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HomeMy WebLinkAboutCC Res 4706 1999-05-10 I I I CITY OF SEAL BEACH LOCAL AGENCY RESOLUTION NUMBER. #1t> ~ RESOLUTION AUTHORIZING AND APPROVING THE BORROWING OF FUNDS FOR FISCAL YEAR 1999-2000; THE ISSUANCE AND SALE OF A 1999-2000 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW FINANCING PROGRAM WHEREAS, local agencies arc authorized by Section 53850 to 53858, both inclusive, of the Govenunent Code of the State of California (the "Act") (being Article 7.6, Chapter 4, Part I, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary notes; WHEREAS, the legislative body (the "Legislative Body") of the local agency specificd in Section 25 hereof (the "Local Agency") has determined that a sum (the "Principal Amount"), not to cxceed the Maximum Amount of Borrowing specified in Section 25 hereof, which Principal Amount is to be confirnled and set in the Pricing Confirnlation (as defined in Section 4 hereof), is needed for the requirements of the Local Agency, to satisfy obligations of the Local Agency, and that it is nccessary that said Principal Amount be borrowed for such purpose at this time by the issuancc of a note thcrefor in anticipation of the receipt of taxes, II1come, revenue, cash rcceipts and other moneys to be received by the Local Agency for the general fund of the Local Agency attributable to its fiscal year ending June 30, 2000 ("Fiscal Ycar 1999-2000"); WHEREAS, the Local Agency hereby deternlines to borrow, for the purposes set forth above, the Principal Amount by the issuance of the Notc (as hereinafter defined); WHEREAS, it appears, and this Legislative Body hereby finds and detennines, thatthc Principal Amount, when added to the interest payable thereon, does not excecd eighty- five pcrcent (85%) ofthc cstimated amount of the uncollected taxes, income, revenue (including, but not limited to, revcnue from the state and federal governments), cash receipts and other moneys of the Local Agency attributable to Fiscal Year 1999-2000 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 temporary notes in anticipation of the receipt of, or payable from or secured by, taxes, income, revenue, cash receipts or other moneys for Fiscal Year 1999-2000; WHEREAS, pursuant to Section 53856 of the Act, certain moneys which will be received by the Local Agency during and attributable to Fiscal Year 1999-2000 can be pledged for the payment of the principal oflhe Note and the interest thereon (as hereinafter provided); WHEREAS, the Local Agency has determined that it is in the best interests of the Local Agency to participate in the California Communities Cash Flow Financing Program (the "Program"), whereby participating local agencies (collectively, the "Issuers") will simultaneously issue tax and revenue anticipation notes; WHEREAS, the Program requires the participating Issuers to sell their tax and revenue anticipation notes to the California Statewide Communities Development Authority (the "Authority") pursuant to note purchase agreements (collectively, "Purchase Agrcements"), each bctween such individual Issuer and the Authority, and dated as of the date of the Pricing Confinnation, a fonn of which has been submitted to the Legislative Body; WHEREAS, the Authority, in consultation with Sutro & Co. Incorporated, as financial advisor for the Program (the "Financial Advisor"), will form one or more pools of notes (the "Pooled Notes") and assign each note to a particular pool (the "Pool") and sell a series (the "Series") of bonds (the "Bonds") secured by each Pool pursuant to an indenture (the "Indenture") between the Authority and U.S. Trust Company of California, N.A., as trustee (the "Trustee"), each Series distinguished by whether or what type(s) of Credit Instrument(s) (as hereinafter dcfined) secure(s) such Series, by the principal amounts of the notcs assigned to the Pool or by othcr factors, and the Local Agency hereby acknowledges and approves the discretion of the Authority to assign the Note to such Pool and such Indenture as the Authority may detennine; Resolution Number 47tJ/P WHEREAS, as additional security for the owners of each Series of Bonds, all.or a p0l1ion of the payments by all of the Issuers of the notes assigned to such Series mayor may not be secured (by virtue or in form of the Bonds, as indicated in the Pricing Confirnlation, being securcd in whole or in part) by an irrcvocable letter (or lettcrs) of credit or policy (or policies) of insurance or proceeds of a separate bond issue issued for sllch purpose (the "Reserve Fund") or other crcdit instrument (or instruments) (collectively, the "Crcdit Instrument") issued by the credit provider or credit providers designated in the Indenture, as finally executed (collcctively, the "Credit Provider"), pursuant to a crcdit agreement or agreements or commitment leller or lellers or, in the case of thc Rescrve Fund, an indenture (the "Reserve Indenture") (collectively, thc "Crcdit Agreement") between (i) in the case of an irrevocable leller (or lellers) of credit or policy (or policics) of insurance, the Authority and the respective Credit Providcr and (ii) in the case of the Reserve Fund, the Authority and U.S. Trust Company of California, N.A., as trustee of the Reserve Indenlure (the "Reserve Trustee"); I WHEREAS, if, as designated in the Pricing Confirmation, the Crcdit Instrument is the Reserve Fund, bonds issued pursuant to the Reserve Indenture (the "Reserve Bonds") may, as indicated in the Pricing Confinnation, be secured by an irrevocable leller of credit or policy of insurance or other crcdit instrument (the "Reserve Credit Instmment") issued by the credit provider identified in the Reserve Indenture as finally executed (the "Reserve Credit Providcr"), pursuant to a credit agreement or commitmentleller (the "Reserve Credit Agreement") identified in the Rcserve Indenture as finally executed, such Reserve Credit Agreement being betwecn the Authority and the Reserve Credit Provider; WHEREAS, the net proceeds ofthe.Note may be invested by the Local Agency in Permitted Investments (as defined in the Indenture) or in any other investment permilled by the laws of the State of California, as now in effect and as hereafter amended, modified or supplemented from time to time; WHEREAS, as part of the Program each participating Issuer approves the Indcnture, the alternative fornlS of Credit Agreements, if any, and the alternative forms of Reserve Credit Agreements, if any, in substantially the fonns presented to the Legislative Body, with the final fonn of Indenture, type of Creditlnstmment and corresponding Credit Agreement and type of Rescrve Credit Instrument and corresponding Reserve Credit Agreement, if any, to be detcn11ined and approved by delivery of the Pricing Confirnlation; I WHEREAS, pursuant to the Program each participating Issuer will be responsible for 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 Crcdit Provider, the fees of the 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 Obligations and the Issuer's Reimbursement Obligations, jfany (each as defined in the Indenture); WHEREAS, pursuant to the Program cach participating Issucr will be rcsponsible for its share of the feCS of the Reserve Trustee and the costs of issuing the apphcable Scries of Reserve Bonds, all such costs and fees being payable from the proceeds of the applicable Series of Bonds (or, with respect to costs and fees of the Reserve Credit 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 purchasc, in the case of each Pool of Notcs, the Scries of Bonds which will be sccurcd by thc Indenture to which such Pool will be assigned; WHEREAS, it is necessary to engage the services of certain professionals to assist the Local Agency in its participation in the Program; I NO\\', THEREFORE, the Legislative Body hereby finds, detemlines, declares and resolves as follows: Section I. Recitals. This Legislativc Body hcreby finds and deternlines thaI all the above recitals are true and correct. I I I Resolution Number4"7*'" t~ Section 2. Authorization of Issuance. This Legislative Body hereby determines to borrow solcly for the purpose of anticipating taxes, income, revenue, cash receipts and other moneys to be received by the Local Agency for the general fund of the Local Agency attributable to Fiscal Year 1999-2000, by the issuance of a note in the Principal Amount under Sections 53850 et seq. of the Act, designated the Local Agency's "1999-2000 Tax and Revenue AnlicilJation Note" (the "Note"), to be issued in the fonn of one fully registered note at the Principal Amount thereof, to be dated the date of its delivery to the initial purchaser thereof, to mature (without option of prior redemption) not more than fifteen months thereaftcr on a date indicated on the face thereof and detennined in the Pricing Confirnlation (the "Maturity Date"), and to bcar interest, payable at maturity (and if the maturity is more than twelve months from the date of issuance, payable on the interim payment date set forth in the Pricing Confinnation) 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 detennined in the Pricing Confinnation and indicated on the face of the Note (the "Note Rate"). If the Series of Bonds issued in connection with the Note is secured in whole or in part by a Credit Instrument or such 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 draw under, payment by or claim upon a Credit Instrument which draw, payment or claim is not fully reimbursed on such date, such Note shall become a Defaulted Note (as defincd in the Indenture), and the unpaid portion (including the interest component, if applicable) thereof (or the portion (including the interest component, if applicable) thereof with respect to which a Credit Instrument 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 thereafter until paid at the Default Rate (as defined in the Indenture). If the Credit Instrument is the Reserve Fund and the Reserve Bonds issued to fund the Reserve Fund are sccured by the Reserve Credit Instrument and a Drawing (as defined in the Indenture) pertaining to the Note is not fully reimbursed by the Reserve Principal Payment Date (as defined in the Indenture), such Note shall become a Defaulted Reserve Note (as defined in the Indenture), and the unpaid portion (including the interest component, if applicable) thereof (or portion (including lhe interest component, if applicable) with respect to which the Reserve Fund apphes for which reimbursemcnt on a Drawing has not been fully made) shall be decmed 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 part and the Note is not fully paid at maturity, the unpaid portion thereof (or the portion thereof to which no Credit Instrument applies which is unpaid) shall be deemed outstanding and shall continue to bear interest thereafter until paid at lhe Defaull Rale. In each case sct forth in the preceding three sentences, the obligation of the Local Agency with respect to such Defaulted Note or unpaid Note shall not be a debt or liability of the 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 1999-2000, as provided in Section 8 hereof. The percentage of the Note to which a Credit Instrument, if any, applics (the "Secured Pcrcentage") 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 thereoO of all Issuers, exprcssed as a percentage (but not greater than 100%) as of the maturity date. The percentagc of the Note to which the Reserve Credit Instrument, if any, applies (the "Secured Reservc 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 thereof, including the interest component, if applicable), expressed as a percentage (but not greater than 100%) as of the Reserve Principal Payment Date. Both the principal of and interest on the Note shall be payable in lawful money of the United States of America. The principal df and interest on the Note at maturity shall be paid upon sUlTender of the Note at the corporate trust office of U.S. Trust Company of California, N.A. in Los Angeles, California. The Note shall be issued in conjunction with the note or notes of one or more other Issuers as part of the Program and within the meaning of Section 53853'ofthe Act. Section 3. Form of Note. The Nole shall be issucd ill fully registered fonn without coupons and shall be substantially in the fonn and substance set forth in Exhibit A as attached hereto and by reference incorporated herein, the blanks in said fonns to be filled in with appropriate words and figures. Resolution Number L/7ot:, Section 4. Sale of Note; Delegation. The Note shall be sold to the Authority pursuant to the Purchase Agreement. The fornl of the Purchase Agreement, including the fonn of the pricing confirnlation supplement (the "Pricing Confinnation") set forth as Exhibit A thereto, presentcd to this meeting are hereby approved. The authorized representatives set forth in Section 25 hercof (the "Authorized Representatives") are each hcreby authorized and directed to execute and deliver the Purchase Agreement in substantially said fonn, with such changcs thereto as such Authorized Reprcsentative shall approve, such approval to be conclusively evidenced by his or her execution and delivery thereof; provided, however, that the Purchase Agrcement shall not be effective and binding on the Local Agency until the execution and dclivery of the Pricing Confirmation. The Authorized Representatives are each hereby further authorized and directed to exccute and deliver the Pricing Confinnation in substantially said fonn, with such changes thereto as such Authorized Representative shall approve, such approval to be conclusively evidenced by his or her execution and delivery thercof; provided, howevcr, thatthc interest rate on the Note shall not excecd 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 Bonds, shall not excced one percent (1.0%), and the Principal Amount shall not exceed the Maximum Amount of Borrowing. Delivery of an executed copy of the Pricing Confinnation by fax or telecopy shall bc deemed effective execution and delivery for all purposes. Section S. Program Approval. The Pricing Confirnlation shall indicate whcther and what type of Credit Instrument and, if applicable, Reserve Credit Instrument will apply. The fornls of Indenture, alternative general types and fonns of Credit Agreements, if any, and alternative gencral types and fornls of Reserve Credit Agreements, if any, presented to this meeting are hereby acknowledged, and it is acknowledged that the Authority will execute and dcliver the Indenture, one or more Credit Agrecments, if applicable, and one or more Reserve Credit Agreemcnts, if applicable, which shall be identified in the Pricing Confirmation, in substantially one or morc of said fonns with such changes therein as the Authorized Rcpresentative who executes the Priclllg Confirnmtion shall require or approvc (substantially final fonns of the Indcnture, the Credit Agreement and, if applicable, thc Rcserve Crcdit Agreement are to be delivered to the Authorized Representative concurrent with the Pricing Confirmation), such approval of the Authorized Representative and this Legislative Body to be conclusively evidcnced by the execution of the Pricing Confirnlation. If the Credit Agreement identified in the Pricing Confirnlation is the Reserve Indenture, it is acknowledged that the Authority will issue the Reserve Bonds pursuant to and as provided in the Reserve Indcnture as finally executed. I I Anyone of the Authorized Representatives of the Local Agency is hereby authorizcd and directed to provide the Financial Advisor or the underwriter with such infonnation rclating to the Local Agency as the Financial Advisor or the underwriter shall reasonably rcquest for inclusion in the Preliminary Official Statement and Official Statement of the Authority. Upon inclusion of the infonnation relating to the Local Agency therein, the Preliminary Official Statement and Official Statement or such other offering document is, except for certain omissions pennitted 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 certificate to such effect. If, at any time prior to the end of the underwriting period, as defined in the Rule, any event occurs as a result of which the infonnation contained in the Preliminary Official Statement or other offering document relating to the Local Agency might include an untrue statement of a matcrial fact or omit to state any material fact necessary to make the statcments 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 I become a Defaulted Note, the unpaid portion (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 Notc, 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 Agreemcnt, and, (ii) the holders of the I I I Resolution Number~j1~~ Note, or Series of the 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 Ratc) to the date of deposit of such aggregate required amount with the Trustee. For purposes of clause (ii) of the preceding sentence, holders of the Series of Bonds will be decmed to have received such principal amount upon deposit of such moneys with the Trustee. Subject 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 pOltion (including the interest component, if applicable) to which a Reservc Crcdit Instrument, if any, applies for which full reimbursement on a Drawing has not been made by the Reserve Principal Payment Date shall be deemed outstanding and shall not be 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 undcr the Reserve Credit Instrumenl wilh respect to the Note, including interest accmed 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 accmed thereon (calculated at the Default Rate) (0 the date of deposit of such aggregate rcquired amount with the Trustee. For the 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 Tmstee. The Local Agcncy agrees to payor cause to be paid, in addition to the amounts payable under the Note, any fees or expenses of the Trustee and, to the extent pennitted 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 Instrument), any Predefault Obligations and Reimbursement Obligations (to the extent not payable under the Note), (i) arising out of an "Event of Default" hereunder (or pursuant to Section 7 hercoO or (ii) arising out of any other event (other than an event arising solely as a rcsult of or otherwise attributable to a default by any other Issuer). In the case described in (ii) above with respect to Predefault Obligations, the Local Al!encv shall owe only the percentage of such fees, cxpenses and Predefault Obligations 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 Local Agency of a bill therefor from the Trustee. Section 6. No Joint Obligation. The Note 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 obligation of the Local Agency to make payments on or in respect to its Note is a several and not a j9int obligation and is strictly limited to the Local Agency's repayment obligation under this Resolution and the Note. Section 7. Disposition of Proceeds of Note. A portion of the moneys received from the sale of the Note in an amount equal to the Local Agency's share of the costs of issuance (which shall include any fees and expenses in connection with any Credit Instrument (and the Reserve Credit Instrument, if any) applicable to the Note or Series of Bonds and the corresponding Reserve Bonds, if any) shall be deposited 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. The balance of the moneys received from the sale of the Note to the Authority shall be deposited in the Local Agency's Proceeds Subaccount hereby authorized to be creat~d pursuant to, and held and invested by the Trustce under, the Indenture for the Local Agency and said moneys may be used and expend cd by the Local Agency for any purpose for which it is authorized to use and expend moneys, upon requisition from the Proceeds Subaccount as specified in the Indenture. Amounts in the Proceeds Subaccount are hereby pledged to the payment of the Nole. The Tmstee willnol create subaecoullls within the Proceeds Fund, but will keep records to account separately for proceeds of the Bonds allocable to thc Local Agency's Note on deposit in the Proceeds Fund which shall constitute the Local Agency's Procecds Subaccount. Resolution Number 470ft::, Section S. SOUTce of Pa)'m~nt. (A) The principal amount of the Note, together with thc interest thcreon, shall be payable from taxes, income, revenue (including, but not limited to, revenue from the state and fcdcral govell1ments), cash receipts and other moneys which are received by the Local Agcncy for the gencral fund of the Local Agency and are attributable to Fiscal Year 1999-2000 and which are available for payment thereof. As security for the payment of the principal of and 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 gcneral fund of the Local Agency and are attributable to Fiscal Year 1999-2000, and the principal of the Note and the interest thereon shall constitute a first lien and charge thereon and shall be payable from the first moneys received by the Local Agency from such Pledged Revenues, and, to the extent not so paid, shall be paid from any other taxes, income, revcnue, cash rcceipts and other moneys of the Local Agency lawfully available therefor (all as provided for in Sections 53856 and 53857 of the Act). The tenn "unrestricted revenues" shall mean all taxes, income, revenue (including, but not limited to, revenue from the state and federal governments), cash receipts, and other moneys, intended as receipts for the general fund of the Local Agency attributable to Fiscal Year 1999-2000 and which are generally available for the paymenl 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 received by the Local Agency and are attributable to Fiscal Year 1999-2000. I In order to effect thc pledge refercnced in the preceding paragraph, the Local Agcncy hercby agrees and covenants to establish and maintain a special account within the Local Agency's gcneral fund to be designated the "1999-2000 Tax and Revenue Anticipation Note Paymcnt Account" (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. Notwithstanding the foregoing, if the Local Agency elects to have Note proceeds invested in Pennitlcd Investments to be held by the Trustce pursuant to the Pricing Conlinnation, a subaccount of the Payment Account (thc "Payment Subaccount") shall be established for the Local Agcncy under the Indenture and proceeds credited to such account shall be pledged to the payment of the Note. The Trustee need not create a subaccount, but may keep a record to account separatcly for proceeds of the Note so held and investcd by the Trustce which record shall constitute the Local Agency's Proceeds Subaccount. Transfers from the Paymcnt Subaccount shall bc 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 Confirnlation as Repayment Months (each individual month a "Repayment Month" and collectively "Repayment Months") (and any amounts received thereafter attributable to Fiscal Year 1999-2000) until the amount on deposit in the Payment Account, togethcr with the amount, if any, on deposit in the Payment Subaccount, is equal in the respective Repayment Months identified in the Pricing Confinnation to the percentage of the principal and interest due on the Note specified in thc Pricing Confinnation. 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 fund moneys, but, notwithstanding any commingling of funds for investment or other purposes, the amounts rcquired to be transferred to and deposited in the Payment Account shallneverthcless be subject to the lien and charge created herein. Anyone of thc Authorized Representatives of the Local Agency is hereby authorized to approve the deternlination of the Repayment Months and percentages of the principal and interest due on the Note rcquired to be 011 deposit in the Payment Account and/or the Payment Subaccount in each Repayment Month, all as specified in the Pricing Confirmation, by executing and delivering the Pricing Confinnation, such execution and delivcry 10 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 mnimum amount of Pledged Revenues required to be deposited in each Repayment Month shalloot exceed fifty 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 sufficient unrestricted revenues to pamit the deposit into the Payment Account ofthc full amount of Pledged Revenues to be dcposi'led in the Payment Account from said unrestricted revenues in said month, thcn the amount of:my deficiency shall be satisfied and made up from any other moneys of the Local Agency lawfully available for the payment of the principal of the Note and the interest thereon, as and whem:sach other moneys are received or are otherwise legally available. I I I I I Resolution Numbe~;r~~ ((B) Any moneys placed in the Payment Account or the Payment Subaccount shall be fork benefit of (i) the holder of the Note and the holders of Bonds issued in connection with the NlItIl:i;., (ii) (10 thc extent provided in the Indenture) the Credit Provider, if any, and (iii) (to the extent provided in the Indenture and, if applicable, the Credit Agreement) the Reserve Credit Provider, ifany. The moneys in the Payment Account and the Payment Subaccount shall be applied only for the purposes for which such Accounts are created until the principal of the Note and all interest thereon are paid or until provision has been made for the payment of the pnncipal of the Note at maturity with interest to maturity (in accordance with thc requirements I 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 directs the Trustee to transfer on the Note Payment Deposit Date (as defined in the Indenture), any moneys in the Payment Subaccount to the Bond Payment Fund (as defined in the Indenture). In addition, on the Note Payment Deposit Date, the moneys in the Payment Account shall be transferred by the Local Agency to the Trustee, to the extent necessary (after crediting any transfer pursuant to the preceding sentence), to pay thc principal of and/or interest on the Note or to reimburse the Credit Providcr for payments made under or pursuant to lhe Credit Instrument. In the event that moneys in the Payment Account and/or the Payment Subaccount are insufficient to pay the principal of and interest on the Note in full 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 respcct to,the Note; fourth to reimburse the Credit Provider for payment, ifany, of principal with respect to the Note; fifth to reimburse the Reserve Credit Provider, if any, for payment, if any, of interest with respect to the Note; sixth to reimburse the Reserve Credit Provider, if any, for paymcnt, if any, of principal with respect to the Note; and seventh to pay any Reimbursement Obligations of the Local Agency and any of the Local Agency's pro rata share of Predefault Obligations owing to the Credit Provider and Reserve Credit Provider (i f any) as applicable. Any moneys remaining in or accming to the Payment Account and/or the Payment Subaccount after the principal of the Note and the interest thereon and any Predefault Obligations and Reimbursement Obligations, ifapplieable, have becn paid, or proVision for such payment has been made, shall be transferred to the general 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 from its obligation to pay its Note in full on the Maturity Date. (D) Moneys in the Proceeds Subaccount and in the Paymcnt Subaccount shall be invested by the Trustee pursuant to the Indenture as directed by the Local Agency in Pel1nitted Investments as described in and under the ternlS of the Indenture. Any such investment by the Tmstee shall be for the account and risk of the Local Agency, and the Local Agency shall not be deemed to be relieved of any of its obligations with respect to the Note, the Predefault Obligations or Reimbursement Obligations, if any, by reason of such investment of the moneys in its Proceeds Subaccount or the Payment Subaccount. (E) At the written request of the Credit Provider, if any, or the Reserve Credit Provider, if any, the Local Agency shall, within ten (10) Business Days following the receipt of such written request, file such report or reports to evidence the transfer to and deposit in the Payment Account required by this Section 8 and provide such additional financial infol11latiol1 as may be required by the Credit Provider, if any, or the Reserve Credit Provider, if any. Section 9. Execution of Note. Anyone of the Authorized Representatives of the 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 o~ the Local Agency, or any duly appointed assistant thereto, shall be authorized to countersign the Note by manual or facsimile signature. Said Authorized Representative of the Local Agel~cy, is hereby authorized to cause the blank spaces of the Note to be filled in as may be app.ropnate p~rsuant to the Pricing Confinnation. The Authorized Representative is hereby authonzed and ~~rected to cause the Authority to assign the Note to the Trustee, pursuant to the tenllS a.nd conditions of the Purchase Agreement, this Resolution and the Indenture. In case any Authonzed Representativc whose signature shall appear on any Note shall cease to be an Authorized Represcntative before the delivery of such Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until dclivery. The Note need not bear the seal of the Local Agency, if any. Resolution Number~7~~ Section 10. Intentionally Left Blank. This section has been included to preserve the sequencc of scction numbers for cross-referencing purposes. Section 11. Representations and Covenants of the Local Agency. The Local Agency makcs the following representations for the benefit of the holder of the Note, the owners of the Bonds, the Credit Provider, if any, and the Reserve Credit Provider, ifany: (A) The Local Agency is duly organized and existing under and by virtue of I the laws of the State of Califomia and has all necessary power and authority to (i) adopt this Resolution and perfornl its obligations thereunder, (ii) enter into and perfonn its obligations under the Purchase Agreement, and (iii) issue the Note and perfoml its obligations thereunder. (B) (i) Upon the issuance of the Note, the Local Agency shall have taken all action required to be taken by it to authorize the issuance and delivery of the Note and the perfomlance 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 of the Resolution and the execution and delivery of the Purchase Agreement, and compliance with the provisions hereof and thereof do not conflict with, breach or violate any law, administrative regulation, court decree, resolullon. charter, by-laws or other agreement to which the Local Agency is subject or by which it IS bound. . (D) Except as may be required under blue sky or other securities laws of any state or Section 3(a)(2) of the Securities Act of 1933, there is no consent, approval, authorization or other order of, or filing with, or certification 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 Agcncy of the other transactions contemplated by this Resolution, except those the Local Agency shall obtain or perfonn 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 for Fiscal Year 1999-2000 sctling forth expected revenues and expenditures and has complied with all statutory and regulatory requirements with respect to the adoption of such budget. The Local Agency hereby covenants that it shall (i) duly, regularly and properly prepare and adopt its final budget for Fiscal Year 1999-2000, (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 final budget and of any subscquent revisions, modifications or amendments thereto and (iii) comply with all applicable laws pertaining to its budget. (F) The sum of the principal amount of the Local Agency's Note plus the interest payable thereon, on the date of its issuance, shall not exceed fifty percent (50%) of the estimated amounts of the Local 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 attributable to Fiscal Year 1999-2000, all of which will be legally available to pay principal of and interest on the Note. (G) The Local Agency (i) has not defaulted within the past twenty (20) years, and is not cUlTently in default, on any debt obligation and (ii), to the best knowledge of the Local Agency, has never defaulted on any debt obligation. (1-1) The Local Agency's most recent audited financial statements present fairly the financial condition of the Local Agency as of the date thereof and the results of operation for the period covered thereby. Exccpt as has been disclosed to the Financial Advisor 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 perfonn its obligations under this Resolution and the Note. The Local Agency agrees to furnish to the Authority, the Financial Advisor, the underwriter, the Trustce, the Credit Provider, if any, and the Reserve Credit Providcr, if any, promptly, from time to time, such information regarding the operations, financial condition and property of the Local Agency as such party may reasonably request. I I I I I Resolution Numbe~~t'~ (I) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, arbitrator, governmental or other board, body or official, pending or, to the best knowledge of the Local Agency, threatened against or affecting the Local Agency qucstioning 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, ifany, 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 foregoing, or wherein an unfavorable decision, ruling or finding would have a materially adverse effect on the Local Agency's financial condition or results of 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 affect the validity or enforceability of, or the authority or ability of the Local Agency to perfornl its obligations under, the Note, the Purchase Agreement, the Indcnture, the Credit Agrcemcnt, if any, the Reserve Credit Agreement, if any, or this Resolution. . (J) Upon issuance of the Note and execution of the Purchase Contract, this Resolution, the Purchase Contract and the Note will constitute legal, valid and binding agreements of the Local Agency, enforceable in accordance with their respective tenns, except as such enforceability may be limited by bankruptcy or other laws affecting creditors' rights gcnerally, the application of equitable principles if equitable remedies are sought, the exercise of judicial dlscrction in appropriate cases and the limitations on legal remedies against local agencies, as applicable, in the State ofCalifomia. (K) The Local Agency and its appropriate officials have duly taken, or will takc, all proceedings necessary to be taken by them, if any, for the levy, receipt, collection and enforcement of thc Pledged Revenues in accordance with law for canying out the provisions of this Resolution and the Note. (L) The Local Agency shall not incur any indebtedness secured by a pledge of its Pledged Revenues unless such pledge is subordinate in all rcspects to the pledge of Plcdged Revenues hcreunder. (M) So long as the Credit Provider, if any, is not in payment defaultundcr the Credit Instrument or the Reserve Credit Provider, if any, is not in default under the corresp'onding Reserve Credit Agreement, the Local Agency hcreby agrees to pay its pro rata sharc of all Predefault Obligations and all Reimbursement Obligations attributable to the Local Agency in accordance with provisions of the Credit Agreement, if any, the Reserve Credit Agreement, if any, and/or the Indenture, as applicable. Prior to the Maturity Date, moneys in the Local Agency's Payment Account and/or Payment Subaccount shall not be used to make such payments. The Local Agency shall pay such amounts promptly upon receipt of notice from the Credit Provider or from the Reserve Credit Provider, if applicable, that such amounts arc due to it. (N) So long as any Bonds issued in connection with the Notes are Outstanding, or any Predefault Obligation or Reimbursement Obligation is outstanding, the Local Agency will not create or suffer to be created any pledge of or lien on the Note other than the l>ledge and lien of the Indenture. Section 12. Tax Covenants. (A) The Local Agency shall not take any action or fail to take any action if such action or failure to take such action would adversely affect the exclusion from gross income of the interest payable on the Note or Bonds under Section 103 of the Internal Revenue Code of 1986 (the "Code''). Without limiting the gcnerality of the foregoing, the Local Agency shall not make any use of the proceeds of the Note or Bonds or any other funds of the Local Agency which would cause the Note or Bonds to be an "arbitrage bond" within thc meaning of Section 148 of the Code, a "private activity bond" within the meaning of Section 141 (a) of the Code, or an obligation the interest on which is subject to federal income laxation because it is "fedcrally guaranteed" as provided in Section 149(b) of the Code. The Local Agency, with respect to the proceeds of the Note, will comply with all requirements of 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, applicable and in effect. Resolution Number J./1o /p (B) The Local Agency hereby (i) represents that the aggregate face amount of all tax-cxempt obligations (including any tax-exempt leases, but excluding private activity bonds), issued and to be issued by the Local Agency during calendar year 1999, including the Note. is not reasonably expected to exceed $5,000,000; or. in the alternative. (ii) covenants that the Local Agency will take all legally pennissible steps necessary to ensure that all of the gross procecds of the Note will be expended no latcr than the day that is six months after the date of issuance of the Note so as to satisfy the requirements ofSecllon 148(O(4)(B) of the Code. (C) Notwithstanding any other provision of this Resolution to the contrary, upon the Local Agency's failure to observe, or refusal to comply with, the covenants contained in this Section 12, no one other than the holders or fonner holders of the Note, the owners of the I Bond, the Credit Provider, if any, the Reserve Credit Provider, if any, or the Trustee on their bchalf shall be entitled to exercise any right or remedy under this Resolution 011 the basis of the Local Agency's failure to observe, or refusal to comply with, such covenants. (D) The covenants contained in this Section 12 shall survive the payment of the-Note. Section 13. Events of Default and Remedies. If any of the 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 transfer, deposit or other payment is due and payable; (B) Failure by the Local Agency to observe and pcrfonn any covenant, condition or agreement on its part to be observed or perfomled under this Resolution, for a period of fifteen (15) days after written notice, specifying such failure and requesting that it be remedicd, IS given to the Local 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 I Credit Provider, if applicable, shall all agree in writing to an extension of such time prior to its expiration; (C) Any warranty, representation or other statcment by or on behalf of the Local Agency contained in this Resolution or the Purchase Agreement (including the Pricing Confinnation) or in any requisition or any financial report 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, rcorganization, arrangcment, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect and is not dismissed within 30 days after such filing, 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 Local 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 cffect, or consents to the filing of any petition against it under such law; or (F) The Local Agency admits insolvency or bankruptcy or is generally not paying its debts as such debts become due, or becomes insolvent or bankrupt or makes an I assignment for the belie fit of crcditors, or a custodian (including without limitation a receiver, liquidator or trustee) of the Local 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 refcrred 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 providcd herein or by law or under the Indenture, if applicable, have the right, at its option without any further demand or notice, to takc one or any combination of the following remcdial steps: I I I Resolution Number~~~ (I) Without declaring the Nole to be immediately due and payable, require the Local Agency tp 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 due hereunder, and upon notice to the Local Agency the same shall become immediately due and payable by the Local Agency withoul further notice or demand; and (2) Take whatever other action at law or in equity (except for acceleration of payment on the Note) which may appear necessary or desirable to collect the amounts 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 No.te is secured in whole or in part by a Credit Instrument (other than the Reserve Fund) or if the Credit Provider is subrogated to rights under the Local Agency.'s Notc, 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 Pl"Ovider 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) to direct the remedies upon any Event of Default 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 requircd 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, uscd 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 component, if applicable) thcrcof 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 subjcct to Section 8 hereof. If the Credit Instrumcnt 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, lhe Defaulted Note shall become a Defaulted Reserve Note and the unpaid portion (including the interest component, if applicable) thereof (or the portion thereof with respect to which the Reserve Fund applies for which reimbursement on a DrawlIlg has not been fully made) shall be deemed outstanding and shall bear interest at the Dcfaull Rate until the Local Agency's obligation on the Defaulted Reserve Note is paid in full or payment is duly provided for, all subject to Section 8 hereof. Section 14. Trustee. The Local Agency hereby directs and authorizes the payment by the Trustee of the interest on and principal of the Note when such become due and payable, from amounts rcceived by the Trustee from the Local Agency in the manner set forth herein. The Local Agency hereby covenants to deposit funds in such account or fund, as applicable, at the time and in the amount spccified herein to provide sufficient moneys to pay the principal of and interest on the Note on the Note Payment Deposit Date. Payment of the Note shall be in accordance with the tcnns of the Note and this Resolution. Section IS. Sale of Note. The Note shall be sold to the Authority, in accordance with the terms of the Purchase Agreement, hereinbeforc approved, and issued payable to the Trustee, as assignee of the Authority. Section 16. Intentionally Left Blank. This section has been included to preserve the sequence of section numbers for cross-referencing purposes. Section 17. Approval of Actions. The aforementioned Authorized Rcprescntatives of the Local Agency are hereby authorized and directed to execute the Note and calise the Trustee to accept delivery of the Note, pursuant to the ternlS and conditions of the Purchasc Agrcement and the Indenture. All actions heretofore takcn by the officers and agents of the Local Agency or this Legislative Body with respect to the sale and issuance of the Note and participation in the Program are hereby approved, confirnled and ratified and the Authorized Representatives and agents of the Local Agency are hereby authorized and directed, for and in Resolution Number~t1~ the name and on behalf of the Local Agency, to do any and all things and take any and all actions and execute any and all certificates, agreemcnts and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivcry of the Note in accordancc with, and related transactions contemplated by, this Resolution. The Authorized Representatives of the Local Agency referred to above in Section 4 hereof are hereby designated as "Authorized Local Agency Representatives" under the Indcnture. In the event that the Note or a portion thereof is secured by a Credit Instrument, anyone of the Authorized Representatives of the Local Agency is hereby authorized and directed I to provide the Credit Provider and, if applicable, the Reserve Credit Provider, with any and all infonnation rclating to the Local Agency as such Credit Provider or Reserve Credit Provider may reasonably request. Section 18. Proceedings Constitute Contract. The provisions of the Note and of this Resolution shall constitute a contract between the Local Agency and the registered owner of the Note, and such provisions shall be enforceable by mandamus or any other appropriate suit, action or proceeding at law or in equity in any court of competent jurisdiction, and shall be irrcpealable. The Credit Provider, if any, and the Reserve Credit Providcr, if any, are third party beneficiaries of the provisions of this Resolution and the Note. Section 19. Limited Liability. Notwithstanding anything to the contrary containcd hcrein or in the Note or in any other documcnt mentioned herein or relatcd 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 connection with thc transactions contemplated hcreby 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 Agcncy may adopt one or more Supplemental Resolutions with the written consents of the Authority, the Credit Providcr, if any, and the Reservc Crcdit 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: I (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; (B) to add to the limitations and restrictions in this Resolution, other limitations and restrictions to be observed by the Local Agcncy which are not contrary to or inconsistent with this Rcsolution as theretofore in effect; (C) to confinn, as further assurance, any pledge under, and the subjection 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 or inconsistent provision in this Resolution; or (El 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 issu~d in connection with the Notes. Any modifications or amendment of this Resolution and of the rights and I obligations of the Local Agency and of the owner of the Note or of the Bonds issued in connection witllthe Note may be made by a Supplemental Resolution, with the written consents of the Authority, the Credit Provider, ifany, and the Reserve Credit Provider, ifany, and with the writtcn consent of the owners of at least a majority in principal amount of the Note and of the Bonds issued in connection with the Note outstanding at the time such consent is given; provided, IllOWever, that if such modification or amendment will, by its tenns, not take effect so long as the Note or any Bonds issued in connection with the Note remain outstanding, the consent of the owners of such Note or of such Bonds shall not be required. No such I I I REsolution Number ~~t, modification 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 Rcsolution, without the consent of the owners of such Note or the owners of all the Bonds issued in connection 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 court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 22. Appointment of Bond Counsel. The law firnl of Orrick, HelTington & Sutcliffe LLP, Los Angeles, California is hereby appointed as Bond Counsel for the Program. The Local Agency acknowledges that Bond Counsel regularly perfonns legal services for many private and public entities in connection with a wide variety of matters, and thai Bond Counsel has represented, is representing or may in the future represent other public entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders, financial and other consultants who may have a role or interest in the proposed financing or that may be iflYolved 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 no conflict of interest exists or would exist, waives any conflict of interest that might appear to exist, and consents to any and all such relationships. Section 23. Appointment of Financial Advisor and Underwriter. Sutro & Co. Incorporated, Los Angeles, California is hereby appointed as financial advisor for the Program. Morgan Stanley & Co. Inc., together with such co-undcrwriters, if any, identified in the Purchase Contract, is hereby appointcd as underwriter for the Program. Section 24. Effective Date. This Resolution shall take effect from and after its date of adoption. Section 25. Resolution Parameters. (A) Name of Local Agency: CITY OF SEAL BEACH (B) Maximum Amount of BOlTowing: TWO MILLION DOLLARS (C) Authorized Representatives: TITLE 1. City Manager 2. Director of Administrative ServieeslTreasurer 3. City Clerk Resolution Number 410ft:, PASSED, APPROVED of Seal Beach at /A'#.. day of NIIOWing vote: and ADOPTED by the city Council of the a re r meeting thereof held on the , 1999 by the city ABSENT: Councilmember I AYES: Councilmembe NOES: councilmember MayO~ ATTEST: STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF SEAL BEACH ) I, Joanne M. Yeo, City Clerk of the City of Seal Beach, California, do hereby certify that the for~oi~ Resolution is the original copy of Resolution Number "" on file in the office of the City Clerk, passed, approved and adopted by the city Council of the city of Seal Beach~ regular meeting thereof held on the 7~~ day of 1" 1999. I I I I I Resolution Number #O~ EXHIBIT A [NAME OF LOCAL AGENCY] 1999-2000 TAX AND REVENUE ANTICIPATION NOTE, [SERIES ~~' Interest Rate Maturity Date Date of Original Issue REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS FOR VALUE RECEIVED, the Local Agency designated above (the "Local Agency"), acknowledgcs itself indebted to and promises to pay to the registered owner identified above, or registered assigns, on the maturity datc set forth abovc, the principal sum specified above in lawful money of the United States of America, and to pay interest thereon [on , 1999 and] at maturity at the rate of interest specified above (the "Note Rate"). 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 Icgal 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 U.S. TllIst Company of California, N.A. in Los Angcles, California, or its successor in trust (the "Trustee"). Inte'rest shall be calculated on the basis of a 360-day year, consisting of twelve 30- day months. Both the principal of and interest on this Note shall be payable only to the registered owner hereof as the same shall fall due; provided, however, no intercst shall bc payable for any period after maturity during which the holder hereof fails 'to properly prcscnt this Notc for payment. 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 certain Indenture of Trust, dated as of 1,1999 (the "Indenture"), by and betwcen the California Statewide Communities Dcvelopment Authority and U.S. Trust Company of California, N.A., as trustee), if any, is not reimburscd in full for the amount drawn on or paid pursuant to the Credit Instrument (as defined in the Resolution and thc Indenture) to pay all or a portion (including the interest component, If applicable) of this Notc on the date of such payment, this Note shall become a Defaulted Note (as defincd in the Resolution and the Indenture and with the consequences set forth in the Resolution and the Indenture, including, without limitation, that this Note as a Defaulted Note (and any related reimbursement obligation with respect to a credit instrument) shall bear interest at the Default Rate, as defined in the Indenture). . It is hereby certified, recited and declared that this Note represents the authorized issuc of the Note in the aggregate principal amount authorized, executed and delivered pursuant to and by authority of certain resolutions of the Local Agency duly passed and adopted heretofore, under and by authority of Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Tille 5 of the Califomia Government Code (collectively, the ~'Resolution"), to all of the provisions and limitations of which the owner of this Note, by acceptance hereof, assents and agrees. :'Ifmorc than one Series of Bonds is issued under the Program 111 Fiscal Year 1999-2000 and iflhe Note IS pooled with notes issued by other Issuers (as defined 111 the ResolutIOn). The principal of the Note, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other moneys which are received by the Local Agency for the gcneral fund of the Local Agency and are attributable to Fiscal Year 1999-2000 and which arc available for payment thercof. As security for the payment of the principal of and interest on the Note, thc Local Agency has pledged the first amounts of unrestri9ted revenues of the Local Agency received on the last day of and (and any amounts received thereafter attributable to Fiscal Year 1999-2000) until the amount on deposit in the Paymenl Account (as defined in the Resolution), together with available amounts, if any, on deposit in the Payment Subaccount (as defined in the Resolution) in each such month, is equal to the corresponding percentages of principal of and interest due on the Note as set forth in the Pricing Confinnation (as defined in the Resolution) (such pledged amounts being hereinafter:... Resolution Number l/1~ - called the "Pledged Revenues"), and thc principal of the Note and the interest thereon shall constitute a first lien and charge thereon and shall be payable from the Pledged Revenues, and to thc - extent not so paid shall be paid from any other moneys of the Local Agency lawfully available therefor as set forth in the Resolution. The full faith and credit of the Local 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 registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hercon and for all other purposes, and the Local Agency and the I Trustee shall not be affected by any notice to the contrary. It is hereby certified that all of the conditions, things and acts required to exist, to have happened and to have been perfornled precedent to and in the issuance of this Note do exist, have happened and have been perfonned in due time, fornl and manner as required by the Constitution and statutcs of the State of California and that the amount of this Note, together with all other indebtedness of the Local Agency, does not exceed any limit prescribed by the Constitution or statutes of the State of California. IN WITNESS WHEREOF, the Legislative Body of the Local Agency has caused this Note to be executed by the manual or facsimile signature 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 Body as of the date of authentication set forth below. [NAME OF LOCAL AGENCY] By: Title: Countersigncd I By: Title PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Purchase Agreement"), dated as of the purchase date (the "Purchase Date") specified in Exhibit A attached hereto and made a part hereof, entcred IIlto by and between the signatory local agency designated in Exhibit A (the "Local Agency") and the California Statewide Communities Development Authority (the "Authority"), for the sale and dclivery of the principal amount specified in Exhibit A of the Local Agency's 1999- 2000 Tax and Revenue Anticipation Note (the "Note") to be issued in conjunction with the notes of other Issuers (as hercinafter defined) participating in the Program (as hereinafter defined), as detcnnined in the Pricing Confinnation (as hereinafter defined), pooled with notes of other Issuers and assigncd to secure a series (the "Series") of bonds (the "Bonds") designated in Exhibit A; WITNESSETH: WHEREAS, local agencies are authorized by Sections 53850 to 53858, both inclusive, of the Govenunent Code of the State of California (the "Act") (being Article 7.6, Chapter I 4, Part I, Division 2, Title 5 of the Government Codc) 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 finding that the Local Agency needs to bOITOW funds in its fiscal year ending June 30, 2000 ("Fiscal Year 1999-2000") in the principal amount set forth in Exhibit A and that it is necessary that said sum be bOlTowed at this time 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 thc Local Agency during or attributable to Fiscal Year 1999-2000; I I I Resolution Numbe~O~ WHEREAS, on the resolution date set forth in Exhibil A, lhc Local Agency adopted (as specified in Exhibit A> a resolution or resolutions (collectively or singularly, as applicable, the "Resolution") authorizing the issuance and sale of the Note in the name and on behalfofthc Local Agency; WHEREAS, the Local Agency has detemlined that it is in the best interests of the Local Agency to participate in the Califomia Communities Cash Flow Financing Program (the "Program"), whereby participating local agencies (the "Issuers") will simultaneously issue tax and revenue anticipation promissory notes for purchase by the Authority; WHEREAS, under the Program, the Authority will fonn one or more pools of notes (the "Pooled Notes") and assign cach note to a particular pool (the "Pool") and sell a Series of Bonds secured by each Pool pursuant to an indenture, dated as of July I, 1999 (the "Indenture"), by and between the Authority and U.S. Trust Company, N.A. (the 'Trustee"), and sell each such Series to Morgan Stanley & Co. Incorporated, as representative of the underwriters of the Program (collectively, the "Underwriter"); WHEREAS, if so indicated in Exhibit A, the payment by the Local Agency of its Note will be secured in whole or in part (jointly, but not severally, with notes of the other participating Issuers assigned to the same Series of Bonds) by a letter of credit, policy of insurance, proceeds received from a separate bond issue issued by the Authority for such purpose (the "Reserve Fund") or other credit instrument (collectively, the "Crcdit Instmment") to be Issued by thc entity or entities designated in Exhibit A as the credit provider (the "Credit Provider"); WHEREAS, such Credit Instrument may be issued pursuant to a reimbursement agrcement, commitment lettcr, indenture or olher agreement (lhe "Credit Agreement") as identified in Exhibit A; WHEREAS, in ordcr to participate in the Program, the Local Agency has agreed to be responsible for its share of the fees and expenses of the Trustce, and, if applicable, the Credit Provider and the costs of issuing the Bonds, and the costs, if applicable, of issuing the Credit Instrumcnt, which anticipated fees, expenses and costs of issuance will be deducted from the purchase price set forth in Exhibit A and which unanticipated fees, expenses and costs of issuance will be billed to the Local Agency as the same may arise; WHEREAS, the costs of issuance which will be deducted from the purchase price set forth in Exhibit A for the Local Agency shall not exceed one percent (I %) of the principal amount of each Note; and WHEREAS, pursuant to the Program, the Authority is submitting this offer to purchase the Note pursuant to this Purchase Agreement; NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Scction I. Obligation to Pu rchase. Upon the tenns and conditions and in reliancc upon the rcpresentations, warranties and agreements set forth herein, the Authority shall purchase from the Local Agency, and the Local Agency shall sell to the Authority, the Note, as dcscribcd hcrcin and in the Rcsolution. Scction 2. Purchase Price. The purchase price of the Note shall be thc pllrchasc pricc set forth in the pricing eonfinnation attachcd hcreto as Exhibit A (the "Pricing Confinnation"). The Note shall bear interest fit an interest rate per annum set forth in the Pricing Confinnation, which is hereby agreed to by and between the Authority and the Local Agency by its duly authorized representative executing this Purchase Agreement on behalf of the Local Agency. Section 3. Adjustments to Principal Amount of Note and Purcbase Price. The Authority and the Local Agency hereby agree that the principal amount of the Note purchased by the Authority and sold to the Authority by the Local Agency pursuant to this Purchase Agreement may be reduced, as detennined by the Authority and each Local Agency, based upon the advice of OlTick, HelTington & Sutcliffe LLP ("Bond Counsel"), in order that the Resolution Number41IJ /P proceeds produced from such sale of such Note will be an amount which will not be subject to cither (i) yield restriction (in order for interest to be excluded from gross income under Section 103 of the Intemal Revenue Code of 1986, as amended (the "Code")) or (ii) a rebate requirement (under Scction 148 of the Code), The Authority and the Local Agency hereby further agree that the purchase price of the Note shall be reduced as a result of any reduction of the principal amount of the Note required by this section. Section 4. Delivery of and Payment for the Note. The dclivery of the Note (the "Closing") shall take place at 8:00 a.m., Califomia time, on the closing date set forth in the Pricing Confinnation or at such other time or date as may be mutually agreeable to the Local Agency, the Authority and the Underwriter, at the Los Angeles office of Orrick, Herrington & Sutcliffe LLP or such other place as the Local Agency, the Authority and the Underwriter shall mutually agree. At the Closing, the Local Agency shall cause the Note to be delivered to the Authonty, duly executed and authenticated, together with the other documents hereinafter mcntioncd, and the proceeds of the purchase price of the Note set forth in thc Pricing Confinnation shall be deposited in an amount indicated in the Pricing Confinnation as the Deposit to Proceeds Fund which shall be hcld by the Trustee for the Local Agency and the remainder in the Costs of Issuance Fund held thereunder. If at any time prior to 90 days after the Closing Date, any event occurs as a result of which infonnation relating to the Local Agency included in the official statement of the Authority relating to the Series of Bonds to which the Note is assigned (the "Omcial S,tatement") contains an untrue statement of a material fact or omits 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 Agcncy shall promptly notify the Authority and the Underwriter thereof, and if, in the opinion of the Authority or the Underwriter, such event requires thc preparation and publication of a supplement or amendment to the Official Statement, the Local Agency shall cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in a fonn and in a manner approved by the Authority and the Underwriter, and all reasonablc cxpcnses incurred thereby shall be paid by the Local Agency. Section 5. - The Note. The Note shall be issued in substantially the form set forth in thc Resolution, without coupons in the full principal amount set forth in Exhibit A. Section 6. Representations and Warranties of the Local Agencv. The Local Agency represents and warrants to the Authority and the Underwriter that: (a) All representations and warranties set forth in the Resolution are true and correct on the date hereof and are made for the benefit of the Authority and the Underwriter as if set forth herein. (b) The infornlation relating to the Local Agency included in the Official Statement does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in light of the circumstance under which thcy were n;ade not misleading. (c) A copy of the Resolution has been delivered to the Authority and the Underwriter, and the Resolution will not be amended or repealed without the consent of the Authority and the Underwriter, which consent will not be unreasonably withheld. I I (d) The Local Agency acknowledges that the Authority is authorizcd to exccute the Indenture, to assign the Note to the Trustee under the Indenture and to issue the I Series of Bonds pursuant to the Indenture. (e) The Local Agency shall provide the required Payment Account Deposit Certification (upon a request therefor) in accordance with Section 5.06 of the Indenture. (0 The Local Agency has not issued and will not issue any obligation or obligations, other than the Note, to finance the working capital deficit for which the Note is being issl!ed. I I I Resolution Number~t' ~ Section 7. Closing are as follows: Conditions Precedent to the Closing. Conditions prccedent to the (a) The execution and delivery of the Note consistent with the Resolution. (b) Delivery of a legal opinion addressed to the Local Agency (with a reliance lettcr addrcssed to the Authority and the Underwriter), dated the date of closing of B.ond Counsel with respect to the validity of the Note in fornl and substancc acceptable to the Authority and the Underwriter. (c) Delivcry of a legal opinion, dated the date of Closing, of counsel to the Local Agcncy, with respect to the due authorization, execution and delivery of the Note, in fornl and substance acceptable to Bond Counsel. (d) Approval by the Credit Provider of the credit of the Local Agency and inclusion of thc Local Agency's Note in the assignment, togcther with notes of other Issuers, to a Scries of Bonds. to sccure the Series of Bonds, which approval in the evcnt the Credit Instrument is the Rcscrve Fund shall be evidenced by the issuance of an "SP-l+" rating with respect to the applicable Series of Bonds by Standard & Poor's Ratings Services.. (c) Delivery of each certificatc, document, insirumcnt and opinion required by thc agrecment betwecn the Authority and the Underwritcr for the sale by the Authority and purchase by the Underwriter of the Series of Bonds to which the Pooled Note is assigned. <0 Delivery of such other certificates, instruments or opinions as Bond Counsel may deem necessary or desirable to evidence the due authorization, execution and dclivery of documents pertaining to this transaction and the legal, valid and binding nature thereof or as may be required by the Crcdit Agreement, as well as compliance of all parties with the tenllS and conditions thereof. Section 8. Events Permitting the Authority to Terminate. The Authority may tenninate its obligation to purchase the Note at any time before the Closing if any of the following occurs: (a) Any legislative, executive or regulatory action (including the introduction of Icgislation) or any court decision which, in thc judgment of the Authority, casts sufficient doubt on the legality of obligations such as the Note, and the tax-excmpt status of interest on obligations such as the Bonds, so as to impair materially the marketability or to reduce materially thc markct price of such obligations; (b) Any action by the Securities and Exchange Commission or a court which would require registration of the Note, the Bonds or any instrument securing the Note or Bonds under thc Sccuritics Act of 1933, as amended, in connection with the public offering thercof, or qualification of the Resolution or the Indcnturc under the Trust Indenturc Act of 1939, as amendcd; (c) Any restriction on trading in securities, or any banking moratorium, or the inccption or escalation of any war or major military hostilities which, in the judgment of the Authority, substantially impairs the ability of the Underwriter to markct the Bonds; or (d) The Underwriter tenllinates its obligation to purchase thc Series of Bonds to which the Note is assigncd pursuant to its agreement with the Authority for the purchase of such Series of Bonds. Neither the Underwriter nor the Authority shall be responsible for the payment of any fees, costs or expenses ofthc issuance, offering and sale of the Local Agency's Note except the Underwriter shall be responsible for California Debt and Invcstment Advisory Commission fces and for its own intcmal costs. The fees, costs and expenses that are catcgorizcd in the "Costs of Issuance" definition in the Indenture shall be paid from the Costs of Issuance Fund. The Local Agency shall pay any additional costs allributable to it as set forth in the Rcsolution other than the fces, costs and expenscs so payable from the applicable Costs of Issuance Fund. Resolution Number~l'~ Section 9. Indemnification. To the extent pennitted by law, the Local Agency agrees to indcmnify and hold harnlless the Authority and the Undcrwriter and each person, if any, who controls (within the meaning of Section 15 of the Securities Act of 1933, as amended. or of Section 20 of the Securities Act of 1934, as amended) the Authority or the Underwriter, and the officers, directors, agents and employees of the Authority and the Underwriter against any and all losses, claims, damages, liabilities and expenses arising out of any statcment or infonnation in the Preliminary Official Statement or in the Official Statement (other than statemcnts or infornlation regarding an Issuer othcr than the Local Agency) that is untrue or incorrect in any material respect or the omission or alleged omission therefrom of any statemcnt or information (othcr than statements or infornlation regarding an Issuer other than the I Local Agcncy) that should be stated therein or that is necessary to make the statements and infomlationthcrcinnot misleading in any material respect. Section 10. Credit Agreement. The Local Agency shall comply with all lawful ami proper rcquests of the Authority in order to enablc the Authority to comply with all of the terms, conditions and covcnants binding upon it under the Credit Agreement. Section 11. Notices. Any notices to be given to the Underwriter under the Purchase Agrccmcnt shall be given in writing to Morgan Stanley & Co. Incorporated, Attcntion: 555 Califol1ua Strect, Suite 2200, San Francisco, CA 94104. Any notices to bc given to the Authority undcr the Purchase Agreement shall be given in writing to the Authority, 1100 "K" Street, Suite 101, Sacramento, CA 95814, Attcntion: Secretary. Any notices to be givcn to thc Local Agency shall be givcn in writing to the address specified in Exhibit A. Section 12. No Assignment. The Purchase Agreement has been made by the Local Agency and the Authority, and no person other than thc Local Agency and the Authority or their succcssors or assigns and the Underv.:riter shall acquire or have any right under or by virtue of the Purchase Agrecment. All of the representations, warranties and agreements contained in the Purchase Agrecment shall survive the delivcry of and payment by the Authority for the Notc and any ternlination of the Purchase Agreement. Section 13. AI)plicablc Law. The Purchase Agreement shall be intcrpreted, governcd and cnforccd in accordance with the laws of the State of California. I Section 14. Effectiveness. The Purchase Agrecmcnt shall become effcctive upon the execution hereof by thc Authority and exccution of the Pricing Confinnation by the Local Agcncy, and thc Purchase Agrecment, including the Pricing Confinnation, shall bc valid, binding and cnforceable from and after the time of such effectiveness. Section IS. Severability. In the evcnt any provision of the Purchase . Agreemcnt shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render uncnforceablc any other provision hereof. Section 16. Headings. Any hcadings preceding thc text of scveral sections hereof shall be solely for conveniencc of rcfercnce and shall not constitute a part of this Agreement. nor shall they affcct its meaning, construction or effect. Section 17. Execution in Counterparts. This Purchase Agreement may be executed and cntered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but onc and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be executcd by their duly authorized representatives as of the Purchase Date set forth in Exhibit A attached hereto and incorporatcd herein. I CALIFORNIA STATEWIDE COMMUNlTIES DEVELOPMENT AUTHORITY By: Member of the Commission of the Authority I I I Resolution Number~;1t?~ EXHIBIT A Pricing Confinnation Supplement Local Agel/cy: CITY OF SEAL BEACH Pricil/g II/forma/iol/ Pnnclpal Amount of Note: Interest Rate on Note: $ _0/0 _'Yo _0/0 _'Yo $- ( ) ( ) Re-Offcnng Yield: Purchase Price Default Rate: Purchase Pnce: Less: Cost of Issuance: _% Credit Enhancement: _'Yo DeposJl to Note Proceeds Account: $ Impm'/al// Dates Resolution Date of Local Agency: Purchase Date: Closing Date: Matunty Date: Interest Payment Datc(s): Note Payment Deposit Date: First Pledge Month Ending: Pledge Amount: Pledge Percentage: Second Pledge Month Endlllg: Pledge AmOllnt: Pledge Percentage: /1I1'e!it",ellt Agreelllellt /"/0"'''01;011 $- _0/0 $- _o~ OIC ProvIder Long Term Ratings (S&P/Moody's) Short Tenn Credit Ratings (S&P/Moody's) Interest Rate on OIC _'X, . By initialing the box at the end of this paragraph, the undersigned Local Agency certifies that, in connection with the issuance of the Note under the Resolution and after reasonable inquiry, it is the reasonable expectation of the Local Agency that the aggregate' amollnt of all tax-exempt obligations (excluding private activity bonds) issued or to be issued by the Local Agency during the 1999 calendar year, including the Note, all other notes and bonds, and all tax-exempt leascs, executed or delivered during the 1999 calendar year will not exceed $5,000,000 (See Seclion3.8 oflhe Celiificale oflhe Local Agency iflhe Local Agcncy is unable to make this certification). 0 Investment Alternative - Initial the appropriate box relating to the investment of proceeds rcccived from the issuance and delivery oflhe Local Agency's Note: Resolution Number~70&' Initial One Box Yes, thc undersigncd directs the Trustce to invest the proceeds received from the issuance and delivery of the Local Agency's Note in the Guaranteed Investment Contract described on page A-I. (Do not wire the proceeds as previously directed in Section 4.7 of the Certificate of the Local Agency.) Yes o No, do not invest the proceeds received from the issuance and dclivery ofthe Local Agency's Note in the Guaranteed Investment contract, wire the proceeds as directed in Section 4.7 ofthc Ccrtificate of the Local No Agency. o IN WITNESS WHEREOF, thc Purchase Agreement, including this Pricing Confinnation, is agreed and accepted to on the Purchase Date set forth above. CITY OF SEAL BEACH By: Authorized Representative . Please initial the box !2!J..!.)! if applicable to the Local Agency. I I I