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HomeMy WebLinkAboutMinutes - City Council - 10/15/1985CITY COUNCIL 15 OCTOBER 1985 The South Burlington City Council held a special meeting on Tuesday, 15 October 1985, at 7:30 pm, in the Conference Room, City Hall, 575 Dorset Street. Members Present Paul Farrar, Chairman; Michael Flaherty, Leona Lansing, George Mona, Francis Murray Others Present William Szymanski, City Manager; Stan Wilbur, Webster-Martin Engineering; Margaret Picard, City Clerk/Treasurer; Albert Audette, Street Dept; Angelo Pizzagalli, Charles Tetzlaff, Richard McCain, Paul Newton, Guy Bernadet, Richard Burke, Calvin Wilson Bonding for Airport Parkway Sewage Treatment Plant Mr. Szymanski advised that $1,000,000 in bonds to finance the Airport Parkway Sewage Treatment Plans has been sold through the Vermont bond bank and several documents (attached) forwarded by Mr. Giuliani, the bonding attorney, had to be approved and signed by the Council. Mr. Flaherty moved that the reading of the escrow agreement be waived. Mr. Murray seconded, and the motion passed unanimously. Mr. Flaherty moved that the Council sign the escrow agreement as presented by the City Manager. Ms. Lansing seconded, and the motion passed unanimously. Mr. Flaherty moved that the reading of the Resolution and Certificate be wavied. Ms. Lansing seconded, and the motion passed unanimously. Mr. Flaherty then moved that the Council sign the Resolution and Certificate. Ms. Lansing seconded, and the motion passed unanimously. Executive Session Mr. Flaherty moved that the Council meet in Executive Session for the purpose of discussing deliberations on the sewer bond bid and reconvene only for the purpose of giving out its decision. Ms. Lansing seconded, and the motion passed unanimously. Following the executive session: Ms. Lansing moved that the City Council deny the protest and proceed to award the contract on the basis of the reformed bid price of $5,317,949 to Charwill Construction Company with the official decision and Findings of Fact upon which the decision was made to follow in writing. Mr. Murray seconded the motion which passed 3-2 with Messrs. Farrar and Flaherty opposing. As there was no further business to come before the Council, the meeting adjourned at 11:00 pm. Clerk Published by ClerkBase ©2019 by Clerkbase. No Claim to Original Government Works. LOAN AGREEMENT AGREERENT, dated the day of , 1985, between the VERMONT MUNICIPAL BO~ BRNK,~~~ cotporete and politic constituted as an instrumentality of the State of Vehnt exercising public and essential governmental functions (hereinafter referred to as the "Bank"), created pursuant to the provisions of 24 V.S.A.~, Chapter 93, as amended (hereinafter referred to as the "Act"), having its; principal place of business at Mont- pelier, Vermont, and the CITY Or SmH ~URLINGTON (hereinafter referred to as the "Municipality") : i WHEREAS, pursuant to the Act, Bank is authorized to make loans of money (hereinafter referred to as "Loan" or "Mans") to governmental units; and WHEREAS, the Municipality is a overnmental Unit as defined in the Act and pursuant to the Act is to accept a Loan from the Bank to be evidenced by its municipal sed by the Bank; and 7 EREAS, the Municipality is dedirous of borrowing money from the Bank in the mount of $1,000,000 and has applied to and has requested of the Bank a Man in/ such amount and the Municipality has duly authorized the issuance of serial'bonds in the principal amount of $2,100,000 of which serial bonds in the amount of $1,000,000 [the "Municipal Bonds") are to be purchased by the Bank as evidence of the Loan in accordance with this Agreement, which Munic- pal Bonds shall be in substantially the form appended hereto by the Munici- ality as Exhibit 6; and 6 WHEREAS, to provide for the issuance of bonds of the Bank in order to obtain from time to time monies with which to make such Loans, the Bank has adopted the General Bond Resolution on February 17, 1972 (herein referred to as the "Bond Resolution") and will adopt a resolution authorizing the making of such Loan to the Municipality and the purchase of the Municipal Bonds; NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the Municipality accepts the Loan ':: in the amount of $1,000,000. As evidence of the Loan made to the Municipality and such money borrowed from the Bank by the Municipality, the Municipality hereby sells to the Bank the Municipal Bonds in the amount of $1,000.000. The Municipal Bonds shall bear interest from the date of their delivery to the Bank at such rate or rates per annum as will result in an interest cost rate to the Municipality of per centum [ $1 [as calculated by the "IBA" or "Interest Cost Per Annwn" method] or at such rate or rates per annum as will result in a lesser interest cost rate to the Municipality. The interest cost rate for purposes of this Loan Agreement will be computed without regard to Sections 3 and 4 hereof which require that the Municipality make funds available to the Bank for the payment of principal and interest at least five (5) business days prior to each respective principal and interest payment date. Subject to any applicable legal limitations, the rate or rates of intereet borne by the ~unicipil Bonds shall be the same rate or rates of interest borne by the bcnds sold by the Bank (for corresponding maturities) in order to obtain the monies with which to make the Loan and to purchase the Municipal Bonds. No rate of interest borne by any of the Municipal Bonds shall be more than two per centum (2%) higher than the lowest rate of interest borne by any Of the other Municipal Bonds. ! 2. The Municipality has duly adopted or will adopt all necessary resolutions and has taken or will take all proceedings required by law to enable it to enter into this Loan Agreement and issue its binding obligations to the Bank. 3. The amount to be paid by the Municipality pursuant to this Loan Agreement representing interest due on its Municipal Bonds (hereinafter referred to as the "Municipal Bonds Interest Payments") shall be not less than the rate or rates of interest the Bank is required to pay on the bonds issued by the Bank to obtain the funds from which this Loan is made and shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay interest as the same becomes due on the proportionate amount of bonds issued by the Bank for the purpose of obtaining funds to make the Loan to the ~unicipality (hereinafter referred to as the "~unicipality's Loan Obligation") and the Municipality shall make such funds available to the Bank at least five (5) business days prior to each interest payment date. 4. The amount to be paid by the Municipality pursuant to this Loan Agreement representing principal due on its Municipal Bonds (hereinafter referred to as "Municipal Bonds Principal Payments") shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Municipality's Loan Obligation as the same matures (based upon the maturity schedule provided by and for the Municipality and appended hereto as Exhibit A) and the Municipality shall make such funds available to the Bank at least five (5) business days prior to each principal payment date. - 5. The Municipality is obligated to pay fees and charges to the Bank (hereinafter referred to as the "Fees and Charges"). Such Fees and Charges actually collected from the Municipality shall be in an amount sufficient, together with the Municipality's Allocable proportion of other monies avail- able therefor, including any grants made by the United States of America or any agency or instrumentality thereof or by the State or any ';ency or instrumentality thereof. (a) to pay, as the same become due, the ~unicipality's Allocable Proportion of the administrative expenses of the Bank; and (b) to pay, as the same become due, the Municipality's Allocable Proportion of the fees and expenses of the trustee and paying agents for the bonds of the Bank. M"nicipalityqs Allocable Proportion as used herein shall mean the propor- tionate amount of the total requirement in respect of which the term is used determined by the ratio that the total of the Municipality's Loan Obligation outstanding bears to the total of that portion of the bonds issued by the Bank to obtain funds with which to make loans which are outstanding as certified by the Bank. I ! 6. The ~unicipality is obligated to make the Municipal Bonds Principal Payments scheduled by the Bank on an annual basis and is obligated to make the Municipal Bonds Interest Payments scheduled by the Bank and to pay the Fees and Charges imposed by the Bank on a semi-annual basis. 7.. The Bank shall not sell and the Municipality shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made prior to the date on which all outstanding bonds of the Bank issued with respect to which such Loan relates are redeemable, and in the event of any sale or redemption prior to maturity of such Municipal Bonds thereafter, the same shall be in an amount equal to the aggregate of (i) the principal amount of the Municipality's Loan Obligation so to be redeemed, (ii) the interest to accrue on the Municipality's Loan Obligation so to be redeemed to the next redemption date thereof not previously paid by the Municipality, (iii) the applicable premium, if any, payable on the Municipality's Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bank in effecting the redemption of the Municipality's Loan Obligation so to be redeemed, less the amount of monies available in the applicable sub-account or sub-accounts in the redemption account established by the Bond Resolution and available for withdrawal from the Reserve Fund authorized by Section 4671 of the Act and for application to the redemption of bonds of the Bank so to be redeemed in accordance with the terms and provisions of the Bond Resolution, as determined by the Bank; provided, however, that, in the event the bonds of the Bank @. issued to provide the funds with which the Bank made the Loan under this Loan Agreement with respect to which the sale or redemption prior to maturity of such Municipal Bonds is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such original bonds were issued in a principal amount in excess of or less than the Municipality's Loan Obligation remaining unpaid at the date of issuance of such refunding bonds, the amount which the Municipality shall be obligated to pay under item (i) above shall be the principal amount of such refunding bonds outstanding. In no event shall any such sale or redemption of Municipal Bonds be . I effected without the prior written agreement and consent of both parties hereto. -. 8. Simultaneously with the delivery of the Municipality's Bond or Bonds to the Bank, the Municipality shall furnish to the Bank an opinion of bond counsel satisfactory to the Bank which shall 6et forth among other things the unqualified approval of said Bond or Bonds then being delivered to the Bank and that said Bond or Bonds will constitute valid general obligations Of the Municipality. I 1 9. The Municipality shall be obligated to inform in writing the Bank and the corporate trust office of the trustee for the Bank's bonds at least 30 days prior to each June 1 and December 1 of the name of the official to whom invoices for the payment of interest and principal should be addressed. 10. Notwithstanding Paragraph 14 hereof,-prior to payment of the amount of the Loan, or any portion thereof, and the delivery of the Plunicipslity's Bond or Bonds to the Bsnk or its designee, the Bank ahall have the right to I cancel all or any part of its obligations hereunder if: (a) Any representation made by the Municipality to the Bank in connection with its application for Bank assistance shall be incorrect or incomplete in any material respect. I I (b) The Municipality has violated commitments made by it in its application and supporting documents or has violated any of the terns of this Loan Agreement. I 11. If any provision of this Loan Agreement shall for any reason be I held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan I Agreement and this Man Agreement shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 12. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. 13. No waiver by either party of any term or condition of the Loan Agreement shell be deemed or construed as a walver of any other terms Or conditions, nor shall a waiver of any breach be deemed to constitute a waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase, or other provision of this Loan Agreement. I 14. This Loan Agreement merges and supersedes all prior negotiations. representations, and agreements between the parties hereto relating to the subject matter ,hereof and constitutes the entire agreement between the parties I hereto in respect thereof. 15. The Municipality agrees to furnish to the Bank such financial reports as the Bank may reasonably request. . . .. ~ G~>,..~,..'...~. ~ . . , .y*,;,. ; <;.i* ~,?$i,:~' , ; ,* .;c , . . ' ! t . ng &;;,: IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. i " . I (SEAL) Attest: (SEAL) Attest: VERMONT MUNICIPAL BOND BANK By: Chairman By: - EXHIBIT A To be completed by the Municipality Amounts should be in multiples of $5,000 and each maturity must be equal to or less than the maturity which precedes it. Municipality's Bonds Due December 1 Principal Amount Total : . DELIVERY RESOLUTION I hereby certify that 1 am the duly elected and qualified Clerk of the City of South Burlington ("Municipality"). and that the following is a true and exact copy of a resolution adopted at a regular meeting of the legislative branch of said Municipality, duly noticed, called and held on (y*iUs, 1985: RESOLVED, that in connection with the pending sale of the Munici- pality's face amount $1,000,000 bond to the Vermont Municipal bnd Bank, execution and delivery of the Bond, Resolution Certificate, Loan Agreement and Arbitrage Certificate, all attached hereto, are authorized; and BE IT FURTHER RESOLVED, that J. Paul Giuliani, bond counsel to the Municipality, be authorized and empowered to take possession of said documents for delivery to the ~ermont Municipal Bond Rank, and to complete said documents by the inclusion of appropriate dates and ministerial changes at the direction of the legislative branch of said Municipality or its designated officer; and BE IT FURTHER RESOLVED, that the proceeds derived from the sale of said bond be delivered to the following for deposit: ATTEST : k Clerk ARBITRAGE CERTIFIC6TE The undersigned, being the duly elected and qualified Treasurer of the City of South Burlington in the County of Chittenden, State of Vermont (herein called "Issuer") HEREBY CERTIFIES with respect to the issue and delivery on this date simultaneously with the delivery of this certification of the obligations of the Issuer (herein called the "Bonds") described in Item 2 of Exhibit A attached hereto: I am an officer of the Issuer responsible for issuing the bonds. I reasonably expect the following with respect to the Bonds and with respect to the use of the proceeds thereof: 11) The proceeds from the sale of the Bonds are $1,000,000 and will be used for the purposels) shown in Item 2 of Exhibit A attached hereto. (2) All of the proceeds of the Bonds will be used to meet all of the cost of the project or projects for which the Bonds are issued or to retire obligations of the Issuer issued for the purpose of financing the cost of said project or projects. (3) In connection with that portion of the proceeds from the sale of the Bonds needed for the acquisition and construction of the aforementioned a projects: (a) The Issuer has entered (or will enter within six mdnths from this date) into binding commitment(s) for the acquisition or construction of the project(s) and the amount of such commitment(s) with respect to each of the project(s) will exceed the lesser of an amount equal to 2-1/2 percent of that portion of the estimated total project cost financed by such proceeds of the Bonds and by prior issues of $100,000. (b) After entering into the commitment (s) mentioned in (a), work on acquisition and construction of the project(s1 is proceeding or will proceed with due diligence to completion as shown in Item 3 of Exhibit A. (c) All of such proceeds of the Bonds (including investment earnings thereon) will be expended on the acquisition and construction of the project(s) within three years from the date hereof as shown in Item 3 of Exhibit A. (4) In connection with that portion (if any) of the proceeds from the sale of the Bonds, together with other funds of the Issuer which will be applied to take up, cancel and pay any obligations evidenced by temporary notes (herein called the "Notes") which may have been issued by the Issuer for the purposes indicated on Exhibit A: (a) All of such proceeds will be expended to pay principal and interest on the Notes within thirty days of the date hereof. Any amounts received from the investment of such proceeds not expended to pay principal or Interest on the Notes will be expended within one year of the date of receipt. i . (b) On the date the Notes will be paid, there will be no procebds from the sale of the Notes or of any notes traceable to the Notes through a chain of note refunding transactions which have not been expended. (c) Any outstanding obligations of the Issuer to ,be retired with the proceeds of the Bonds are not "arbitrage bonds" as interpreted by the arbitrage regulations promulgated by the U.S. Department of the Treasury, Internal Revenue Service, at 26 CFR §$1.103-13, 1.103-14 and 1.103-15. (5) The project(s) will not be sold or,otherwise disposed of in whole or in part prior to the maturity date of the Bonds. (6) The Bonds will ba paid from taxes, as well as from other revenue of the Issuer. (7) The taxes used to pay principal and interest on the Bonds will be deposited in a debt service fund and expended within 13 months of the date of deposit in such fund in the payment of debt service on the Bonds. Any amounts received from the investment of such deposit will be expended within one year of receipt. The debt service fund is used to accumulate sufficient funds in each year so that sufficient funds will be available to pay principal and interest due on the Bonds and other obligations of the Issuer coming due on the Bonds in each such year. (8) Except for the debt service fund described in paragraph (71, the Issuer has not created or established, and does not expect to create or establish, any sinking fund, pledged fund, or other similar fund which the Issuer reasonably expects to use to pay principal or interest on the Bonds or which will be available, if needed. to pay debt service even if the Issuer encounters financial difficulties. (9) The amount of other obligations issued for each of the project(s1 within the twelve-month period ending on the date hereof is shown in Item 40f Exhibit A. 110) The original proceeds of the Bonds will not exceed the ambunt necessary for the purpose of the bond issue. (11) The Issuer has not received notice that it has been listed by the Commissioner of Internal Revenue as an issuer that may not certify its bonds, nor has it been advised that the %missioner is contemplating listing the Issuer as a governmental unit that may not certify its bonds. On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be used in a manner which would cause the Bonds to be "arbi- trage bonds" under Section 103(d) of the Internal Revenue Code, as amended, and the Regulations promulgated thereunder. To the best of my knowledge and belief there are no other facts. estimates or circumstances that would materially change the foregoing conclusions. This certification is executed and delivered pursuant to Section 103tc) of the Internal Revenue Code of 1954 and Sections 1.103-13, 1.103-14 and 1.103-15 of the Income Tax Regulations thereunder and is delivered as a part of the transcript of proceedings and accompanying certification with respect to the Bonds. To the beet of the knowledge and-belief of the undercigned, the I Issuer's expectations contained herein a. to the use of the proceeds of the I Bonds are reasonable. I IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the Issuer this - day of , 1985. cit; of SOUW Burlington EXHIBIT A . Title of Bonds: $1,000,000 City of South Burlington Sewer System , --- Improvement General Obligation Registered Bond Tot(ll Principal Amount: $1,0oo,ooo Dated: . - , 1985 Maturity Date (6) Principal Amount (s) Interest Rate (s) as per attached specimen bond Title of Authorizing Resolution(s) or Ordinancets) -- - Resolution and Warning of City Council June 11, 1984 and August 6, 1984 Vote of City Special Meeting September 11, 1984 Delivery Resolution of City Council , 1985 Resolution and Certificate of City Council , 1985 (a) Projects Public sewer system improvements (b) Renewals None (c) Costs of Issuance $1.500 (d) Payment of Interest on the Bonds --- (e) Project Cost - (f) Other - Total : Project Airprt Parkway Sewage Treatment Facility Esrlmated Date - All Proceeds Expended - Other Obligations of Issuer Issued Within Past 12 Months Date - - Face Amount May 8, 1985 $1,000,000 Maturity May 7, 1986 RESOLUTION AND CERTIFICATE Whereas, at a meeting of the legislative branch of the City of South Burlington (herein called the "municipality"), at which all of the members were present and voting, which meeting was duly noticed, called and held, as appears of record, it was unanimously found and determined that the public interest and necessity required certain public improvements hereinafter described, and it was further found and determined that the cost of completing said improvements, after application of funds from the United States of America and the State of Vermont, or either, would be too great to be paid out of ordinary annual income and revenue, and that a proposal for providing such improvements and the issuance of bonds of the municipality to pay for its share of the cost of the same should be submitted to the legal voters at a meeting to be called and held for that purpose, and it was so ordered, all of which action is hereby ratified and confirmed; and Whereas, pursuant to the foregoing action, a meeting of the municipality was warned and held at the place and time appointed therefor, submitting article(s1 of business to be voted upon by ballot between the hours stated in the warning, all as appears by reference to Exhibit A attached hereto; and Whereas, the said warning was duly published and posted, all as appears of record; and Whereas, immediately upon closing of the polls and after counting of the ballots cast the results as set forth in Exhibit A hereto were declared by the moderator, all as appears of record, and pursuant to which the municipality is carrying forward the authorized improvements and pursuing the same diligently to completion; and Whereas, pursuant to pwers vested in them by law the said legislative branch duly entered into a Man Agreement with the Vermont Municipal Bond Bank respecting a loan from said Bank in the amount of $1,000,000 repayable, and with interest, as follows: Payment Due Principal Amount ~nterest Rate As per Exhibit B attached. And whereas, the bond to be given by the municipality to the Vermont Municipal Bond Bank at the time of receiving the proceeds of said loan shall be substantially in the form attached hereto, which bond is hereby awarded and sold to the Vermont Municipal Bond Bank at a price of par and accrued inter- est; Therefore, be it resolved that the legislative branch proceed forthwith to cause said bond to be executed and delivered upon the price and terms stated, and be registered as the law provides: and Be it further resolved that said bond when issued and delivered pursuant to law and this resolution shall be the valid and binding general obligation of the said municipality, payable according to law and the terms and tenor thereof from unlimited ad valorem taxes on the grand list of taxable property of said municipality as established, apportioned and provided by law; and Be it further resolved that in addition to all other taxes there shall annually be assessed and collected in the manner provided by law each year until this bond, or any bond or bonds issued to refund or replace the same, and the interest thereon, are fully paid, a tax, charge or assessment suf- ficient to pay the interest on such bond or bonds and such part of the principal as shall become due; and Be it further resolved that all acts and things heretofore done by the lawfully constituted officers of the municipality, and any and all acts or proceedings of the municipality and of its legislative branch in, about, or concerning the improvements hereinabove described and of the issuance of bondts) or other evidence of debt in r-onnection therewith, are hereby ratified and conf inned. Be it further resolved, in order to restrict the yield to be realized from the temporary investment of the proceeds to be derived from the sale of the bond to the Vermont Municipal Bond Bank, pending the application of said proceeds to the payment of the municipality's issued and outstanding bond anticipation notes, the municipality hereby binds itself to the terms of the Escrow Agreement entered into by and between the municipality and Chittenden Trust Company this date, execution of which is hereby authorized. And we, the undersigned officers, as indicated, hereby certify that we as such officers have signed said bond dated as of , 1985; payable as aforeaid, and reciting that it is issued under and pursuant to the vote hereinabove mentioned, and we also certify that said bond is duly registered in the office of the treasurer of the municipality as prescribed by law. And we, the said officers of the municipality, hereby certify that we . are the duly chosen, qualified and acting officers of the municipality as undersigned, that the bond is issued pursuant to said authority, that no other proceedings relating thereto have been taken, and that no such authority or proceeding has been repealed or amended. We further -ertify that no litigation is pending or threatened affecting the validity of the bond nor the levy and collection of taxes, charges or assessments to pay it, nor the works of improvement financed by the proceeds of said bond, and that neither the corporate existence of the municipality nor the title of any of us to our respective offices is being questioned. City Council oVf the J City of South Burlington a m M EERVICL axm ~WIU 101~~ ~1~16~ 101231115; W MTL RATE PRlYCIPIY IKl EREST EM 6ERVlCL Par ht b1sDODtODO.DO Ikt lnlrmt t* nd Z) B447~221.94 7.978191 T.1.C. llar&t md 1) tl~W0~000.00 7.01'N'IO hrrrHI Lih Eourls 5 Tnrc~ 7 hh, 7 OWS. RECEIPT Received of the Vermont Municipal Bond Bank the sum of ONE ElXLLION WLLRRS ($1,000,000) being in full payment for bond(s) of the CITY OF SOUTH BURLINGTON in the amount of $1,000,000 this day sold and delivered to said Bank, of the issue of , 1985. CITY OF SOUT1l BURLINGTON Name of Municipality UNITED STATES OF AMERICA State of Vermont The CITY OP S4WTtl BURLINGTON (hereinafter called the "MUNICIPALITY"), a body corporate and a political subdivision of the State of Vermont, promises to pay to the Vermont Municipal Bond Bank, or registered assigns, the sum of ONE MILLION MILLfiiCS ($1,000,000) in installments on December 1 of each year as set forth below, with interest on each installment at the rate per annum set forth belov opposite the year in which the installment becomes due: Principal Interest PrinCipal Interest Year - amount Rate Amount Rate - Year - - The interest rate on each installment shall run from the date of the original delivery of this bond to the Vermont Municipal Bond Bank and payment therefor and until payment of each installment and such interest shall be payable semi-annually on December 1 and June 1 of each year. Both principal and interest on this bond are payable in lawful money of the United States at Bankers Trust Company, in the City of New York, State of New York, or at its successor as Trustee under the General Bond Resolution of the Vermont Munic- ipal Eond Bank. Final payment of the interest and principal of this bond shall be made upon surrender of this bond for cancellation at the bank or trust colnpany at which this bond is then payable. This bond is issued by the MUNICIPALITY under and by virtue of Vermont Statutes Annotated and vote of the legal voters of the MUNICIPALITY duly passed on September 11, 1984. This bond is issued for the purpose of making certain sewer system improvements under and by virtue of Chapters 53, 97 and 101 of Title 24, Vermont Statutes Annotated. This bond is transferable only upon presentation to the Treasurer of the MUNICIPALITY with a written assignment duly acknowledged or proved. No transfer hereof shall be effectual unless made on the books of the MUNIC- IPALITY kept by the Treasurer as transfer agent and noted hereon by the Treasurer with a record of payments as provided here -. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the issuing of this bond have been done, have happened, and have been performed in regular and due form, as required by such law and vote, and for the assessment, collection and payment hereon of a tax to pay the same when due the full faith and credit of the MUNICIPALITY are hereby irrevocably pledged. IN TESTIMONY WHEREOF, the MUNICIPALITY has caused this bond to be signed by at least a -majority of its City Council and its Treasurer and its seal (if it has a seal) to be .affixed hereto as of , 1985. (Absence of a seal hereon means that the MUNICIPALITY has no seal and no seal is required.) City council " - J CERTIFICATE OF REGISTRATION It is hereby certified that this bond is a registered bond, the principal and interest due thereon payable only to the holder of record as appears of record in the office of the Treasurer of the issuing MUNICIPALITY. This bond may be transferred by presentation of the same with an assignment in writing signed by the registered holder. Presentation shall be made to the Treasurer of the MUNICIPALITY at his office and he shall record such transfer in his records and on the bond. The name and address of the original registered owner of this bond is Vermont Municipal Bond Bank, care of the State Treasurer, Montpelier, Vermont. Dated as of this day of , 1985. PAYMENT RECORD Date Due - Principal Balance Interest Payment After Payment payment Name 6 Title . Of Authorizing Date Officer Making Paid - Record ESCROW AGREEMENT The CITY OF SOUTH BURLINGTON (the "City") and the CHITTENDEN TRUST COMPANY, acting by and through its Trust Department as a sole and independent contracting agency (the "Bank"), hereby recite the following agreement made between the city and the Bank as of the date hereof with respect to the proceeds to be derived by the City from the sale of its $1,000,000 General Obligation Sewer System Improvement Bond dated , 1985 (the "Bond") : 1. The Bank will hold the net proceeds of the Bond under the Bond Sale Resolution and Certificate (the "Resolution") adopted by the City On , 1985, in an Escrow Account (the "~ccount") defined in said Resolution for the purpose of limiting the income derived from the investment of the proceeds of the Bond and to secure the payment of principal On the .City's Bond Anticipation Notes (the "Notes") previously issued on Hay 8, 1985. for a like amount and maturing Nay 7, 1986, which Notes are not subject to prepayment prior to maturity. 2. The Bank shall establish a separate, special purpose account to be called the City of South Burlington General Obligation Bond 1985 Special Escrow Account, into which the City will deposit the proceeds of the Bond immediately upon the receipt by the City of said proceeds. Said deposit will occur on or about October, 17, 1985, but in no event later than October 24, 1985. 3. The Bank will have investment authority on the Account and hereby certifies that for a period of thirty (30) days from the date of delivery of the Bond,to the Vermont Municipal Bond Bank under the Resolution it will seek to maximize the yield on the investments for the Account. After the thirty (30) day period the Bank will not allow the yield on the investments for the Account to be materially jhigher than the yieldon the portion of the Bond to be used to retire the Notes, thus preventing interest on the Bond to be, taxable to the holder thereof under the provisions of Section 103'(d) of the Internal Revenue Code of 1954, as amended. and the Regulation promulgated .thereunder. In determining allowable yield on investments, the Bank may rely .upon opinions of bond counsel and other counsel to the City. 4. The principal of t' ': ~ccount.-ill be used to pay the principal on the Notes at their maturity and the -city will cause to be deposited with the Bank on or before the maturity date of the Notes monies sufficient to pay the . . ~- interest accrued and payable on the Notes at said maturity. If the City shall . ~. not cause the~interest monies to be so deposited, the Bank shall have the right to setoff from other monies in any account of the City in the Bank to the extent that said monies are needed to cover the interest due and payable a the Notes. 5. Following the retirement of the Notes the Bank shall pay over to the City any funds remaining in the Account and the Account shall terminate. . 6. The Bank, by its acceptance hereof, represents and warrants that:> a. The Bank is duly authorized to enter into this Agreement and the transactions contemplated hereunder; b. This Agreementis a valid and binding obligation of the Bank and does not conflict with, violate, or cause default under any provision$ of federal or state law or any order, decree, license, permit or the like, or any other agreement or instrument to 'which the Bank is a party or by which it is bound, including the Resolution; c. The off.icer signing this Agreement on its behalf is duly authorized to do so; d. The Bank isauthorized by the Resolution to make all investments hereunder; e. The Bank will be making such investments and acqulrlng such securltles for the Bank's own account for investment and not wlth a view to the distribution or resale of any interest thereln; and f. The Bank is permitted under the laws of the State of Vermont to invest monies held under the Resolution in accordance with this Agreement. 7. The City represents and warrants to the Bank that: a. It is duly authorized to enter into the Agreement and transactions contemplated hereunder; b. The Agreement is a valid and binding obligation; c. The persons signlng the Agreement on behalf of the City are so authorized; and d. The Agreement is the Escrow Agreement referred to and incorporated into a certain Bond Sale Resolution and Certificate of even date, duly adopted by the City's City Council. 8. The Benk shall not sell, pledge. assign, or otherwise transfer investment securities or interest other than that which is necessary to comply with Article 3 above, prior to retirement of the Notes, without the prior written consent of the City. 9. This Agreement and all obligations and rights arising hereunder will be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assigns. This Agreement may not be assigned by any party without the prior written consent of the other party. It is hereby expressly provided that any successor to the Bank under the Resolution will be considered a successor in interest to the Eank pursuant to -this Agreement. Nothing expressed. or implied herein is intended or shall be ' . - '., . > I. : - 8 construed to confer upon any person, firm or corporation successors, trahs- ferees and assigns any right, remedy or claim by reason of this Agreement or any term hereof, and a11 terms contained herein shall be for the sole and exclusive benefit of the parties hereto and, to the extent provided herein, their successors, transferees and assigns. This Agreement may not be varied, amended or supplemented except in a writing signed by the representatives of the parties thereunto duly authorized. 10. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Vermont. If any one or more of the obligations or agreements or portions thereof provided in this Agreement to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such obligation or obligations or such agreement or agreements or such portions thereof shall be deemed severable from the remaining obligations and agreements or portions thereof provided in this Agreement, and the invalidity thereof shall in no way affect the validity of the other provisions of this Agreement. 11. The Agreement may be executed in several counterparts each as an original for the parties to the Agreement. The foregoing sets forth the terms and conditions of the Agreement and is effective as of . 1985. - Dated:~r- . . \5 , , 1985. I ATTEST: CITY OF SOUTH 1 By: I/ p-,-L&&w&c,... X . Its City Council > - / CHITPENDEN TRUST COMPANY. ~cting By and Through Its Trust Department,