HomeMy WebLinkAboutResolution 96-113 05/06/1996
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CITY OF' PETALUMA
LOCAL AGENCY, RESOLUTION
NUMBER . ,96-11`:3 Pi.C.S.
RESOLUTION AUTHORIZING AND',APPROYING THE BORROWING OF
FUNDS FOR FISCAL-YEAR-:1996-199,7;iTH3v ISSUANCE AND SALE OF
A 1996-1997'TAX A1VD•REVENUE:ANTICIPATION -NOTE
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THEREFOR r1ND PARTICIPATION IN`THE CALIFORNIA
COMMUNITIES' CASH FI:OW FINANCING PROGRAM
WHEREAS, local agencies are adtfiorized,6y Section:53850 xo'S3858, both-inclusiQe,
of'the Goyerrunent Code of`tfiedState of'Califomia (the "Act-") (being: Article 7:6, Chapter 4`; Part 1,
.Division 2, Title 5 of the GodernSrient Code) to: borrow money by the issuance of temporary hotes;•
WHEREAS, thetlegislativa body (the;"Legi§lative:"Body") of the local agency specified.
:in Secuon.25:'hereof (the "Local,Agency":)`has determined''ihat a~sum,(the "Principal.Amoum"), not to
exceed the Maximum Amount of Borrowing specified.in Section<25-hereof, which Principal Amoun6is
to be confirmed andae[ in the,P.rii:ing Confirmation (as defned.in Section 4 hereof),.is peededfor the
regulrementsof the IocaLASency„to satisfy obligations ofahe LocaLAgency,:and that it is necessary that
said Principal.Aiiiount be borrowed for such purpose at,tliis time"by the issuance ofa note therefor in
'anticipation of the receipt of°_faxes, igcorne, revenue, cash receipts and other moneys to be received by
the~Local.Agency forthe:general fund ofahe Local Agency attributable fo its fiscal year ending June 30,
1996'('Fiscal Year 1996-1997")
WHEREAS, theiLocal Agency hereby, determines to borrow;. for the purposes set forth
above, ,the PrincipaLAmount by the ".issuance of the Note.(as hereinafter defined);
WHEREAS, it appears; and this Legislative Body hereby finds and.deteimines, thatthe
.Principal Ariiiiunt; whBn added to`the,inteiest payable thereon, does not exceed eighty-five percent(85%)
of the estmated.atnount of the uncollected taxes, income, revenue (including; but not limited to, revenue
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front the state and federal governirients), cash receipts and otheYmoneys ofahe Local Agency,attritiutalile
to Fiscal Year, 1.996-1997 and available for the payment of the principal of the Note and the interest
thereon;:
WHEREAS, no `.money has heretofore beeii borrowed by or on behalf of the Local
Agency through the "is_suance.of tax anticipation,notes ortemporary notes imanticipation of the receipt
of; or:payalile from orsecured`by, taxes, income, revenue, ca$frreceipts or other moneys for Fiscal Year
1A96-1997;
WHEREAS, pursuant to Sectiorr53856rofche Act, certain moneys which.,will be received
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by the;Liical.Agency during and attributable to Fiscal Year 1996-1997, can be`pledged for the payment
of `the principal of the~Note and"the interest hereon (as hereinafter provided);
Copyright, 1996, Orrick,'tierrington &~~Sutcliffe: All rights reserved.
Reso. 96-113 NCS Page 1 of 16
LA1=12 23611
WHEREAS, the Local Agency has deterini`ned'~that it€is in.the best interests of the Local
.Agency to participate in'the'California Communities Cash Flow Financing Program (the "Program");
,
whereby partictpating;localagencies (collectively, the "dssuers").will simultaneously issue tax and evenue
anticipation rio[e`st
WHEREAS; the:Prograni requires the~participating Issuers to sellaheir tax and revenue
anticipation notes to'the California Statewide Communities'- Deyelopmen_f Authority• (the "Authority") '
,pursuant: to note purchase agreemenfs (collectively, "Purchase Agreements"), each. between "such
ihdviduahISSUet,and the Authority, and`dated as o_f fhe?dateof'fhePricng Confirmation, a!fo_ rm of which
has beensubmitted'tothe Legislative Body;
WHEREAS; the. Authority, in consultation with Sutro-& Co. Incorporated, as financial
a8visor'for,tte:P,rogram (the; "Financial Advisor"); will form one ormore pools of notes (the "Pooled
Notes') and' assgn'each note to a parficular'pooh(the "Pool") and sell-arseries (the ''Series") ofbonds
(the. Bonds"}secured'by eacfi,Pool pursuahtto an'ind'enture (the "Indenture");between the Authority and
U.S Trust;Companyof:California, N.A., astrustee{the "Trustee''.)',,eacfiSeries distinguishedbywhether
or' what type(s) :of Credit Instrument(s) (as hereinafter defined) secure(s).. such Series, by the principal
amounts of the notes!assigned-to°.fhe Pool,orby other factors, and•the Local Agency hereby acknowledges
and approves tfie discretion ofthe.Authority to assign the Note to such'Pool and such Indenture as the.
Authority may. determine;
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:notes assigned to such Series inay or may not be
secured (by virtueor in form_of the Bonds; as: indicated in the Pricing Confirmation, being secured in
whole or>in part) by an irrevocable letter (or letters) of credit or policy {or policies) of insurance or.
proceeds;ofaseparatebnnd issue issuedfor,such-purpose (the "Reserve Fund") or othercredit instrument
(or,instruments) (collectively,;the' "Credits Instrument") issued byrthe,credit provider or-credit-.providers
designated in•the Indenture,~~as~finallp execufed•(collectively, the "Credit Provider"), pursuant to a"credit
agreemenUOr`agteements.or•commitment letter or letters or, in [he case of the Reserve Eund, an indenture
(the 'Reserve Indenture!') (collectively, the""Credit Agreement") between;(i) in the case:ofan irrevocable,
letter (or letters) Hof credit or policy (or policies) of insurance,, the Authority°and the tespecfive Credit=
Provider and :(ii) in the case of the:Reserve Fund, the Authority and U.S. Trust Company of California,
N.A., asrtrustee,of [he.Reserve Indenture (the. "Reserve Trustee:");
WHEREAS, if;'as designated in'the Pticing.Confirmation, the Credit Instrument is the
Reserve:Eund', bonds issued pursuant to the.Reserve,Indenture,(the "Reserve Bonds") may;, as .indicated"
iri the,Pricin Confirmation, be secured by an'irrevocable letter of creditor policy of insurance or'other,
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creditsinsfrumenti(the "Reserve CredifInstruiiient") issued',tiy=the credifprovider identified'inltlie•Reserve
Indenture ;as finally executed (the "Reserve Credit .Provider"),, pursuant to a credit agreement or
commitment letter' (tfie "Reserve Credit Agreemenn'") identified in [he', Reserve :Indenture: `as finally
executed, such Reserve Credit Agreement being,between;the Authority and'the:Reserve Credit,Provider;
WHEREAS, the .net proceeds of the Note .may be invested by the Local Agency irr
Permitted Investments (as defined in the Indenture) or- in any<otfier investment permitted 6y 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 oftheProgram eachparticipating Issuer approves the Indenture, the
alternative forms of Credit Agreements, ifany, and the:°alternatiVe:forins of Reserve Credit Agreements,
if any, in,subs[antra]ly The'forms_presented to the Legislative-Body; with,the final form of Indenture;; type
of Credit Instrument`, and corresponding Credit Agreement`and type'of Reserve Credit `Instrument and..
RES®. 9 ~v. - 1 1 3 N G~S
'~6A1-124236.1 2 OT,
corresponding Reserve Credit. Agreement, if'ahy; to be determined. and approved by delivery of`the
Pricing Confirmation;
WHEREAS, pursuantto the Program each participating, Issuer wilt be responsible for
its'share of (a) the fees of the Trustee and`the costs.bf issuing the applicable Series of.Bonds, and,(b),
iP;applicablg, the fees of the Credit Provider, the fees of the Reserve Credit' P_ rovider (which shall, be
..payable from, among. other sources, investment earnings on [he Reseive:Fund and moneys in the~Costs
of Issuance Eund established and held-under the Indenture); the Issuer's allocable share of a1l;Predefault
Obligations and'sthe.Issuer's Reimbursement Obligations,. if any (each as defined in the Indenture);
WHEREAS, pursuant to the Program.eachparticipatingIssuer will. be:responsilile for
its share of'tfie `fees of the Reserve Trustee and the costs of issuing the applicable Series of Reserve
Bonds, al]'such.costs and,fees:being payable!'from the:proceeds.of he applicable Series of Bonds (or;. with
respect to "costs and fees'of the Reserve CieditProvider, 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=ihe,case of.eacfi`Pool of`Notes, tlie! Series of Bonds which will be secutedby
the Indenture to which such.Pool will be assigned;
WHEREAS, it is necessary to engage the services of certain professionals to assist the
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Local Agency in its participatioti in the Program;
NOW, THEREFORE, the.Legislative'Body.hereby finds, detertnines,,declares
and resolves as follows:
,'Section 1. Recitals. This~Legislative Body hereby finds and determines that all the
above recitals^are true and correct.
Section 2. Authorization of Issuance.. This Legislative. Body hereby :determines to
borrow solely for the purposetof 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
1996-1997,.by the issuance of a note in the Principal Amount underSections 53850 et sec . ofthe,Act,
designated .the Local Agency's ''1996-1997 Tax and,Revenue Anticipation Note" (the "Note"), to be
.issued in,the form of one fully registered note.at the Principal Amount thereof, to be dated the date of
.its "delivery to the initialpurchaser thereof, to mature (without option of grior redemption) not,more than
'thirteen months thereafter .on a date indicated on the :face thereof and determined in the Pricing
Confirmation (the "Maturity Date"), and to ,bear .interest; payable. at maturity.and:computed upon the.
fiasis;of a 360=day year-consisting ofitwe1ve80-day-months, ata rate Wolin exceed. enpercent?(10-%) per
;annum as determined in;the Pricing Confirmation and indicated on the!facerof the Note (the "Note Rate").
If ithe,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 no[ paid in full at maturity or-payment of-principal;of and
interest on.;the Note s_ pa8 (in whole orin part).liy 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,defined.in the;Indenture),-and the unpaid portion (including,the interest component,
if applicable)`thereofi(or-ttfe;portion:(including-the interest component, if applicable) thereof-with respect
to;which a Credit Instrument applies for which,reimbursemept on a draw, payment orclaim-has not been
fully made) shall.beadeemed 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 ifie Reserve
Bonds issued'to fund the Reserve Fund are secured by the Reserve CrediYTnstrument and a Drawing. (as
defined in the`Indenture)'pertaiding to the Note is not fully reimbursed.by the,ReservePriticipal Payment
LA1-!24236.1 3 ~ ~ I~ESO. g' 6 - 1 1 3 ~N C S,
Date (as defined' inthe.Indennite), such Note shall become~a Defaulted'.Reserve'Note (as defined ih the.
Ihdehture), ahd the unpaid portion (including Ihe.interest;compotient, f`applicalile) thereof'(or portion
(includingihe intereshcomponent;,;if applical5l'e)-with-respect to which-the Reserve Fund applies forwhich
reimbursement on.a;Drawing has not beeh,fully made) shall lie deemed outstanding,andshall continue
to bear interest thereafrer until`,paid a[ [he Default Rate. If the Note or the Series of Bond's issued!in
con`riection with"the:Note•.is unsecured"iii wfiole oryih part and the Note is not fullypaid;at maturity, the
unpaid portion thereof (or the poihion thereofto wfiich.no CreditiInstrument applies which is unpaid) shall
be deemed outstanding and sha1L contihue to bear ihterest.thereafrer'rihtil paid at the Default Rate. In
each case, set (forth inthe.preceding threeaentences,ahe obligation of the Local Agency with respect.to
such Defaulted Note or unpaid. Note shall hot be a debt or. liability of. the Local Agency prohibited by
Article XdI; Section 18. of the California Constitution and the;Local.:Agency shall not be liable thereon
except to; the eztetS[ of any available revehues attributable'to''Fiscal YBar'1996-1992, as provided in
Section,8_-hereof. The. ercenta e bf the Note to which a~Credt-~Ins[rument, ifany; applies (the."Secured
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Percentage";) shall, be-equal fo the ariiouht of the Credit Instrument divided by the aggregate'amouht of
unpaid principal. of and interestTon the'unpaid''notes (or porfions thereof) of all Issuers,-,expressed as a
percentage (but.not greaterthan:100%);as of the maturity d"ate., The peYcehtage:ofthe Notedo which'the
Reserve Credit Instrument, if any, applies (the "Secured Reserve Percentage") shall be equal' to the
amount. of'theiReserve'Credit Instrument:divided by the aggregate amount of uhpaid principal of and
interest oh such uhpaid notes (or portions thereof; including the in__terest component, if applicable),
expressed as,a°percen[age (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
Uhited;States of.America, but only upon surrender thereof„at the corporate tmst'office;of U.S. Trust
Company. of'California, N.A., in Los Angeles, California.
The Note shalb be 'issued ih conjunction with the note or -notes. of one or' more other
Issuers. as part:of the Program,:ahd withinahe meaning of Sectioh 53853.ofthe Act.
Section 3. Form<of Note. The Note shall be:issuedein fully registered form witFioiit
coupons'and shag be substantially`in the form and substance set,forth in ExhibitA as attached hereto and
by reference incorporated herein, the:blanks in said forms to be filled in with: appropriate words ahd
figures.
Sectioh 4. Sale of Notei°Deleeation. The Note shalLbe sold to the Authority pursuant
to the Purchase; Agreement. The form ,of the Purchase Agreement;; including the form of the pricing,
confirmation supplement (the "Pricing.;Confirnration") set forth as Exhibit A thereto', presented to; this'.
meeting are hereby approved. The authorized representatives set forth in Section 25 hereof ,(the
"Authorized Represehtatives") are each .Hereby' authorized ahd directed to execute and .deliver the
Purchase Agreement in substantially said :form;- with such changes thereto as such Authorized:
Representative shall;approve,,such approval to be:"conclusively evidenced by his or het execution and
delivery thereof; provided; however, thatdhe.Purchase Agreement shall not be effective and tiinding:on
the. Local Agency until, the execution and delivery of the '$ticing Confirmation. The Authorized
Representatives are each hereby further authorized' and <directed to execute and deliver the Pricing
Confirmation in'subs[ah[ially said form, :with sach,changes'thereto as such Authorized Representative
shall approve; such approval to be, conclusively evidenced by his or her execution°and delivery thereof;
provided;;however„thatthe ihterest rate oh'the Note shall notezceed ten percent(10%) per..ahhiim, the
discounton the~Note, when added to the Local Agency's share of the costs of issuance of.the Bonds; shall
..not exceed one peiceht (1.0%), and the Ptihcipal Amount shall not exceed the Maximum Amount of
Borrowing. Delivery of an executed copyof the Pricing Confirmation by fax or telecopy shall be deemed
effective executioh and delivery for all priiposes.
cnr-rzaz36.r 4~ r~ ~~sm. ~ '1 1 3 N C S
Section 5. Proeram Aabroval, The Ericing, Con£rtnation shall indicate whether and
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what type: of Credit Instrument and, if applicable, Reserve Credit Instrument will apply.
The forms: oflndenture;;alternative'general types and forms of Credit Agreements; if any,
and;alternative general typestand forms of
Reserve Credit Agreements; if any, presented to this meeting'.
are hereby acknowledged, aril it is acknowledged. that the .Authority will execute and deliver the
Indenture; one ormore Credit Agreements, if applicable, and'-one ormo;e Reserve Credit Agreements,
ifrapplicable, which shall,be identified in he Pricing Confirmation, in substantially one or-more ofsaid
forms withsuch changes thereimas the~Authorized ltepresentatiygwho executes the'Pricing'Confirtnation
shall require: or approve -(substantially final. forms. of the Indenture, the Credit Agreement and, if
applicable thgReserve Credit Agreetnent are to be'deliyered tothe Apthorized Representative concurrent
with the<P.ricing Confirmation), such^approval of the Authorized'Representati"veand4his Legislative Body
to be conclusively evidenced by ;thee execution of the; Pricing Confirmation. If the Credit Agreement"
identified-ifrthe Pricing Confirmation istfie Re"serve Indenture, itis acknowledged [fiaftheaAuthorify'will
issue'the'Reserve Bonds pursuant to and+as provided 'in. the Reserve .Indenture as finally executed.
Any one of the: Authorized Representatives of the Local; Agency is hereby authorrzed and
directed.fo provide the Financial,Advisor of 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-0fficiaL,Stafement and OfficiaLStatement of the Authority: Uponinclusion of the information
relating to the Local Agency therein, the Preliminary Official Statement and Official Statement or~such
other offering docutnenr 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 Rnlel
with respect to the Local Agency, and any:Authorized Representative.of the Local 'Agency is authorized
to execute a .:certificate to stick 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•whrch the information contained in the:Preliminary
Official':Statement or otheroffering document relating to the :Local. Agency might include an untrue.
sfatemenC.of`a material fact orotnit to state any material fact necessary to make the statements therein,.
in' fight o_f the circumstances under which they were made, not misleading, the Local Agency shall
,promptly notify the Financial Advisor and the underwriter.
Subject to Sectioti 8`hareof, the Local Agencyhereby-agrees that if the Note shalPbecome
a Defaulted Note; the unpaid portion ,(including the interest component, if applicable) thereof or the
portion (including the interest component, if applica6l'e)to which a Credit Instrument applies for which,
full reimbursemenaon a draw;::paymenEOr claim has'not been made by the Maturity Date shap`be deetned
outstanding and shall not be deemed o be paid until (i).any CrediEProvider'providiag a CrediCInstrument
with~respecfto theNote orthe'Series of Bonds issued'n connection with the Note, has beensreimbursed
-
for'any drawings, payments or claimsmade under or fromthe Credit Instrument with respecftothe;Nofe,
including interest~.accrued thereon, as provided therein and in the applicable Credit Agreement, .and,
(ii).the holders oPthe Note, or. Series of the Bonds issued inconnection,with the Note, are paid the full
principal amount represented by the unsecured portion of the'•Note plus intereseaccrued. thereon
(calculated at the Default Rate) to the date'of deposit'of such'aggregate required:amount with,the;Trustee.
Forpurposes 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.
Subject to Section ,8 hereof, the Local.Agencyherebyagrees that if the',Note shall become
a,Defaulfed Reserve Note, the:unpaid portion (including the interest component, if applicable) thereof or
the gortion (including the interest component, if applicable) to which a Reserve Creditlnsttnment, if any,
appliesfor which,full reimbursement on a Drawing hasnot;heen made.by the;Reserve Principal Payment
Date shall be deemed outstanding and shall no[ be deemed paid until (i) any Reserve Credit -Provider
providing a Reserve"Credit Instrument wth'iespect to the Reserve'Borids;(agaihst the Reserve Fuiid of
which such. Drawing was made) has been reimbursed for any ;Drawing or payment made under-the
~At-tz4z36,, s o~ r~ 'RESO.9 11 3 N C S
Reserve Credit Instrument with respectsfo the Note,'ihcluding interest accrued thereon, as provided
therein and in',the Reserve Credit Agreement, and (ii) ;the holders=ofthe;Note; or Series of Bohds issued
in connection with the Note, are paid the full principal amount~sepresented`by the unsecured portion,of
the Note phis in[eresf accruedtheieon (calculated at the 'Default 'Rate) to the date of deposit of`such
aggregate required amounf with the Trustee. For the purposes of clause (ii) of the preceding sentence;,
holders of the Series,of Bonds will be deemed to-have receivedsuch`principal amount upon deposit of
such moneys with the Trustee.
The Local-Agency agrees fo;pay or cause to,be paid, in<addition to the;amounfs payable
under the Note, any fees or expenses of the Trustee "and, "to the extent permitted 6y law, if the: Local
Agency's:Note issecured`in whole orin;part by a Credit Instrument and', if applicable, a Reserve Credit,
Instrument„(by virtue,of',the'fact [hat the', Series: of Bonds is secured by a Credit Instrument ,and, if
applicable,. Reserve!Bonds are secured by a 12eserye Credit-Instrument); anyPredefaultObligafions and
Reimbursement Obligations (to he;extent not payable underahe' Note); (i) arising out of an ';Event of
Default" hereunder (or pursuant to Section°7 hereof) or(ii) arising out of'any other event+(other than:am
aJent arising. solely asa<result'of,or otherwise attributable [o a.defatilt~by-any other Issuer). In the case
described. im (ii) above with respect to Predefault Obligations, the Local Agency shall owe only the
percentage;of'such fees, expenses and'Predefault Obligations equal;to tfie ratio of the principal ainoiinC.
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 tfie time of.originaL issuance of sucfi 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 Oblieation. The Note wilG,be issued in conjunction+with~anote or
notes of one or morerother'Issiers; assighed to secure, a,Series of Bonds. 'In all cases, .the obligation of
theLocal~Agency to make paymentsYon orinsrespect to its Note is.a several and not ajoint=obligation
and,is "strictly"limited to the:Local Agencys:repayment obligation under this Resolution and the Note.
Section'7. Disposition of Proceeds: of Note. A portion of the moneys received;frein
the° ale'of fhe Note in an.amount;equal'to the Local Agency s share ofthe costs ofissuance'(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 deposifed' in the Costs of Issuance Fund held" and invested by the Trustee under ahe
Ihdenture::and expended as'~,directed bythe-Authority on costs: of issuance as provided in the Indenture.
The balance of the mone s receiv@d from the sale of the Note to the.AUthority shall.be deposited;in=the
Y
Local,Agencys Proceeds Subaccount hereby authorized to beTCreated pprstiantto, acid held and rove"sted,
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 from rthe Proceeds:<Subaccount as specified in-the Indenture. Amounts in 'the Proceeds.
.Subaccount are hereby, pledged to the payment ofahe! Note. The Trustee, will not create "subaccounts
within.the•Prbceeds Fund, but will keep records toraccopntseparatelyforproceeds of the Botids.alloca6le
to the Local,Agency's.Note on'deposit in the Proceeds Fund which shall 'constitute the Local.ggency's
Proceeds Subaccotnt.
8ection'S, Source of 'Payment.
(A) The principal amount, of the Note; together with the interest therebn, shall be
payable from taxes; income;, revenue (including, but not limited ;to;: revenue from the state .and federal
governments), cash receiptscand other moneys which are received by[hetLocal Agency for'the general
-fund of the Local Agency,and,are attributable to Fiscal Year 1996'-1997 and wFiich.are available for
payment thereof. As securityfor the payment of the principal of and interest on the Note, khe'Local
LA1-124236.1. 6 ~ I ~ ~t>ES®. 9 ~6 - 11 ~3 N ~CS
Agency hereby-pledges certain unrestricted`,;revenues'{as heregaffer provided, the "Pledged Revenues")
which aresreceived by the Local Agency for the general' fund of t1fe;LocaL Agency and are. atttibutable
to Fiscal`Year 1996-1997, and the ptncpal, of the. Note and;the'~interest thereon shall constitute a first
lien and charge thereon and shall be payable from4he first moneys xeceived' by the Local' Agency from
such Pledged 'Revenues, and, to the extent pot 'so paid, shaq~be paid from any other: taxes, income;
revenue; cash:receipts and othermoneys of the Local-Agency lawfully available therefor (aIC: as provided
fore in Sections 53856 and,53857.of "the Act). .The-.term "unrestricted revenues`' shall mean al( taxes,
income, revenue (including, but;not limited to; revenue from~the state-and federaLgovernments), cash
receipts, and other moneys, intendedas:ieceipts for;the.genetal"fund of~the Local Agency attributable to'
Fiscal Year;1,99b-1997 and which are,generally available fo_rthe;payment of~current expenses and other
obligation`s of;t$e Local Agency. The Noteholders, Bondholders, Credit Provideraand, if:applicable, the
Reserve Credit Provider shall have a first lien and charge on such. certain unrestricted :,revenues as
hereinafrer .provided. which are received by the Local .Agency and are attributable to Fiscal Year
1996-1997:
In .order to ~effect;the`pledge referenced in the preceding. paragraph;: the Local Agency
hereby agrees and covenants o establish and maintain a special account withinthe Local Agency's;general
fund [o be designated the ".1996-1997 Tax .and Revenue Anticipation, Note Payment Account"' (the'
'!Payment:Account");and furtheragrees and codenants 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 Permitted Investments td be held by the,Trustee pursuant, to the.
Pricing Confirmation, a subacconnt of the Payment Account :.(the. "Payment Snbaccount") shall ''be.
established' forthe, Local Agency under the:Indenture and proceeds credited to such account. shall be•
pledged to the paymenr;of the' Note. .The Trustee need not create a sutiaccounr, but may keep a record.
to account separately for groceed_s of the Note°so held and invested by the Trustee_ which record shall-
constitute tlie,Local AgBncy's'P.i'oceeds Subaccount. Transfers:from tlie.:PaymenLSubaccounrshall`be
made in accordance with t1ieIndenture. The Local Agency agrees to transfer to and deposit in the
Payment,Account the lfirsLamounts received: in the months specified 'in the Pricing Confirmation as
Repayment Months-(each individual month a "Repaymenrlvlontl" and collectively "'Repayment,Months'')
(and any'ainountsrreceived'thereafrer;attributable to Fiscaf Year` :1996'1997) until tfiedamount on deposit+
inthe Payment Account, togetherwith the:amount, ifany, on"deposit: in the Payment Subaccount,,is equal
in - he respective Repayment. Months identified in the Pricing Confirmation to the percentage of `,the
principal and interestdue•on the`Note at maturity specified in the; Pricing Confirmation. In malting such
,transfer and deposit, =the Lbcal Agency shall not be required o~physically segregate the amounts to:be~
'transferred to and deposited,in the;Payment AccounCfrom the Local Agency's other general fund moneys,
but; notwithstanding any commingling of,funds for investment or other purposes, the amounts aequred-
~to be transferred to and deposited in.the Payment Account shall: nevertheless be sutiject to tfie~lien!and.
.charge .created herein. Any: one of the Authorized Representatives of the Local ,Agency '.is hereby
authorized to approve the determnation;of the.Repayment Months and. percentages of the;principal and
:interest due€on the Note;at ma[uiity required to be'ondi;posit?in the Payment Account and/or the`Payment
Subaccount in each;Repayment Month, all as specified imihe Pricing Confirmation, by executing,:and
-
delivenng;the Pricing?Confii~ination, such execution and delivery-to be,conclusive;evidence of approdal
by this Legisla[ive;Body and such Authorized Representative; provided, however, that the maximum
e.
number-~ofRepaymenf,Months shall be six and theinaximum amount of Pledged Revenues:i•equired to
be:d_eposted' in each Repayment lylonth shall not exceed fifrypercent (50%) of the principal and interest
due on the Note at matiirity. 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 fo peimit the deposit:into the.`Payment Account ofthe full amount of Pledged Revenues to be
deposited in the Paymgnt'Account from said unrestricted revenues in said,month, then.the amount of any
deficiency shall be satisfied and<made up from any other moneys ofthe'Local Agencylawfully available
for the payment of the ptincipal iif'the Note and the interest thereon, a's and when such other'moneys.are
received or are otherwiseilegally, available.
~A~,~z4z36:, 1~ It~SO: 9 G- 1 13 N C S
(B) Any moneys placed in the Payment Account or the Payment Subaccountshall be
for tfie benefit of (i) the holdecof;the'Note;atid.the holders,oP:Bonds issued in connection with the<Notes;
(ii) (to the exten[,proyided is,[he Indenture) he Credit Provider;: if any, and (iii) (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>and the Payment'Subaccountahall be applied only for the^purposes for.
which such Accounts are created until [he principal of the'Note andtall interest;thereon ace paid or,urifil
provision lias been made for~thg.payment;of the principakofthe Note a_t maturity with interestto~mafurity
(in.accocdance with the requirements' for dfefeasanca•ofrhe Bonds as set forth in;the Indenture). and, if
applicable; (fo the extent provided inthe Indenture and;,ifapplicable; the Credit Agreement)`,the payment
,
of all -PCedefault ,Obligations• and Reimbursement Obligations, owing to -the Credit Provider and, if
applica6le~ the Reserve~'Credit"Provider.
(C) The~Local Agency herebydirects the Tmstee toxransfer, at least two (2) Business.
Days (as defined in tfie Indenture) prior to:[he Note Maturity Date,~(as 'defined in the Indenture), any'
.moneys inthe~P.ayment;Subaccount;to;the Bond PaymenrFpnd,(as defined~in:flie Indenture). In addition;
at least two:(2)~Business Daysiprior-,to~the MaturityDate of tfie Note, the~inoneys in`.the Payment.Account,
shall be transfetted by the Local Agency to the Trustee; to'the extent necessary, to pay the principal of
and'•interest onthe No[e orto+reimburse the Credit Provider for;payments~made under or pursuanfta#he.
CredifInstrumenr. In the;evenf that moneys inthe Payment Accountand/or'the Payment Subaccount are
insufficienhao pay the;principal.of'and interest on the Note in full on the Maturity Date, such-moneys
shall be applied in,thefollowing;'priocity first to pay.inferest 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 to3reimbur"se;tlie~Credit Provider for'payment, if any,. ofprincipal with respect to the:IVOte;rfiftli
to reimburse the Reserve Credit.Proyider, .if+any, for payment; `.if any, of interest .with..respect to~the
Noted sixth to-reimburse the Reserve Coedit Provider, if any,,. for- payment, if any, of principalwith.
respect to the Note;>and seventh to pay.any Reimbursement Obligations?of the Local.. Agencyand any of:
the'LOca1; Agency'spco ratashare of'P.redefault Obligations owingato the Credit Provider and Reserve
Credit ProVider'(if;anY) as' applicable: Any moneys remaining; in or accruing to the Payment Account.
and/or the;Payment Subaccountafter,the principal of the Note and the:interest thereon and any`PCedefault
Obli~gatioiis;and.Reimbursement Obligations, if applicable, have:been 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.ful[ on the Maturity Date.
(D) Moneys in fhe Proceeds Stiba_ccount and in~the Payment Subaccoun["shall be
invested.'.by the Trustee pursuant to the. Indenture as directed by the Local Agency in, Permitted.
Investments'as described in and under the terms of the Indenture. Any such investmentby'fhe Trustee
- ,
shall be for'the; account and risk'of the Local Agency; and tfie.Local;Agency shall not be deemed to,.6e
relieved•ofrany of ifs obligationsrwithrespect to theNote, the"Predefault 061igations;oi 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 th8 Credit `Provider;. if any, dr the Reserve Credit
Provider, if any,'the Local Agency shall;. within ten (10) Business Days following the receipt of such
writien~request, file!such repon!or reportsto;evidence,the transfer,to and depositin the Payment Account
required by this Sec4ion.8,,and pYovide:,such additional financial information as may be required by.the
CreditProvider, if any, orrthe:Reserye'Credit Provider, if any.
Section 9.. Ezecutiori of-,Note. Any one of the,Autfiorized Representatives oftheLocal
Agencyor any other officer designated by the Legislative Bodytshall be authorized to execute the Note
by+manual orfacsimile signature.and'the Secretary or Clerk of the Legislative Bodyof the Local Agency,
cni-~z4i36i a l b ICES®, 9 l Y `3 N C S
or any duly'appointed assistantthereto, shall be authorized to;countersign the Note by manual or,facsimile
signature. Said Authorized.Representafiye 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 Cotifimtation. The
Authorized Representative is:hereby authorized.and directed.to cause the Authority to assign the Note to
4he Trustee; pursuant to the termsand conditions of'the Purchase.Agreement, this Resolution and the'
Indenture., ,In case any Authorized Representative whose signature-shall appear on any Note shall cease
to be an Authorized-Representative before the'~delivery. of such Note, such signature,'shall nevertheless
be:valid and'sufticiept'for all purposes; the same as if: uch'officer'had remained in office until delivery:
The Note<need not.bear the seal of the:Local Agency, if any.
Sectiom 10. Inteiitionatly Left Blank. This section has been. included to preserve the
sequence of section numbers for: cross-referencing' purposes.
Section 11. Retiresentakions?and Covenants of'the Local Aeency.
The Local Agency makes [ne follo3ving,:representations for tfie benefit of°the holder of
the Note; the owners of the Bonds, theCredit Provider, if~any, and the.Reserve Credit Provider, if any:
(A) The Local Agency is duly organized,and existing under and by virtue of the laws
of `the: State of California and has all necessary power- and authority to (i) adopt this Resolution, and..
perform its obligations thereunder, (ii)'enter into and=perform its' obligations under the Purchase
Agreemett, and (iii) issue the Note and.perfortit its obligations thereunder.
(B) (i) Upoir the issuance of the Note, [he Local Agency shall. have taken all. action.
required to be takehby:it to `authorize the issuance and deliveryof the Note andahe;performance,of its.
obligations thereunder, and (ii)'-the Local Agency has full legal;rigfit, powerand authorityao is"sue.anc]
deliver the Note.
(C) The issuance:ofthe Note, the adoption of the Resolution and the,executio~ and
delivery of the Purchase Agreement, and- compliance with the provisions hereof and: theieof'do -not ,
conflict with, breach or violate 'any law, administrative regulation;.. court' decree, 7esolution, charter;
by-laws or other agreement to which the Local Agency. is subject or by which it •is bound.
(I)) 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, orfiling with, or certification by; any regulatory authority having jurisdiction over the Local
Agency. required for the issuance''.and sale~ofthe-,Note or the; consummation by the Local Agency of,the'.
other transactions contemplated by thisResolution, excepGthose the-Loca1 Agency shall obtainorperfotm.
prior'to or:nponthe'issuance:of the Note.
(E) The. Local Agency has (or will nave prior to the issuance of the-Note) duly,
.regularly and properly adopted a preliminary budget for'Fiscal Year 1996-1997 setting forth expecti;d
revenues and expenditures and has complied with all statutory and regulatory requirements with respect
to the adoption of=suchbudget. The Local•Agency hereby covenants thaCit shall{i) duly,'regularly and
properly prepare and adopt its final ;budget for Fiscal Year 1996 1997,. (ii) provide to the Trustee; the
.Credit Provider; if .any,, [he Reserve Credit Provider, if any; and the Financial Advisor and the
underwriter, promptly"upon "adoption, copies of such final budget and. of any subsequent revisions,
modifications or amendments thereto and (iii) comply°with all applicatite laws pertaining to its budget.
(F} The, sum :of the principal amount ofahe Local Agency's Note plus the interest
.payabledhereon, onthe:date of its issuance, shall not exceed fifty,percent (50%) of"the esfimated' amounts
of the Local Agency's uncollected taxes, income, revenue.(including, but not aimited to, revenue from
LA1,(24236.1 9~ ~6. I~ESO.9 1 1 3N C S
thestate.and':federaLgovernments)', cash receipts, and.other;moneys-to be received by the.Local,Agency
for the general fund of the Local Agency attributable; to Fiscal. Year .1996-1997, all of which will be
legally-availahle to~pay°principal of and interest,on'tfie=Note.
(G) The-Local-Agency (i) has not defaulted within the.pas6 twenty (20)'years, and is
not currently in default, on any-debt obligation and (ii); to the'best knowledge ofthe I:ocal Agency;'has
never: defaulted on any debt obligation,
(H) The Local Agency's most:recent::audited' 5nancial statements present fairly- the
financial condition ofahe Local Agency asrof the date thereof and the'results of operation for the period
covered thereby. Except as has been disclosed;to the: Financial Advisor°and-the underwriter, the Credit
Provider, if any, 'and the, Reserve Credit Provider, if any, th8re has been no change. in the 5nancial
condition of the Local Agency since the date of such audited financial statements that will in the
reasonable~opinion of[he Local,Agency~materially%impau rtsiability to perform its obligations under this'
Res_olutionrand the.Note: The Local Agency agreesao 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 regarding the operations,:financial conditionand.property
ofahe Local Agency as such party may reasonably request.
(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 Agencyquestioning the validity
of'any proceeding taken or to,be'taken by the Local Agency inconnection with.theNote, the Purchase,
Agreement, the Indenture, the CrediGAgreemenb„ if-any, thesReserve Credit Agreement,.if'any, or•this, '
Resolution;,orseeking,to prohibit, restrain or`enjointhe execution, delivery'or performance by the Local.
Agency. of.any of';the foregoing; or wherein an unfavorable decision, :ruling on finding+would have:a,
mafer'ially adveise effect onetha, Local Agency's 5nancial. condition or'results of operations or on the;
ability of the,Local:Agency taconductitg activities°aspresently conducted or asproposed or'contemplafed'
to be conducted, 6r would materially adversely affect the validity or enforceability of„ or [he authority
orability'of the, Local Agency to"perform;i[s obligations under, the Note; the Purchase Agreement; the.
Indenture, the Credit Agreement, `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 theNote4wi11 constitute legal;'valid and binding agreements of the;
Local Agency, enforceable in accordance with their respectiveaerms, except-as such enforceability<may
be;limited by'bankruptcy or other laws affecting creditors' rights generally,'the applicatioq of'equitable,
principles if;equitable remedies are sough4,ahe exercise of judicial discretion imappropriate;cases and the,
limitationson legal remedies against local agencies, as applicable, in the `State of California.
( ) _ g y , pp p ' s have.duly taken, or will take, all
K The-Local A enc and itsra ro Hate official
proceedings,riecessaryao be'taken,by them„if any, .for the levy, receipt, collection and enforcement of
the Pledged Reyenues in accordance with law for carrying out he 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 respects to the pledge of Pledged Revenues
hereunder.
(IVI) So long as .the Coedit Provider, if any; is not in default under the Credit.
Instrument or thee. Reserve+'Credif Provider, if any, is not. in default under. the corresponding Reserve
Credit;Agreement, the;Local,Agency hereby agrees to pay its pro rata share of a1LPredefaultObligations
and all Reimbursement Obligations attributable to'the Local Agency in accordance with provisions of the.
~;,-lzazsb:i" io d~ F6 RESO. g S- 11 3 N C S
Credit Agreement; if any; th@ Reserve'Credit Agreement, if'any, and/or the Indenture; as applicable
Prior to the~Ma[urityDafe; moneys in theiLocal Agency's'Payment Account and/or PaymenLSubaccount
shall .not be used .to make suchcpayments'. The iocal -Agency shall pay such amounts.. promptly upon
receipt of`nohice from the Credit Provider or from the Reserve Credit Provider, if applicable, thatsuch
amounts ar'e due to it.
(N) 50 long as any Bonds issued idconnection.withthe Notes are Outstanding, orany
Predefault Obligation or RembursemenT Obligation is outstanding; the Local Agency will not create or
suffer tabe created-any pledge-of or"lien on the Note otfier xhan the.:pledge and lien. of the Indenture.
Section 12: Tax Covenants. (A) The Local Agency shall not take any action orfail to
take: any action if such action or failure to;take such actionwould.adversely affect the. exclusion from.
gross income of the interest payable on the No[e or Bondsunder Section 103 of the Internal Revenue
Code of
1986 (the ".Code"). With'outiimiting the'generalityof [he foregoing; the Local,Agencyshall,not
make anyuse of'the:proceedsrofthe.Note or Bonds or=any other funds of the`Local Agency which would.
cause the; Note or Bonds to be an "arbitrage bond" withih the, meaning oflSection 148 of'the Code;. a
"private actiyiiybond" within the meaning of Section 141(a) of the Code, or an obligation the interest
on which is. subject [o federal 'ihcoine taxation because it 'is "federally guaranteed" as 'provided in
Section 149(b) of the Code:. The Local",Agency,. with respec6 to the proceeds of the Note, will comply
with all requirements of such'sections ofahe`Code and all regulations of the United States Department
of the Treasury issued or applicable thereunder to the extenC~that such requirements are, at the time,
applicable;and:in effect.
(B) The Loca]-Agency:hereby(i) represents than he aggregate face amount<ofialLtax-
exempt obligations, (including any tax;exempt leases; but excluding private activity bonds); issued and'to
bessued by the LocaLAgency during;calendar year 1996', including~the Note, isnot,reasonably expected'
to exceed :$5;000;000; or (ii) covenants that the Local Agency will take all legally permssible'sreps
necessary to ensure that all of=the gross proceeds of,the:Note will be expended`no laterfhan.the day that
is six months, after the date of issuance of the Note so as to satisfy the requirements of Section
148(t)(4)(B); of the Code.
(C) Notwithstanding any other_proyision;ofrhis Resolution to the:contrary, upon the
Local Agency's failure o observe,.. or refusal to comply with, the covenants contained in this Section 12,
no"one other than,the holders•or former holders, of the. Note, tfie owners of the Bond; the Credit Provider;.
if;any, the:Reserve Credit Provider,, if any, or theTnistee on their behalf shall be entitled to exercise any
right or remedy under this. Resolution on the basis of the Local Agency's failure to observe, or refgsal
[o comply with, such covenants.
(D) The`covenants contained in this Section 12shall survive the payment oftheNote.
Section 13. Events•of`Default"and`Remedies.
If.anybf 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;perform any covenant, condition or
agreement oh its part io tie observed or performed under his Resolution, for a period of:fiffeen
LAY124236.1 1~- RES®. 9 3- 1 1 3 N C' S
(15)'daysafter written notice, specifying such failuce;and.i•equesting 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 '[he 'Trustee and the Credit Provider or the Reserve. Credit
Provider, if applicable, shall all agree ,in writing to an extension of such time prior 'to its
expiration;
(C) Any warranty„ representation or othenstatement by or on behalf of the Local
Agency contained. ih this Resolution or the Putcfiase Agreement (including the Pricing
Gonfirmation):or in any requisition or any financial report delivered by the Local:Agency or in
any instniinent furnished in compliance with or'in referenceao 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~liquidatioh,Iaw~of any ju>isdiction,
whether now<or hereafter ineffect and. is not. dismissed within 30 days after such filing;.but;the
Trustee shallhavethesright [o intervene in the proceedings prior to the expiiation:ofsuch thirty
(30)'^days to p"rotect its and the Bond Owners' (orNoteholdecs') interests;
(E) The Local Agency.files a petition in voluntary bankruptcy or-seeking relefunder
any,provisionofany bankruptcy;;reorganization, arrangement insolvency, readjustment of debt,
dissolution oraiquidation,law-of any jurisdiction, whether now on hereafrer in effect, or'consents
to'the'filing of any petition against itunder such law; or
(F) The;Local Agency,admits insolvency;ocbankruptcy or is generally not:payingrifs
debts as such debts 6ecome.due,:oe becomes insolveflt or bankrupt:or makes an assignment;for
the.benefit of'creditors, or a custodian (including without. limitation areceiver, liquidator or
rustee) of the .Local Agency or any of its ,property is appointed by .court order or takes,
possession thereof and;such order".remains in effect orsuch possession'continues:for'more than
30 days, but- the Trustee shall' Have 'the right to 'inleivene •in the proceedings prior to- the,
"expiration ofsuch thitty (30) days taprotect its and. the Boud Owners' or Noteholders' interests.
'Whenever any'Even[ of''Default referred 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 bylaw or undeYthe Indenture, •if applicable, have the right, at its:option`without any furtherdemand
or°notice, to.take one orany combination of the following remedial, steps:
(I) Withoutdeclaiing the;Note to be immediately due and payable, require the.Local.
Agehcy to-pay~to the Trustee, as;holder-'of the Note, an;amount equal tothe principal of the Note
and nteresC thereon to maturitg,. plus: all`other amounts .due hereunder, and upon notice to the
Local Agency the same shall become immediafely dne'and payable by the Local Agencywithout
further notice or demand; and
(2) Take wfiateverother:actionaLlaw or in equity (except for-acceleration of payment
on th"e :Note) which may appear necessary 'ot desirable to collect the amounts then due and
thereafter°to become due hereunderand•under the: Note°or to enforce any other of its rights
'
hereunder.
Notwithstandingahe foregoing, iftlie,Local'Agency's-Note is secured in'whole or in part
by a Credit Instrumen[ (other than the Reserve"Fund) or 1f;the:°CreditProvider is subrogated to rights
under the.LOcal Agency's Note; as' long.as tfie'Ctedit;'Provider~has not failed fo comply with its payment
obligations under the Credit Instrument, the Credit ]?i•ovider shall have the rightto direct the remedies
upomany;EventofI)efaulthereunder,'and; notwithstanding the foregoing; if a R®®es77e~~rvcQe Credit Instrument
liA1-124236.1 ZZ U~ ~~{0 H6S.J®. ;J - I I -3 N C S
is applicable, asrlong as the:Reserve CrediYProviderhas not failed'-to comply with?its payment obligations
under the~Reserve CredirAgteement, the=Reserve Credit Providec.shall have the: right (prior to the Credit
Provlder) fo
direct;the remedies uponany Event of~Defaultihereunder, in each case so long as suchac[ion
' will not materially adversely affect the-rightsof any B'ond,Owner, and theCredit'Provider's(and Reserye_
Credit,Provider's (if.any) prior consentshall.be requiredao-any remedial action proposed tobeaaken'by
the Tcusteesheretinde.
Ifahe Credit Provider isdnot:reimbursed:on the Maturity Dateaforthe drawing, payment
orclaim, asapplicable; used to pay principal;of and interest on the Note due to a default in paymenton
the Note by the Local Agency,;or if any principal of or interest on,the;Note remains unpaid afterthe
Maturity Date, the,Noteshall be a Defaulted Note, the,unpaid'portion (including the interest component;
if•applicable) thereof orthe;portion (including the interest coritponent,'if applicable),to which:a Credit
Instrument. applies for which; reimbursement oa a draw; payment or claim has not been. made shall be
deemed outstanding: and shall $earinterest atithe,Default Rafe untiithe:Local Agency's obligation on the
Defaulted Note is paid. in full or`payment is duly provided for, all stibjectto Section 8.hereof.
If, fie, Credit'Instrumen[:is th'e Reserve Fund and the, Reserve Bonds are'secured,by the
Reserye~Credit Instrument and all principal,of:and interest on the Note is not paid in full by the Reserve
_
Principal .Pay`ment -Date, the. 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 Ito
which.the ~Resetive Fund applies for whichdreimbnrsement on a Drawingfias not been fully made). shall
bedeemedoutstanding~and shall bear interest;at the Default Rate until the Local Agency'srobligatiop;on
ttieDefaul[ed,Reserve Note is paid.in full or payment:is duly provided for, all subjecfto'Section 8!hereof.
Section l4. Tnrstee. The:Local Agency hereby-directs and authorizes the•payment'by
the Trustee of the;interest on and p>incipal of the Note when such become ;due and'payable;;from;amounts
received+by~the Trustee.-from the Local Agency in the manner~setforth,herein. The~Local Agency;hereby
covenants to deposit;funds~in such account or fund, as applicable, at the tine;and in the amounrispecified
her@into;progide sufficient moneys to pay theprincipal of`and:interest on the Note on the day on which
it matures.. Payment of the Note shall beiinaccordance with the terms' of the Note and this Resolution.
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'ssued;payable to the Trustee, as
.assignee', of"the Authority.
;Section 16. Intentionally Left Blank. This section has been included`to preserveahe
sequence_of'secfion;numbers:forcross-referencing purposes:
Section'17. Approval of Actions. The aforementioned;AuthorizedRepreseiitatives of
the Local Agency are hereby authorized~and directed to execute?the Note and'cause the Trustee to accept
_ -
delivery ofthe Note, pursuant to the terms and conditions of the"Purchase Agreement and the Indentufe.
Aliactions heretofore taken,by the officers and;agents of.the Local Agency orthis. Legislative 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 nattte:and on behalf,of the'LocaLAgency, to do any'and all things
and take any and all actions and execute any and all certificates,;agreements and other documents which
they, or any of their, may deem necessary or advisable in~order to consummate the lawful issuance and
delivery of thetNote in accordance 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 Indenture. /n~ C
LA1-t24236ik 13 U1 t ~ 'J ~ 1 13 N~G S
Inahe event [fiat the Note rorJa_portion"tlitireof;is secured'by, a CreditInstrument, any one
of the Authorized Representatives of the Local Agency is hereby authorized and directed to provide the.
Credit Provider and,'if.applica6le, the Reserve Credit Provider; with any'and all information relating to
the Local Agency as such Credit Provideror Reserve'Gredir:Provider may reasonably request.
Section l8. Proceedings Constitute Contract> The-provisions of the Note and of this
Resolution shall constitute a contract,betweenahe Local Agency and tfie registered owner of the:Note;
and`such provisionsshall be enforceable bymandamus or any'otherappropriate suit, action oYproceeding
af.law or inequity in anycourt of competenrjurisdiction, and-shall be irrepealable. The Credit:Provider,
if-any, and'the Reserve'Credif Provider, if any; are third party beneficiaries of the provisions of this
Resolution~andJthe No[e.
Section 19. Linuted Liability, Notwithstanding anything to thg contrary contained
herein or in; he=Note Orlin any otherdocument~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`o_r
by: reason hereof"Orin connection with the fransactions contemplated':herebyexcept,to the;extentpayable
from moneys available theiefor'as setforth in'Section 8 hereof.
Section 20. Amendments. At any time or:from time to time, the;LocaLAgency may
adopt one, or more Supplemental 'Resolutions with the written consents of the Authority, the Credit
Piovtder, 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 any one or more'. of `the
following purposesi
(A) to :add to(the.covenants and agreetrtents ofahe,Local Agency,in thrsrResolution,
othercovenants and agteements'fo be observed by the Local Agency which are'not contrary to
or inconsistent. with this Resolution as "theretofore in effect;
(B) to add to tfie limitations and restrictions in his Resolution, otheriimitations and
restrictions to be observed by`the Local Agency which are not contrary to or inconsistent}witfi
this Resolution as theretofore=in effect;
(C) to confirm, asfurtherassurance; any pledge under, and3he subjectionto any'liem
orpledge-created or to 6e created'by, this Resolution,.of any tnonies, securities or. funds, or'to'
establish any additional funds oraccounts to be held, under this. Resolution;
(D) to cure any ambiguity, supply any omission, or cure or correct any defect or
incbnsistenr provision` in this Resolution; of
(E) to amend o;supplement this Resolution in any other respect;
provided; .however; thatany such Supplemental Resolution does noradvetsely affect the interests of-the
owners of'the-Note or of the Bonds issued in connection with the Notes.
• Anymodifications or amendment of'tfiis Resolution and of the rights and;obligations of
the Local,A'gency'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 [fie writtenconsent 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 consenhis given; provided, howevet that if such modification oramendment.will, by`its terms, nor
take effect so long'asdhe Note or any Bonds issued in connection with the'Note remain outstanding; [he
consent of'the owners of such. Note or of such Bonds shall not be required. No such modification or
amendment shall permit a change in the maturity of the Note or a reduction of the principal: amount
LA,_,z4z36,~, ~4 fb ~tESO.9 ~ - 11 3 N C'S
thereof or~an extension=of the time of anypayment thereotror a<reduction of the rate of interest.thereon,
or a change in-the date or amounts of the pledge set.forth.in,this 1esolution, withouC,the consenf`of the
owners of.such Note>or the owners of;all [he Bonds,ssued inconnecton with he Note, or shall reduce
the;percetitage.of'the Note or Botidsethe?.consent of the'ownets`.of'whicfr is required to effect any such
modification'oramtindmen[, orshall change'or modify any'of the rights or obligations of the Ttustee
without its written assent thereto.
Section 21. Severabilitv.. Inthe evenf atiy provision of this Resolution shalt beheld
invalid or' unenforceable by any court of competent jurisdiction, such holding' shall not invalidate or
render unenforceable any otherprovision hereof.
LA1-124236.1 i s~ t 6 RE50.9 6- 1 1 3 N C S
Section 22. Appointment of Bond Counsel. The law firm of Orrick, Herrington &
Sutcliffe, Los Angeles, California is hereby appointed as Bond Counsel for [he 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 pubic 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 involved with or adverse to Local Agency in [his 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 al] 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-underwriters, if any, identified in the Purchase Contract, is
hereby appointed 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 PETALUMA
(B) Maximum Amount of Borrowing: $4,000,000
(C) Authorized Representatives:
TITLE
1. City Manager
2. Finance Director
3. City Clerk
4.
Under the power and authority conferred upon this Council by the Charter of-said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
onn
CouncII of the City of Petaluma at a (Regular) (.[~gtppytl~k~f, )meeting ~ -
on the 6th day of .._---°---'~-MaY...........---....................., 19.86.., by the
following vote:
City Attorney
AYES: Stomps, Read, Shea, Vice Mayor Barlas, Mayor Hilligoss
NOES: None
ABSENT: Maguir on /(yyy///JJJ,// ~-O ~ ~/'xn
ATTEST : C,.__................... `?...YY•...................---........-.. .U.Y?.....
City C el rk Mayor
Cowed File....._......_........._....__
ca lo~es ~ ~ ~ ~ 1 3 N C S Rrs. No......0.6.: t.3....... n.c.s. Page 16 of 16
EXHIBIT A
[NAME OF LQCAL AGENCY]
1996-1997 TAX AND REVENUE ANTICIPATION NOTE,,[SERIES
Date of
Interest Rate IVlaturity Date Original Issue.,
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
FO1Z' VALUE RECEIVED; the Local Agency designated above (the "Local Agency"),
at:knowledges itself indebted to and promisestopay to the, registered owneridentified above; or registered
assigns, on the maturity date set-forth above, the principal sum. specified above in lawful money ofthe
United St_at_es of America, together with interestthereon at the rate of interest specified above (the "Note
Rate"). Pnnclpal:of'and interest on;this Note are payable in such coin or currency of the Unifed.States
as at the time of.payment isaegal tender for payment of private and-public debts; such principal and
interest to be--~paid,uponsurrender hereofat,the:principal corporate trustoffice of U.S, Tiust:Company
of'Galifoi`nia, N.A. in Los Angeles, California, or its successor in.trust,(the "Trustee"). Interest shall
be calculated on-the basis of a 360-day year, consisting of twelve 30-day months, in like lawfuC money
ftom'the date hereof until the iriaturity' date specified above and,. if funds are not provided for payment
atmatnrity, tfieteafter oh the basis,of a 360-day yearforactual days;elapsed until payment in'full ofsaid
principal sum: :Both the principal of and in[eresLon this Note shall be payable-only to the. registered
owner hereof uponsurrender of his Note as'the same shall fall due; provided, however; no interest shall
be payable for any period after,maturity during which the holdee_hereoffails to properly present-this Note
forpaymeng. If the Local Agency failsao pay [his Note when,due or,the Credit Provider (as-.defined in
the:Resolution hereinafter described and imtha[ certain Indenture of Trust, dated as of 1;
1996 (ihe'Indenture"), by and' between the California Statewide Communities Development Authority
and U:S', Trust Company, of California, N.A., as,trustee), tf.any, is notretmbursedin fullffor the.amount
drawn-on or}paid pursuant to dfie .CraditSInstrument (as defined ih the Resolution and the Indenture) to
pay-all or"a; portion.(includmg=the intetest~compoaent if applica6le)~of-this Note"on the: date of Such.
payment tfiis;Note shall become. a Defaulted Note (as',defined in the Resolution and.the~Indenture and
with the consequences set'forth;in the Resolution and the Indenture,~,inclutiing; without limitation, thaC
this: Note gas 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).
dt is hereby certified; recitedeand declared thabthis Note represents the authorized issue
of(thesNote'in the aggregate'^principal amount-autfio_rized, 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..l, Division 2, Title 5 0E-
theCalifornia GoverninenCCode:(collectively, the "Resolution!'),'to;all.of theprovisions and'limitations
of'.which'theowner of this Note,'by-acceptance hereof, assents' and agrees.
The.principal of tbe.Note;~togetfier with the igterestthereon, shall be payable;from taxes;
income, revenue,.cash receipts and other.moneys which.areaeceived'by the Local-Agencyfor the general.
-fund of the Local Agency and are attributable to Fiscal Year 1996=1997 and which are available for
payment. theieof: As security:foi• the: payment of=the principal of and interest on the Note, the Local
Ag"ency has pledged the first amounts ofunre$tricfed kevenues'ofthe Local Agency received on the last
day"of _i,and;_ (and,any amounts received thet•eafter attributable`to Fiscal Year 1996-1997) until
the amount on deposit in the Payment Account (as defned in the Resolution),. together with. available
amounts; if any, ondeposit in'the'Payment Subaccount;,(as defined in [he Resolution),in each such month,
is equal to tfie corresponding percentages of principal of and'interest dut:' on the Note' at maturity set forth
in the'Pricing. Confirmation (as defined,in theResolution) (such pledged amounts being hereinafter called
the "Pledged Revenues"), and,the 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 the extent not so paid shall
If more, than^one Seriesof Bondris;issiied'under the Program in Fiscal Year 1995-1996 and.ifafie Note is pooled with
notes Issued by other Issu@rs~(as definedin the Resolution). _
t.At-tz4~36t A-~ YtES0.9 6 - Y, Y 3N C`S
~ ~ ~
be paid fiom any other moneys' of the ;Local'. Agency aawfiilly. available therefor as set ;forth in the.
Resolution: The fulf'faith and credit of thefLocal Agency`is not"pledged to the payment of the;principal
of or interest"on this.Note.
The LocaLAgency and the Trustee may deem and treat the registered owner hereof as
the+absoluteowner hereoffor the purpose ofireceiving payment of or,on^account of principal hereof and
interest duehereon and for all other purposes, and the Local Agency and the Trustee shall not be affected
by any notice to the contrary.
Itis hereby certified thaf.all of the conditions, things an$.acts required to exist, to have
happened, and_ [o have been performed precedent to. and in the issuapce of this Note do exist, have
happened. and have Been;performed in;
due time, form.and:manner as required by ;the Constitution and
statutes of the State of California and thaCthe;amount of this Note, together with all other indebtedness;
of the Local Agency, does not exceed any limit prescribed _by the Gonstitution or statutes of the:State of
California:
IN WITNESS WHEREOF, the Legislative-.Body of:-the Local Agency has caused this
Note to be executed 6ythe manual or-facsimile signature:of a duly Authorized,Represetitati4e of the.
Local Agency and countersigned'. by the manual or facs~mile;;sig"""natute of'the`Secretary' or Clerk of'the
Legislative Body as of'the'date ofauthentication set:forth.helow.
[NAME OF LOCAL AGENCY]
By
Title:.
Countersigned
By
Title:,
cniizaz36.~ A-a RES0,;9'6 - 11 3 N C S
EK Z ~ [0
PURCHASE AGREEMENT
THIS. PURCHASE AGREEMENT (the '"Purchase Agreement"); dated as of the
purchase date (the "Purchase Date") specified in ExhibitA attached hereto and made a pact. hereof,
entered into liy'uid between'the signatory9ocal. agency designated in ExhibitA (the "Local. Agency") and
the Ca]ifornialStatewide Communities Development Authority{ttie "Authority"), forthesale and delivery
of the prihcipal, amount specified in Exhibit A of`the Local Agency's 1996-1997 Tax and Revenue
Anticipation.Note (the "Note").to be.issued in conjunction with the notes of other Issuers (as:hereinafter
defined) participating ih the Program (as hereinafter defined), astdetermihed in the Pricing Confirmation
(as hereinafter defined), .pooled with :notes of otlier:Issuers'and assigned to secure a series (the ".Series")
of bonds (th'e "Bonds") designated ih Exhibit A;
WITNESSETH:
WHEREAS, local agencies are authorized by Sectiohs 53850 to 53858,,both inclusive,
of the. Government<Code of the State of California (the "Act"), (being Article 7.6, Chapter 4,. Part 1,
Division 2; Title 5 of the GoverhmentiCode) 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 thaUthe.Local Agency needs to borrow funds in its fiscal year
ending.June;30, 1997 ("Fiscal Year 1996-1997') in the principal amouhtset forth in Exhibit A and that..
itis necessary•,thatsard sum be.borrowed at this time by the issuance of a note therefor ih anticipation
ofthe receipt. of taxes„ income,. revenue, cash receipts: and .other moheys to be received by the Local
Agency during or attributable to Fiscal Year 1996-1997;
WHEREAS, on'the resolution date set°forth in ExliibitA; the 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 behalf of the Local
Agency;
WHEREAS; the Local Agency has determinedahatit is in the best interests ofthe Local
Agency to participate in the California Communities Cash Flow Financing, Program (the "Program",),
whereby participating localeagencies (the "Issuers") will simultaneously issue tax and revenue anticipation
promissory notes-forpurcttase by the duthority;
WHEREAS, under the Progratn,.the Authority will Pormone or more pools of notes (the
",Pooled:Notes") and assign each hote;to a particular pool (the "Pool") and sell a Series of Bonds secured
by each P.oo],pursuant to an indenture, dated as of July, 1, 1996 (the,"Indenture"), by and between the
Authority and U:S. Trust Company of California, N.A. (the "Trustee"), and sell each such Series fo
Morgan Stanley & Co. Inc., as representative of the underwriters of the Program (collectively, the
"Underwriter".);
WHEREAS, ifso indicated in Exhibit A, ihe~payment by the Local Agency of its Note
will be secured ih whole or in part (jointly, but not severally, with gotes of the other pazticipating Issuers
assigned to the same Series of Bonds) by a letter of credit; policy of'in_surance, proceeds received from
a separate bond issue issued by the Authority for such purpose (the, "Reserve Fund") or other credit
instrument (collectively, the ".Credit Instrument") to be issued by the entity or entities designated in
Exhibit A as the,crediC provider (the. "Credit Provider");
°1996; Orrick, Herrington & Sutcliffe: All rights reserved.
~~.,~,b,:, DES®. s s -1 ~ 3 N c~~s
Ex 3 ~
WHEREAS, such Credit Instrument may' tie, issued pursuant to a reimbursement
agreement; commitment letter, indenture or other agreement (the "Credit Agreement!') as identified in
" Exhibit A;
WHEREAS, in order to participate in the:Program, the Local Agency has agreed to be
responsible for its-share of the fees-and"expenses of'the`Trustee and, if applicable, the Credit Provider
and'the costs of'issuing the Bonds, and the costs; if applica¢le, of issuing-;the Credit Instrument; which
anticipated fees, expenses -and costs of issuance -will be deducted from the purchase price set forth in
ExfiibiCA and°wfiich unanticipated fees; expenses and costs ofissuance 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 (1 of the principal amount of
each Note; and
WHEREAS, pursuanbto;the Program, the Authorityissubmitting this offer to purchase
the Note pursuant to this Purchase-Agreement;
NOW, 1'HEREFORE,;for good and valuable consideration the receipt and sufficiency
of which is neraby acknowledged, the parties hereto agree as. follows:
Section 1. Obligation to Purchase: Upon e terms aHd conditions and in reliance upon
the representations; warranties and agreements set forth herein,'the Authority shall purchase from .the
Local Agency,, and the Local Agency sfiall sell to the Authority, tfie Note, as described herein and in the
Resolution.
Section 2. Purchase'Price. The purchaseprice;ofthe Note shall be the purchase price
setforth imthe pricingconfirmation attached'hereto as Exhibit A{the "Pricing Confirmation"). The Note
shall bear interest at an ipterest rate perannumset forth in the. Pricing Confirmation, 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 ofthe Local Agency.
.Section 3'. Adi6stmeiits'to Principal Amount of Note and Purchase 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 determined by the Authority and each Local Agency,.. based upon the advice of Orrick,
.Herrington Sutcliffe ("Bond Counsel"), in .order that.the proceeds produced from such sale of such
Note, will be am amount which will not be subject to, either (i) yield restriction (in order for interest to
be excluded from'gross:ncome under Section 703 of the InterriaLRevenue Code of 1986, as amended (the
"Code")) or (ii) a rebate requirement (under Section 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 delivery of the Note (the
"Closing") shall take place: at 8:00-a.m., California time, on the closing date set forth in the Pricing
Confirmation 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 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 Authority, duly executed and authenticated;
together with the~other documents Hereinafter mentioned, and the proceeds of the purchase price of the
.Note set forth in the Pricing: Confirmation shall be deposited in an amount indicated in the Pricing
~„-~~~63:~ z YtES®. ~ 6- 1 1 3 N C S
~,C ~f ~ 1'D
Confirmation as.the Deposit,to Proceeds. Fund which shall be held liy 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 information relatingto the Local Agency included in the official statementbf the Authority relating:
to the Series of Bonds to which the Note is assigned (the "Official Statement") 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 Agency shall
promptly riotify the;Authority and'the Underwriter thereof, and if, in the opinion ofthe Authority or the
Underwriter, such event requires the 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
prepazation of an,amendment or supplement to the Official Statemerirn a form and in a manner approved
by the.Authority and the Underwriter, and all reasonable expenses 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 the
Resolution, without coupons' in the full principal amount set forth in Exhibit A.
Section 6. Representations, and"Warranties of the Local Agency. 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 aze made for the benefit of the Authority and the. Underwriter as if set forth
herein.
(b) The information-relating to the Local Agency included in the Official Statement does
.not contain any untrue statement of a-material factor omittoatate any:material fact necessary to make
the statements therein in light of the circumstance under which they were made 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.
(d) The Local Agency acknowledges that the Authority is authorized to 'execute the
Indentures to assign the Note to the Trustee under the Indenture and to issue the 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.
Section 7. .Conditions Precedent to'the Closine. Conditions precedent to the Closing
are as'follows:
(a) The execution and delivery ofthe Note consistent with .the Resolution.
(li) Delivery of a legal opinion addressed to the Local Agency (with a reliance letter
addressed to the Authority and the Underwriter), dated the date of Closing, of Orrick, Herrington &
Sutcliffe ("Bond Counsel") with respect to the validity of the Note in form and substance acceptable to
the Authority and the Underwriter.
a~-~~~63:~ 3 dtES , - 1 1
~ !0 3NCS
5~
(c) Delivery of a legal opinion, dated the data`; of Closing, of counsel to the Local
Agency, with respect to the due authorization, execution and delivery of the Note, in form and substance
acceptable to Bond Counsel.
(d) Approval by the Credit Provider ofthe credit of the Local Agency and inclusion
of the Local Agency's Note in the assignment, togetherwith notes of'other Issuers, to a Series of Bonds,
to secure the 8eeies of Bonds; which approval in the eveht tha Crediflnstrument is the Reserve Fund shall
be evidenced by the issuance. of an "SP-1 + " rating with respect to. the applicable Series of Bonds by
Standard & Poor?s Ratings Group.
(e) Delivery of each certificate; document;. instrument and opinion required by the
agreement between the Authority and the.Underwriterfor the sale bythe Authority and purchase by the
Underwriter of the Series of Bonds o• which the Pooled Note is assigned.
(f) Delivery.ofsuch other certificates, instruments or opinions as Bbnd CounseLmay
deem necessary or desirafile`to evidence the due authorization,. execution and delivery of documents
pertaining o this transaction.and the legal, valid and bindingnatirre thereof or as may be requiYed'by the
Credit Agreement, as well as compliance of all parties with'the terms and conditions thereof.
Section 8. Events Permitting the Authority 'to Terminate. The Authority may
terminate 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
legislation)' or any courhdecision which, in•the judgment+ofthe: Authority, casts sufficient doubt on the
3egality of obligations such as,tlie;Note, and the tax-exempt status of interest on obligations such as the
Bonds, so as to impair materially the marketability or to reduce .materially the market 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 the
Securities Act of 1933, as amended, in connection with the public offering thereof, or qualification of
the Resolution or the Indenture under the Trust Indenture Act of 1939, as amended;
(c) Any restriction on trading in securities; or any banking moratorium, or the
inception or escalation of any war or major military hostilities which, in the judgment of the Authority,
substantially impairs the ability of the Underwriter to market the Bonds; or
(d) The Underwriter terminates its obligation to purchase the Series of Bonds to
which the. Note is assigned 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- of .the issuance, offering ,arid sale of the Local .Agency's Note except the
Underwriter shall be responsible for California Debt Advisory Commission fees and for its own internal
costs. The fees, costs and expenses that are categorized in the "Cdsts of Issuance" definition in the
Indenture shall be paid from the Costs of Issuance Fund. The Local Agency shall pay any additional
costs attributable to it as set forth in the Resolution other than the fees, costs and expenses so payable
from the applicable Costs of Issuance Fund.
~~s®. 9 ~ -113 N c s
LAI-121163.1 ~ O
Section 9. Indemnification. To the extent pe'mitted by law, the Local Agency agrees
to indemnify and liold.hazmless the Authority and the,Underwriterand each person,, if ang,~who controls
(within the meaning of: Section 13; of tfie-5ecurities Act of 1933, as. amended, or of Section.20 ofae
Securities Act of 1934; as .amended) tfie Authorityor the Underwriter,:and the officers, directors, agents
and employees ,of?the Authority and 'the Underwriter a'gaiiist any and all losses, claims, damages,
liabilities and expenses azising'out~of any~statement."or information in the Preliminary Official Statement
or in e Official Statement (other than statements or information regarding°an Issuer other than the,Local.
Agency) that is untrue or incorrectin any material respect.or'the omission or alleged omissioq'ttierefrom,
of any statement or;information (other ttiah statements or information regarding an Issuer otherthan.the
Local Agency) that should be•stated therein_or that is,necessary`to make the statements and information
therein not:misleading in any material-respect.
..Section i0. Credit Agreement: Tfie Local-.Agency shall comply with,all ]awful and
proper requesfs of the Authority yin order to'e'nable the Authority to comply with all. of the terms,
conditions and covenants binding upon it under the Credit,Agreement:
Section 11. Notices: -Any- notices to be given to 'the' Underwriter under',the„Purchase
AgreemenC shall ba given in writing to Morgan. Stanley & Co. Inc., , CA
,Attention:. Any notices to be given to the ;Authority under the.P.urchase
Agreement shall be given in writing' fo the Authority, 1100. "K" Street, ,Suite 101, Sacramento, CA
95814; Attention; Secretary. Any notices to be'given to the Local Agency shall be given 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 Authotity, ahd'no petson other than the' Local Agency and the .Authority or their
successors or assigns and the Underwriter shall acquire or have any right under or by virtue of the
.Purchase. Agreement: Al] of the;representations,'wazranties and agreemenfs contained in;the Purchase
Agreement shall survive the delivery of and payment by the Authority for the Note and any termination
of the Purchase Agreement.
Section 13'. A~iplicable Law: The Purchase Agreement shall be interpreted, governed
and enforced in accordance with the laws of the State of California. y
Section 14'. Effectiveness. The Purchase Agreement shall become effective upon the
execution-hereofrby the Authority and execution of the Pricing Confirmation by the Local Agency; and
the Purchase Agreement, including;the Pricing Confirmation; shall be valid, binding and enforceable from.
and after the 4ime of such effectiveness.
8ection.l5. Severability. In the event any provision of the Purchase Agreement shall
be held,invalidorhnenforceabl@byany court of;competent'jurisdiction, such'holding shall not invalidate
or render unenforceable any other provision hereof.
'Sectidn.l6:: HeadinQS. Any headings preceding the textof several sections hereof shall
be~solely for convenience of'reference and shall not constitute a part ofthis Agreement, nor shall'they
affect its meaning, consfnc~tion or effect.
Section 17, Execution in Counterparts. This Purchase Agreement may- be. executed
and entered into in, several counterparts,-:each ofwhicli shall be deemed an original, and all of which shall
constitute but one and the same instrument.
RF.S®. ~ 1 1 3 N C S
LA]-12N 63.1 5 ~ ~ ~
IN R!ITNESS WHEREOF, the parties,hereto,have caused this Purchase Agreement to
be executed by their duly authorized representatives as of the Purchase Date set forth in Exhibit A
attached hetifo and;ih"corpotated herein.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOP-MENT AUTHORITY
By
Member of`the Commissio_ n
of the Authority
RES®. ~ ~ - 11 3 N C S
EXHIBIT A.
PRICINGS CONFIRMATION
Name of Local Agehcy: CITY OF PETALUIVIA
Addiess of Local Agency:
' Principal Amount of'Note: $
Interest Rate (Note Rate):
Net Interest. Cost (NIC):
Defau]b'Rate:
Purchase Piice
(including costs
of>iss~ance):
Less:
Costs of Issuance:
Credit instrument Cost:
Deposit to Proceeds
Account:
Resolution Date
of Local Agency:
Purchase Date:
Closing. Date:
Maturity'Date:
Repayment Dafe:
First Pledge Ivlpnth:
Pledge Amount:
Pledge Percehtage:
Second Pledge Month:
Pledge Amount:
Pledge Percentage:
Reserve Requirement:
Series of Bondsao which
Note will be assigned:
Note/Series of Bonds Secured
by Credit Instrument: yes _ no
Type of"Credit Iristiument:
Credit:.Pcoviderc
Credit Agreement:
If Credit Instrument.is the Reserve Fund, '
is there a Reserve Credibinstrument? yes no
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LAI-121163:1 A-1
PJ1~ Q ~ !',d
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 amount df all tax-exempt
obligations (excluding private activity bonds) issued or to be issued_by the Local Agency during the 1996'
calendar year, including',the Note, all other .notes and. bonds,. and all tax-exempt leases, executed or
delivered during the 1996 calendar year will notsxceed' $5;000,000 (See Section 3.8 of the Certificate
of the Local Agency if the Local Agency is unable to make this. certification) ?
Investment Alternative- Initial the appropriatebox relating to the investmentpfproceeds
received from the issuance and delivery of the Local Agency's Note:
Initial
One Box
Yes, the undersigned directs the Trustee to invest the proceeds
received from the issuance and delivery of the Local Agency's Note
in the Guaranteed Investment:Contract described in Attachment I.
(Do not wire the proceeds as previously directed in Section 4:7 of ?
the Certificate of the Local Agency.) Yes
No, do not invest the proceeds received' from the issuance and
delivery of the Local Agency's Note. in the Guaranteed Investment
contract,. wire the proceeds as directed in Section 4.7 of-the ?
Certificate of the Local Agency. No
IN WITNESS WHEREOF; the Purchase Agreement, including this Pricing,Confirmation,
is agreed and. accepted to on tfie Purchase Date setforth above.
CITY OF PETALUMA
ay
Ankhorized Representative
Please-initial.[he box ai [he end' of Paragraph No. 16 only if applicable to4he Loeal Agency.
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