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HomeMy WebLinkAboutCC Res 4890 2001-05-14 CITY OF SEAL BEACH LOCAL AGENCY RESOLUTION NUMBER~a RESOLUTION AUTHORIZING AND APPROVING THE BORROWING OF FUNDS I?OR FISCAL YEAR 2001-2002; THE ISSUANCE AND SALE OF A 20111-2002 TAX AND REVENUE ANTICIPATION NOTI~ THEREI?OR AND I)ARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW FINANCING PROGRAM WHERI!:AS, local agencies are authorized by Section 53850 to 53858, both inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4, Part I, Division 2, Tille 5 of the Government Code) to borrow money by the issuance of temporary notes; I WHEREAS, the legislative body (the "Legislative Body") of the local agency specified in Section 25 hereof (the "Local Agency") has determined that a sum (the "Principal Amount"), not to exceed the Maximum Amount of Borrowing specificd in Section 25 hereof, which Principal Amount is to be confirmed and set in the Pricing Confirmation (as defined in Section 4 hereof), is needed for the requirements of the Local Agency, to satisfy obligations uf the Local Agency, and that it is necessary that said Principal Amount be borrowed for such purpose at this lime by the issuance of a note therefor in anticipation of the receipt of taxes, income, revenue, cash receipts and other moneys to be received by the Local Agency for the general fund of the Local Agency allributable to its fiscal year ending June JO, 2002 ("Fiscal Year 2001-2002"); WHEREAS, the Local Agency hereby determines to borrow, for the purposes set forth above, the Principal Amount by the issuance of the Note (as hereinaller defined); WI-IEUEAS, it appears, and this Legislative TIody hereby finds and determines, that the Principal Amount, when added to the interest payable thereon, does not exceed eighty- I live percent (85%) of the estimated amount of the uncollected taxes, income, revenue (including, but not limited to, revenue from the state and federal govenunents), cash receipts ali(I other muneys of the Local Agency attributable to Fiscal Year 2001-2002 and available for the payment of the principal of the Note and the interest thereon; WHEREAS, no money has heretofore been borrowed by or on behalf of the Local Agency through the issuance of tax anticipation notes or temponuy notes in anticipation of the receipt of: or payable from or secured by, taxes, income, revenue, cash receipts or other moneys I'm Fiscal Year 2001-2002; WHEREAS, pursuant to Section 53856 of the Act, cel1ain moneys which will he received by the Local Agency during and attributable to Fiscal Yellr 2001-2002 Clln be pledged for the payment of the principal of the Note and the interest thereon (as hereinaller provided); WIIEREAS, the Local Agency has determined that it is in the best interests of the Local Agency to participate in the California Communities Cash Plow FilUuu;iug Program (the "Program"), whereby pllltieipating local agencies (collectively, the "Issuers") will simultaneuusly issue tax and revenue anticipation llotes; WHEREAS, the Program requircs the participating Issuers to sell their tax and revenue anticipation notes to thc California Statewide Communities Development Authority (the "Authority") pursuant to note purchase IIgreements (collectively, "Purchase Agreements"), each I between such individual Issuer and the Authority, and dated as of the date of the Pricing Confirmation, a form of which has been submitted to the Legislative Body; WIIIW.EAS, the Authority, in consultation with Sutro & Co. Incorporated, us financial advisor for the Program (the "Financial Advisor"), will form one or more puols of notes (the "Pooled Notes") and assign each note to a particular pool (the "Pool") and sell a series (the "Series") ofbolllls (the "Bonds") secured by each Pool pursuant to an indenture (the "Indenture") between the Authurity and Wells Fargo Bank, National Association, as trustee (the "Trustee"), each Series distinguished hy whether or what type(s) of Credit Instrnment(s) (as hereinafter delined) secure(s) such Series, by the principal amounts of the notes assigned 10 the 1'001 or by uther filctors, und the Local Agency hereby acknowledges and approves the discretion of the Aulhority to assign the Nute to such Pool and such Indenture as thc Authority may determine; I I I Resolution Numbe~~" WHEREAS, as additional security for the owners of each Series of Bonds, all or a portion of the payments by all of the Issuers of the notcs assigned to such Series mayor may not be secured (as indicated in the Pricing Confirmation) by an irrevocable letter (or lellers) of credit or policy (or policies) of insurance or proceeds of a separate bond issue issued for such pnrpose (the "Reserve Fund") or other credit instrument (or instruments) (cullectively, the "Creditlnstnunent") issued by the credit provider or credit providers designated in the Indentnre, as linally executed (collectively, the "Credit Provider"), pursuant to a credit agreement or agreements or commitment leller or letters or, in the case of the Reserve Fund, an indenture (the "Reserve Indenture") (collectively, the "Credit, Agreement") between (i) in the case of an irrevocable letter (or letters) of credit or policy (or policies) of insurance, the Authority and the respective Credit Provider and (ii) in the case of the Reserve Fund, the Authority and Wells Fargo Bank National Association, as trustee of the Reserve Indenture (the "Reserve Trustee"); WHEREAS, if, as designated in the Pricing Cunlirmation, the Credit Instrument is the Reserve Fund, bonds issued pursuant to the Reserve Indenture (the "Reserve Bonds") may, as indicated in the Pricing Conlirmation, be secured by an irrevocable teller uf credit or policy uf insurance or other credit instrument (the "Reserve Credit Instrument") issued by the credit provider identilied in the Reserve Indenture as finally executed (the "Reserve Credit Provider"), pursuant 10 a credit agreement or commitment leller (the "Reserve Credit Agrecment") idenlilied in the Reserve Indenture as finally executed, such Reserve Credit Agreement being between the Authority and the Reserve Credit Provider; WHEUEAS, the net proceeds of the Note may be invested by the Local Agency in Permilled Investmeuts (as defined in the Indenture) or in any other investment permilled by the laws of the State of Calilol"llia, as now in effect and as hereal\er amended, il10dilied or supplemented from time to time; WHEREAS, as part of the Program each participating Issuer approves the Indenture, the alternative forms of Credit Agreements, if any, and the alternative flll"llls of Reserve Credit Agreements, if any, in substantially the forms presented to the Legislative 130dy, with the final form of Indenture, type of Credit Instrument and corresponding Credit Agreement amI type of Reserve Credit Instrument and corresponding Reserve Credit Agreement, if any, 10 be determined and approved by delivery of the Pricing Conlirmation; Wl-illREAS, pursuant to the Program each participating Issuer will he responsible fur its share of (a) the fees of the Trustee and the costs of issuing the applicable Series of Bonds, and (b), if applicable, the fees of the Credit Provider, the fees of thc Reserve Credit Provider (which shall be payable from, among other sources, investment earnings on the Reserve Fund and moneys in the Costs of Issuance Fund established and held under the Indenture), the Issuer's allocable share of all Predefault Obligalions and the Issuer's Reimbursement Obligations, ifE1ny (each as defined in the Indenture); WHEREAS, pursuant to the Program each participating Issuer will be responsible for its share of the fees of the Reserve Trustee and the costs of issuing the applicahle Series of Reselve Bonds, all such costs and fees being payable from the proceeds of the applicable Series of Dunds (or, with respect to costs and fees of the Reserve Cledit Provider, as may otherwise be provided in the Reserve Indenture); WHEREAS, pursuant to the Program, the underwriter will submit an offer to the Authority to purchase, in the case of each 1'001 of Notes, the Series of Donds which will be secured by the Indenture to which such Pool will be assigned; Wl-IEREAS, it is necessary to engage the services of certain professiunals 10 assist the Local Agency in its participation in the Program; NOW, THEREFORJ!:, the Legislative Body hereby finds, determines, declares ami resolves as follows: Section 1. Recitllls. TIlis Legislative Body hereby finds and determines that all the above recitals are true and correct. Section 2. Authorization of Issuance. TIlis Legislative Body herehy determines to borrow solely for the purpose of anticipating taxes, income, revenue, cash receipts and olher moneys to be received by the Local Agency Ibr the general fimd of the Local Agency aurihutable tu Fiscal Year 2001-2002, by the issuance of a note in the Principal Amount under Sectiuns 53850 et seq. of the Act, designated the Local Agency's "2001 Tax and Revenue Anticipation Note" (the "Nute"), to be issued in the form of une fully registered note at the Resolution Number. Principal Amount thereof, to be dated the date of its delivery to the initial purchaser thereol: tu mature (withuut uption of prior redemption) not more than fifteen months thereafter un a date indicated on the face then:of and determined in the Pricing Confirmation (the "Maturity Dall:"), and to bear interest, payable at maturity (and if the maturity is more than twelve months jj"mn the date of issuance, payahle on the interim payment date set forth in the Pricing Continuation) and computed upon the basis of a 360-day year consisting of twelve 30-day months, at a rate not to exceed twelve percent (12%) per annum as determined in the Pricing Confirmatiun and indicated on the face of the Note (the "Note Rate"). If the Series of Bonds issued in connectiou with the Note is secllred in whole or in part by a Credit Instrument or sllch Credit Instrument (other than the Reserve Fund) secures the Note in whole or in part and all principal of and interest on the Note is not paid in full at maturity or if payment of principal of and/or interest on the Note is paid (in whole or in part) by a thaw under, payment by or claim upun a Credit [nstrnlllent which draw, payment or claim is not fully reimbursed on such date, such Note shall become a Delillllled Note (as defined in the Indenture), and the unpaid pOliion (including the interest component, if applicable) thereof (or the portion (including the interest component, if applicable) thereof with respect to which a Credit Instrnment applies for which reimbursement on a draw, payment or claim has not been fully made) shall be deemed outstanding and shall continue to bear interest therealler until paid at the Default Rate (as defined in the Indenture). If the Creditlnsllument is the Reserve Fund ami the Reserve Bonds issued to fund the Reserve Fund are secured by the Reselve Credit Instrument and a D1'lIwill'g (as defined in the Indenture) pertaining to the Note is not fully reimbursed by the Reserve Principal Payment Date (as delined in the Indenture), such Nole shall become a Defaulted Reserve Note (as delined in the Indenture), and the unpaid portion (including the interest component, if applicable) thereof (or portion (including the interest component, if applicable) with respect to which the Reserve Fund applies for which reimbursement on a Drawing has not been fully made) shall be deemed outstanding and shall continue to bear interest thereafter until paid at the Default Rate. If the Note or the Series of Bonds issued in connection with the Note is unsecured in whole or in pm1 and the Note is nut Illlly paid at maturity, the unpaid portion thereof (or the portion thereuf to which no Credit Instrument applies which is unpaid) shall be deemed outstanding and shall continue to bear interest thereafter until paid at the Default Rate. In each case set flllth in the preceding t1uee sentences, the obligation of the Local Agency with respect to such Defaulled Note or unpaid Note shall nut be a debt ur liability ufthe Local Agency prohibited by Article XVI, Section 18 of the California Constitution and the Local Agency shall not be liable thereon except to the extent of any available revenues attributable to Fiscal Year 2001-2002, as provided in Sectiun 8 hereof. The percentage of the Note to which a Credit Instmment, if any, applies (the "Secured Percentage") shall be equal to the amount of the Credit Instrument divided by the aggregate amount of unpaid principal of and interest on the unpaid notes (or portions thereof) of all Issuers, expressed as a percentage (but nut greater than 100%) as of the maturity date. The percentage of the Note to which the Reserve Credit lustrument, if any, applies (the "Secured Reserve Percentage") shall be equal to the amount of the Reserve Credit Instrument divided by the aggregate amount of unpaid principal of and interest on such unpaid notes (or portions thereot: including the interest component, if applicable), expressed as a percentage (but not greater than 100%) as of the Reserve Principal Payment Date. 30th the principal of and interest on the Note shall be payable in lawful money of the United States of America. The priucipal of and interest on the Nute at maturity shall be paid upon sUllender of the Note at the corporate trnst oflice of Wells Fargo Dank, National Association in Los Angeles, California. The Note shall be issued in conjunction with the note or notes of one or more other Issuers as pmi of the Program and within the meaning of Section 53853 of the Acl. Section 3. Form of Note. The Nute shall be issued in ti.1lly registered fOlm without coupons and shall be substantially in the form aud substance set lorth in Exhibit A as attached hereto and by reference incorporated herein, the blanks in said forms to be lilled in with appropriate words and figures. Section 4. Sale or Note; Delegation. The Note shall be sold to the Authority pursuant to the Purchase Agreement. The form of the Purchase Agreement, including the forlll of the pricing confirmation supplement (the "Pricing Conlirmation") set forth as Exhibit A thereto, presented to this meeting are hereby approved. The authorized representatives set f0l1h in Section 25 hereof (the "Authorized Representatives") are each hereby authorized and directed to execllte and deliver the Purchase Agreement in substantially sllid torm, with such chllnges thereto as such Authorized Representative shall approve, such approvat to be conclusively evidenced by his or her execution and delivery thereof; provided, however, that the Purchase Agreement shall 1I0t be effective and binding on the Local Agency until the execution and I I I I I I Resolution Numbe~)7~ delivery of the Pricing Conlinnation. The Authorized Representatives are eaeh hereby further authorized and directed to execute and deliver the Pricing Confirmation in substantially said form, with such changes thereto as such Authorized Representative shall approve, such approval to be conclusively evidenced by his or her execution and delivery thereof; provided, however, that the interest rate on the Note shall not exceed twelve percent (12%) per annum, the discount on the Note, when added to the Local Agency's share of the costs of issuance of the Bunds, shall not exceed one percent (1.0%), and the Principal Amount shall not exceed the Maximum Amount of 13orrowing. Delivery of an executed copy of the Pricing Confirmation by Hlx or telecopy shall be deemed effective execution and delivery for all purposes. Section 5, l'J'ogl'am Appl'Oval. The Pricing Confirmation shall indicate whether and what type of Credit Instrument and, if applicable, Reserve Credit Instrument will apply. The forms of Indenture, alternative general types and forms of Credit Agreements, if any, and alternative general types and forms of Reserve Credit Agreements, if any, presented to this meeting are hereby acknowledged, ami it is acknowledged that the Authority will execute and deliver the Indenture, one or more Credit Agreements, if applicable, and one or more Reserve Credit Agreements, if applicable, which shall be identified in the Pricing Confirmation, in substantially one or more of said forms with such changes therein as the Authorized Representative who executes the Pricing Conlirmation shall require or approve (substantially final forms of the Indenture, the Credit Agreement and, if applicable, the Reserve Credit Agreemen! are to be delivered to the Authorized Representative concurrent with the Pricing Confirmatiun), such approval of the Authorized Representative and this I..egislative Body to be conclusively evidenced by the execution of the Pricing Confirmation. If the Credit Agreement identified in the Pricing Cunfirmation is the Reserve Indenture, it is acknowledged that the Authority will issue the Reserve Bonds pursuant to and as provided in the Reserve Indenture liS linally executed. Anyone uf the Authorized Representatives of the Local Agency is hereby authorized and directed to provide the Financial Advisor or the underwriter with such information relating to the Local Agency as the Financial Advisor or the underwriter shall reasonably request for inclusion in the Preliminary Ollicial Statement ami Official Statement of the Authority. Upon inclusion of the infonnation relating to the Local Agency therein, the Preliminary Ol1icial Statement and Official Statement or such other offering document is, except for certain omissions permitted by Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"), hereby deemed final within the meaning of the Rule with respect to the Local Agency and any Authorized Representative of the Local Agency is authorized to execute a certiJicate to such effect. If, at any time prior to the end of the undelwriting period, as defined in the Rule, any event occurs as a result of which the information contained in the Preliminary OfJicial Statement or other offering document relating to the Local Agency might include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Local Agency shall promptly notify the Financial Advisor and the underwriter, Subject to Section 8 hereof, the Local Agency hereby agrees that if the Note shall become a Defaulted Note, the unpaid portiun (including the interest component, if applicable) thereof or the portion (including the interest component, if applicable) to which a Credit Instrument applies for which full reimbursement on a draw, payment or claim has not been made by the Maturity Date shall be deemed outstanding and shall not be deemed to be paid until (i) any Credit Provider providing a Credit Instrument with respect to the Note or the Series of Bonds issued in connection with the Note, has been reimbursed for any drawings, payments or claims made under or from the Credit Instrument with respect to the Note, including interest accrued thereon, as provided therein and in the applicable Credit Agreement, and, (ii) the holders of the Note, or Series of the Bonds issued in connection with the Note, are paid the full principal lIInuunt represented by the unsecured portion of the Note plus interest accrued theleon (calculated at the Default Rate) tu the date of deposit of such aggregate required amuunt with the ;rrustee. For purposes of clause (ii) of the preceding sentence, holders of the Series of Bonds will be deemed to have received such principal amount upon deposit of such moneys with the Trustee. Snbject to Section 8 hereof, the Local Agency hereby agrees that if the Note shall become a Defaulted Reserve Note, the unpaid portion (including the interest component, if applicable) thereof or the portion (including the interest component, if applicahle) to which a Reserve Credit Instrument, if any, applies fur which filII reimbursement on a Drawing has not been made by the Reserve Principal Payment Date shall be deemed uutstanding and shall not be Resolution Number_ deemed paid until (i) any Reserve Credit Provider providing a Reserve Credit Instrument with respect to the Reserve Bonds (against the Reserve Fund of which such Drawing was made) has been reimbursed for any Drawing or payment made under the Reserve Credit Instrument with respect to the Note, including interest accrued thereon, as provided therein and in the Reserve Credit Agreement, and (ii) the holders of the Note, or Series of Bonds issued in connection with the Note, are paid the full principal amount represented by the unsecured portion of the Note plus interest accrued thereon (calculated at the Default Rate) to the date of deposit of such aggregate required amount with the Trustee. For the purposes of clause (ji) of the preceding sentence, holders of the Series of Bonds will be deemed to have received such principal amount upon deposit of such moneys with the Trustee. The Local Agency agrees to payor cause to be paid, in addition to the amounts payable under the Note, any tees or expenses of the Trustee and, to the extent permilled by law, if the Local Agency's Note is secured in whole or in part by a Credit Instrument and, if applicable, a Reserve Credit Instrument (by virtue of the fact that the Series of Bonds is secured by a Credit Instrument and, if applicable, Reserve Bonds are secured by a Reserve Credit Instnll'nent), any Predefault Obligations and Reimbursement Obligations (to the extent not payable under the Note), 6) arising out of an "Event of Default" hereunder (or pursuant to Section 7 hereof) or (ii) arising out of any other event (other than an event arising solely as a result of or otherwise atlributable to a default by any other Issuer). In the case described in (ii) above with respect to Pn:default Obligations, the Lucal Agency shall owe only the percentage Ilf such fees, expenses and Predefault Obligatiuns equal to the ratio of the principal amount of its Note over the aggregate principal amounts of all notes, including the Note, of the Series of which the Note is a part, at the time of original issuance of such Series. Such additional amounts will be paid by the Local Agency within twenty-five (25) days of receipt by the Lucal Agency of a bill therefor from the Trustee. Section 6. No Joint Obligatioll The Nute will be issued in conjunction with a note or notes of one or more other Issuers, assigned to secure a Series of Bonds. In all cases, the ubligation of the Local Agency to make payments on or in respect to its Note is a several al!(l not a joint obligation and is strictly limited to the Local Agency's repayment obligation undt:r this Resolution and the Note. SccHon 7. Disposition of pJ'Oceeds of Note. A portion uf the moneys received ji-om the sale of the Nute in an amount equal to the Local Agency's share of the costs uf issuance (which shall include any fees and expenses in connection with any Credit Instrument (and the Reserve Credit Instrument, if any) applicable to the Nute or Series of Bonds and the corresponding Reserve Bonds, if any) shall be depusited in the Costs of Issuance Fund held and invested by the Trustee under the Indenture and expended as directed by the Authority on costs of issuance as provided in the Indenture. "111e balance of the moneys received ii"om the sale of the Note to the Authority shall be deposited in the Local Agency's Proceeds Subaccount hereby authorized to be created pursuant to, and held and invested by the Trustee under, the Indenture for the Local Agency and said moneys may be used and expended by the Local Agency for any purpose for which it is authorized to use and expend moneys, upon requisition fi"om the Proceeds Subaccount as specified in the Indenture. Amounts in the Proceeds Subaccount are hereby pledged to the payment of the Note. 'Dle Trustee will not create subaccounls within the Proceeds Fund, but will keep records to account separately for proceeds of the Bonds allocahle to the Local Agency's Note on deposit in the Proceeds Fund which shall constitute the Local Agency's Proceeds Subaccounl. Section II. Source of Payment. I I (A) The principal amount of the Note, together with the interest thereon, shall be payable from taxes, income, revenue (including, but not limited to, revenue from the state llnd I federal governments), cash receipts and other moneys which are received by the Local Agency for the general fund of the Local Agency and are attributable to Fiscal Year 2001-2002 and which are available for payment thereof. As security for the payment of the principal of ami interest on the Note, the Local Agency hereby pledges certain unrestricted revenues (as hereinafter provided, the "Pledged Revenues") which are received by the Local Agency for the general flmd uf the Local Agency and are allributable to Fiscal Year 2001-2002, and the principal of the Nute and the interest thereon shall constitute a first lien and charge thereon and shall he payable from the first moneys received by the Local Agency fi-om such Pledged Revenues, 1II1d, to the extent not so paid, shall be paid from any other taxes, income, revenue, cash receipts and other moneys of the Local Agency lawfully available therefor (all as provided for in Sections 53856 and 53857 of the Act), The term "unrestricted revenues" shalllllean all taxes, income, revenue (including, but not limited to, revenue frolll the state and federal I I I Resolution Number'" governments), cash receipts, and other moneys, intended as receipts for the general fund of the Local Agency allributable to Fiscal Year 2001-2002 and which are generally available f(lr the payment of current expenses and other obligations of the Local Agency. The Noteholders, Bondholders, Credit Provider and, if applicable, the Reserve Credit Provider shall have a first lien and charge on such certain unrestricted revenues as hereinafter provided which are receil'ed by the Local Agency and are allributable tu riseal Year 2001-2002. In order to effect the pledge referenced in the preceding paragraph, the Local Agency hereby agrees and covenants to establish and maintain a special account within the Local Agency's general fund to be designated the "2001 Tax and Revenue Anticipation Note Payment Accuunt" (the "Payment Account") and further agrees and covenants to maintain the Payment Account until the payment of the principal of the Note and the interest thereon. Nutwithstanding the foregoing, if the Local Agency elects to have Note proceeds invested in Permitted Investments to be held by the Trustee pursuant to the Pricing Cunlirmation, a subaccount of the Payment Account (the "Payment Subaccount") shall be established for the Local Agency under the Indenture and proceeds credited to such account shall be pledged to the payment uf the Note, The Trustee need not create a subaccount, but may keep a record to account separately for proceeds of the Note so held and invested by the Trustee which record shall constitute the Local Agency's Proceeds Subaccount. Transfers fi-om the Payment Subaccount shall be made in accordance with the Indenture. The Local Agency agrees to transfer to and deposit in the Payment Account the first amounts received in the months specified in the Pricing Confirmation as Repayment Months (each individual month a "Repayment Month" and collectively "Repayment Months") (and any amounts received thereafter attributable to riscal Year 2001- 2002) until the amount on depusit in the Payment Account, together with the amuunt, if any, on deposit in the Payment Subaccount, and taking into consilleration anticipated investment earnings theron to be received by the Maturity Date, is equal in the respective Repayment Months identilied in the Pricing Confirmation to the percentage of the principal and interest due on the Note specilied in the Pricing Conlirmation. In making such transfer and deposit, the Local Agency shall not be required to physically segregate the amounts to be transferred to and deposited in the Payment Account from the Local Agency's other general Ilmd moneys, but, notwithstanding any commingling of funds for investment or other purposes, the amounts required tu be transferred tu and deposited in the Payment Account shall nevertheless be subject to the lien and charge created herein. Anyone of.the Authorized Representatives of the Local Agency is hereby authorized to approve the determination of the Repayment Months and percentages of the principal and interest due on the Note required to be on deposit in the Payment Accountand/or the Payment Subaccount in each Repayment Month, all as specilied in the Pricing Confirmation, by executing and delivering the Pricing Confirmatiou, such execution and delivery tu be conclusive evidence of approval by this Legislative Body and such Authorized Representative; provided, however, that the maximum number of Repayment Months shall be six and the maximum amount of Pledged Revenues required to be deposited in each Repayment Month shall not exceed tifty percent (50%) of the aggregate principal and interest due on the Note. In the event on the day in each such Repayment Month that a deposit to the Payment Account is required to be made, the Local Agency has not received sullicient unrestricted revenues to permit the deposit into the Payment Account of the full amount of Pledged Revenues to be deposited in the Payment Account from said unrestricted revenues in said munth, then the amount of any deficiency shall be satislied and made up flOm any other moneys of the Local Agency lawfully availllble fur the payment of the principal of the Note and the interest thereon, as and when such other moneys are received or are otherwise legally available. (0) Any moneys placed in the Payment Account or the Payment Subaccount shall be f(lr the benelit of (i) the holder of the Note and the holders of Bonds issued in cunnection with the Notes, (ii) (to the extent provided in the Indenture) the Credit Provider, if any, and (iji) (to the extent provided in the Indenture and, if applicable, the Credit Agreement) the Reserve Credit Provider, if any. The moneys in the Payment Account anll the Payment Subaccuunt shall be applied only tor the purposes for which such Accounts are created until the principal of the Note and all interest thereon are (laid or until provision has been made for the payment of the principal of the Note at maturity with interest to maturity (in accordance with the requirements for defeasance of the Bonds as set forth in the Indenture) and, if applicable, (to the extent provided in the Indenture and, if applicable, the Credit Agreement) the payment of all Predefault Obligations and Reimbursement Obligations owing to the Credit Provider and, if applicable, the Reserve Credit Provider. (C) The Local Agency hereby direcls the Tmstee to transfer on the Note Payment Deposit Date (as defined in the Indenture), any moneys in the Payment Subaccount to Resolution Number~ the Bond Payment Fund (as defined in the Indenture). In addition, on the Nute Payment Deposit Dale, the moneys in the Payment Account shall be transferred by the Local AgeJl1cy to the Trustee, to Ihe extent necessary (after crediting any transfer pursuant to the preceding sentence), tu pay the principal of and/or interest on the Note or to reimburse the Credit Provider lor paymenls made under or pursuant to the Credit Instrument. In the event that moneys in the Payment Account and/or the Payment Subaccount are insullicie::nt to pay the principal uf and interest on the Note in thll when due, such moneys shall be applied in the following priority: first to pay interest on the Note; second to pay principal of the Note; third to reimburse the Credit Provider for payment, if any, of interest with respect to the Note; fourth to reimburse the Credit Provider for payment, if any, of principal with respect to the Note; fifth to reimburse the Reserve I Credit Provider, if any, lor payment, if any, of interest with respect to the Note; sixth to reimburse the Reserve Credit Provider, if any, for payment, if any, of principal with respect to the Note; and seventh to pay any Reimbursement Obligations of the Local Agency ami any of the Local Agency's pro rata share of Predefault Obligations owing tu the Cledit Provider and Reserve Credit Provider (if any) as applicable. Any moneys remaining in or accruing to the Payment ACl.:ount and/or the Payment Subaccount after the principal uf the Note and the interest lheleon and any Predefaull Obligatiuns and Reimbursement Obligations, if applicable, have been paid, or provisiun for such payment has been made, shall be transferred to the generul fund of the Local Agency, subject to any other disposition required by the Indenture, or, if applicable, the Credit Agreement. Nothing herein shall be deemed to relieve the Local Agency li'om its obligalion to pay its Note in full on the Maturity Date. (D) Moneys in the Proceeds Subaccount and in the Payment flubaccount shall be invested by (he Trustee pursuant to the Indenture as directed by the LOl.:al Agency in Permilled Investments as described in and under the terms of the Indcnture. Any such investment by the Trustee shall be for the account and risk of the Local Agency, und the Local Agency shall not be deemed to be relieved of any of its obligations with respect to the Note, the Predefaull Obligations or Reimbursement Obligations, if any, by reason of such investment of the moneys in its Proceeds Subaccount or the Payment Subacl.:ounl. (E) At the wrillen request of the Credit Provider, if any, or thc Reserve Credit Provider, if any, the Local Agency shull, within ten (10) Business Days folluwing the receipt of I such wrillen request, file such repurt or reports to evidence the tl'llnsfer tu and de::posit in the:: Payment Account required by this Section 8 aud provide such additional financial informal ion as may be required by the Credit Provider, ifany, or the Reserve Credit Provider, if any. Section 9. Execution of Note. Anyone of the Authorized Representatives of Ihe Local Agency or any other officer designated by the Legislative Body shall be:: authorized to execute the Note by manual or facsimile signature and the Secretary or Clerk of the Legislative Body of the Local Agency, or any duly appointed assistant thereto, shall be authorized to countersign the Note hy manual or faesimile signature. Said Authorized Representative of the Local Agency, is hereby authorized to cause the blank spaces of the Note to be filled in as may be appropriate pursuant to the Pricing Confirmation. The Authurized Representative is hereby authorized and directed to cause the Authority to assign the Note to the Trustee, pursuant tu the terms und conditiuns of the Purchase Agreement, this Resolution and the Indenture. In case any Authorized Representative whuse signature shall appear on any Note shall cease to be an Authorized Representative before the delivery of such Note, such signature shall neve,1heless be vulid and sufficient for "II purposes, the same as if such officer had remained in oflice uutH delivery. The Note need not bear the seal of the Lucal Agency, if any. Section 10. Intentionally Left Blan[(. This section has been included to preserve the sequence of section numbers for clOss-referencing purposes. Section 11. Representations and Covenants of the Local Agency, I The Locul Agency makes the following representations lor the benefit uf the holder of Ihe Nute, the owners of the Bonds, the Credit Provider, if any, and the Reserve Credit Provider, if any: (A) The Local Agency is duly organized and exisling under and by virtue of the laws of tbe fltate of California and has all necessary power and authurity to (i) adopt this Resolution and perfurm its obligations thereunder, (ii) enter into and perfOlm its obligalions under the Purchase Agreement, and (iii) issue the Note and perform its obligations thereunder. (B) (i) Upon the issuance of the Note, the Local Agency shall have taken all aClion required to be taken by it to authorize the issuance and delivery of the Note and the I I I Resolution Number~;?~ performance of its obligations thereunder, and (ii) the Local Agency has full legal right, power and authority to issue and deliver the Note. (C) The issuance of the Note, the adoption ofth~ Resolution and the execution and delivelY of the Purchase Agreement, and compliance with the provisions hereof and thereof do not eonOict with, breach or violate any law, administrative regulation, court decree, resolutiun, charter, by-laws or other agreemenllU which the Local Agency is subject or by which it is bound. (D) Except as may be required under blue sky or other securiti~s laws uf any stale 01 Section 3(a)(2) of the Securities Act of 1933, there is no consent, approval, 1Illthorization or other order of, or liling with, or eertilication by, any regulatory authority having jurisdiction over the Local Agency required for the issuance and sale of the Note or the consummation by the Local Agency of the other transactions contemplated by this Resolution, except those the Local Agency shall obtain or perform prior to or upon the issuance of the Note. (E) The Local Agency has (or will have prior to the issuance of the Note) duly, regularly and properly adopted a preliminary budget lor Fiscal Year 2001-2002 selling lorth expected revenues and expenditures and has complied with all statutOlY ami r~gulatory requirements with respect to the adoption of such budget. The Local Agency herehy cuvenants that it shall (i) duly, regularly and properly prepare and adopt its final budg~t for Fiscal Year 2001-2002, (ii) provide to the Trustee, the Credit Provider, if any, the Reserve Credit Provider, if any, and the Financial Advisor and the underwriter, promptly upon adoption, copies of such linal budget and uf any subsequent revisions, modilications or amendmcnts therelo and (iii) comply with all applicable laws perlaining to its budget. (F) The sum of the principal amount of the Local Agency's Nute plus the interest payable thereon, on the dute of its issuance, shall not exceed fifty percenl (50%) of the estimated amounts of the Locul Agency's uncollected taxes, income, revenue (including, but not limited to, revenue from the state and federal governments), cash receipts, and other moneys to be received by the Local Agency for the general fund of the Local Agency allributable to Fiscal Year 2001-2002, all of which will be lega,lly available to pay principal of and interest on the Note. (0) The Local Agency (i) has not defaulted within the past twenty (20) years, and is not currently in default, on any debt obligation and (ii), to the besl knuwledge uf the Local Agency, has never defaulted on any debt obligation. (1-1) The Local Agency's most recent audited financial statements present fairly the financiul condition of the Local Agency as of the date thereof and the results of operation for the period covered thereby. Except as has been disclosed to the Financial Advisur and the underwriter, the Credit Provider, if any, and the Reserve Credit Provider, if any, there has been no change in the financial condition of the Local Agency since the date of such audited financial statements that will in the reasonable opinion of the Local Agency materially impair its ability to perform its obligations under this Resolution and the Note. The Local Agency agrees to furnish to the Authority, the Financial Advisor, the underwriter, the Trustee, the Credit Provider, if any, and the Reserve Credit Provider, if any, promptly, from time to time, such information regurding the operations, financial condition and properly of the Local Agency as such party may reasonably request. (1) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before Ul" by any court, arbitrator, governmental or other board, body or official, peuding or, to the best knowledge of the Local Ageney,llucatened against or affecting the Local Agency questioning the validity of any proceeding taken or to be taken by the Local Agency in connection with the Note,' the Purchase Agreement, the Indenture, the Credit Agreement, if any, the Reserve Credit Agreement, if any, or this Resolution, or seeking to prohibit, restrain or enjoin the execution, delivery or performance by the Local Agency of any of the forcgoing, or wherein un unfavorable decision, ruling or finding would have a materially adverse efTect on the Local Ag~ncy's financial condition or results uf operations or on the ability of the Local Agency to conduct its activities as presently conducted or as proposed or contemplated to be conducted, or would materially adversely alTeet the validity or enforceability of, or the authority or ability of the Local Agency to perform its ubligations under, the Note, the Purchase Agreement, the Indenture, the Credit Agreement, if any, the Reserve Credit Agreement, if any, or this Resolutiou, Resolution Number~ (1) Upon issuance of the Note and execution of the Purchase Contract, this Resolutiun, the Purchase Contract and the Note will constitute legal, valid and binding agreements of the Local Agency, enforceable in accordance with their respective tenus, except as such enforceability may be limited by bankruptcy or uther laws affecting creditors' rights generally, the application of equitable principles if equitable remedies are sought, the exercise of judicial discretion in appropriate cases and the limitatiuns on legal remedies against local agencies, as applicable, in the State of California. (K) The Local Agency and its appl'Opriate ol1icials have duly tllken, or will take, all proceedings necessary to be taken by them, if any, for the levy, receipt, cullection ami enforcement of the Pledged Rel'enues in accordance with law for carrying out the provisions of this Resolution and the Note. (I.) 'Ille Local Agency shall not incur any indebtedness secured by a pledge of its Pledged Revenues uuless such pledge is suburdinate in all respects to the pledge of Pledged Reveuues hereunder. (M) So long as the Credit Provider, if any, is not in paYlTlt:nl default under Ihe Credit Instrument or the Reserve Credit Provider, if any, is not in delimit under the corresponding Reserve Credit Agreement, the Local Agency hereby agrees to pay its pro rata share of all Predefault Obligations and all Reimbursement Obligations atlributable to the Local Agency in accordance with provisions of the Credit Agreement, if any, the Reserve ,Credit Agreemeut, if any, and/or the Indenture, as applicable. Prior to the Malurity Date, moneys in the Local Agency's Payment Acconnt and/or Payment Subaccount shall not be used to make such payments. TIle Local Agency shall pay such amounts promplly upon receipt of notice fi'om the Credit Provider or from the Reserve Credit Provider, if applicable, that such llmounts are due to it. (N) So lung as auy Bonds issued in connection with the Notes are Outstanding, or any Predefault Obligation or Reimbursement Obligation is outstllnding, the Local Agency will not create or suffer to be created any pledge of or lien on the Note other than the pledge and lien uf llle Indenture. Section 12. TIIX Covenants. (A) The Local Agency shall nottllke any action or fail to take any action if such action or failure to take such action would adversely allect the exclusion from gross income of the interest payable on the Note or Bonds under Section 103 of the Internal Revenue Code uf 1986 (the "Code"). Without limiting the generality of the furegoing, the Local Agency shall not make any use of the proceeds of the Note or Bunds or lIny other funds of the Lucal Agency which would cause the Note or Bonds to he an "arbitrage bond" within the meaning of Section 148 of the Code, a "private activity bond" within the meaning of Section 141 (a) of the Cude, or an obligation the interest on which is subject to federal income taxation because it is "federally guaranteed" as provided in Section 149(b) of the Code. The LOClll Agency, with respect to the proceeds of the Note, will comply with all requirements or such sections of the Code and all regulations of the United States Department of the Treasury issued or applicable thereunder to the extent that such requirements are, at the time, appliellble and in effect. (13) '1be Local Agency hereby (i) represents that the aggregate fllce amount of all tax-exempt obligations (including any tax-exempt leases, but excluding privlIte activity bonds), issued and to be issued by the Local Agency during calendar year 2001, including the Note, is not reasonably expected to exceed $5,000,000; 01", in the IIIternaHve, (ii) covenants thai the Lucal Agency will take all legally permissible steps necessary to ensure tlmt all uf the gross proceeds of the Note will be expended no later than the day that is six months after the dale of issuance of the Note so as to satisfy the requirements of Section 148(1)(4)(13) of the Code. (C) Notwithstanding any other provision of this Resolulion to the contrary, upon the Local Agency's failure to observe, or refusal to comply with, the covenants contained ,in lhis Section 12, no one other than the holders or former holders of the Note, the owners of the Bond, the Credit Provider, if any, the Reserve Credit Provider, if any, or the Trustee on their behalf shall be entitled to exercise any right or remedy under this Resolution un the basis of the Local Agency's failure to observe, or refusal to comply with, such cuvenants. (D) The covenants contained in this Section 12 shall survive the payment of the Note. I I I I I I Resolution Section 13. Evcnts of Dcfault lInd Rcmcdics. NumbemtJ [I' any of thc following events occurs, it is hereby defined as and declared to be and to constitute an "Event of Default": (A) Failure by the Local Agency to make or cause to be made the transfers and deposits to the Payment Account, or any other payment required to be paid hereunder, including payment of principal and interest on the Note, on or before the date on which such transler, deposit or other payment is due and payable; (B) Failure by the Local Agency to observe and perfurm any covenant, condition or agreement on its part to be observed or performed under this Resolution, for a period of liftecn ([5) days after written notice, specifying such failure and requesting that it be remedied, is given to the Loca[ Agency by the Trustee, the Credit Provider, if applicable, or the Reserve Credit Provider, if applicable, unless the Trustee and the Credit Provider or the Reserve Credit Provider, if applicable, shall all agree in writing to an extension uf such time prior to its expiration; (C) Any warranty, representation or other statement by or on behalf of the Local Agency contained in this Resolution or the Purchase Agreement (including the Pricing Confirmation) or in any requisition or any financial rep0l1 delivered by the Local Agency or in any instrument furnished in compliance with or in reference to this Resolution or the Purchase Agreement or in connection with the Note, is false or misleading in any material respect; (D) A petition is filed against the Local Agency under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereatler in effect and is not dismissed within 30 days after such liling, but the Trustee shall have the right to intervene in the proceedings prior to the expiration of such thirty (30) days to protect its and the Bond Owners' (or Noteholders') interests; (E) The Lucal Agency files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any petition against it under such law; or (F) The Local Agency admits insolvency or bankmptcy or j; generally not paying its debts as such debts become due, or becomes insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including without limitation a receiver, liquidator or trustee) of the Lucal Agency or any of its property is appointed by court order or takes possession thereof and such order remains in effect or such possession continues for more than 30 days, but the Trustee shall have the right to intervene in the proceedings prior to the expiration of such thirty (30) days to protect its and the Bond Owners' or Noteholders' interests. Whenever any Event of Default refened to in this Section 13 shall have happened and be continuing, the Trustee, as holder of the Note, shall, in addition to any other remedies provided herein or by law or under the Indenture, if applicable, have the right, at its option without any further demand or notice, to take one or any combination of the following remedial steps: (I) Without declaring the Note to be immediately due and payable, require the Lucal Agency to pay to the 'Trustee, as holder of the Note, an amount equal to the principal of the Note and interest thereon to maturity, plus all other amounts dne hereunder, and upon notice to the Local Agency the same shall become immediately due and payable by the Local Agency without further notice or demand; and (2) Take whatever other action at law or in equity (except for acceIClation of payment on the Note) which may appear neccssary or desirable to collect the amuunts then due and ,thereafter to become due hereunder and under .the Note or to enforce any other of its rights hereunder. Notwithstanding the foregoing, if the Local Agency's Note is secured in whole or in part by a Crcdit Instrument (other than the Reserve Fund) or if the Crcdit Provider is subrogated to rights under the Local Agency's Note, as long as the Credit Provider has not failed to comply with its payment obligations under the Credit Instrument, the Credit Provider shall have the right to direct the remedies upon any Event of Default hereunder, and, not withstanding the foregoing, if a Reserve Credit Instrument is applicable, as long as the Reserve Credit Resolution Numbe. Provider has not failed to comply with its payment obligations under the Reserve Credit Agreement, the Reserve Credit Provider shall have the right (prior to the Credit Provider) tu direct the remedies upon any Event of Delimit hereunder, in each case so long as such action will not materially adversely affect the rights of any Bond Owner, and the Credit Provider's and Reserve Credit Provider's (if any) prior consent shall be required to any remedial action proposed to be taken by the Trustee hereunder. If the Credit Provider is not reimbursed for any drawing, payment or claim, as applicable, used to pay principal of and interest on the Note due to a default in payment on the Note by the Local Agency, or if any principal of or interest on the Note remains unpaid after the Maturity Date, the Note shall be a Defaulted Note, the unpaid portion (including the interest I component, if applicable) thereof or the portion (including the interest component, if applicable) to which a Credit Instrument applies for which reimbursement on a draw, payment or claim has not been made shall be deemed outstanding and shall bear interest at the Default Rate until the Local Agency's obligation on the Defaulted Note is paid in full or payment is duly provided for, all subject to Section 8 hereof. If the Credit Instrument is the Reserve Fund and the Reserve Bonds are secured by the Reserve Credit Instrument and all principal of and interest on the Note is not paid in full by the Reserve Principal Payment Date, the Defaulted Note shall become a Delimited Reserve Note and the unpaid portion (including the interest component, if applicable) thereof (or the portiun thereof with respect to which the Reserve Fund applies for which reimbursement on a Drawing has not been fully made) shall be deemed outstanding and shall bear interest at the Default Rate until the Local Agency's obligation on the Defaulted Reserve Nute is paid in filII or payment is duly provided for, all subject to Section 8 hereof. Section 14. Trustee. TIle Local Agency hereby directs and authorizes the paymeot by the Trustee of.the interest on and principal of the Note when such become due and payable, fronl amounts received by the Trustee froril the Local Agency in the manner set torth herein. The Local Agency hereby covenants to deposit fimds in such account or timd, as applicable, at the time and in the amount specified herein tu provide suflicient moneys tu pay the principal of and interest on the Note on the Note Payment Deposit Date. Payment uf the Note I shall be in accordance with the terms of the Note and this Resolutiun. Section 15. Sale of Note. The Note shall be sold to the Authority, in accordance with the terms of the Purchase Agreement, hereinbefore approved, and issued payable to the Trustee, as assignee of the Authority, Seelion 16. Intentionall)' Left 11111111(. This section has been included to preserve the sequence uf section numbers for cross-referencing purposes. Section I? 'ApPI'oval of Actions. TIle aforementioned Authorized Representatives of the Lucal Agency are hereby authorized and directed to execute the Nute and cause the Trustee to accept delivery of the Note, pursuant to the terms and conditiuns uf the Purchase Agreement and the Indenture. All actions heretofore taken by the officers and agents of the Local Agency ur this Legisllltive Body with respect to the sale and issuance of the Note and participation in the Program are hereby approved, confirmed and ratified and the Authorized Representatives and agents of the Local Agency are hereby authorized and directed, for and in the name and on behalf of the Local Agency, to do any and all things and take any and ullaetions and execute any and all eertHicates, agreements and other documents which they, or any of them, mllY deem necessary or advisable in order to consummate the lawful issuance and delivery uflhe Note in accordance with, and related transactions contemplated by, this Resolution. The Authorized Representatives of the Local Agency referred to above in Sectiun 4 hereof arc hereby designated as "Authorized ,Local Agency Re~resentatives" under the Indenture. In the event that the Note or a portion thereuf is secured by a Credit Instrument, anyone of the Authorized Representatives of the Local Agency is hereby authorized and directed to provide the Credit Provider and, if applicable, the Reserve Credit Provider, with any and all information relating to the Local Agency as such Credit Provider or Reserve Credit Provider may reasonably requesl. I Section 18. Proceedings Constitute Contract. The provisions of the Note and of this Resolution shall constitute a contract between the Local Agency IInd the registered owner of the Note, and such provisions shall be enforceable by mandamns or any uther appropriate suit, action or proceeding at law or in equity in any court of competent jurisdiction, I I I Resolution Number~~~ and shall be irrepealable. The Credit Provider, if any, and the Reserve Credit Provider, if any, are third party beneficiaries of the provisions of this Resolutionlllld the Note. Section 19. Limited Liability. Notwithstanding anything to the contrary contained hcrein or in the Note or in any other document mentioned herein or related to the Note or to any Series of Bonds to which the Note may be assigned, the Local Agency shall not have any liability hereunder or by reason hereof or in cOlUlection with the transactions contemplated hereby except to the extent payable from moneys available therefor as set forth in Section 8 hereof. Section 20. Amendments. At any time or from time to time, the Local Agency may adopt one or more Supplemental Resolutions with the written consents of the Authority, the Credit Provider, if any, and the Reserve Credit Provider, if any, but without the necessity for consent of the owner of the Note or of the Bonds issued in connection with the Note for anyone or more of the following purposes: (A) to add to the covenants and agreements of the Local Agency in this Resolution, other covenants and agreements to be observed by the Local Agency which are not contrary to or inconsistent with this Resolution as theretofore in effect; (8) to add to the limitations and restrictions in this Resolution, other limitations and restrictions to be observed by the Local Agency which are not contrary to or inconsistent with this Resolution as theretofore in effect; (C) to confirm, as further assurance, any pledge under, and the subjcction to any lien or pledge created or to be created by, this Resolution, of any monies, securities or funds, or to establish any additional funds or accounts to be held under this Resolution; '(D) to cure any ambiguity, supply any omission, or cure or correct any defect ur inconsistent provision in this Resolution; or (E) to amend or supplement this Resolution in any other respect; provided, however, that any such Supplemental Resolution does not adversely affect the interests of the owners of the Note or of the Bonds issued in connection with the Notes. Any modifications or wnendment of this Resolution and of the rights and obligations of the Local Agency and of the owner of the Note or of the Bonds issued in connection with the Note may be made by a Supplemental Resolution, with the wriUen consents of the Authority, the Credit Provider, if any, and the Reserve Credit Provider, if any, and with the written consent of the owners of at least a majority in principal amount of the Note WId of the Bonds issued in connection with the Note outstanding at the time such consent is given; provided, however, that if such modification or amendment will, by its temls, not take effect so long as the Note or any Bonds issued in cOlUlection with the Note remain outstanding, the consent of the owners of such Note 01' of such Bonds shall not be required. No such modilication or amendment shall permit a change in the maturity of the Note or a reduction of the principal amount thereof or an extension of the time of any payment thereon or a reduction of the rate of interest thereon, or a change in the date or amounts of the pledge set forth in this Resolution, without the consent of the owners of such Note or the owners of all the Bonds issued in cOlUlection with the Note, or shall reduce the percentage of the Note or Bonds the consent of the owners of which is required to effect any such modification or amendment, or shall change or modify any of the rights or obligations of the Trustee without its written assent thereto. Section 21. Severability. In the event any provision of this Resolution shall be held invalid or unenforceable by any comt of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 22. Appointment of Bond Counsel. The law film of Orrick, Herrington & Sutcliffe LLP, Los Angeles, Califomia is hereby appointed as Bond Counsel for the Program. The Local Agency acknowledges that Bond Counsel regularly performs legal services for many private and public entities in connection with a wide variety of matters, and that Bond Counsel has represented, is representing or may in the future represent other, public entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders, financiallllld other consultants who may have a role or interest in the proposed financing or that may be involved with or adverse to Local Agency in this or some other matter. Given the special, limited role of Bond Counsel described above the Local Agency acknowledges that 110 Resolution Number. connict of interest exists 01' would exist, waives any conilict of interest that might appeal' tu exist, and consents to 1II1Y and all such relationships. Section 23. Appointment of Financial - Advisor and Ullllcnvriter. Sutro & Co. Incorporated, Los Angeles, California is hereby appointed as financial advisor for the Program. Lehman Brothers Inc., together with such co-underwriters, if any, identified in the Purchase Contract, is hereby appointed as underwriter for the Program. Section 24. Effective Date. TIlis Resolution shall take effect from and after its date of adoption. , Section 25. Resolution Parametel'S. I (A) Name of Local Agency: City of Seal Beach (B) Maximum Amount of Borrowing: $2,300,000 (C) Authorized Representatives: TITLE I. City Manager 2. Director of Administrative Servicesrrreasurer 3. City Clerk [Attach form of Certification of the Secretary or Clerk, as appropriate, with respect to the Resolution.] . AYES: Councilmember Council of the City of 200l by the following I PASSED, APPROVED".~ ADOPTED Seal Beach this ~day of vote: NOES: Councilmembers ABSTAIN: CO\lncilmember ABSENT: Councilmembers ~~~'~~~ Mayor ATT I STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF SEAL BEACH ) ) ss ) I I, Joanne M. Yeo, City Clerk of the City of Seal Beach, California,- do hereby certify tha~OregOing Resolution is the original copy of Resolution Number n file in the office of the ci y Clerk, passed, approved, and ad pted by the City Coun~~of the . of Sea each at a meeting thereof held on the ~day of , 2 1. I I I Resolution Number'" EXHIBIT A CITY OF SEAL BEACH 2001 TAX AND REVENUE ANTICIPATION NOTE, [SERIES --1!/ Interest Rate Date or Original Issue Maturitv Date REGISTERED OWNER: PRINCIPAL AMOUNT: $2,300,000 FOR VALUE RECEIVED, the Local Agency designated above (the "Loeal Agency"), acknuwledges itself indebted to and promises to pay to the registered owner identilied above, or registered assigns, on the maturity date set forth above, the principal sum specified ahove in lawtill money of the United States of America, and to pay interest thereon [on , 2002 and J at maturity at the rate of interest specified above (the "Note RJlte"). Principal of and interest on this Note are payable in such coin or currency of the United States as at the time of payment is legal tender for payment of private and public debts. Principal and interest at maturity shall be paid upon surrender hereof at the principal corporate trust office of Wells Fargo Bank, National Association in Los Angeles, California, or its successor in trust (lhe "Trustee"). Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30- day months. Both the principal or and interest on this Note shall be payahle only 10 the registered owner hereof as the same shall fall due; provided, huwever, no interest shall be payable for any period aller maturity d~lring which the holder hereof fails to properly present this Nute for paymenl. If the Local Agency fails to pay this Note when due or the Credit Provider (as defined in the Resolution hereinafter described and in that celtain Indenture of Trust, dated as of 1,2001 (the "Indenture"), by and between the California Statewide Communities Development Authority and Wells Fargo Dank National Association, as trustee), if any, is not reimbursed in li11l for the amollnt drawn on or paid pursuant to the Credit Instrument (as delined in the Resulution and the Indenture) to pay all or a portion (including the interest component, if applicable) of this Note on the date of such payment, this Note shall become a Defaulted Note (as defined in the Resolution and the Indenture and with the consequences set lorth in the Resulution and the Indenture, including, withuut limitation, that this Notc as a Defaulted Note (and any related reimhursement obligation with respect to a credit instrument) shall bcar interest at the Delimit Rate, as de lined in the Indenture). II is herehy certilied, recited and declared that this Note represents the authorized issue uf the Note in the aggregate principal amount authorized, executed and delivered pursuant to and by authority or certain resolutions of the Local Agency duly passed and adopted heret%~~re, under and by authority of Article 7.6 (commencing with Section 53850) of Chapter 4, Part I, Division 2, Title 5 of the California Government Code (collectively, the "Resolution"), to all of the provisions and limitations of which the owner of this Note, by acceptance heleof, assents and agrees. The principal of the Note, together with the interest thereon, shall be payable li'om taxes, income, revenue, cash receipts and other moneys which are received by the Local Agcncy for the general fund of the Local Agency and are anributable to Fiscal Year 2001-2002 and which are available for payment thereuf. As security for the payment of the principal of and interest on the Note, the Lucal Agency has pledged the first amounts of ulll"eslricted revenues of the Local Agency received on the last day of and (and any amounts received therealler attributable to Fiscal Year 2001-2002) until the amount on deposit in the Payment Account (as defined in the Resolution), together wilh available amounts, if any, on iIeposit in the 'Payment Subaccount (as defined in the Resolution) in each such month, is equal to the curresponding percentages of principal of and interest due on the Note as set forth in the Pricing Conlirmation (as defined in the Resolution) (such pledged amounts being hereinaller called the "Pledged Revenues"), and the principal of the Note and the interest lhereon shall constitute a lirstlien and charge thereon and shall be payable ti-om the Pledged Revenues, ami 10 ~/I r more than onc Scries of Oonds is issueduncler the Program in Fiscal Year 2001-2002 and if the Note is pouled with notes issued by olher Issuers (as defined ill the Resolution). Resolution NUItiber_ the extent not so paid shaH be paid from any other moneys of the Local Agency lawfuHy available therefor as set forth in the Resolution. The full faith and credit of the Lucal Agency is not pledged to the payment of the principal of or interest on this Note. The Local Agency and the Trustee may deem and treat the registerell owner hereof as the absolute owner hereof for the purpose of receiving payment of or on acconnt of principal h~reof and interest dne hereon and for aH other purposes, and the Local Agency and the Trustee shall not be a,m:cted by any notice to the contrary. It is hereby certified that all of the conditions, things and acts required to exist, to I have happened al1lllo have been performed pref:edent to and in the issuance of this Note do exist, have happened and have heen performed in due time, form and manner as required by the Constitutiun and statutes of the State of California and that the amount of this Nute, tugether with all other indebtedness of the Local Agency, does not exceed any limit prescribed by the Constitution or statutes of the Stute ofCulilomia. IN WITNESS WHEREOF, the Legislalive Body of the Local Agency has caused this Note to be executed by the mauual or lacsimile siguuture of a duly Authorized Representative of the Local Agency and countersigned by the manual or facsimile signature of the Secretary or Clerk of the Legislative Dody as of the dale of authentication set forth below. By: Manager I I I I I Resolution Number~ PURCHASE AGREEMENT TI-IIS PURCHASE AGREEMENT (~le "Purchase Agreement"), dated as of the purchase date (dIe "Purchase Date") specified in Exhibit A attached hereto and made a pmt hereof, entered into by and hetween the signatory local agency designated in Exhibit A (the "Local Agency") and dIe Calit(lrnia Statewide Conullunities Development AuthOl;ty (the "Authority"), lor the sale and delivelY of~le principal amount specified in Exhibit A of the Local Agency's 2001 Tax and Revenue Auticipation Note (the "Note") to be issued in conjullction with the notes of othel Issuers (as hereinaller defined) participating in dIe Program (as hereinafter defined), as detennined in the Pricing Confirmation (as hereinafter delined), pooled with Ilotes of other Issuers and assigned to secIJre a series (1he "Series") of bonds (dre "Ilonds") designated in Exhibit A; WITNESSETH: WHEREAS, local agencies are authorized by Sections 53850 to 53858, both inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4, Pmt 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary notes; WHEREAS, the legislative body of the Local Agency (the "Legislative Body") has heretofore adopted its resolution fmding that the Local Agency needs to borrow li.l11ds in its fiscal year ending June 30,2002 C'fiscal Year 2001-2002") in the principal amOlmt set forth in Exhibit A and that it is necessary that said sum be borrowed at dlis time by dIe issuance of a note therefor in anticipation of the receipt of taxes, income, revenue, cash receipts and other moneys to be received by the Local Agency during or attributable to Fiscal Year 2001-2002; WHEREAS, the Local Agency has adopted a resolution or resolutions (collectively or singularly, as applicnble, the "Resolution") authorizing the issuance and sale of lhe Note in the name and, , 011 bellalf of the Local Agency; WHEREAS, dIe Local Agency has determined that it is in the best interests of the Local Agency to participate in the California Commlulities Cush Flow Financing Pl'Ognull (the "Program"), whereby participating local agencies (the "Issuers") will simultaneously issue tax and revenue anticipation promissory notes for purchase by the Authority; WHEREAS, lmder dJe Program, the AuthOl;ty will fonn one or more pools of notes (the "Pooled Notes") and assign each note to a pruiicular pool (the "Pool") and sell a Series of Bonds secured by each Pool pursuant to an indenture, dated as of July 1, 2001 (the "Indenture"), hy amI between the Authority mId Wells Fargo Dank, National Association (the "Trustee"), and sell each such Series to Lehman Brodlers Inc., as representative of the underwriters of the Program (collcctively, the "Ulu.lerwriler"); WHEREAS, if so indicated in Exhibit A, the payment by the Local Agency of its Note will be seclU'ed in whole or in parl Goinlly, but not severally, with notes of the other participaling Issuers assigned to the same Series of Bonds) by a letter of credit, policy of insurmlce, proceeds received Ji'OIJ1 a separate bond issue issued by the Authority for such purpose (the "Reserve Fund") or uthcr credit instillment (collectively, the "Credit Insb'lunent") to be issued by the entity or entities designated in Exhibit A as the credit provider (the "Credit Providd'); WHEREAS, such Credit InstlUment may be issued pursuant to a reimbursement agreement, commitment letter, indenture or Othel' agreement (tile "Credit Agreement") as identified in Exhibit A; WHEREAS, in onler to participate in the Program, the Local Agency has agreed 10 be responsible for its share of the fees Imd expenses of the Tllls\ee, and, if applicable, the Creditl'rovider and the costs uf issuing the Bonds, and the costs, if applicable, of issuing the Credit Instnllnent, which l1nticipated fees, expenses and costs of isslllIDce will be deducted from the purchase price set forth in Exhibit A 1U1d which unanticipated fees, expenses and costs of issuance will be billed to tile Local Agency as Ule same muy mise; WHEREAS, the costs of issuance which will be deducted from Ule purchase price set forth in Exhibit A for the Local Agency shall not exc~ed one percent (1 'Yo) of the principal amount of each Note; and Resolution Number~ WHEREAS, pursuant to the Program, the Authority is submilling this uffer to purchase the Note pursuant to this Pmchllse Agreement; NOW, TJ-lliREFORI!:, for good and valuable consideration the receipt and sufliciency of which is hereby acknowledged, the parties hereto agree as folloy.'s: Section I. Oblil!ntion to }'urchase. Upon the terms and conditions ami in reliance upun the representlltiolL~, wlllTdnties and a~reements set Jilrth herein, the Authority shall purchase fium the Local Agency, and the Local Agency slmll sell to the AUlhority, the Note, as I desClibed herein 1II1d in the Resolution. Section 2. Pnrchllse Pl'ice. TIle purchase price of the Note shall be the purchase price set forth in the pricing confimlation allached hereto as Exhibit A (the "Pricing Confirmation"). The Note shall bear interest at an interest mte per annum set forth in the Pricin~ Confinnation, which is hereby agreed to by and between the Authority and the Local Agency by its duly autllOriZt'd representative executing this Purchase Agreement on behalf of the Local Agency. Section 3. Adiustments to Principal Amount of Note IInd Purchase Price. TIle Authority and the Local Agency hereby agree that the principallllllount of thc Nute pun:hased by dle Authority and sold to the Authority by tlle LoclIl Agency pursuant to tllis Purchase Agreement may be reduced, as detemlined by the Authority and each Local Agency, bllsed upon (he advice of Orrick, Herrin~ton & Sutcliffe LLP ("Bond Cuunsel"), in order that the proceeds produced from such sale of such Note will be an 8lJlOlUlt which will not be subject to either (i) yield restriction (in order lor interest to be excluded from gross income WIder Section 103 of the Intemal Revenue Code or 1986, as amended (the "Code")) ur (ii) a rebate requil'Cment (nnder Section J 48 of the Code). The Authority ami the Local Agency hereby Ii.uther a~ree that the purchase price of the Note shall be reduced as a result of any reduction of the principallUJlount of the Note required by this section. Section 4. I>clivel"Y of nnd I'nvment fOI' the Note. 'nle delivery or the Note (the "Closing") shall take place al 8:00 a.m., Califomia time, on the closing date set fill'Ul in the Pricing COIumnation or at such other time or date as mny be mutually agreeable to the Local Agency, the I AuUlurity 8lld the Undelwriter, al the Los Angeles office of On'ick, I-Ienington & Sutcliffe LLP or such uther place as Ule Local Agency, the AutllOrity and the Underwriter shall mutually agl'Ce. At the Closing, the Local Agency shall cause the Note to be delivered to the Authority, duly executed ami authenticated, together with the uther documents hereinafter mentioned, ami (he proceeds of the purchase price of the Nute sel fortll in the Pricing Confumalion shall be deposited in an amOlult indicated in the Pricing ConfinJlation as the Deposit to Proceeds Fund which shall be held by the Trustee for the Local Agency 8l1d the remainder in the Costs of Issuance FLUId held lhel'ClUlder. If ut any time plior to 90 days aner the Closing Date, any event occurs us a result of which infonnation relating to the Local Agency included in the oflicial statement of the AutllOrity relating to the Series of Ilonds to which (he Note is assigned (the "Oflicial Statement") contains an untrue statement of a material fact or omits to Slate any material fact neeeSSIWY to make the statements therein in light of the circlunstances under which they were made, not misleading, the Locul Agency shall promptly notily the Autllority and tile UndelWliter thereof, and if, in tile opinion of \he Autllority or the Uuderwriter, such event requires Ule prepamtion and publication of a supplement or amendment to the Official Statement, the Locul Agency shall cooperate wiU, the AutllOrity and tllt: {Jndelwrit~r in the preparation of an amendment ur supplement to the Official Statement in a /ol1n and in a manner appl'Oved by the AuUlority IUld the Underwriter, and all reasonable expenses incnrred thereby slmU be paid by (he Local Agency. Section S. The Note. l11c Note shall be issued Ul substantially tile form set ((lith in tlle Resolution, without coupons in tlle full plincipal amOlUlt set forth in Exhibit A. Section 6. Representations and Wllrr:lIIlies of the Locnl A~ency. The Local Agency replesenls and warrants to the Authority and the Undenvriter thaI: I , (u) All representations lUld wamUlties set Jorth in the Resolution are tme 8lld COl'rect on the date hereof and 1IJ'C made for the benefit uf tile Authority aud the Underwriter as if set forUI herein. (11) TIle inlolmation relating to tlle Local Agency included in the Oflicial :::ilatement dues not contain any lllltruc stalemenl of a material lact or omit to state any materiul fact necessary to make the statements Ulerein in light of the circlunstlUlCe luuler which tlley were made nut misleading. I I I Resolution Number~ (c) A copy of thc Resolution has been delivered to the AUtil0l1ty wId the UndeIWriter, wld tile Resulutiun will not be wnended or repealed WitilOUt the consent of the AUlhority and tilt: UndeIWriter, which consent will not be u1II'ellsonably withheld. (d) 'Die Local Agency acknowledges that the Authority is authorized to cxecute tile Indenture, to assign the Note to the Trustee under the Indenture wld to issue the Series of Bonds pm"SUllllt to the Indenture. (e) 'DIe Local Agency shall provide the required Payment Account Deposit Certilication (upon a request therefor) in accordance with Section 5.06 uf tile Indenture. (0 The Local Agency has not issued and will not issue any ohligation or obligalions, other lhml the NOle, to fmance the working capital deficit tor which the Nute is being issued, Section 7. Closing woe as !ollows: Conditions I)recedent to thc Closing. Cunditiuns precedent to the (a) TIle exccution and delivelY of tile Note consistent witilthe Resolulion. (b) Delivery ofa legal opinion addressed to the Loc.1l Agency (with a reliance leuer addressed to the Anthority and the Underwriter), dated the date of clusing of Bond COlUlsel with l'CSpect to the validity of the Bonds in fonn and substance aeccptable to the Authority and the Undelwriter. (c) Delivery of a legal opinion, dated the date of Closing, of counsel to the Local Agency, with respect to tile due authorization, execution IUld delivery of tile Note, in limn lInd substance acceptable to Dond Cuunsel. (d) Approval by the Credit Provider of the credit of the Local Agcney and inclusion of tile Local Agency's Note in the assignment, together with notes of other Issuers, to a Series of Donds, to secure the Series of Donds, which approval in (he event the Credit Instrument is the Reserve flUId shall be evidenced by the issuance ufan "SP-I+" rating with respect to the applicable Series uf 130nds by Stlllldard & l'oor's Ratings Services. (e) Delivery of cach cel1iticate, document, instrmnentlUld opiuiun required by the agreement betwecnthe Autilority and tile Underwriter lor the sale by the Authority and purchase by the Underwriter uCthe Series of Bonds to which the Pooled Note is assigned. (0 Delivery of such other celtificates, inslnUllenls or opinions lIS Bond Cuunsel lTIlIY deem necesswy or desirable to evidence tile due auth0l1zation, execution and delivery of doclUuents pertaining to this transaction and the legal, valid and binding nature thereof or as lIlay be required by tile Credit Agreement, as well as compliance of all parties with tile temls wld conditions thereo( Section 8. Events Pel"milling the Authority to Terminate. "fhe Authority may tenllinate its obligation to purchase the Note at any time before Ole Closing if WlY uf the folluwing occurs: (a) Any legislative, executive or regulatory action (including Ole introduction of legislution) or any comt decision which, in the judgment of the AuOlOrity, casts sufticient doubt on the legality of obliglltions such as the Note, and Ole tax-exempt status of interest on obligations such as the Bonds, so as to impair materially the marketability or to reduce materially the market pIice or such obligations; (b) Any action by the Securities and Exchange Commission or a court which would require registration of the Note, the Bonds or [my instrument securing the Note or Bonds under the Secm1ties Act of 1933, as amended, in connection with the public offering thereof, or qualification ur the Resolution or the Indenture lmder the TlUst Indenture Act of 1939, as amended; (c) Any restriction on trading in secm"ities, or any banking moratoriulll, or the inception or escalation of [my war or m,yor militlllY hostihties which, in the judgmeot of the' Authurity, substantially impairs tile ability of the Undelwriter to mlll'ket the Bonds; or (d) TIle Underwriter temlinates its obligation to purchase the Series of Bonds tu which the Note is assigned plU"SUlIIltto its agreement WWI the Authurity for the purchase uf such Series of DOllds. Resolution Numberlj!9 () Neither the LJndenvriter nor the Authority shall be responsible lor th.: payment of any fees, costs or expenses of the issuance, offering and sale of the Local Agency's Note except the Underwriter shall be responsible fur Califurnia Debt and [nvesbllent AdvisOlY Commission lees and lor its OWll internal costs. '!be fees, costs and expenses that are categorized in the "Costs of Issuance" definition in the Indenture shall be paid lillm the Costs of Issuallce Fund. l11e Local Agency shall pay any additional costs attributable to it as set fOl1h in the Resolutiun other thWl the fees, costs and expenses so payable fium the applicable Costs ofIssuwlce Fund. Section 9. Indell1nilielltiolL To the extent pennitted by law, the Local Agency I agrees to indemnity and hold llUImless the Authority and the Underwriter and each person, if any, who controls (within the meaning of Section 15 uf the Securities Act of 1933, as amended, or of Section 20 uf the Securities Act of 1934, as amended) the Authority or the Underwriter, and the oflicers, directurs, agents and employees uf the Authority and the Undenvriter against any lllld all losses, claims, dama~es, liabilities and expenses m"ising out uf any statement ur infol111atiun in the Preliminwy Official Statement or in the Official Stntement (other than statements or information regarding lID Issuer other than the Local Agency) that is untllle or incorrect in any material respect or the omission or alleged omission therefium of any statement or infbmlation (other than statements or infolmation legarding an Issuer other than the Local Agency) that should be stated therein or that is necesSlIIY to make the statements and inlo11l1ation therein not misleading in any matelial respect. Section 10. Credit Al!I"eement. TIle Local Agency shall comply with alllawlilt and proper requests of the AudlOlity in order to elu1ble dle Authority to comply with all of the telllls, couditions and covenants binding upon it under the Credit Agreement. Section J 1. Notices. Any noticcs 10 be given to the Underwriter uuder dIe Purchase Agreement shall be given in wliting to Lehman Brothers Inc., 601 S. rigueroa Street, Suite 4400, Los Angeles, CA ,90017, Attention: Kevin O'Blien. Any notices to be given to the Authority lUlder the Purchase Agreement shall be given in wliting to the Authority, 1100 "K" Street, Suite 101, Sacmmento, CA 95814, Attention: Secretary. Section 12. No Assil!nll1ent. 'nle Purchase Agreement has been mad.: by the I Local Agency wld the AUlhOlity, amIno person other than the Local A~eI1CY and dle Authority or their snccessors or assigns and the Underwriter shall acquire or have any right under or by vil1ue of the Purchase Agreemenl. All of the representations, wall1Ulties and agreements contained in the Purchase Agreement shall slllvive die delivelY of and payment by the AuthOlity for the Note and any tennination of the PLU"Chase Agreement. Section 13. Applicable Law. The Purchase Agreement shall be interpreled, governed and enforced in accordance with dle laws of the State of Cali/ornia. Section 14. Effectiveness. The Purchase Agreement shall become el1eclive upon the execution hereof by dle Autholity and execution of the Pricing Contimllltion by dle Local Agency, and the Pnrchase Agreement, including the Plieing Confi11l1ation., shall be valid, binding tmd enllwceable fium and after the time of such effectiveness. See lion IS. Severabilitv. Cn dIe event any pmvision of the Pnrchase Agreement shall be held invalid or ullCl~llwcet\ble by any court of competent jUlisdiction, suc:h holding shall not invalidate or render unenlorceabte any other provision hereof. Section 16. Headings. Any headings preceding dle text of several sectiuns hereof shall be solely tor convenience of reference and shall not constitute a p1ll1 of this Agreement, nOl' shall they a/feet its meaning, construction or el1i:cl. Section 17. Execution in Connterpalis. TIlis Purchase Agreement may be I executed and entered into in seveml eounterpwis, each of which shall be deemed an original, llnd all of which shall c:onstitule but one and the same instl1lmenl. IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agleeffient to be executed by their duly authorized representatives as of the Purclmse Date set forth in Exhibit A !lllached hereto Wll! incorporated herein. CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHOIUTY By: Member of dIe COlllmissiun of the Aulhority Resolution Number~ I EXHIBIT A Pricing Confirmatiun Supplement Local Agellcy: City of Seal Beach I Pricillg bljo,."lfItit)JJ Principal Amounl of Note: Interest Rale on Note: Re-Offering Yield: Purchase Price Default Rale: Purchase Price: Less: Cost ofIssuance: % Credit Enhancement: _ % Deposit to Note Proceeds Accounl: [II/portlll/t /Jates Resolution Date of Local Agency: Purchase Date: Closing Dare: MlIturity Date: Interesl Puyment Date(s): Note Paymenr Deposil Dale: rirst Pledge Month Ending: Pledge Amount: Pledge Percentage: Second Pledge Month Ending: Pledge Amount: Pledge Percentage: Jllvestll/ellt Agt'eell/ellt IlIformatioll G1C Provider L.ong Term Ratings (S&P/Moody's) ShOlt Term Credit Ratings (S&P/Moody's) Interest Rate on G1C $ _% _% _% _% $- ( ) ( ) $ $- _% $- _% I _% Resolution Numbera . By initiali~g the box at the end of tillS paragraph, the undersigned Local Agency I certifies that, in connection with the issuance of the Note under the Resolution and after reasonable inquiry, it is the reasonabh: expectation of tile Local Agency that tile uggregute amount of alltllx-exempt obligations (excluding private activity bonds) issued or to be issued hy the Local Agency dlU'ing the 2001 calendar year, including the Note, all other notes and bonds, and alltax-exelllpt leases, executed or delivered during the 2001 calendw' year will not exceed $5,000,000 (See Section 3.8 of the Certificate of tile Local Agency if the Local Agency is lUlllble tu 1IllLke this certification). 0 Investment Alternative - Initial the appl'Opriate hox relating to the investment of procceds received fium tile issuwlce and delivery of the Local Agency's Note: Initial OneDox Yes, tile undersigned directs tile Trustee to invest the proceeds received frolllthe issulUlce and delivery of tllC Local Agency's Note in the Guarll1lteed Investment Contract Yes 0 described on page A-I. No, do not invest the proceeds received fi'omthe issuance and delivelY of tile Local Agency's Note in the Guarwlteed Investment contmct. No o I IN WITNESS WHEREOF, tile Purchase Agreement, including this Pricing Conlimlation, is agreed and accepted to on the Purchase Date sct fortll above. City of Seal Beach By: AuthOliZl:d Representative Print Name of Person Signing . Please initial the box only if applicable to the Local Agency. I I I I Resolution Number~ CERTll?lCATE OF THE LOCAL AGltNCY In eonneetiun with the Calilc)rnia COll1munities Cash Flow Financing Proglall1 (the "Program"), the nndersigned duly elected (or appointed) and qualified oflieers identified in and executing Scetiun4.7 hereof (the "Authorized Representatives") of the local agency identified in Section 4.7 hereof (the "Local Agency"), acting for and un behalf of the Local Agency, hereby cCliifY, as of July 3, 2001 ((he "Closing Date"), as fiJllows with respect to the 2001 Tax ami Revenue Anticipation Note (tbe "Nute") issued by the Local Agency: I. CERTIFICATIONS REGARDING CERTAIN LOCAL AGENCY MATTERS I. J. At all limes mentioned herein, the Local Agency is a duly organized, validly existing and operating local agency (as de lined in Section 53850 of the Chlifornill Govell1l11cnt Code), under the laws of the Slate of California (the "State"). I :2. TIle undersigned Authorized Representatives, under the resolution (the "Resolution") adopted by the legislative body of the Local Agency (the "Legislative Body") authorizing the borrowing of funds for Fiscal Year 2001-2002, are duly authorized to make this certification for and on behalf of the Local Agency pursuant to the Resolution. 1.3. AUlIched hereto as Exhibit A is a true, co/rect and complete copy of the Resolution, duly adopted by the Local Agency after an agenda of the meeting of the Legislative Body at which snch Resolution was adopted was pusted at lellst 72 hours beJore said meeting, at a lucation freely accessible to members of the public, and all of the members of the Legislali ve Body had due notice of said meeting and a quorum thereof were present at said meeting. The Local Agency has previously provided the California Statewide Communities Development Authority (the "Authority") with a true, accurate and complete copy of the Resolution. 1.4. 'Ille Resolution has not been amended or revoked and is in full force and effect on the date hereof, and there is no proceeding of the Legislative Body in conflict with or in !\ny way altering the Resolution. 1.5. Thc information contained in the Credit Questionnaire (including the Cashllow Wurksheet therein) (the "Credit Questionnaire") completed by the Local Agency and submitled to the Authority amI Sulro & Co. Incorporated as financial advisor (the "Financial Advisor") in eunnection with the Program, was at the time submitted and is on the date uf this Certificate tllle and accurate. Representatives of the Local Agency have reviewed the Indenture, hereinafter detined, including the Continuing DiscloslU"e Agreement set forth in Article XI thereof: The Local Agency Shall notify the Trustee of the occurrence of any "Listed Event" which relates in any way to the Local Agency, and will otherwise cooperate with the Trustee and the Authority in satisfYing any continuing disclosure obligation. 1.6. The Local Agency does not have a negative cash balance at (he beginning of Fiscal Year 2001-20U2 in its general fund. 1.7. The Local Agency has authorized or acknowledged, by all necessary action, the execution, delivery, receipt and due performance of the Resolution, the Note, the Purchase Agreement by and between the Authority and the Local Agency (severally and not jointly with other local agencies), including the Pricing Continnation Supplement allached thereto (the "Purchase Agreement"), the Indenture; dated as of July I, 200 I (the "Indenture"), by and between Wells Fargo Dank, National Association (the "Trustee") und the Authority, pertaining to the issuance of the California Statewide Communities Development Authority 2001 Local Agency Tax and Revenue Anticipation 13onds, Series _ (the "Bonds"), and any and all other agreements and documents (the "Other Agreements") as may be required to be executed, delivered and received by the Local Agency or the ,Authority in order to carry out, give em:ctto and consummate the transactions contemplated by the Resolution. The Resulution, the Note, the Indenture, the Purchase Agreement, and the Other Agreements are collectively referred to herein as the "Docnments." 1.8. None of the Documents applicable to the Local Agen:y have been amended, modified or rescinded by the Local Agency and each of such Documents is in fhll force and efli:ct on the dme lJt:reof. Resolution Number_ 1.9. The representations and warranties of the Local Agency set forth in the applicable Documents were on the date made and ure on the date hereof true and accurate as though maLle on and as of tbe date IJt:reof. 1.10. The Purchase Agreement and the Note of the Local Agency have been duly executed and delivered by the duly authorized officers of the Local Agency, and Ihe Note and the Purchase Agreement, when executed ami delivered by the other pm ties thereto (where necessary) and the obligations of the Local Agency under the 1ndenture will constitute legal, valid and binding agreements of the Local Agency, enforceable in accordance with their respective terms, I except as such enforceability may be limited by bankruptcy or other laws affecting creditors' rights, the application, of equitable principles if equitable remedies are sought, the exercise of judicial discretion in appropriate cases and the limitations on legal remedies against public entities in the State 1.1 ] . The Local Agency has complied with all provISIons of IIpplicable IIIW in conneclion with the adoplion of Ihe Resolution and the transactions contemplated under the Resolution and the documents llpproved thereby. 1.12. The execution, delivery and performance by the Local Agency of the Note and the Purchllse Agreement and the execution delivery and performance by the Authurity of the In<.lenture and the Bonds and, in each case the borrowing thereunder or in connection therewith (and the application uf the proceeds thereof) have been duly authorized or acknowledged by all necessary actiun on the part of the Local Agency. 1.13. The Local Agency has full power and anthority to acknuwledge the AUllorily's execution and delivery of the lndenture. The execution and delivery by the Authority of the Indenture (and the Local Agency's obligations thereunder) (i) do not and will not contravene the laws of the Slate provi<.ling lor the organizatiun and government of the Local Agency and (ii) do not and will not connict with, or result in the violation of, any applicable law. 1.14. The Local Agency covenants that upon receipt from the Trustee of a request tu I confirm that amounts constituting such Local Agency's repayment obligation described in Seclion 8 of the Resulution have been transferred to and set aside in the I!ayment Account (as defined in the Resolution), the Local Agency shall within five (5) Business Days (as defined in the Indenture) after the dute of such request, confirm such transfer to the Trustee by submilling the Payment Account Deposit eertification in the fonn sct furth in Exhibit C oflhe Indenture. I .15. I f prim to the Closing Date the Local Agency should have any reason to believe that any of the representations or certifications contained herein or in the Docnments arc not true and correct, the Local Agency covenants that it will notifY Orrick, I-IelTington & Sutclim: LLP, ("Bond Counsel"). n. CERTlrICATIONS REGARDING TAX MATTERS 2.1. The Local Agency sblll not take any actions (or fail to take any actions) that would cause interest on the Oonds to be included in gross income for federal income tax purposes. Without limiting the generality of the fUl"egoing, the Local Agency: a) shall not allow the use of my proceeds of the Note to be used III the trade or business of any nonguvernmental person; b) shall not loan any proceeds of the Note to any nonguvernmental persun; c) shall take no actions that would cause the Bonds to be treated as "federally I guaranteed," within the meaning of Section 149(b) of the 1nternal Revenue Code of 1986 (the "Code"); , d) shall not use any proceeds of the Note to repay any principal or interest of any outstanding tax-exempt obligation of the Local Agency apUl1 from interest that accrues during a une-year periud commencing Jnly 3, 2001; e) shall not set aside or specifically earmark amounts to be used to satisfy the Local Agency's repayment obligatiun described in Section 8 of the Resolution earlier than the dale which is one year prior to the final maturity date of the Note of the Lucal Agency; and I I I Resolution Number~j?l/ f) shall take no actions that would cause (he Bonds to be treated as "arbitrage bonds," within the meaning of Section 148 of the Code. III. CERTIFICATIONS REGARDING ARBITRAGE AND REBA Tn The fullowing are tbe certifications and the reasonable expectations of the Local Agency, stated pursuant to Treasury Regulations Section 1.148-2(b), relating to the use and investment of the proceeds of the Note: 3.1. The Note is being issued in anticipation of taxes or other revenues and will be spent to pay lawful expenses of the Local Agency payable from its genewl fund. 3.2, Rased upon the Local Agency's cashflow projections which lire set forth in Appendix E of the Ol1icial Statement relating to the Bonds (the 'Cashflow Projections"), the Local Agency expects to allocate the proeceds of the Note to working capital expenditures within 13 months after July 3, 2001, using the methodulogy described in the next section. 3.3. Proceeds of the Note will be IIllocated to working capital expeuditures of the Local Agency on any date that the Local Agency's working capilal expenditures exceed the Local Agency's "available amounts." "Available amonnts" include any cash, investments, or other amounts held in any fund or account by the Local Agency that is available lor (he Loelll Agency to use for working capital expenditures without legislative or judicial action amI without a legislative, judicial, or contractual requirement that thuse amounts be reimbursed. "Available amounts" du not include proceeds of the Notes or amounts held in a reasonable working capital reselve that is limited to either ten percent (10%) of the amount of the Note or the lesser of either (i) five percent (5%) of the Local Agency expenditures paid out of current revenues during Fiscal Year 2000-2001 or (ii) the amount that the Local Agency has historically and custumarily maintllined as a working capital rescrve. 3.4. The funds and accounts maintained by or for the benetit of the Local Agency that are considercd availllble for payment of the Local Agency's expenditures have been described in the Credit QuestiOlUlaire, and their cash balances as of the date of issue have been taken into account in the Cashflow Projections. 3.5. In pr~paring its cash flow analysis for Fiscal Year 2001-2002, the Local Agency has reviewed its Fiscal Year 2000-2001 cash flows and has, where applicable, compared the Fiscal Year 2000-2001 actual cash flows with the Fiscal Year 2000-2001 cash flolVs projected just before the beginning of fiscal Year 2000-2001. Taking this information into account and such other information as is available to the Local Agency, the Local Agency believes that the projected cash flow analysis for Fiscal Year 2001-2002 is reasonable and is based on reasonable assumptions. 3.6. All of the proceeds of the Nute, together with earnings thereon, less amounts allocable to the Local Agency's costs of issuance set forth in lhe Purchase Agreement, will be deposited into the Proceeds Fund established under the Indenture. 3.7. The Note will be repaid from the general funds of the Local Agency rectived after all Note Proceeds are spent as described above. The moneys to be so used will be separately acconnted for unlil nsed 10 repay the Note. 3.8. If the Local Agency is unable to make the small issuer certification set lonh in the Pricing Conlirmation Supplement, then the Agency hereby makes the following certifications: All of the proceeds of the Note, together with eamings thereon, will be deposited into the Lucal Agency's Generul Fund (the "General Fund"),or a special fund created solely to hold proceeds of the Note (the "Special Note Fund"). Note proceeds, together with earnings thereon, so depOSIted may be withdrawn and expended by the Local Agency on any given day during Fiscal Year 2001-2002 for any purpose for which the Local Agency is authorized to expend funds from its 'General Fund, but only aner exhausting all funds that are available amounts as of such given day, and lor purposes of this requirement, available amonnts excludes amounts that are held or set aside ill a reasonable working capilal reserve that is limited to either ten percent (10%) or the amount of Ihe Note or the lesser uf either (i) five percent (5%) of the Local Agency expenditures paid out uf current revenues during Fis~al Year 2000-2001 or (ii) the amount that the Local Agency has historically and customarily maintained as a working capital reserve; provided, that Resolution Numbe. if on the date that is five (5) months from the date of issuance of the Note or on any dale thereafter, it appears that all remaining amounts in the Special Nute Fund (or, if uppropriate, all remaining proceeds of the Note, including earnings thereon, held in the General Fund) will not have been so withdrawn and spent hy the date that is six (6) months li'om the date of issuance of the Note, the I..ocul Agency shall promptly notify Bund Counsel and, to the extent of its puwer and authority, comply with the instructions frum Bond Counsel as to the means uf satisfying the rebate requirements uf Section 148 of the Code. The woddng capital reserve shall be funded with any revenues of the Local Agency's General Fund but will not be funded with proceeds of the Note. 111e working capital reserve will be tracked and administered as a separate account or I subaccount within the General Fund. On the basis of the facts, estimates and circumstances in existence on the date of delivery, it is not expected that the proceeds of the Note will be used in a manner that would cause the Note to be an issue of arbitrage bonds wiLhin the meaning of Section 148 of the Code. 3.9. To the best knowledge and belief of the undersigned, there are no other facts, estimates, or circumstances which would materially change the foregoing statements, and the foregoing expectations are reasonable. 3.10. The Locul Agency understands that Bond Counsel will rely upon this Certilieate in giving its opinion that interest un the Bonds is excluded from federal gross income. IV. REQUEST TO AUTHORITY AND TRUSTEE, CERTIFICATIONS RELATING THERETO AND SIGNATURE CERTIFICATIONS Of THE LOCAL AGENCY 4.1. Tbe Trustee is hereby requested and authorized to authenticate and deliver the 2001 Tax and Revenue Anticipatiun Note of the Local Agency upon receipt of the purchase price thereof. The Trustee is alsu hereby requested and authorizcd to authenticate and deliver the Bonds upon receipt thereof from the Authority. 4.2. It is hereby acknowledged that the Authority is authorized 10 issue the Bonds, I upon receipt of the purchase price of the Note of the Local Agency togethcr with the aggregate purchase price of all other notes of the other Local Agencies participating in the Program and whose notes will be pooled with the Local Agency's Note in connection with the issuance of the Bonds. 4.3. The Trustee is hereby directed to deposit the proceeds of the Note in tit: amounts as set forth in the Pricing Confirmation Supplement into the Costs uf Issuance Fund and ill the Proceeds Fund. 4.4. Upon the deposit of proceeds as set fOlth in Section 4.3 hereof, the Trustee is requested and authorized to pay, from amounts held tar the bene lit of the Local Agency in the Pmceeds Account within the Proceeds Fund, the amounts on deposit in such Proceeds Account, as indicated in Schedule I of the Pricing Confirmation Supplement to the Purchase Agreemcnt, to - the Local Agency by [wirc/checl( (circlc one)], If the Local Agency is to receive such lImonnts by wire, the Local Agency shall provide the Trustee with appropriate wiring instl1lctions for the financial institulion which will receive such al1l0unts. 4.5. The amoLlnt requisitioned hereby will be applied to a purpose fO! which the Local Agency is aUlhurized lu use and expend funds from the general fund of the Local Agency and pending snch application will be invested in investments which are legal for the investment of funds of the Local Agency. 4.6. As of the date hereof, no event has OCCUlTed and is continuing which constitutes I an Event uf Default under the Resolution or would constitute an Event of Default but for the requirement that uotice be given, or time elapse, or both. 4.7. .. The following named persons are duly elected (or appointed), qualitied alld actiug officers of the Loclll Agency presently holding Ihe oflices set forth upposite their respective nalues helow and hy execution hereof each certifies that the signatures of the olhci. officer or of/icers hereto are the genuine signatures of such ot1icer or officers (signatures of the officers .. Pl<:ase complete the following items of inforn;ation, including the name of !lIe Local Agency's Authorized Represenlatives and the signatures, of such Authorized Representatives. I I I Resolution Number~ executing the Nute, the Purchase Agreement and the Amended and Restated Joint Exercise of Powers Agreement relating to the Authority (if applicable) mllst appear below): AUTHORIZED REPRESENTATIVES OF CITY OF SEAL ilEACI-!: NAME .. r.P-'" ,-.' or " / I~/~ TITLE SIGNATURE City Munager Director of Administrative Services/Treasurer City Clerk '. . \