Arizona Revised Statutes (hereinafter referred to as the "Act"), and
Section 9-500.05, Arizona Revised Statutes, the Municipality, the
District, the Owner and Builder enter into this Agreement as a
"development agreement" to specify, among other things, conditions,
terms, restrictions and requirements for "public infrastructure" (as
such term is defined in the Act) and the financing of public infra-
structure and subsequent reimbursements or repayments over time from
�
Regular Council Meeting - June 4, 2013 - Page 216 of 296
funds derived from the District's sale of the hereinafter defined
Developer Bonds; and
WHEREAS, with regard to the real property described in
Exhibit "A" hereto (hereinafter referred to as the "Property") which
makes up the real property included within the District, the Munici-
pality, the District, the Owner and Builder determined to specify some
of such matters in this Agreement, particularly matters relating to
the construction or acquisition of certain public infrastructure by
the District, the acceptance thereof by the Municipality and the
reimbursement or repayment of the Owner with respect thereto, from the
Developer Bonds, all pursuant to the Act, such public infrastructure
being necessary for the Owner to develop the Property prior to the
time at which the District will have the necessary funds to itself pay
for the construction and/or acquisition thereof; and
WHEREAS, this Agreement as a"development agreement" is
consistent with the "general plan" of the Municipality, as defined in
Section 9-461, Arizona Revised Statutes, applicable to the Property on
the date this Agreement is executed; and
WHEREAS, pursuant to a Resolution passed and adopted by the
district board of the District (hereinafter referred to as the
"District Board") on October 16, 2007, an election was duly called and
regularly held on November 21, 2007 (hereinafter referred to as the
"Election"), when there was submitted to landowners according to
Section 48-3043, Arizona Revised Statutes, of the District, questions
authorizing the district board of the District (i) to issue certain
general obligation bonds of the District in an amount not to exceed
3
Regular Council Meeting - June 4, 2013 - Page 217 of 296
$99,000,000, including to provide moneys for certain public infra-
structure purposes (as such term is defined in the Act) described in
the General Plan of the District heretofore approved by the Munici-
pality and the District and in this Agreement (hereinafter referred to
as the "Bonds") including the levy, assessment and collection of a
debt service tax against all real and personal property in the
District, unlimited as to rate or amount therefor, and (ii) to levy
and collect an additional operation and maintenance tax in an amount
up to $0.30 per $100.00 of assessed valuation for all real and
personal property in the District (hereinafter referred to as the "O/M
Tax") to provide for amounts which become attributable to the
operation and maintenance expenses of the District in the future; and
WHEREAS, after canvass of the official election returns, in
answer to the questions submitted to such landowners according to Sec-
tion 48-3043, Arizona Revised Statutes, at the Election, the District
Board resolved pursuant to a Resolution passed and adopted on December
4, 2007, that the majority of the votes cast were cast in favor of the
issuance of the Bonds and the levy and collection of the O/M Tax; and
WHEREAS, the use of the proceeds of the sale of the
Developer Bonds and amounts which will be collected with respect to
the O/M Tax in the future are, among other things, subjects of this
Agreement; and
WHEREAS, pursuant to the Act, the District enters into this
Agreement with the Owner and Builder with respect to the advance of
moneys for public infrastructure purposes by the Owner and the
repayment by the District of such advances and to process disbursement
B!
Regular Council Meeting - June 4, 2013 - Page 218 of 296
and investment of disbursements from the proceeds derived from the
sale of the Developer Bonds; and
WHEREAS, pursuant to the Act and Title 11, Chapter 7,
Article 3, Arizona Revised Statutes, the District and the Municipality
entered into the specified sections of this Agreement as an
"intergovernmental agreement" with one another for joint or cooper-
ative action for services and to jointly exercise any powers common to
them and for the purposes of the planning, design, inspection, owner-
ship, control, maintenance, operation or repair of "public infrastruc-
ture," including particularly to provide for the timely acceptance by
the Municipality of the public infrastructure constructed for the
benefit of, or acquired by, the District;
NOW, THEREFORE, in the joint and mutual exercise of their
powers, in consideration of the above premises and of the mutual cove-
nants herein contained and for other valuable consideration, and sub-
ject to the conditions set forth herein, the parties hereto agree
that:
ARTICLE I
DEFINED TERMS; MISCELLANEOUS
MATTERS RELATING TO USE THEREOF
Section 1.1 (a) For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires, the terms defined in this Section have the meanings assigned
to them in this Section and include, as appropriate, the plural as
well as the singular:
�
Regular Council Meeting - June 4, 2013 - Page 219 of 296
"Acquisition Infrastructure" means Infrastructure other
than that which is the subject of a request of the Owner and approval
of the District Manager described in Section 2.1.
"Acquisition Project" means each project which is a part of
the Acquisition Infrastructure on a project-by-project basis.
"Acquisition Project Construction Contract" means a con-
struction contract for an Acquisition Project.
"Act" means Title 48, Chapter 4, Article 6, Arizona Revised
Statutes.
"Agreement" means this District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs Com-
munity Facilities District), dated as of June 1, 2013, by and among
the Municipality, the District, the Owner and the Builder, as amended
from time to time.
"Bonds" means bonds of the District authorized by the
Election and payable from the debt service tax levied against all real
and personal property in the District, unlimited as to rate or amount
therefor.
"Certificate of the Engineers" means a certificate of the
Owner Engineer and the District Engineer in substantially the form of
Exhibit "B" hereto.
"Code" means the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations applicable thereto.
"Complete" means, with respect to each Segment, that the
items listed in Section 4.2(a) through (f) have been provided as set
forth in Section 4.2.
C.7
Regular Council Meeting - June 4, 2013 - Page 220 of 296
"Construction Contract" means a construction contract for a
Project.
"Conveyance" means a conveyance for a Segment in substan-
tially the form of Exhibit "C" hereto.
"Court" means Pima County Superior Court.
"Cure Period" has the meaning provided thereto in Section
10.20(b).
"Developer Bonds" means the portion of the Bonds authorized
to be sold and issued by the District for the purpose of acquiring
Infrastructure from the Owner or otherwise providing for its construc-
tion as described in this Agreement.
"Disclosure Statement" means the disclosure statement sub-
stantially in the form of Exhibit "D" hereto.
"District" means Saguaro Springs Community Facilities Dis-
trict, a community facilities district formed by the Municipality, and
organized and existing, pursuant to the laws of the State.
"District Board" means the district board of the District.
"District Budget" means the budget of the District required
for each Fiscal Year by the Act.
"District Engineer" means the Engineer for the Munici-
pality.
"District Expenses" means the reasonable expenses and costs
of the operation and administration of the District including the rea-
sonable expenses and costs incurred by the Municipality in connection
with the formation of the District; its operations; its relationship
with the Municipality; its issuance of the Developer Bonds or any sim-
7
Regular Council Meeting - June 4, 2013 - Page 221 of 296
ilar matters and reasonable fees and related actual costs and expenses
of staff of the Municipality, financial advisors, engineers, apprais-
ers, attorneys and other consultants and including any allocable
overhead incurred by the Municipality with respect thereto.
"District Indemnified Party" means the Municipality and
each legislator, director, trustee, member, officer, official or
employee thereof or of the District.
"Election" has the meaning assigned to it in the recitals
hereto.
"Engineers" means, collectively, the Owner Engineer and the
District Engineer; provided, however, that neither may be changed upon
less than ten (10) days' prior written notice and, in the case of the
Owner Engineer, without compliance with the other provisions hereof
with respect to such change.
"Fiscal Year" means the twelve (12) month period beginning
on July 1 of any year and ending on June 30 of the following year.
"Force Majeure" means any condition or event not reasonably
within the control of a party obligated to perform hereunder, includ-
ing, without limitation, "acts of God"; strikes, lock-outs, or other
disturbances of employer/employee relations; acts of public enemies;
orders or restraints of any kind of the government of the United
States or any state thereof or any of their departments, agencies, or
officials (including, without limitation, moratoria of any type and
duration), or of any civil or military authority; insurrection; civil
disturbances; riots; epidemics; landslides; lightning; earthquakes;
subsidence; fires; hurricanes; storms; droughts; floods; arrests;
Ea
Regular Council Meeting - June 4, 2013 - Page 222 of 296
restraints of government and of people; explosion; unavailability of
goods and/or materials; and partial or entire failure of utilities.
Failure to settle strikes, lock-outs and other disturbances of
employer/employee relations or to settle legal or administrative
proceedings by acceding to the demands of the opposing party or
parties, in either case when such course is in the judgment of the
party hereto unfavorable to such party, shall not constitute failure
to use its good faith efforts to remedy such a condition or event.
"Guarantor" means a person or entity approved by the
District that will be jointly and severally liable with the Owner for
(1) the indemnities described in Article VIII and (2) the funds
described in Article IX.
"Indemnified Party" means the Municipality and the District
and each legislator, director, trustee, partner, member, officer,
official, independent contractor or employee thereof and each person,
if any, who controls the Municipality and/or the District within the
meaning of the Securities Act.
"Infrastructure" means that public infrastructure (as such
term is defined in the Act) which becomes the subject of this
Agreement.
"Intergovernmental Agreement Act" means Title 11, Chapter
7, Article 3, Arizona Revised Statutes.
"Initial Expenses" means the District Expenses prior to
receipt of collections of the first levy of the O/M Tax.
"Initiation Notice" has the meaning provided in Section
10.20(d).
�']
Regular Council Meeting - June 4, 2013 - Page 223 of 296
"Land Development Agreement" means the Development
Agreement, by and between the Municipality and the Owner, recorded
July 22, 2011, in Docket No. 20112030004, official records of Pima
County, Arizona, as further amended from time to time.
"Municipality" means the Town of Marana, Arizona, a munici-
pality incorporated and existing pursuant to the laws of the State.
"O/M Expenses" means the reasonable expenses and actual
costs of the operation and maintenance of the Projects (including
after acceptance by the Municipality pursuant to Section 7.1, but
specifically excluding the operation and maintenance costs associated
with Twin Peaks Road) and for accumulating a Replacement Reserve
Amount with respect to the Projects including any allocable overhead
incurred by the Municipality with respect thereto.
"O/M Tax" means the operation and maintenance tax in the
amount up to $0.30 per $100.00 of secondary assessed valuation for all
real and personal property in the District.
"Owner" means Marana 670 Holdings, LLC, an Arizona limited
liability company, its successors and permitted assigns.
"Owner Engineer" means any firm of professional engineers
hired by the Owner after approval thereof by the District Manager to
perform the services required therefrom for the purposes hereof.
"Panel" has the meaning provided in Section 10.20(d).
"Plans and Specifications" means the plans and specifica-
tions for a Project which shall be prepared and reviewed in accordance
with the requirements for plans and specifications for construction
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projects of the Municipality similar to the Project or the Acquisition
Project, as applicable.
"Process" has the meaning provided in Section 10.20(d).
"Project" means each discrete item of the Infrastructure
that is subject to a separate procurement process pursuant to the
terms of this Agreement, and, if constructed in phases, which is a
Segment when Complete.
"Property" means the real property described in Exhibit "A"
to this Agreement.
"Public Lot" means any lot which has been finally subdi-
vided and individually (and not in "bulk") leased (for a period of
longer than one year) or sold to the purchaser or user thereof, or any
lot or parcel conveyed or dedicated to any governmental authority,
utility provider, school district or property owners association.
"Replacement Reserve Amount" means an amount calculated
using reasonable accounting practices based on the useful life of the
various assets composing the Projects, as established by the Code.
"Report" means the study of the feasibility and benefits
required by the Act for the applicable Project or Acquisition Project.
"Securities Act" means the Securities Act of 1933, as
amended.
"Segment" means a Complete, discrete portion of an Acqui-
sition Project.
"Segment Price" means an amount equal to the sum of the
amounts paid by the Owner for (1) design of the Segment (including the
costs of the review of such design by the District Engineer), (2) con-
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struction of the Segment pursuant to the Acquisition Project Construc-
tion Contract for such Segment (such amount to be equal to the
contract amount plus any increases to such contract amount approved as
described in Section 3.5 less any change orders decreasing the
contract amount), (3) inspection and supervision of performance under
such Acquisition Project Construction Contract, (4) acquisition of
interests in land not actually or beneficially owned by the Owner but
necessary in connection with acquisition of the Segment and (5) other
miscellaneous costs for such Segment attributable to construction of
the Segment approved by the Engineers as certified in the Certificate
of the Engineers for that Segment, including, without limitation, any
temporary facilities of the Project.
"State" means the State of Arizona.
(b) All references in this Agreement to designated
"Exhibits," "Articles," "Sections" and other subdivisions are to be
deemed to refer to the designated Exhibits, Articles, Sections and
other subdivisions of this Agreement as originally executed.
(c) The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Exhibit, Article, Section or other subdivision.
ARTICLE II
CONSTRUCTION OF PROJECTS BY THE DISTRICT;
ACQUISITION OF PLANS AND SPECIFICATIONS
Section 2.1. Upon a written request of the Owner and after
approval by the District Manager, the District may and, if the Project
which is the subject of such request is not on real property in which
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the Owner or Builder has an interest, shall, at the sole cost and
expense of the Owner cause Infrastructure to be constructed pursuant
to the Plans and Specifications in a fashion which, in the sole
discretion of the District Board, allows for development of the
Property to proceed in accordance with the terms of the Land
Development Agreement. The Owner shall be liable for the cost and
expense of such Infrastructure pursuant to a separate completion
guaranty and indemnity in form acceptable to the District Manager
provided with the request described in the first sentence of this
Section. (Underlying ownership of real property shall be determined
in the final plat or final development plan process of the
Municipality.)
Section 2.2 (a) The construction of the Infrastructure
which is the subject of this Article shall be procured, and such
Infrastructure shall be constructed, in accordance with the require-
ments for publicly procuring and constructing projects of the Munici-
pality similar to the Projects.
(b) Such Infrastructure (or any Project which is a
part thereof) shall be procured in one or more parts by and in the
name of the District, and Construction Contracts shall be entered into
with the contractors selected in accordance with the requirements for
awarding contracts for projects of the Municipality similar to the
Construction Contracts as specified in Article 3-4 of the Marana Code
and any procurement guidelines promulgated in connection therewith.
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Section 2.3 The Owner (or any entity related to it) shall
not be compensated more than once by the Municipality or the District
for any costs of any Project.
Section 2.4 Construction of any Project which is the sub-
ject of this Article shall be financed (a) at any time before the sale
and delivery of the Developer Bonds intended for such purpose pursuant
to Article VI (or after there are no available, unrestricted proceeds
of the sale of such Developer Bonds remaining) only pursuant to
Section 5.1(a) and (b) at any time after the sale and delivery of the
Developer Bonds intended for such purpose pursuant to Article VI (and
while there are remaining available, unrestricted proceeds of the sale
of such Developer Bonds) only pursuant to Section 5.1(b).
Section 2.5. (a) Unless the financial assurances de-
scribed in the next subsection are provided, any advertisement for
bids for construction of any Project which is the subject of this
Article pursuant to Section 2.1 shall include the following language:
"THE INFRASTRUCTURE WHICH IS THE SUBJECT OF THIS BID IS THE SUBJECT OF
A DISTRICT DEVELOPMENT, FINANCIAL PARTICIPATION AND INTERGOVERNMENTAL
AGREEMENT AMONG OWNER, THE TOWN OF MARANA, ARIZONA, AND MARANA 670
HOLDINGS, LLC. THE SUCCESSFUL CONTRACTOR WILL NOT HAVE RECOURSE,
DIRECTLY OR INDIRECTLY, TO SUCH TOWN OR OWNER FOR ANY COSTS UNDER ANY
CONSTRUCTION CONTRACT OR ANY LIABILITY, CLAIM OR EXPENSE ARISING
THEREFROM. MARANA 670 HOLDINGS, LLC SHALL HAVE SOLE LIABILITY
THEREFOR." (The District is "OWNER" for purposes of the foregoing.)
(b) Each Construction Contract for such a Project
shall provide that the respective contractors shall not have recourse,
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directly or indirectly, to the Municipality or the District for the
payment of any costs pursuant to such Construction Contract or any
liability, claim or expense arising therefrom and that the Owner shall
have sole liability therefor. In lieu of the foregoing, the Owner may
post financial assurances in a form and an amount determined
acceptable in the sole and absolute discretion of the District Manager
to provide for amounts due with respect to any of such Construction
Contracts.
Section 2.6 Plans and Specifications for any such Proj-
ects shall be prepared by the Owner Engineer and shall be acquired by
the District pursuant to Section 5.2(b) simultaneously with the
financing of the construction of the related Project pursuant to
Section 5.1(b). The District shall not be liable for any payment or
repayment to the Owner with respect to such Plans and Specifications
except as provided by this Agreement.
ARTICLE III
CONSTRUCTION OF ACQUISITION PROJECTS BY THE OWNER;
CERTAIN MATTERS RELATED TO PLANS AND SPECIFICATIONS
Section 3.1 The construction of the Acquisition Infra-
structure shall initially be at the sole cost and expense of the Owner
at the location denoted on, and in accordance with, the Plans and
Specifications. (Underlying ownership of real property in and on
which the Acquisition Infrastructure is to be built shall be deter-
mined in the final plat or final development plan process of the
Municipality.) Notwithstanding anything to the contrary in this
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Agreement, this Agreement shall not obligate the Owner to construct
any Infrastructure.
Section 3.2 (a) The construction of the Acquisition
Infrastructure and the preparation of the Plans and Specifications
shall be procured pursuant to the provisions of Title 34, Chapter 2,
Article 1, Arizona Revised Statutes, and in accordance with the
requirements for construction projects and plans and specifications,
respectively, of the Municipality similar to the Acquisition Projects
and the Plans and Specifications as specified in Article 3-4 of the
Marana Code and any procurement guidelines promulgated in connection
therewith. Acquisition Project Construction Contracts shall be
entered into with the contractors selected in accordance with the
requirements for awarding contracts for projects of the Municipality
similar to the Acquisition Project Construction Contracts as specified
by such Code and guidelines, and contracts for preparation of the
Plans and Specifications shall be entered into with the contractor
selected in accordance with the requirements for awarding contracts
for preparing plans and specifications of the Municipality similar to
the Plans and Specifications as specified by such Code and guidelines.
(Compliance with such requirements with respect to the Acquisition
Projects shall be evidenced by a Certificate of the Engineers.)
(b) As between the Owner and the District, the Owner
shall bear all risks, liabilities, obligations and responsibilities
under each Acquisition Project Construction Contract and all risk of
loss of or damage to any Acquisition Project (or any part thereof)
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occurring prior to the time of acquisition of such Acquisition Project
(or part thereof) pursuant to Article IV.
(c) The Municipality and the District shall be named
as additional insureds on any liability insurance policies required
under a bid for an Acquisition Project and as a third party
beneficiary with respect to all warranties, guarantees and bonds, if
any, with respect thereto.
(d) An indication of final payment and contract
closeout shall be provided to the District Manager before any acqui-
sition pursuant to Article IV. If any liens are placed on any Segment
of an Acquisition Project which is the subject of an Acquisition
Project Construction Contract or if litigation ensues between the
Owner and any contractor with respect to an Acquisition Project
Construction Contract, the District shall not acquire such Segment
until such liens are removed or such litigation is resolved or bonded.
Section 3.3 (a) Subsequent to the execution and delivery
of this Agreement, any advertisement for bids for construction of any
Acquisition Project or provision of any Plans and Specifications to be
acquired shall clearly indicate that the Owner will be the "owner" for
purposes of the Acquisition Project Construction Contract or contract
for such Plans and Specifications and shall include the following
language: "THE WORK WHICH IS THE SUBJECT OF THE BID IS THE SUBJECT OF
A DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTERGOVERNMENTAL
AGREEMENT AMONG OWNER, THE TOWN OF MARANA, ARIZONA, AND SAGUARO
SPRINGS COMMUNITY FACILITIES DISTRICT PURSUANT TO WHICH SUCH WORK MAY
BE ACQUIRED BY SUCH COMMCJNITY FACILITIES DISTRICT. THE SUCCESSFUL
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CONTRACTOR WILL NOT HAVE RECOURSE, DIRECTLY OR INDIRECTLY, TO SUCH
TOWN OR COMMCJNITY FACILITIES DISTRICT FOR ANY COSTS UNDER ANY CONTRACT
OR ANY LIABILITY, CLAIM OR EXPENSE ARISING THEREFROM. OWNER SHALL
HAVE SOLE LIABILITY THEREFOR." (The Owner is "OWNER" for purposes of
the foregoing.)
(b) Each Acquisition Project Construction Contract or
contract for such Plans and Specifications shall provide that the
respective contractors shall not have recourse, directly or indi-
rectly, to the Municipality or the District for the payment of any
costs pursuant to such Acquisition Project Construction Contract or
contract for such Plans and Specifications or any liability, claim or
expense arising therefrom and that the Owner shall have sole liability
therefor. In lieu of the foregoing, the Owner may post financial
assurances in a form and an amount determined acceptable in the sole
and absolute discretion of the District Manager to provide for amounts
due with respect to any of such Construction Contracts.
Section 3.4 The Owner shall provide for inspection of
work performed under any Acquisition Project Construction Contract by
the Engineers.
Section 3.5 Any change order to any Acquisition Project
Construction Contract shall be subject to approval by the Engineers
(which approval shall not be unreasonably withheld or delayed) and
shall be certified to in the applicable Certificate of the Engineers;
provided, however, that any change order expected to increase the
amount of an Acquisition Project Construction Contract shall be the
subject of the same approval requirements that a change order to
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increase the cost of a construction contract of the Municipality would
be subject unless modified by action of the District Board and, spec-
ifically, the approval of the District Manager.
ARTICLE IV
ACQUISITION OF ACQUISITION PROJECTS FROM THE OWNER
Section 4.1 (a) Subject to the other terms of this
Agreement, the Owner shall sell to the District, and the District
shall acquire from the Owner, each Segment for the applicable Segment
Price.
(b) Acquisition of a Segment shall be financed (1) at
any time before the sale and delivery of the Developer Bonds intended
for such purpose pursuant to Article VI (or after there are no
available, unrestricted proceeds of the sale of such Developer Bonds
remaining) only pursuant to Section 5.2(a) hereof and (2) at any time
after the sale and delivery of the Developer Bonds intended for such
purpose pursuant to Article VI (and while there are available, unre-
stricted remaining proceeds of the sale of such Developer Bonds) only
pursuant to Section 5.2(b) hereof.
(c) The District shall not be liable for any payment
or repayment to the Owner with respect to the Acquisition
Infrastructure except as provided by this Agreement and applicable
law.
Section 4.2 The District shall acquire from the Owner
and, to the extent it has available funds, pay the Segment Price for
each Segment as provided in Section 4.1, but no more than thirty (30)
days after receipt by the District manager of the below stated items
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(a through f) relating to each Segment, and the Owner shall accept
the Segment Price for and sell to the District, each Segment as
provided in Section 4.1 after the approval of the Report and within
thirty (30) days after receipt by the District Manager of the
following with respect to such Segment, in form and substance
reasonably satisfactory to the District Manager:
(a) the Certificate of the Engineers;
(b) the Conveyance;
(c) evidence that public access to the Segment or the
Acquisition Project, as applicable, has been or eventually
will be provided to the Municipality;
(d) the assignment of all contractors' and material-
men's warranties and guarantees and to the extent
assignable, the assignment of payment and performance
bonds;
(e) an acceptance letter issued by the Municipality
and by its terms subject specifically to recordation of the
Conveyance which is the subject of such letter and
(f) such other documents, instruments, approvals or
opinions as may reasonably be requested by the District
Manager including, with respect to any real property re-
lated to the Acquisition Project, title reports, insurance
and consultant reports that provide evidence, satisfactory
to the District Manager, that such real property does not
contain environmental contaminants which make such real
property unsuitable for its intended use or, to the extent
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such contaminants are present, a plan satisfactory to the
District Manager which sets forth the process by which such
real property will be made suitable for its intended use
and the sources of funds necessary to accomplish such
purpose.
ARTICLE V
FINANCING OF COSTS OF PROJECTS
AND PLANS AND SPECIFICATIONS
Section 5.1 (a) (1) To provide for amounts due pursuant
to any Construction Contract (including incidental costs relating
thereto) before the sale and delivery of the Developer Bonds intended
for such purpose pursuant to Article VI and after there are no remain-
ing, available, unrestricted proceeds of the sale of such Developer
Bonds, such amounts shall be advanced by the Owner and the obligation
to advance such amounts shall be the obligation of the Owner pursuant
to the terms of this Agreement. Each such advance shall be evidenced
by a written acknowledgement of the District Manager included as part
of the written approval of the Engineers with each pay request of the
contractor for each Construction Contract.
(2) As soon as possible after the sale and
delivery of the Developer Bonds intended for such purpose pursuant to
Article VI, the total amounts so advanced by the Owner for such pur-
pose prior to the sale and delivery of such Developer Bonds shall be
immediately paid to the Owner (without interest for the period during
which it was unpaid) from, and only from, the available, unrestricted
proceeds of the sale of such Developer Bonds, but only to the extent
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of the remaining amounts thereof. Neither the District nor the Munic-
ipality shall be liable to the Owner (or any contractor or assigns
under any Construction Contract) for payment of any such amount except
to the extent available, unrestricted proceeds from the sale of such
Developer Bonds are available for such purpose, and no representation
or warranty is given that the Developer Bonds can be sold or that
sufficient proceeds from the sale of the Developer Bonds shall be
available to pay such amounts.
(3) Until the sale and delivery of future
series of the Developer Bonds intended for such purpose pursuant to
Article VI and during any time when there are no available,
unrestricted remaining proceeds of the sale of such Developer Bonds,
the District shall not have any obligation to repay the Owner for any
advance made by the Owner to pay such amounts.
(b) (1) Any amounts due pursuant to any Construc-
tion Contract (including incidental costs relating thereto) after the
sale and delivery of the Developer Bonds intended for such purpose
pursuant to Article VI (and while there are remaining, available,
unrestricted proceeds of the sale of such Developer Bonds) shall be
provided for by the payment of such amounts from, and only from, the
available, unrestricted proceeds from the sale of current and future
series of the Developer Bonds intended for such purpose pursuant to
Article VI to the extent only of the remaining amounts thereof.
(2) If there are no available unrestricted pro-
ceeds from the sale of current or prior series of the Developer Bonds
intended for such purpose pursuant to Article VI, then until the sale
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and delivery of future series of the Developer Bonds intended for such
purpose pursuant to Article VI, the District shall not have any
obligation to pay such amounts. Furthermore, in such an event,
neither the District nor the Municipality shall be liable to the Owner
(or any contractor or assigns under any Construction Contract) for
payment of any such amount except to the extent available, unre-
stricted proceeds from the sale of future series of the Developer
Bonds intended for such purpose pursuant to Article VI are available
for such purpose, and no representation or warranty is given that the
Developer Bonds can be sold or that sufficient, available,
unrestricted proceeds from the sale of such future series of the
Developer Bonds shall be available to pay such amounts.
Section 5.2 (a) (1) To provide for any acquisition of a
Segment occurring before the sale and delivery of the Developer Bonds
intended for such purpose pursuant to Article VI and after there are
no remaining, available, unrestricted proceeds from the sale of such
Developer Bonds, the Segment Price of that Segment shall be advanced
by the Owner pursuant to the terms of this Agreement and the
Conveyance for that Segment.
(2) As soon as possible after the sale and
delivery of the Developer Bonds intended for such purpose pursuant to
Article VI, the amount advanced by the Owner for the Segment Price of
a Segment prior to the sale and delivery of such Developer Bonds
shall, subject to the requirements of Section 4.2, be paid to the
Owner (without interest for the period during which it was unpaid)
from, and only from, the available, unrestricted proceeds of the sale
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of such Developer Bonds, but only to the extent of the remaining
amounts thereof. Neither the District nor the Municipality shall be
liable to the Owner (or any contractor or assigns under any Acquisi-
tion Project Construction Contract) for payment of any Segment Price
except to the extent available, unrestricted proceeds from the sale of
such Developer Bonds are available for such purpose, and no repre-
sentation or warranty is given that the Developer Bonds can be sold or
that sufficient available, unrestricted proceeds from the sale of the
Developer Bonds shall be available to pay any specific Segment Price.
(3) Until the sale and delivery of future
series of the Developer Bonds intended for such purpose pursuant to
Article VI and during any time when there are no available, unre-
stricted remaining proceeds of the sale of such Developer Bonds, the
District shall not have any obligation to repay the Owner for any
advance made by the Owner to pay a Segment Price.
(b) (1) Any acquisition of a Segment or of Plans
and Specifications for a Project occurring after the sale and delivery
of the Developer Bonds intended for such purpose pursuant to Article
VI (and while there are remaining, available, unrestricted proceeds
from the sale of such Developer Bonds) shall, subject to the require-
ments of Section 4.2, be provided for by the payment of the Segment
Price for such Segment or the costs of such Plans and Specifications,
whichever is applicable, as determined by the District Engineer and
the District Manager based on actual amounts paid by the Owner to the
Owner Engineer therefor from, and only from, the available, unre-
stricted proceeds from the sale of such Developer Bonds, but only to
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the extent of the remaining amounts thereof. The District shall pay
the costs of such Plans and Specifications to the Owner as provided in
Section 2.6 after approval of the Report and within thirty (30) days
after receipt by the District Manager of evidence of exclusive
ownership of the architectural materials (including memoranda, notes
and preliminary and final drawings) and the related intellectual prop-
erty rights (including copyright, if any) related to such Plans and
Specifications, in all media, including electronic, for the limited
purpose of operating and maintaining the Segment(s) that are the sub-
ject of the Plans and Specifications, and that the District shall be
held harmless and be free to use such Plans and Specifications for the
limited purpose of such operation and maintenance.
(2) Until the sale and delivery of a series of
Developer Bonds intended for such purpose pursuant to Article VI, the
District shall not have any obligation to pay such Segment Price or
such costs of such Plans and Specifications. Neither the District nor
the Municipality shall be liable to the Owner (or any contractor or
assigns under any Acquisition Project Construction Contract) for pay-
ment of any Segment Price or for the costs of such Plans and Specifi-
cations except to the extent available, unrestricted proceeds from the
sale of the Developer Bonds are available for such purpose, and no
representation or warranty is given that the Developer Bonds can be
sold or that sufficient, available, unrestricted proceeds from the
sale of the Developer Bonds shall be available to pay such Segment
Price or such costs of such Plans and Specifications.
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ARTICLE VI
MATTERS RELATING TO THE BONDS AND
OTHER OBLIGATIONS OF THE DISTRICT
Section 6.1 (a) Subject to Section 6.3 below, to the
extent the District is not otherwise prohibited from agreeing to do so
pursuant to applicable law, at the request of the Owner, the District
Board shall, from time to time, take all such reasonable action
necessary for the District to sell and issue, pursuant to the
provisions of the Act, an applicable amount of the Developer Bonds in
an amount sufficient to repay all then outstanding and pending
advances for, or to pay directly from the available, unrestricted
proceeds thereof, the total of all amounts due for the purposes of any
Construction Contract for the Infrastructure and the Segment Prices
for the Acquisition Infrastructure and costs of the Plans and
Specifications for the Infrastructure to be acquired, established or
reasonably expected to be established pursuant hereto plus all
relevant issuance costs related thereto. To the extent the District
is not otherwise prohibited from agreeing to do so pursuant to
applicable law, except at the request of, or with the written consent
of, the Owner, the District shall not undertake the issuance of any of
the Bonds until the earlier of (1) twenty (20) years from the date
hereof and (2) the issuance of all of the Developer Bonds.
(b) If the Developer Bonds are not issued or if the
available, unrestricted proceeds of the sale of the Developer Bonds
intended for such purpose are insufficient to pay all of the amounts
due described in Section 5.1(b) or all of the Segment Prices for the
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Acquisition Infrastructure and costs of the Plans and Specifications
for the Infrastructure to be acquired, then there shall be no recourse
against the District or the Municipality for, and neither the District
nor the Municipality shall have liability with respect to, such
amounts so due or the Segment Prices for the Acquisition Infrastruc-
ture, except from the available, unrestricted proceeds from the sale
of the Developer Bonds, if any and as applicable.
Section 6.2 (a) The District shall, subject to the other
conditions of this Agreement, issue, in one or more series in princi-
pal amounts to be determined by the District Board, the Developer
Bonds at the sole discretion of the District Board. The District
shall not issue any series of the Developer Bonds unless the
corresponding series of the Developer Bonds shall receive one of the
four highest investment grade ratings by a nationally recognized bond
rating agency or shall be sold in other than a"public sale" (as such
term is used in the Act) and with restrictions on subsequent transfer
thereof under such terms as the District Board shall, in their
reasonable discretion, approve.
(b) The total aggregate principal amount of all of
the series of the Developer Bonds shall not exceed $25,000,000 in
principal amount, leaving $74,000,000 in principal amount of all other
series of the Bonds which are not controlled by the terms of this
Agreement but subject to the provisions of Section 6.1(a) hereof.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, the District, in its sole and absolute discretion, may fund
a portion of the costs to design, construct, or acquire all or part of
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Twin Peaks Road from the western boundary of the Property to the
intersection of Twin Peaks Road and Silverbell Road (including poten-
tially the costs to design and install a traffic control signal at the
Twin Peaks/Saguaro Peaks Boulevard intersection), in which event the
District, the Town and the Owner agree that: (i) the costs of such
design, construction or acquisition shall not be funded through the
Developer Bonds; (ii) a portion of the costs of such construction or
acquisition may be funded by the Bonds that are not Developer Bonds
during the twenty-year period referenced in Section 6.1(a)(1)(i), but
only after $15,000,000 principal amount of the series of the Developer
Bonds have been issued by the District; and (iii) all of the costs to
design and construct Twin Peaks Road adjacent to the Property (includ-
ing the costs to design and install a traffic control signal at the
Twin Peaks/Saguaro Peaks Boulevard intersection) shall be included in
the Bonds issued to fund the portion of the design, construction,
and/or acquisition costs of Twin Peaks Road not adjacent to the Prop-
erty and the available, unrestricted proceeds from the sale of the
Bonds issued for such purpose shall be allocated fifty percent (500)
to the District and fifty percent (500) to the Owner until the Dis-
trict is reimbursed in full or the Owner is paid the related acquisi-
tion price in full, respectively, and, thereafter, one hundred percent
(1000) of the remaining available, unrestricted proceeds from the sale
of the Bonds issued for such purpose shall be allocated to the other
party until it is reimbursed in full or the related acquisition price
is paid in full.
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(c) The Developer Bonds shall only be issued if the
debt service therefor can be amortized with substantially equal
amounts of annual debt service from amounts generated by a tax rate of
not to exceed $2.50 per one hundred dollars of secondary assessed val-
uation of property within the boundaries of the District as indicated
on the tax roll for the current tax year. For purposes of the fore-
going, a delinquency factor for tax collections equal to the greater
of five percent (50) and the historic, average, annual, percentage
delinquency factor for the District as of such Fiscal Year shall be
assumed; all property in the District owned by the Owner or any entity
owned or controlled (as such term is used in the Securities Act) by,
or which owns or controls (as such term is used in the Securities
Act), the Owner shall be assigned the last value such property had
when categorized as "vacant" for purposes of secondary assessed valua-
tion and the debt service for any outstanding series of the Developer
Bonds theretofore issued shall be taken into account in determining
whether such tax rate will produce adequate debt service tax collec-
tions; provided, however, that the first series of the Developer Bonds
shall be issued as soon as practicable to accomplish the goal of
having the debt service tax costs therefor appear on the earliest tax
bill applicable to any single family residential dwelling unit to be
located within the boundaries of the District to be owned by other
than the Owner or any entity owned or controlled (as such term is used
in the Securities Act) by the Owner or any homebuilder to whom the
Owner or any entity owned or controlled (as such term is used in the
Securities Act) by, or which owns or controls (as such term is used in
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the Securities Act), the Owner sells property to within the boundaries
of the District.
(d) If necessary in the sole discretion of the Dis-
trict Board, the "sale proceeds" from the sale of each series of the
Developer Bonds shall include an amount sufficient to fund a reserve
fund, which shall be a reserve to secure payment of debt service on
that series of the Developer Bonds, in an amount equal to the maximum
amount permitted by the Code.
Section 6.3 The District Board shall not be required to
take any action to sell and issue the Developer Bonds unless and until
the District, in its reasonable discretion, has approved a credit-
worthy person or entity to be the "Guarantor" under this Agreement,
and the Guarantor has executed and delivered such documents,
agreement, instruments, financial information and other materials as
the District shall reasonably require as a condition to the District's
approval of such person or entity as the "Guarantor" under this
Agreement.
Section 6.4 Notwithstanding anything to the contrary
under the Act and to the extent the District is not otherwise
prohibited from agreeing to do so pursuant to applicable law, the
District Board shall not take any action to sell and issue special
assessment lien bonds that will encumber, or levy any special
assessments against, all or any portion of the real property described
on Exhibit "E" attached hereto (the "Horton Property").
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ARTICLE VII
ACCEPTANCE BY THE MUNICIPALITY
Section 7.1 Simultaneously with the payment of the
related Segment Price or completion of construction of a Project, the
Segment of Acquisition Infrastructure, to the extent of the interest
retained by the Owner therein, or the Project constructed is hereby
accepted (including for purposes of maintenance and operation thereof
if not theretofore provided) by the Municipality, subject to the
conditions pursuant to which facilities such as the Acquisition
Projects and the Projects so constructed are typically accepted by the
Municipality and thereafter shall be made available for use by the
general public.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 (a) The Owner and Guarantor (1) shall,
jointly and severally, indemnify and hold harmless each Indemnified
Party for, from and against any and all losses, claims, damages or
liabilities, joint or several, arising from actions in connection
with, or arising from, formation of the District or with respect to
the Election and the actions of the Owner or Guarantor (but not of
third parties) or a failure of performance by the Owner or Guarantor
(but not of third parties), relating to the activities or
administration of the District, or the carrying out of the provisions
of this Section, including particularly but not by way of limitation
and as limited by the aforesaid for any losses, claims or damages or
liabilities (A) related to any Acquisition Project Construction Con-
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tract or Project initiated upon a written request of the Owner
constructed pursuant to a Construction Contract including claims of
any contractor, vendor, subcontractor or supplier, (B) to which any
such Indemnified Party may become subject, under any statute or
regulation at law or in equity or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue state-
ment of a material fact set forth in any offering document relating to
the Developer Bonds, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or which is
necessary to make the statements therein, in light of the circum-
stances in which they were made, not misleading in any material
respect and (C) to the extent of the aggregate amount paid in any
settlement of any litigation commenced or threatened arising from a
claim based upon any such untrue statement or alleged untrue statement
or omission or alleged omission if such settlement is effected with
the written consent of the Owner (which consent shall not be unreason-
ably withheld) and (2) shall reimburse any legal or other expenses
reasonably incurred by any such Indemnified Party in connection with
investigating or defending any such loss, claim, damage, liability or
action.
(b) Section 8.1(a) shall, however, not be applicable
to any of the following:
(1) matters involving any gross negligence or
willful misconduct of any Indemnified Party,
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(2) any loss, claim, damage or liability for
which insurance coverage is actually procured which names the District
as an insured, in order to provide insurance against the errors and
omissions of the District Board or the other representatives, agents
or employees of the District and any loss, claim, damage or liability
that is covered by any commercial general liability insurance policy
actually procured which names the District as an insured (including
those of the Owner under which the District is to be added as an
additional named insured),
(3) any loss, claim, damage or liability aris-
ing from or relating to defects in any Infrastructure that are not
known to the Owner and are discovered one (1) year or more following
acceptance thereof by the Municipality pursuant to Section 7.1;
(4) matters arising from or involving any
breach of this Agreement by the District or any other Indemnified
Party or
(5) Projects or Construction Contracts initi-
ated by the District without a written request of Owner and any loss,
claim, damage or liability arising from or relating to any Infrastruc-
ture constructed or installed in connection therewith.
(c) An Indemnified Party shall, promptly after the
receipt of notice of a written threat of the commencement of any
action against such Indemnified Party in respect of which indemnifica-
tion may be sought against the Owner or Guarantor, notify the Owner in
writing of the commencement thereof and provide a copy of the written
threat received by such Indemnified Party. Failure of the Indemnified
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Party to give such notice shall reduce the liability of the Owner or
Guarantor by the amount of damages attributable to the failure of the
Indemnified Party to give such notice to Guarantor, but the omission
to notify the Owner of any such action shall not relieve the Owner or
Guarantor from any liability that either of them may have to such
Indemnified Party otherwise than under this Section. In case any such
action shall be brought against an Indemnified Party and such
Indemnified Party shall notify the Owner of the commencement thereof,
Guarantor may, or if so requested by such Indemnified Party shall,
participate therein or defend the Indemnified Party therein, with
counsel satisfactory to such Indemnified Party and the Owner (it being
understood that, except as hereinafter provided, neither of the Owner
nor Guarantor, shall be liable for the expenses of more than one
counsel representing the Indemnified Parties in such action), and
after notice from the Owner to such Indemnified Party of an election
so to assume the defense thereof, neither of the Owner nor Guarantor
shall be liable to such Indemnified Party under this section for any
legal or other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof; provided, however, that
unless and until the Owner defends any such action at the request of
such Indemnified Party, the Owner shall have the right to participate
at its own expense in the defense of any such action. If the Owner
shall not have employed counsel to defend any such action within a
reasonable period of time after receipt of written notice of such
action or if an Indemnified Party shall have reasonably concluded that
there may be defenses available to it and/or other Indemnified Parties
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that are different from or additional to those available to the Owner
(in which case the Owner shall not have the right to direct the
defense of such action on behalf of such Indemnified Party) or to
other Indemnified Parties, the legal and other expenses, including the
expense of separate counsel, incurred by such Indemnified Party shall
be borne by the Owner.
(d) Neither of the Owner nor Guarantor shall have any
obligation to indemnify or hold harmless any Indemnified Party until
such time that the Indemnified Party has exhausted all other
insurance, risk retention or other indemnification options or remedies
available to it. In the event that the insurance, risk retention or
other indemnification options or remedies of the Indemnified Party are
insufficient to reimburse the Indemnified Party for its actual losses,
claims, damages or liabilities, then, and only then, shall the Indem-
nified Party have a right to indemnification from the Owner and
Guarantor, and even then only to the extent that indemnification by
the Owner, KB Home Tucson and Guarantor will be secondary to, and in
excess of, the primary insurance, risk retention or other indemnifi-
cation options or remedies of the Indemnified Party.
Section 8.2 To the extent permitted by applicable law,
the District shall indemnify, defend and hold harmless each Indemni-
fied Party for, from and against any and all liabilities, claims or
demands for injury or death to persons or damage to property arising
from in connection with, or relating to the performance of this
Agreement. The District shall not, however, be obligated to indemnify
the District Indemnified Parties with respect to damages caused by the
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negligence or willful misconduct of the District Indemnified Parties.
The District shall not indemnify, defend and hold harmless the Munici-
pality with respect to matters relating to public infrastructure owned
by the Municipality.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES AND COSTS
Section 9.1. To provide for expenses and costs for agents
or third parties required to administer the Developer Bonds and to
levy and collect ad valorem taxes for payment of the Developer Bonds
and any purposes otherwise related to such activities of the District,
amounts shall be budgeted by the District Board each Fiscal Year in
the District Budget for such purposes and shall be paid from amounts
available from the tax levy described in Section 6.2(d).
Section 9.2. To provide for the payment of the District
Expenses and the O/M Expenses, the District Board shall levy all or a
portion of the O/M Tax and shall apply the collections of the O/M Tax
first to pay the District Expenses and second to pay the O/M Expenses.
To the extent the collections (including any excess collection from
previous years) of the O/M Tax are not sufficient to pay the District
Expenses and the O/M Expenses (excluding from the latter any amount to
fund the Replacement Reserve Amount), the Owner and Guarantor shall,
to the extent of reasonable amounts necessary therefor, be liable and
obligated, jointly and severally, to pay or, on a reasonable basis
acceptable to the District Manager in his sole discretion, obligate a
homeowner's or similar association to pay, to the District on July 1
of each Fiscal Year of the District the amount of any shortfall
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indicated in the District Budget with respect to the District Expenses
and the O/M Expenses (excluding from the latter any amount to fund the
Replacement Reserve Amount), including any amount required because of
any shortfall in the prior Fiscal Year as provided in such District
Budget and no matter how such shortfall was otherwise funded. The
District shall only levy the O/M Tax in an amount necessary for the
District Expenses and the O/M Expenses reflected in the District
Budget for the Fiscal Year of the District and only in reasonable
amounts therefor. The collective obligation of the Owner and
Guarantor pursuant to this Section shall not exceed $100,000 in total
per Fiscal Year (less the O/M Tax actually collected during such
Fiscal Year) beginning with the first full Fiscal Year after the
execution and delivery hereof by the District [provided, however, that
for any period prior thereto such obligations shall not exceed
$100,000 times the number of full months remaining in such Fiscal Year
divided by twelve (12), less the prorata share of the O/M Tax actually
collected during such Fiscal Year] and shall only be effective until
the July 1 after the levy of the O/M Tax at $0.30 per $100.00 of
secondary assessed valuation could first result in collections of
$100,000, given the tax base of the District for the applicable tax
year and assuming a delinquency factor of five percent (50).
Section 9.3 The Owner shall advance $75,000, as a deposit
on account, to be applied by the Municipality to pay Initial Expenses.
When $50,000 of the $75,000 deposit is expended, an accounting will be
made to the Owner of all amounts incurred by the Municipality for the
Initial Expenses to date, and the Owner and Guarantor shall be liable
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and obligated, jointly and severally, to provide additional funds as
necessary for the Initial Expenses in an amount requested by the
Municipality which must be paid forthwith and which shall thereafter
be the subject of a similar accounting. Amounts paid pursuant to this
Section by the Owner and Guarantor which may be reimbursed under
applicable law to the Owner and Guarantor from the proceeds derived
from the sale of the Developer Bonds shall, without the need for
further request by the Owner, but subject to the extent of available
amounts therefor, be included as part of the purpose of the Developer
Bonds. The obligations of the Owner and Guarantor pursuant to this
Section shall only be effective until the July 1 after the date that
the first collections of the O/M Tax are received by the District.
ARTICLE X
MISCELLANEOUS
Section 10.1. None of the Municipality, the District, the
Owner nor Guarantor shall knowingly take, or cause to be taken, any
action which would cause interest on any Bond to be includable in
gross income for federal income tax purposes pursuant to Section 61 of
the Code.
Section 10.2. (a) To provide evidence satisfactory to the
District Manager that any prospective purchaser of land within the
boundaries of the District has been notified that such land is within
the boundaries of the District and that the Developer Bonds may be
then or in the future, be outstanding, the Disclosure Statement shall
be produced by the Owner, or, subsequent to a sale of land by the
Owner, shall be produced by each homebuilder (including Builder) to
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whom the Owner has sold land; provided, however, that the Disclosure
Statement may be modified as necessary in the future to adequately
describe the District and the Developer Bonds and the source of
payment for debt service therefor as agreed by the District Manager
and the Owner.
(b) The Owner shall or shall require that each home-
builder to whom the Owner has sold land:
(1) cause any purchaser of land to sign the
Disclosure Statement upon entering into a contract for purchasing
such land;
(2) provide a copy of each fully executed Dis-
closure Statement to be filed with the District Manager and
(3) provide such information and documents,
including audited financial statements to the extent necessary
for the underwriters of the Developer Bonds to comply with Rule
15c2-12 of the Securities Exchange Act of 1934.
Section 10.3 (a) This Agreement shall be binding upon
and shall inure to the benefit of the parties to this Agreement and
their respective legal representatives, successors and assigns and the
duties, obligations and liabilities under this Agreement are attached
to and run with the Property. Upon the conveyance of all or any por-
tion of the Property (other than a Public Lot), all of the Owner's (or
its successor's) duties, obligations and liabilities under this Agree-
ment with respect to the portion of the Property conveyed and first
arising after the effective date of such conveyance shall, upon the
written consent of the District Board, be assigned to, and assumed by,
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the purchaser of the Property. The assigning Owner (or its successor)
shall thereafter be relieved of all duties, obligations and liabil-
ities arising from and after the effective date of such conveyance
with respect to the portion of the Property conveyed. The Owner (or
its successor) and the purchaser of all or any portion of the Property
may expressly delineate the portion of the Owner's right, title and
interest under this Agreement being assigned to the purchaser by a
written instrument executed by the Owner (or its successor) and the
purchaser, and recorded in the Official Records of Pima County,
Arizona.
(b) This Agreement shall not create conditions or
exceptions to title or covenants running with any individual lots into
which the Property is subdivided. Any title insurer can rely on the
language of this Section when issuing any commitment to insure title
to any individual lot or when issuing a title insurance policy for any
individual lot. Nevertheless, in order to alleviate any concern as to
the effect of this Agreement on the status of title to any of the
Property, this Agreement shall terminate without the execution or
recordation of any further document or instrument as to any Public
Lot, and thereupon such Public Lot shall be released from and no
longer be subject to or burdened by the provisions of this Agreement.
Nothing herein shall limit or affect the validity of any document to
be recorded other than this Agreement nor of the tax for the Bonds or
the O/M Tax which, when imposed upon the Property, shall run with the
Property in accordance with applicable laws.
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Section 10.4 Each party hereto shall, promptly upon the
request of any other, have acknowledged and delivered to the other any
and all further instruments and assurances reasonably requested or
appropriate to evidence or give effect to the provisions of this
Agreement.
Section 10.5 This Agreement sets forth the entire under-
standing of the parties as to the matters set forth herein as of the
date this Agreement is executed and cannot be altered or otherwise
amended except pursuant to an instrument in writing signed by each of
the parties hereto. This Agreement is intended to reflect the mutual
intent of the parties with respect to the subject matter hereof, and
as such no rule of strict construction shall be applied against any
party.
Section 10.6 This Agreement shall be governed by and
interpreted in accordance with the laws of the State.
Section 10.7 The waiver by any party hereto of any right
granted to it under this Agreement shall not be deemed to be a waiver
of any other right granted in this Agreement nor shall the same be
deemed to be a waiver of a subsequent right obtained by reason of the
continuation of any matter previously waived under or by this
Agreement.
Section 10.8 This Agreement may be executed in any number
of counterparts, each of which, when executed and delivered, shall be
deemed to be an original, but all of which taken together shall con-
stitute one of the same instrument.
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Section 10.9 (a) To the extent applicable under Section
38-511, Arizona Revised Statutes, the Municipality and the District
may, within three years after its execution, cancel this Agreement,
without penalty or further obligation, if any person significantly
involved in initiating, negotiating, securing, drafting or creating
this Agreement on behalf of the Municipality or the District, respec-
tively, is, at any time while this Agreement is in effect, an employee
or agent of the Owner, Builder and Guarantor in any capacity or a
consultant to any other party of this Agreement with respect to the
subject matter of this Agreement and, if applicable, may recoup any
fee or commission paid or due any person significantly involved in
initiating, negotiating, securing, drafting or creating this Agreement
on behalf of the Municipality or the District, respectively, from the
Owner, Builder and Guarantor arising as the result of this Agreement.
The Owner, Builder and Guarantor have not taken and shall not take any
action which would cause any person described in the preceding
sentence to be or become an employee or agent of the Owner, Builder
and Guarantor in any capacity or a consultant to any party to this
Agreement with respect to the subject matter of this Agreement.
(b) To the extent applicable under Section 41-4401,
Arizona Revised Statutes, the Owner, Builder and Guarantor shall
comply with all federal immigration laws and regulations that relate
to their employees and their compliance with the "e-verify" require-
ments under Section 23-214(A), Arizona Revised Statutes. The breach
by either of the foregoing shall be deemed a material breach of this
Agreement and may result in the termination of their services. The
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Municipality and the District retain the legal right to randomly
inspect the papers and records of the Owner, Builder and Guarantor to
ensure that the Owner, Builder and Guarantor are complying with the
foregoing. The Owner, Builder and Guarantor shall keep such papers
and records open for random inspection during normal business hours by
the Municipality and the District. The Owner, Builder and Guarantor
shall cooperate with the random inspections by the Municipality and
the District including granting the Municipality and the District
entry rights onto their property to perform such random inspections
and waiving their respective rights to keep such papers and records
confidential.
(c) Pursuant to Sections 35-391.06 and 35-393.06,
Arizona Revised Statutes, the Owner, Builder and Guarantor do not have
a scrutinized business operation in Sudan or Iran. For the purpose of
this Section the term "scrutinized business operations" shall have the
meanings set forth in Section 35-391 and 35-393, Arizona Revised
Statutes, as applicable. If the Municipality or the District
determine that either submitted a false certification, the Munici-
pality or the District may impose remedies as provided by law
including terminating their services.
Section 10.10 The term of this Agreement shall be as of
the date of the execution and delivery hereof by each of the parties
hereto and shall expire upon the earlier of (i) the agreement of the
District, the Municipality, the Owner and Guarantor to the termination
hereof, (ii) June 1, 2063, and (iii) the date on which all of the
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Developer Bonds are paid in full or defeased to the fullest extent
possible pursuant to the Act.
Section 10.11. All notices, certificates or other communi-
cations hereunder (including in the Exhibits hereto) shall be suffi-
ciently given and shall be deemed to have been received 48 hours after
deposit in the United States mail in registered or certified form with
postage fully prepaid addressed as follows:
If to the Municipality:
11555 North Civic Center Drive
Marana, Arizona 85653
Attention: Manager
If to the District:
11555 North Civic Center Drive
Marana, Arizona 85653
Attention: Manager
If to the Owner:
Marana 670 Holdings, LLC
Suite 100
7377 East Doubletree Ranch Road
Scottsdale, Arizona 85258
Attention: Brian Baehr, Vice President,
Land Development
With a copy to:
Fennemore Craig, P.C.
Suite 2600
3003 North Central Avenue
Phoenix, Arizona 85012-2913
Attention: Jay S. Kramer
If to Builder:
D.R. Horton, Inc.
3580 W. Ina Road, Suite 100
Tucson, Arizona 85741
Attn: Eric Montgomery
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with a copy to:
The Lenihan Law Firm, P.C.
1050 East River Road, Suite 300
Tucson, Arizona 85718
Attn: Stephen J. Lenihan, Esq.
and a copy to:
D.R. Horton, Inc.
20410 North 19th Avenue, Suite 100
Phoenix, AZ 85027
Attn: Robert Coltin
Any of the foregoing, by notice given hereunder, may designate differ-
ent addresses to which subsequent notices, certificates or other com-
munications will be sent.
Section 10.12. If any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other
provision thereof, and such ruling person or tribunal shall not deem
the entire Agreement to be invalid or unenforceable.
Section 10.13. The headings or titles of the several Arti-
cles and Sections hereof and in the Exhibits hereto, and any table of
contents appended to copies hereof and thereof, shall be solely for
convenience of reference and shall not affect the meaning, construc-
tion or effect of this Agreement.
Section 10.14. This Agreement does not relieve any party
hereto of any obligation or responsibility imposed upon it by law;
provided, however, that if the provisions of this Agreement conflict
in any particular with those of the Land Development Agreement relat-
ing to the District, the provisions of the Land Development Agreement
shall supersede and control those of this Agreement, as amended, in
all respects.
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Section 10.15 No later than ten (10) days after this
Agreement is executed and delivered by each of the parties hereto, the
Owner shall on behalf of the Municipality and the District record a
copy of this Agreement with the County Recorder of Pima County,
Arizona.
Section 10.16 Unless otherwise expressly provided, the
representations, covenants, indemnities and other agreements contained
herein shall be deemed to be material and continuing, shall not be
merged and shall survive any conveyance or transfer provided herein.
Section 10.17 If any party hereto shall be unable to
observe or perform any covenant or condition herein by reason of Force
Majeure, then the failure to observe or perform such covenant or con-
dition shall not constitute a default hereunder so long as such party
shall use its best efforts to remedy with all reasonable dispatch the
event or condition causing such inability and such event or condition
can be cured within a reasonable amount of time.
Section 10.18 Whenever the consent or approval of any
party hereto, or of any agency therefor, shall be required under the
provisions hereof, such consent or approval shall not be unreasonably
withheld, conditioned or delayed unless specifically otherwise limited
as provided herein.
Section 10.19 Notwithstanding any other provision of this
Agreement to the contrary, the provisions of Sections 7.1, 8.1, 8.2,
9.3, 10.1, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11,
10.12, 10.13, 10.14, 10.15, 10.17, 10.18, 10.19 and 10.20 are the only
provisions that are effective against the Municipality for purposes of
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the Intergovernmental Agreement Act as the Intergovernmental Agreement
Act is intended to be applied for purposes of this Agreement.
Section 10.20 (a) This Agreement in no way acquiesces to
or obligates the Municipality or the District to perform a legislative
act.
(b) Failure or unreasonable delay by any party to
perform or otherwise act in accordance with any term or provision of
this Agreement for a period of thirty (30) days (hereinafter referred
to as the "Cure Period") after actual receipt of written notice
thereof from any other party, shall constitute a default under this
Agreement; provided, however, that if the failure or delay is such
that more than thirty (30) days would reasonably be required to
perform such action or comply with any term or provision hereof, or
there is existing a Force Majeure event, then such party shall have
such additional time as may be necessary to perform or comply so long
as such party commences performance or compliance within a reasonable
period of time under the facts applicable to each situation; provided
further that the foregoing shall not apply to the last sentence of
Section 9.2. Said notice shall specify the nature of the alleged
default and the manner in which said default may be satisfactorily
cured, if possible. In the event such default is not cured within the
Cure Period, any non-defaulting party shall have all rights and
remedies that are set forth in the next subsection.
(c) Except as provided in subsection (b), the parties
shall be limited to the remedies and the dispute resolution procedure
set forth in this subsection and subsection (d). Any decision rend-
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ered by the Panel pursuant to the provisions of subsection (d) shall
be binding on the parties unless and until a court of competent juris-
diction renders a conflicting final decision on the disputed issue,
and if any party does not abide by the decision rendered by the Panel
during the pendency of an action before the court of competent
jurisdiction or otherwise (if no court action), any other party may
institute an action for money damages on the issues that were the
subject of the Panel's decision and/or any other relief as may be
permitted by law.
(d) (1) If an event of default is not cured within
the Cure Period, any non-defaulting party may institute the dispute
resolution process set forth in this subsection (hereinafter referred
to as the "Process") by providing written notice initiating the Proc-
ess (hereinafter referred to as the "Initiation Notice") to the
defaulting party.
(2) Within thirty (30) days after delivery of
the Initiation Notice, each involved party shall appoint one person to
serve on an arbitration panel (herein referred to as the "Panel").
Within twenty-five (25) days after delivery of the Initiation Notice,
the persons appointed to serve on the Panel shall themselves jointly
appoint one person to serve as a co-member of the Panel. Such jointly
appointed person shall function as the chairperson of the Panel.
(3) The remedies available for award by the
Panel shall be limited to specific performance, declaratory relief and
injunctive relief, all other forms of relief being herein expressly
waived by all parties.
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(4) Any party can petition the Panel for an
expedited hearing if circumstances justify it. Such circumstances
shall be similar to what a court would view as appropriate for injunc-
tive relief or temporary restraining orders. In any event, the hear-
ing of any dispute not expedited shall commence as soon as practica-
ble, but in no event later than forty-five (45) days after selection
of the chairperson of the Panel. This deadline can be extended only
with the consent of all parties to the dispute or by decision of the
Panel upon a showing of emergency circumstances.
(5) The chairperson of the Panel shall conduct
the hearing pursuant to the Center For Public Resources' Rules for
Non-Administered Arbitration of Business Disputes then in effect. The
chairperson of the Panel shall determine the nature and scope of dis-
covery, if any, and the manner of presentation of relevant evidence,
consistent with the deadlines provided herein, and the parties' objec-
tive that disputes be resolved in a prompt and efficient manner. No
discovery may be had of privileged materials or information. The
chairperson of the Panel upon proper application shall issue such
orders as may be necessary and permissible under law to protect
confidential, proprietary or sensitive materials or information from
public disclosure or other misuse. Any party may make application to
the Court to have a protective order entered as may be appropriate to
confirm such orders of the chairperson of the Panel.
(6) The hearing, once commenced, shall proceed
from business day to business day until concluded, absent a showing of
emergency circumstances. Except as otherwise provided herein, the
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Process shall be governed by the Uniform Arbitration Act as enacted in
the State.
(7) The Panel shall, within fifteen (15) days
from the conclusion of any hearing, issue its written decision,
including the rationale and support for its decision. The decision
shall be rendered in accordance with this Agreement and the laws of
the State.
(8) Any involved party may appeal the decision
of the Panel to the Court for a de novo review of the issues decided
by the Panel, so long as such appeal is made within thirty (30) days
after the Panel's decision is actually received by such party. The
remedies available for award by the Court shall be limited to specific
performance, declaratory relief and injunctive relief, with all other
forms of relief being herein expressly waived by all parties. During
any pendency of an appeal, the decision of the Panel shall be binding
on both parties until the Court renders a binding decision. If a non-
prevailing party in the Process fails to appeal to the Court within
the time frame set forth herein, the decision of the Panel shall be
final and binding. If one party does not comply with the decision of
the Panel during the pendency of the action before the Court or
otherwise, then another party shall be entitled to exercise all rights
and remedies that may be available under law or equity, including
without limitation the right to institute an action for money damages
related to the default that was the subject of the Panel's decision
and the provisions of this subsection shall not apply to such an
exercise of rights and remedies.
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(9) All fees and costs associated with the
Process before the Panel, including without limitation the fees of the
Panel, other fees, and the prevailing party's attorneys' fees, expert
witness fees and costs, shall be paid by the non-prevailing party or
parties. The determination of prevailing and non-prevailing parties,
and the appropriate allocation of fees and costs, shall be included in
the decision by the Panel. Similarly, all fees and costs associated
with an appeal to the Court or any appellate court thereafter,
including without limitation, the prevailing party's attorneys' fees,
expert witness fees and costs, shall be paid by the non-prevailing
party. The determination of prevailing and non-prevailing parties,
and the appropriate allocation of fees and costs, shall be included in
the decision by the Court.
* * *
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IN WITNESS WHEREOF, the officers of the Municipality and of
the District have duly affixed their signatures and attestations, and
the duly authorized officer(s) of the Owner and Builder have affixed
their signatures, all as of the day and year first written above.
TOWN OF MARANA, ARIZONA
By ....................................
Ed Honea, Mayor
ATTEST:
................................
Jocelyn C. Bronson, Town Clerk
Pursuant to A.R.S. Section
11-952(D), this Agreement has
been reviewed by the undersigned
attorney for the Municipality
who has determined that this
Agreement is in proper form and
is within the powers and author-
ity granted pursuant to the laws
of this State to the Munici-
pality
................................
Frank Cassidy, Town Attorney
STATE OF ARIZONA )
) ss.
COUNTY OF PIMA )
The foregoing instrument was acknowledged before me on this
...... day of .............. 2013, by Ed Honea, as Mayor of the Town
of Marana, Arizona, a municipal corporation under the laws of the
State of Arizona.
......................................
Notary Public
My commission expires:
y
Regular Council Meeting - June 4, 2013 - Page 266 of 296
SAGUARO SPRINGS COMMUNITY FACILITIES
DISTRICT
By ....................................
Ed Honea, Chairperson, District
Board
ATTEST:
................................
Jocelyn C. Bronson, District
Clerk
Pursuant to A.R.S. Section
11-952(D), this Agreement has
been reviewed by the undersigned
attorney for the District, who
has determined that this Agree-
ment is in proper form and is
within the powers and authority
granted pursuant to the laws of
this State to the District
................................
Frank Cassidy, District Counsel
STATE OF ARIZONA )
) ss
COUNTY OF PIMA )
The foregoing instrument was acknowledged before me on this
...... day of .............. 2013, by Ed Honea, as Chairperson of the
District Board of Saguaro Springs Community Facilities District, an
Arizona community facilities district.
......................................
Notary Public
My commission expires:
53
Regular Council Meeting - June 4, 2013 - Page 267 of 296
MARANA 670 HOLDINGS, LLC, an Arizona
limited liability company
By....................................
Printed Name :.........................
Title :................................
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of Marana 670 Holdings, LLC, an Arizona limited
liability company, on behalf thereof.
......................................
Notary Public
My Commission Expires:
Z!
Regular Council Meeting - June 4, 2013 - Page 268 of 296
D.R. HORTON, INC., a Delaware
corporation
By....................................
Printed Name :.........................
Title :................................
STATE OF ............... )
) ss.
COUNTY OF .............. )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of .
......................................
Notary Public
My Commission Expires:
�17
Regular Council Meeting - June 4, 2013 - Page 269 of 296
CONSENT AND AGREEMENT
Reference is made to that certain District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District), dated as of June 1, 2013, by and among
the Town of Marana, Arizona, Saguaro Springs Community Facilities
District, Marana 670 Holdings, LLC, and D. R. Horton, Inc., to which
this Consent and Agreement is attached (the "Development Agreement").
All capitalized terms used and not otherwise defined in this Consent
and Agreement shall have the meanings set forth in this Development
Agreement. The undersigned Marana 670 Holdings, LLC, an Arizona
limited liability company ("Beneficiary"), is the beneficiary under a
Deed of Trust dated December 28, 2012 and recorded December 31, 2012
in Sequence No. 20123661102, Records of Pima County, Arizona (the
"Deed of Trust") covering property included in Saguaro Springs
Community Facilities District the "District"). The undersigned
acknowledges that the Development Agreement shall bind all real
property in which the undersigned has an interest under the Deed of
Trust and authorizes the recordation of the Development Agreement with
respect to all such real property.
MARANA 670 HOLDINGS, LLC, an Arizona
limited liability company
By....................................
Printed Name :.........................
Title :................................
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of Marana 670 Holdings, LLC, an Arizona limited
liability company, on behalf thereof.
......................................
Notary Public
My Commission Expires:
......................
Regular Council Meeting - June 4, 2013 - Page 270 of 296
CONSENT AND AGREEMENT
Reference is made to that certain District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District), dated as of June 1, 2013, by and among
the Town of Marana, Arizona, Saguaro Springs Community Facilities
District, Marana 670 Holdings, LLC, and D. R. Horton, Inc., to which
this Consent and Agreement is attached (the "Development Agreement").
All capitalized terms used and not otherwise defined in this Consent
and Agreement shall have the meanings set forth in this Development
Agreement. The undersigned having an interest in real property within
the District, hereby consents to the Development Agreement,
acknowledges that the Development Agreement shall bind all real
property in which the undersigned has an interest within the District,
and authorizes the recordation of the Development Agreement with
respect to all such real property. In no event, however, shall
anything in this Consent and Agreement constitute a personal
assumption by the undersigned of the obligations of the Owner under
the Development Agreement.
MARANA LAND HOLDINGS, LLC, an Arizona
limited liability company
By: Grayhawk Holdings Inc., an
Arizona corporation, Manager
By..............................
Printed Name :...................
Title :..........................
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of Grayhawk Holdings Inc., an Arizona
corporation, the Manager of Marana Land Holdings, LLC, an Arizona
limited liability company, on behalf thereof.
......................................
Notary Public
My Commission Expires:
Regular Council Meeting - June 4, 2013 - Page 271 of 296
CONSENT AND AGREEMENT
Reference is made to that certain District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District), dated as of June 1, 2013, by and among
the Town of Marana, Arizona, Saguaro Springs Community Facilities
District, Marana 670 Holdings, LLC, and D. R. Horton, Inc., to which
this Consent and Agreement is attached (the "Development Agreement").
All capitalized terms used and not otherwise defined in this Consent
and Agreement shall have the meanings set forth in this Development
Agreement. The undersigned having an interest in real property within
the District, hereby consents to the Development Agreement,
acknowledges that the Development Agreement shall bind all real
property in which the undersigned has an interest within the District,
and authorizes the recordation of the Development Agreement with
respect to all such real property. In no event, however, shall
anything in this Consent and Agreement constitute a personal
assumption by the undersigned of the obligations of the Owner under
the Development Agreement.
FIRST AMERICAN TITLE INSURANCE
COMPANY, A CALIFORNIA CORPORATION, AS
TRUSTEE UNDER TRUST NO. 9140, AND NOT
PERSONALLY
By....................................
Printed Name :.........................
Title :................................
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of First American Title Insurance Company, a
California corporation, as Trustee under Trust No. 9140, and not
personally, on behalf thereof.
......................................
Notary Public
My Commission Expires:
Regular Council Meeting - June 4, 2013 - Page 272 of 296
CONSENT AND AGREEMENT
Reference is made to that certain District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District), dated as of June 1, 2013, by and among
the Town of Marana, Arizona, Saguaro Springs Community Facilities
District, Marana 670 Holdings, LLC, and D. R. Horton, Inc., to which
this Consent and Agreement is attached (the "Development Agreement").
All capitalized terms used and not otherwise defined in this Consent
and Agreement shall have the meanings set forth in this Development
Agreement. The undersigned having an interest in real property within
the District, hereby consents to the Development Agreement,
acknowledges that the Development Agreement shall bind all real
property in which the undersigned has an interest within the District,
and authorizes the recordation of the Development Agreement with
respect to all such real property. In no event, however, shall
anything in this Consent and Agreement constitute a personal
assumption by the undersigned of the obligations of the Owner under
the Development Agreement.
FIRST AMERICAN TITLE INSURANCE
COMPANY, A CALIFORNIA CORPORATION, AS
TRUSTEE UNDER TRUST NO. 8692, AND NOT
PERSONALLY
By....................................
Printed Name :.........................
Title :................................
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this
.......... day of ................ 2013� bY �
as of First American Title Insurance Company, a
California corporation, as Trustee under Trust No. 8692, and not
personally, on behalf thereof.
......................................
Notary Public
My Commission Expires:
......................
Regular Council Meeting - June 4, 2013 - Page 273 of 296
ATTACHMENTS:
EXHIBIT A -- Legal Description Of The Property
EXHIBIT B -- Form Of Certificate Of Engineers For Conveyance Of
Segment Of Project
EXHIBIT C -- Form Of Conveyance Of Segment Of Project
EXHIBIT D -- Form Of Disclosure Statement
327532401.8-3/15/2013
�
Regular Council Meeting - June 4, 2013 - Page 274 of 296
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
A-1
Regular Council Meeting - June 4, 2013 - Page 275 of 296
\
5ta�tec Cansutting lnc.
201 Nort� Bonita Avenue Suite lOt
Tursos� AZ 85745-2999
Tel: {520} 750-7479 Fax: (520) 75Q-7476
sta[ttec.COm `
�\
� \
;,� �'�
S iQn� \
PROPERTY D�5CftIPTION '
SAGUARO SPRI�EGS
�ESCR[PT{ON af property �ocated in portions of Sectinns 17, 18 and 19, Towr�ship 12 South,`'.,
Range 12 East and a pnrtion of Section 13, Township 12 South, Range 11 East, Gi[a and Salt '.
River Meridian, Pima County, Arizona. Said property being more fu�ly described as follows:
Blocks 1 thru 10 and A t�r� D together with Lots 1 thru 9, A and B, as shown on the Biock Plat
for SAGUARD SPRINGS; recorded in 800k 58 of Maps and Plats, Page 23, in the office of the
Pima County Recorder, Pirna County, Arizona.
Together vvith:
A postion of said Section 13, as described in i3ocket 'E22D8, Page 1961, Pima Gounty
Recards.
�xcepting therefrom:
Lat B of said Block Plat
Aiso excepting therefrom:
That portion of Block 5 of said B�ock Plat to be dedicated for use as a school site, as recorded
in Docket 12711, Page 10927, Pima County Records.
A[so exceptirtg therefrom;
That portion of Block 5 of said Block Piat to be dedicated for �se as a par�c site, as recorded in
Docket 12755, Page 4378, Pima County Records.
Said parcel containing a total area of 32,839,128 square feet or 753.8$ acres of land, more or
less.
Disclairrrer.� Stanfec Consulting accepts no liability for fhis descripfion if it has been modifred or
reformatted in any way irom its origina! format and content, or usecf far any purpose other than that for
which if was origina!!y fntended.
�re�ared by Nathan L. Gardner, RLS 36786
�re{�ared on June 14, 2007
F'repared for and an behalf of Stantec Consulting Enc.
P� Number: 18�621935
w:lactive11 8562 9 9351[ots121935_property_owned_by_empire_070614.doc
Regular Council Meeting - June 4, 2013 - Page 276 of 296
A-3
Regular Council Meeting - June 4, 2013 - Page 277 of 296
5tantec consurcing SAGl1Ai20 RESERVE
�� 20i Norfh 8or,ita Ave T 12 S, R 12 E, SECT€ONS t7, 18 & 79
TuCSOn AZ U.S.A. 7 12 S, R 1 i E, SECTEON 13, PIMA COUNIY, AZ
. �� 85745-2999 �` �o
,�
Tel. 52D.750.7474 rue
�fl� Fax. 520.750.7470 Saguaro Springs
www.stantec.com DeSC�ipti0tl �xhib�t
EXHIBIT B
FORM OF CERTIFICATE OF ENGINEERS FOR
CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT
CERTIFICATE OF ENGINEERS FOR CONVEYANCE OF SEGMENT OF
ACQUISITION PROJECT
(insert description of Acquisition Project/Segment)
STATE OF ARIZONA )
COUNTY OF PIMA )
TOWN OF MARANA ) ss.
SAGUARO SPRINGS COMMUNITY )
FACILITIES DISTRICT )
We the undersigned, being Professional Engineers in the
State of Arizona and, respectively, the duly appointed District Engi-
neer for Saguaro Springs Community Facilities District (hereinafter
referred to as the "District"), and the engineer employed by Marana
670 Holdings, LLC (hereinafter referred to as the "Owner"), each
hereby certify for purposes of the District Development, Financing
Participation and Intergovernmental Agreement (Saguaro Springs
Community Facilities District), dated as of June 7, 2013 (hereinafter
referred to as the "Agreement"), by and among, among others, the
District, the Town of Marana, Arizona, and the Owner that:
1. The Segment indicated above has been performed in
every detail pursuant to the Plans and Specifications (as such term
and all of the other initially capitalized terms in this Certificate
are defined in the Agreement) and the Acquisition Project Construction
Contract (as modified by any change orders permitted by the Agreement)
for such Segment.
2. The Segment Price as publicly bid and including the
cost of approved change orders for such Segment is $ .............
3. The Owner provided for compliance with the
requirements for public procurement for such Segment as required by
the Agreement (including, particularly but not by way of limitation,
Title 34, Chapter 2, Article 1, Arizona Revised Statutes, as amended)
in connection with award of the Acquisition Project Construction
Contract for such Segment.
4. The Owner filed all construction plans, speci-
fications, contract documents, and supporting engineering data for the
construction or installation of such Segment with the Municipality.
5. The Owner obtained good and sufficient performance and
payment bonds in connection with such Contract.
B-1
Regular Council Meeting - June 4, 2013 - Page 278 of 296
DATED AND SEALED THIS ...... DAY OF ................ 200..
By....................................
District Engineer
[P.E. SEAL]
[P.E. SEAL]
By....................................
Engineer for the Owner
[Confirmed for purposes of Section
3.5 of the Development Agreement by
......................................
Manager for
Saguaro Springs Community Facilities
District*]
[THIS WILL BE REQUIRED
FOR EVERY SEGMENT ACQUIRED
WITH PROCEEDS OF THE
SALE OF THE DEVELOPER BONDS!!!]
* To be inserted if the provisions of Section 3.5 hereof are
applicable to the respective Segment of the Project
�
Regular Council Meeting - June 4, 2013 - Page 279 of 296
EXHIBIT C
FORM OF CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT
CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT
(Insert description of Acquisition Project/Segment)
STATE OF ARIZONA )
COUNTY OF PIMA )
TOWN OF MARANA ) ss.
SAGUARO SPRINGS COMMUNITY )
FACILITIES DISTRICT )
KNOW ALL MEN BY THESE PRESENTS THAT:
....................................... ���.........") for
good and valuable consideration received by .......... from Saguaro
Springs Community Facilities District, a community facilities district
formed by the Town of Marana, Arizona (the "Municipality"), and duly
organized and validly existing pursuant to the laws of the State of
Arizona (the "District"), receipt of which is hereby acknowledged [,
and the promise of the District to hereafter pay the amounts described
in the hereinafter described Development Agreement],* does by these
presents grant, bargain, sell and convey to the District, its succes-
sors and assigns, all right, title and interest in and to the follow-
ing described property, being the subject of a District Development,
Financing Participation and Intergovernmental Agreement (Saguaro
Springs Community Facilities District), dated as of 1, 2013,
by and among, among others, the Municipality, the District and Marana
670 Holdings, LLC and more completely described in such Development
Agreement:
[Insert description of Acquisition Project/Segment]
together with any and all benefits, including warranties and
performance and payment bonds, under the Acquisition Project Construc-
tion Contract (as such term is defined in such Development Agreement)
or relating thereto, all of which are or shall be located within
utility or other public easements dedicated or to be dedicated by plat
or otherwise free and clear of any and all liens, easements, restric-
tions, conditions, or encumbrances affecting the same [, such subse-
quent dedications not affecting the promise of the District to here-
after pay the amounts described in such Development Agreement],* but
subject to all taxes and other assessments, reservations in patents,
� Insert with respect to any acquisition financed pursuant to Section
5.2 (a) hereof.
C-1
Regular Council Meeting - June 4, 2013 - Page 280 of 296
and all easements, rights-of-way, encumbrances, liens, covenants,
conditions, restrictions, obligations, leases, and liabilities or
other matters as set forth on Exhibit I hereto.
TO HAVE AND TO HOLD the above-described property, together
with all and singular the rights and appurtenances thereunto in any-
wise belonging, including all necessary rights of ingress, egress, and
regress, subject, however, to the above-described exception(s) and
reservation(s), unto the District, its successors and assigns, for-
ever; and .......... does hereby bind itself, its successors and
assigns to warrant and forever defend, all and singular, the above-
described property, subject to such exception(s) and reservation(s),
unto the District, its successors and assigns, against the acts of
.......... and no other.
.......... binds and obligates itself, its successors and
assigns, to execute and deliver at the request of the District any
other or additional instruments of transfer, bills of sale, convey-
ances, or other instruments or documents which may be necessary or
desirable to evidence more completely or to perfect the transfer to
the District of the above-described property, subject to the excep-
tion(s) and reservation(s) hereinabove provided.
This conveyance is made pursuant to such Development Agree-
ment, and .......... hereby agrees that the amounts specified above
and paid [or promised to be paid*] to .......... hereunder satisfy in
full the obligations of the District under such Development Agreement
and hereby releases the District from any further responsibility to
make payment to .......... under such Development Agreement except as
above provided.
.........., in addition to the other representations and
warranties herein, specifically makes the following representations
and warranties:
1. .......... has the full legal right and authority to
make the sale, transfer, and assignment herein provided.
2. .......... is not a party to any written or oral
contract which adversely affects this Conveyance.
3. .......... is not subject to any bylaw, agreement,
mortgage, lien, lease, instrument, order, judgment, decree, or other
restriction of any kind or character which would prevent the execution
of this Conveyance.
4. .......... is not engaged in or threatened with any
legal action or proceeding, nor is it under any investigation, which
prevents the execution of this Conveyance.
5. The person executing this Conveyance on behalf of
.......... has full authority to do so, and no further official action
need be taken by .......... to validate this Conveyance.
C-2
Regular Council Meeting - June 4, 2013 - Page 281 of 296
6. The facilities conveyed hereunder are all located
within property owned by .......... or utility or other public
easements dedicated or to be dedicated by plat or otherwise.
IN WITNESS WHEREOF, .......... has caused this Conveyance
to be executed and delivered this .......... day of ................
200..
......................................
By....................................
By....................................
Title:..............................
C-3
Regular Council Meeting - June 4, 2013 - Page 282 of 296
STATE OF .......... )
) ss.
COUNTY OF .......... )
This instrument was acknowledged before me on
............... 20.. by ........................................., of
............................ an Arizona limited liability company, on
behalf of said corporation.
...................................
Notary Public
...................................
Typed/Printed Name of Notary
[NOTARY SEAL] My Commission Expires :.............
Notice required by A.R.S. Section 41-313 The foregoing
notarial certificate(s) relate(s) to the Conveyance of Segment of
Acquisition Project, dated 1, 2013, executed by the
, a (the " Notarized
Document The Notarized Document contains a total of 4 pages.
C-4
Regular Council Meeting - June 4, 2013 - Page 283 of 296
EXHIBIT I
TO
CONVEYANCE OF SEGMENT OF PROJECT
(Insert description of Project/Segment)
EXHIBIT I
Regular Council Meeting - June 4, 2013 - Page 284 of 296
EXHIBIT D
FORM OF DISCLOSURE STATEMENT
SAGUA.RO SPRINGS COMMUNITY FACILITIES DISTRICT
DISCLOSURE STATENIENT
A community facilities district ("CFD") has been established at the
development known as "Saguaro Springs." The CFD has financed and, in
the future will finance, certain public infrastructure improvements,
which will result in a property tax liability for each property owner
of Saguaro Springs resulting from being in the CFD.
BACKGROUND
On September 30, 1988, the Arizona Community Facilities District Act
became effective. This provision in State law was created to allow
Arizona municipalities to form CFDs for the primary purpose of financ-
ing the acquisition, construction, installation, operation and/or
maintenance of public infrastructure improvements, including water and
sewer improvements.
HOW THE CFD WORKS
On September 4, 2007, the Mayor and Council of the Town of Marana,
Arizona (the "Town"), formed the CFD which includes all of the
residential and commercial property in Saguaro Springs. An election
was held on November 21, 2007, at which time the owners of the
property within the CFD voted to authorize up to $99,000,000 of ad
valorem tax bonds to be issued over time by the CFD to finance the
acquisition or construction of water, sewer, road and park improve-
ments. The improvements have been or will be dedicated to the Town
after acquisition or construction of such public infrastructure by the
CFD. The Town will operate and maintain such improvements.
WHAT WILL BE FINANCED?
The CFD has been established to finance up to $99,000,000 in public
infrastructure improvements within or benefiting Saguaro Springs
including financing costs related to such improvements. The initial
bond issue is expected to be approximately $.......,000. The proceeds
of this bond issue is currently expected to be utilized to finance the
engineering, design and construction of a portion of the ..........
improvements for Saguaro Springs. In addition, it is anticipated that
approximately $..........,000 in bonds will be issued over the next
approximately .......... years for future phases of infrastructure at
D-1
Regular Council Meeting - June 4, 2013 - Page 285 of 296
Saguaro Springs. Thereafter, any remaining bond authorization would
be available for issuance to finance other improvements.
AD VALOREM TAXES OF THE CFD
General obligation bonds and the CFD's operation and maintenance
expenses are paid from ad valorem taxes levied against all property
within the CFD. Your share of general obligation bond payments and
expenses are included as part of your regular Pima County property tax
statement and are separately shown in addition to taxes levied by the
Town of Marana and other political subdivisions.
BENEFITS TO RESIDENTS
The bond issues by the CFD will benefit all residents within Saguaro
Springs by providing public roadway, utility, drainage, park and
recreation and other public infrastructure improvements. This benefit
was taken into account by the Builder in connection with establishing
the price of the lot on which your home is to be located. Each
resident of the CFD will participate in the repayment of the bonds in
the form of an additional property tax to the current property taxes
assessed by other governmental entities. This added tax is currently
deductible for purpose of calculating federal and state income taxes.
PROPERTY OWNERS' TAX LIABILITY
The obligation to retire the bonds will become the responsibility of
any property owner in the CFD through the payment of property taxes
collected by the Pima County Treasurer in addition to all other
property tax payments. (PLEASE NOTE THAT AT THIS TIME, OTHER THAN
GLADDEN FARMS COMMCJNITY FACILITIES DISTRICT, NO OTHER AREA WITHIN THE
BOUNDARIES OF THE TOWN IS SUBJECT TO A PROPERTY TAX LEVIED BY ANY
OTHER COMMUNITY FACILITIES DISTRICT.) Beginning in fiscal year
200 , the CFD levied a not to exceed $2.80 per $100.00 of secondary
assessed valuation tax rate to provide for repayment of the bonds and
the payment of certain administrative expenses associated therewith
and to provide for the expenses of the CFD and of operation and
maintaining the infrastructure it finances.
Although the level of the tax rate is not limited by law, the tax rate
of the CFD is not expected to exceed $2.80 per $100.00 of secondary
assessed valuation for as long as the bonds are outstanding.
IMPACT OF ADDITIONAL CFD PROPERTY TAX
The following shows the total annual District taxes including the
District operational and maintenance tax, for repayment of expected
District general obligation bonds.
�iII.�
Regular Council Meeting - June 4, 2013 - Page 286 of 296
(A) (A) + (B)
Estimated Annual Estimated Total
Market Value of General Obligation and Annual CFD Tax
Residence(1) Expense Payment(2) Payments(4)
$200, 000 - -
225,000 - -
250,000 - -
275,000 - -
300,000 - -
325,000 - -
350,000 - -
375,000 - -
400,000 - -
Footnotes
(1) Market value is not the same as full cash value as reported by
the County Assessor, which is typically 850 of market value.
(2) General obligation bond debt service and operations and
maintenance expenses assuming a$2.80 increase in the ad valorem
property tax rate per $100 of assessed value. The estimated
annual additional tax liability will vary depending upon the
final terms of the General Obligation Bonds.
(3) All of the taxes and charges described above are in addition to
any taxes, fees and charges imposed by the Town of Marana or
other political subdivisions and are in addition to any
assessments or fees imposed by any homeowners association.
*Assumptions:
A. Assumes residential property assessment ratio will remain at 100.
B. Tax amount is computed by multiplying the tax rate per $100 of
assessed value by full cash value times the assessment ratio.
Additional information regarding the description of infrastructure
improvements to be financed by the CFD, bond issue public disclosure
documents and other documents and agreements (including a copy of this
Disclosure Statement) are available for review in the Town of Marana
Town Clerk's office.
Your signature below acknowledges that you have read this disclosure
document at the time you made your decision to purchase property at
Saguaro Springs and you signed your purchase contract and that you
understand the property you are purchasing will be taxed to pay the
CFD bonds described above.
D-3
Regular Council Meeting - June 4, 2013 - Page 287 of 296
..............................
Home Buyer(s) Signature/Date
..............................
Home Buyer(s) Signature/Date
�!
..............................
Home Buyer(s) Printed Name(s)
..............................
................... Parcel
No. ..... Lot No. .....
Regular Council Meeting - June 4, 2013 - Page 288 of 296
EXHIBIT E
LEGAL DESCRIPTION OF HORTON PROPERTY
PARCEI� �:
$loalcs l tiuv�� 3, inalusive, Blacics 5 tfiraugh T, inclusiv�e, B1oc�CS 9 and 10 a�d I� 1 t�rrough
� in Saguaro 5pErings, �s s�avsm an t� map xecorded i�t BoaY 5S ofil�i�, Pag�e �3, reoords of
Pima Cnunty, A�iznn�;
�C�`� �ROM thase psits af said Bi� �� I� u�al far a Park Site �nd a School Site,
d�cxi�cd � follovua:
PART� STi'E:
All that pqxticr� o�Bl�ck � of Saguaro 3p�ing�, Sloe�rs 1 F]uv [0 en� A thru D and La#s 1 f�u 9
aon� A a�d a, re;co�ded �n Boo� S8 t►�A�[ags and �lat� at �'�ge 23 �#�e affic� of the Co�ty
Recorder, Pima �ounty, AriT.a�na, more particularly descrihed as �a�laws:
BEGIf�TAiINC� at tlye Swat�aw�st ov�er of �d Block 5;
T�TENCL �long the V�ast line c�f said Black 5 Nortb 1�°2+�'24" "West a dist�ce of 481.�2 fest to
t�e he�iuning o�a teng�t cun+e �am.ca� t� #he Fast hav�ng a radiu� nf3U.Q� feet an� a aeirbral.
angle nf 51°�3'3�";
TH�'sNC� com.in�ang along said �est lime a�d along the �rc �f �aid aurv� to t�e right s distaace
��7.08 fett to a paurt Qf #�ngen�y an t�e No�th�rest Iine o�said Block S;
TfiF�ICB alnng s�id I+Iorthvve�t Iinc Naa�t� 37°f 9'02" East a dismnce �f 755,61 fice� �
THF�d�E coz�tiatui�g al�g said Nc�rth�wcst lir� �Torth 3�°�2�3U" East a dista�ce �6?1.15 Tae� �o
the beginaing af a�ng�t curve oonc,�ve i�o 1� �a�t h�i�g a r�udius of �O.U(1 f�et and ��
a�e of I�5°18'35";
TFIBN�E ao�tinuing alnng said bl,� linG an�d thc arc of said ourv�e ta �he�r�g�t a dislan�c� of
55.�4 f,�et to a poant af #ange�cy am the Nart�ea.�t �ine o+f said Hlock 5;
1�I�+TC$ ainng said ]darthe�st lina �c�uth 38°I 8'�5'" Sast a distanoe of 22.8� �eet tn a point on a
liae 6D.OD feet So�enst nf � parallaf �+vvi#b� tl� No�fhvvest lit� of said Bloclr 5;
THh'I�TGTs alnng said pa�ra�t�l line Sut�th 36°�'3U" West a dasGanae of 69�.53 �t;
TH�NCS ���inuing al�a� se�id �mrall� �ine �� 37°19'�2 West a distance a�5�.d1 fe�;
T�II�I�B 3a^�flx 35°13'S4" Sast a diatance af 71G.�3 feet to a podnt on tl�s Srnx� line af eaid
B1ock 5;
'�'F�hICE aiong s�id �o�li�n�e S�ulh 83°4�'1�" Wes# a ciis�ncc of�88.8Q fe�tt4 the 1"�INT
O� 8��i1�I�1[�.
E-1
Regular Council Meeting - June 4, 2013 - Page 289 of 296
SCH�L SITB:
�1 that ptuiion vf 81ack 5 af �aguaro S�riz�a Blocks � thru 1Q s�d �, � I3 and Lots 1 tluv 9
an�d A and B, rec�dad �n Boak 58 �f M�ps a�d � a# paga 23 in th� a�i�e ��ti�e Cauout�
Recarcle�, Pima Conncy, Aarir�ana, mo�a,�arti,cularly d�cxibed as �allow�:
[�l►rtM�N��G a� t�e Sou#hwest co�er vf said �lock �;
TN�d�E at�ng th� �auth tme of �aid B1oak 51�arth 83°�'13" �ast a�as#a�ae of�1.88.8� f�ct ta
the PO11�T OF 8���`r,
`i��.TB �+Torth 35°13'S4�" W�st � di�sta�noe o�715.33 feet t+o a pomt a�n a line �0.4� �eet
S�uthe�st o� a�d p�x�11e� wit� the Narthw�t line of � Biack 3;
'1��t�IC'E alnng aai,� p�ra�lel line l�iarth �?°] 4'�2" East a dis�no� of 44�.3� �;
'I�CE �4u##� �F7°1?'L?8" �?ast a dis#anc� af��2.3� f�eet t�o t�e �ast �in.c �f said �loc� S beixt� a
pai�t o� a aur�ve h�nrin,g a xadius a��3Q5.�D fee# a�d #a w�ich � r�l line 1�ears North 88�372"
West;
T�+T�� a�vng said East Ii�a �Bloc1� 5�nd tihe �rc of sai�cl curw�c � th� l,�ft thr�ugh a ce�tr�l
�� acf Ofi°15'S9" � dis�ance a�25�.�9 �e�E to a pourt a�f reve�se cvrve, having a�adius �f �5.00
feet a�d a�ntra3 ang�c o� 8S°�5�4";
TFIE�CE cv��im�ivag al�g the P�sE Iine a�said Blvc.� S a�d s� nf said curva a dis#�r�e n�38,S8
f� ta s�nFnt nffiange�cy oaL t� S�uth line a�aaid Bloak 5;
1�ISi�CE a1�g said ��uth Eine �vuth 8�°4�'1�" �?Vest a�istance af A�44.07 �et tn t� �J�T
�F BBGr1�1Iri`IN�.
�,A�RC�L �:
,A,II tbatpnrtion a� Sc�cfion 13, Tovvt�hip 1� Soutl�, �ge i i F.ast, C�ila and Salt Ri�z �xi�i�n,
�i�a �au�y Ari�ana, more �ti.cu��y desc�ibeci as fvllows:
C4NlNlL1�CIl�� at a 1 ll.� inc,� lca,d c�ped pap� �ara�erly m� �:nvz�raating t�a
Sou�t carnix ofsaid �eclao�. X3;
'1�I�Fd� �1�g �e E�st �ine of s�id Secfion i3,1�Ioa�tth oQ°!�8'�5'" �vest a aistanc� �f 75.�0 f�eet
#a i� PQ�'F �F BEGINNIl+I(�;
��CE �lo� � line 75 feet N�t& of and parall�l to the Sn� litfe af s�id Sec�oon� 13, Soutb
S�°�TSa° Wesf, � distaac� of I142.34 �ao�t;
TI�1�i�S N�nth 38°�3'�6" �ast, a distance v� 1833.$l. �, ta #he Eaat lin� af ��i�m 13 ta
whic� � 2" l�ad ca�ped piP� praPerl�' m�ed at� tnvm�'nenti�pg th� �T�st q�r carner of said
Sect,ivn � 8 h�ears N�rth �°�8'OS" Wes� a diatsnce of 11�9.� 1 f�;
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Regular Council Meeting - June 4, 2013 - Page 290 of 296
THSNCE ��ng said &ast li�e of Sectian �� �outh �°t]$'�5"' F�ast e d�sEan,�e o� 1�F3�.51 �cet ta
tt�e PQINT 0F }3Ffi4V�INC�.
_���
Lots ], fhroug� � 30, incl►r�v�, and C�m�x�ar� �Areas nA" a�d uBn, of ��n ��ngs Bl�ock SA�,
aocording tu the Flet of R.�oa� of Sag��am �prira,gR ��k $A, acoo�ding to #he Plat vf Itecorci m f#�e
�tae �t�e Co�� Recor�ler o�fPima. Couut�r, A�a� recx�rded a�n Hoo� 6� afMap�, Page 7.
�.OtS 1�� �Q� ��} I11ClI!&�V� � �Q�! I�1.'G�$ w�n � u�n � t0 � �Bf ���aC4S�
c�` S�gaaro Sp�ings B1nck SB, a�c�u� to the Pla� of R�ocyrd in the �ffi�ee nf the Cou�+ It�.�r
o�� �ount�. A��ana, xet�orded in Honrk G� �f �vlap�s, Pa�e 8.
�,6t$ �� �}1�717�1 �11� �11C�11$�V� ffii� � I'13l11�d1. }��S ��pl � ��8�, BDGUD�II1$ tU � �� d��CD�
d��l�O .�. �Yl� �L'�C �� A09�1�ll� tQ �P. F� 0�� �I7 t�18 ��LQC {7f 1,�I� �;OU[T�+ ��COT��' 4�
Pirr�a Cvunty Ar3�ona, recard�d inHaak 6� afMaps, P'ag�e 5.
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Regular Council Meeting - June 4, 2013 - Page 291 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Frank Cassidy, Town Attorney
Strategic Plan Focus Area:
Not Applicable
Item A 4
Subj ect: Ordinance No. 2013.09: Relating to Development; Amending Ordinance No. 2013.003
(creating the Towne Center Specific Plan) by retroactively repealing Section 4 concerning the
execution and recording of property owner waivers; and setting an effective date
Discussion:
On March 5, 2013, the Council adopted Marana Ordinance No. 2013.003, creating the Marana Towne
Center Specific Plan and approving a minor amendment to the General Plan. Section 4 of Ordinance No.
2013.003 included Town staff s current standard ordinance language relating to the signing and
recording of property owner waivers under the Arizona Property Rights Protection Act (A.R.S. § 12-
1131 et seq., and specifically A.R.S. § 12-1134), and providing that if the waivers were not recorded
within 90 calendar days, Ordinance No. 2013.003 would be void and of no force and effect.
As of tonight's meeting, 92 days have elapsed since the March 5 adoption of Ordinance No. 2013.003,
and Town staff has received all waivers required under Section 4 of the ordinance except one (the
waiver for the Circle K property).
The process of requiring property owner waivers was established by Town staff with the advice of the
Town Attorney in an abundance of caution following the 2006 enactment of the Arizona Property Rights
Protection Act, known as Prop 207, which allows property owners to seek compensation for diminution
in property value resulting from the adoption of land use ordinances and regulations. In situations like
this one, where the property owner voluntarily seeks an "up-zoning" (a rezoning to a less restrictive
zoning classification), there is little chance that a property owner will bring a Prop 207 diminution
claim. In any event, if such a claim were brought, the Town would have the opportunity to reverse the
rezoning as applied to the claimant's property, avoiding the need to pay for any claimed diminution in
value.
In this case, the Town has received executed waivers from property owners representing approximately
460 of the 462 acres in the Marana Towne Center Specific Plan. Town staff believes that the public
interest in retaining this carefully conceived specific plan far outweighs any potential diminution claim
from the owner of the approximately two-acre parcel owned by the property owner who has not
submitted a waiver.
This case has also caused Town staff to reconsider its standard practice of including Prop 207 waiver
requirements in adopting ordinances presented to the Council for landowner-initiated up-zonings. Unless
the Council wishes to discuss the waiver process at a future study session, rezoning ordinances
addressing landowner-initiated up-zonings of property will no longer contain a Prop 207 waiver
Regular Council Meeting - June 4, 2013 - Page 292 of 296
provision similar to Section 4 of Ordinance No. 2013.003.
Ordinances drafted by Town staff to address annexations and landowner-initiated down-zonings will
continue to include a Prop 207 waiver requirement, due to the higher risk of a diminution claim in those
situations.
ATTACHMENTS:
Name:
Description: Type:
�
Ord 2013.09 Revision to Marana Towne Center adoptinq ordinance Ordinance 2013.09 Ordinance
(00034210).doc
Staff Recommendation:
Staff recommends adoption of Ordinance 2013.09, retroactively repealing Section 4 of Ordinance
2013.003.
Suggested Motion:
I move to adopt Ordinance 2013.09, retroactively repealing Section 4 of Ordinance 2013.003.
Regular Council Meeting - June 4, 2013 - Page 293 of 296
MARANA ORDINANCE NO. 2013.09
RELATING TO DEVELOPMENT; AMENDING ORDINANCE NO. 2013.003 (CREATING
THE TOWNE CENTER SPECIFIC PLAN) BY RETROACTIVELY REPEALING SECTION 4
CONCERNING THE EXECUTION AND RECORDING OF PROPERTY OWNER
WANERS; AND SETTING AN EFFECTNE DATE
WHEREAS the Town Council adopted Marana Ordinance No. 2013.003 on March 5,
2013, creating the Marana Towne Center Specific Plan and approving a minor amendment to the
General Plan; and
WHEREAS Section 4 of Ordinance No. 2013.003 included the Town's current standard
ordinance language relating to the signing and recording of property owner waivers under the
Arizona Property Rights Protection Act (A.R. S. § 12-1131 et seq., and specifically A.R. S.
§ 12-1134), and providing that if the waivers were not recorded within 90 calendar days,
Ordinance No. 2013.003 would be void and of no force and effect; and
WHEREAS the Town has received signed waivers from property owners representing
approximately 460 of the approximately 462 acres of land included in the Marana Towne Center
Specific Plan; and
WHEREAS the Town Council finds that retaining this carefully conceived specific plan
far outweighs any potential diminution claim from the owner of the approximately two-acre
parcel owned by the property owner who has not submitted a waiver.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, as follows:
SECTION 1. Section 4 of Marana Ordinance No. 2013.003 is hereby repealed.
SECTION 2. This Ordinance addresses a matter of municipal administration and is
effective retroactively to April 5, 2013.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA,
A�uzoNa, this 4 day of June, 2013.
Mayor Ed Honea
ATTEST:
Jocelyn C. Bronson, Town Clerk
Ordinance No. 2013.09
APPROVED AS TO FORM:
Frank Cassidy, Town Attorney
5/22/2013 5:04 PM FJC
Regular Council Meeting - June 4, 2013 - Page 294 of 296
ll555 W. CNIC CENTER DRNE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To:
From:
Mayor and Council
Jocelyn Bronson, Town Clerk
Strategic Plan Focus Area:
Not Applicable
Subj ect: Relating to Mayor and Council; selection of the Vice Mayor
Discussion:
Item A 5
Section 2-3-1 of the Town Code sets forth the process for selection of the Vice Mayor by the Town
Council. Section 2-3-3 provides that the Vice Mayor shall serve a two-year term and may be
reappointed to an unspecified number of additional two-year terms. On June 21, 201 l, the Council
selected Council Member Patti Comerford to serve a two-year term as Vice Mayor; thus, Council
Member Comerford's most recent two-year term has expired.
Pursuant to Section 2-3-1, the Town Council shall choose a Vice Mayor from among the Council
Members by a majority vote. Any Council Member may make a motion to appoint a certain Council
Member as Vice Mayor. The motion must be seconded and then voted upon. The Council will continue
making motions until a motion to appoint a Council Member as Vice Mayor is successfully passed by a
majority of the Council.
Pursuant to Section 2-3-1, the selection of the Vice Mayor must take place no later than June 30
following the date of a general election for Town Council.
ATTACHMENTS:
Name:
No Attachments Available
Staff Recommendation:
Council's pleasure.
Suggested Motion:
I move to appoint
Description:
Type:
as Vice Mayor of the Marana Town Council.
Regular Council Meeting - June 4, 2013 - Page 295 of 296
11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653
Council Chambers, June 4, 2013, 7:00 PM
To: Mayor and Council
From: Gilbert Davidson, Town Manager
Strategic Plan Focus Area:
Commerce, Community, Heritage, Progress and Innovation, Recreation
Item D 1
Subject: Presentation: Relating to Mayor and Council; discussion and direction regarding options for the
2013 Strategic P1an retreat
Discussion:
The Town Council has, every other year, participated in a strategic planning process to update the Town's
strategic plan document. This update includes a comprehensive review of the plan and facilitated discussion on
the next iteration. An integral part of this update is a Council retreat,led by a consultant. The purpose of the
retreat sha11 be to provide an in depth update on the status of the current initiatives and strategies and to prepare
a draft plan to serve as guidance for policy decisions in the future.
There are three options for the 2013 retreat.
1. East Va11ey (Mesa, Chandler, and Queen Creek) -- featuring Chandler's airport and downtown development,
Queen Creek's Horsehoe Park and Equestrian Facility, and Mesa's education hub related to economic
development
2. Prescott and Prescott Va11ey -- featuring historic downtown Prescott's linkage to heritage, Rodeo Arena,
various historical/heritage museums, and public-private partnership projects within the municipalities
3. Cochise County (Sierra Vista, Bisbee) -- featuring historical/heritage focus as a tourism draw, strong
emphasis on a downtown, new public projects from the municipalities, and satellite campus for the University
of Arizona
The Town Manager is seeking direction from Council based on the above options for the 2013 retreat to be
held in late October or early November.
Financial Impact:
Funds have been identified in the Town Manager's Office FY14 budget
ATTACHMENTS:
Name: Description: Type:
No Attachments Available
Staff Recommendation:
The Town Manager is seeking direction on options for the 2013 retreat
Suggested Motion:
Council's Pleasure
Regular Council Meeting - June 4, 2013 - Page 296 of 296