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HomeMy WebLinkAboutCC Resolution 10399 (Communities Cash Flow Financing Program)RESOLUTION NO. 10399 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL 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 are authorized by Section 53850 to 53858, both inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4, Part 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary notes; WHEREAS, the City Council (the "City Council") of the City of San Rafael specified in Section 25 hereof (the "City of San Rafael") has determined that a sum (the "Principal Amount"), not to exceed the Maximum Amount of Borrowing specified in Section 25 hereof, which Principal Amount is to be confirmed and set in the Pricing Confirmation (as defined in Section 4 hereof), is needed for the requirements of the City of San Rafael, to satisfy obligations of the City of San Rafael, and that it is necessary that said Principal Amount be borrowed for such purpose 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 the City of San Rafael for the general fund of the City of San Rafael attributable to its fiscal year ending June 30, 2000 ("Fiscal Year 1999-2000"); WHEREAS, the City of San Rafael hereby determines to borrow, for the purposes set forth above, the Principal Amount by the issuance of the Note (as hereinafter defined); WHEREAS, it appears, and this City Council hereby finds and determines, that the Principal Amount, when added to the interest payable thereon, does not exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, income, revenue (including, but not limited to, revenue from the state and federal governments), cash receipts and other moneys of the City of San Rafael 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 City of San Rafael 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 City of San Rafael during and attributable to Fiscal Year 1999-2000 can be pledged for the payment of the principal of the Note and the interest thereon (as hereinafter provided); Copyright, 1/1/1999, Orrick, Herrington & Sutcliffe. All rights reserved. UOCSLA1:299175.1 40929-205 JCG Y WHEREAS, the City of San Rafael has determined that it is in the best interests of the City of San Rafael 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 Agreements"), each between such individual Issuer and the Authority, and dated as of the date of the Pricing Confirmation, a form of which has been submitted to the City Council; 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 defined) secure(s) such Series, by the principal amounts of the notes assigned to the Pool or by other factors, and the City of San Rafael hereby acknowledges and approves the discretion of the 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 may or may not be secured (by virtue or 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 of a separate bond issue issued for such purpose (the "Reserve Fund") or other credit instrument (or instruments) (collectively, the "Credit Instrument") issued by the credit provider or credit providers designated in the Indenture, as finally executed (collectively, the "Credit Provider"), pursuant to a credit agreement or agreements or commitment letter or letters or, in the case of the Reserve Fund, an indenture (the "Reserve Indenture") (collectively, the "Credit Agreement") between (i) in the case of an irrevocable letter (or letters) of credit or policy (or policies) of insurance, the Authority and the respective Credit Provider and (ii) in the case of the Reserve Fund, the Authority and U.S. Trust Company of California, N.A., as trustee of the Reserve Indenture (the "Reserve Trustee"); WHEREAS, if, as designated in the Pricing Confirmation, the Credit Instrument is the Reserve Fund, bonds issued pursuant to the Reserve Indenture (the "Reserve Bonds") may, as indicated in the Pricing Confirmation, be secured by an irrevocable letter of credit or policy of insurance or other credit instrument (the "Reserve Credit Instrument") issued by the credit provider identified in the Reserve Indenture as finally executed (the "Reserve Credit Provider"), pursuant to a credit agreement or commitment letter (the "Reserve Credit Agreement') identified in the 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 City of San Rafael in Permitted Investments (as defined in the Indenture) or in any other investment permitted by the laws of the State of California, as now in effect and as hereafter amended, modified or supplemented from time to time; DOCSLA 1:299175.1 40929-205 JC6 -2- WHEREAS, as part of the Program each participating Issuer approves the Indenture, the alternative forms of Credit Agreements, if any, and the alternative forms of Reserve Credit Agreements, if any, in substantially the forms presented to the City Council, with the final form of Indenture, type of Credit Instrument and corresponding Credit Agreement and type of Reserve Credit Instrument and corresponding Reserve Credit Agreement, if any, to be determined and approved by delivery of the Pricing Confirmation; 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 Credit 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, if any (each as defined in the Indenture); WHEREAS, pursuant to the Program each participating Issuer will be responsible for its share of the fees of the Reserve Trustee and the costs of issuing the applicable Series 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 purchase, in the case of each Pool of Notes, the Series of Bonds which will be secured by the Indenture to which such Pool will be assigned; WHEREAS, it is necessary to engage the services of certain professionals to assist the City of San Rafael in its participation in the Program; NOW, THEREFORE, the City Council hereby finds, determines, declares and resolves as follows: Section 1. Recitals. This City Council hereby finds and determines that all the above recitals are true and correct. Section 2. Authorization of Issuance. This City Council hereby determines to borrow solely for the purpose of anticipating taxes, income, revenue, cash receipts and other moneys to be received by the City of San Rafael for the general fund of the City of San Rafael 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 City of San Rafael's "1999-2000 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 initial purchaser thereof, to mature (without option of prior redemption) not more than fifteen 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 if the maturity is more than twelve months from the date of issuance, payable on the interim payment date set forth in the Pricing Confirmation) and computed upon the basis of a 360 -day year consisting of twelve 30 -day months, at a rate not to exceed twelve percent (12%) per annum as determined in the Pricing Confirmation 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 DOCS LA 1:299175.1 40929-205 JCG -3- 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 defined 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 secured 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 the interest component, if applicable) with respect to which the Reserve Fund applies for which reimbursement on a Drawing has not been fully made) shall be deemed outstanding and shall continue to bear interest thereafter until paid at the Default Rate. If the Note or the Series of Bonds issued in connection with the Note is unsecured in whole or in 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 the Default Rate. In each case set forth in the preceding three sentences, the obligation of the City of San Rafael with respect to such Defaulted Note or unpaid Note shall not be a debt or liability of the City of San Rafael prohibited by Article XVI, Section 18 of the California Constitution and the City of San Rafael 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, applies (the "Secured Percentage") shall be equal to the amount of the Credit Instrument divided by the aggregate amount of unpaid principal of and interest on the unpaid notes (or portions thereof) of all Issuers, expressed as a percentage (but not greater than 100%) as of the maturity date. The percentage of the Note to which the Reserve Credit Instrument, if any, applies (the "Secured Reserve Percentage") shall be equal to the amount of the Reserve Credit Instrument divided by the aggregate amount of unpaid principal of and interest on such unpaid notes (or portions 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 of and interest on the Note at maturity shall be paid upon surrender 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 of the Act. Section 3. Form of Note. The Note shall be issued in fully registered form without coupons and shall be substantially in the form and substance set forth in Exhibit A as attached hereto and by reference incorporated herein, the blanks in said forms to be filled in with appropriate words and figures. Section 4. Sale of Note; Delegation. The Note shall be sold to the Authority pursuant to the Purchase Agreement. The form of the Purchase Agreement, including the form DOCSLAI :299175.1 40929-205 JC6 -4- of the pricing confirmation supplement (the "Pricing Confirmation") set forth as Exhibit A thereto, presented to this meeting are hereby approved. The authorized representatives set forth in Section 25 hereof (the "Authorized Representatives") are each hereby authorized and 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 her execution and delivery thereof, provided, however, that the Purchase Agreement shall not be effective and binding on the City of San Rafael until the execution and delivery of the Pricing Confirmation. The Authorized Representatives are each hereby further authorized and directed to execute and deliver the Pricing Confirmation in substantially said form, with such changes thereto as such Authorized Representative shall approve, such approval to be conclusively evidenced by his or her execution and delivery thereof, provided, however, that the interest rate on the Note shall not exceed twelve percent (12%) per annum, the discount on the Note, when added to the City of San Rafael's share of the costs of issuance of the Bonds, shall not exceed one percent (1.0%), and the Principal Amount shall not exceed the Maximum Amount of Borrowing. Delivery of an executed copy of the Pricing Confirmation by fax or telecopy shall be deemed effective execution and delivery for all purposes. Section 5. Program Approval. The Pricing Confirmation shall indicate whether and what type of Credit Instrument and, if applicable, Reserve Credit Instrument will apply. The forms of Indenture, alternative general types and forms of Credit Agreements, if any, and alternative general types and forms of Reserve Credit Agreements, if any, presented to this meeting are hereby acknowledged, and it is acknowledged that the Authority will execute and deliver the Indenture, one or more Credit Agreements, if applicable, and one or more Reserve Credit Agreements, if applicable, which shall be identified in the Pricing Confirmation, in substantially one or more of said forms with such changes therein as the Authorized Representative who executes the Pricing Confirmation shall require or approve (substantially final forms of the Indenture, the Credit Agreement and, if applicable, the Reserve Credit Agreement are to be delivered to the Authorized Representative concurrent with the Pricing Confirmation), such approval of the Authorized Representative and this City Council to be conclusively evidenced by the execution of the Pricing Confirmation. If the Credit Agreement identified in the Pricing Confirmation is the Reserve Indenture, it is acknowledged that the Authority 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 City of San Rafael is hereby authorized and directed to provide the Financial Advisor or the underwriter with such information relating to the City of San Rafael as the Financial Advisor or the underwriter shall reasonably request for inclusion in the Preliminary Official Statement and Official Statement of the Authority. Upon inclusion of the information relating to the City of San Rafael therein, the Preliminary Official Statement and Official Statement or such other offering document is, except for certain omissions permitted by Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"), hereby deemed final within the meaning of the Rule with respect to the City of San Rafael and any Authorized Representative of the City of San Rafael 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 information contained in the Preliminary Official Statement or other offering document relating to the City of San Rafael might include an untrue statement of a material fact or omit to state any material fact necessary DOCSLA1:299175.1 40929-205 JCG -5- to make the statements therein, in light of the circumstances under which they were made, not misleading, the City of San Rafael shall promptly notify the Financial Advisor and the underwriter. Subject to Section 8 hereof, the City of San Rafael hereby agrees that if the Note shall 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 Note, has been reimbursed for any drawings, payments or claims made under or from the Credit Instrument with respect to the Note, including interest accrued thereon, as provided therein and in the applicable Credit Agreement, and, (ii) the holders of the Note, or Series of the Bonds issued in connection with the Note, are paid the full principal amount represented by the unsecured portion of the Note plus interest accrued thereon (calculated at the Default Rate) to the date of deposit of such aggregate required amount with the Trustee. For purposes of clause (ii) of the preceding sentence, holders of the Series of Bonds will be deemed to have received such principal amount upon deposit of such moneys with the Trustee. Subject to Section 8 hereof, the City of San Rafael hereby agrees that if the Note shall become a Defaulted Reserve Note, the unpaid portion (including the interest component, if applicable) thereof or the portion (including the interest component, if applicable) to which a Reserve Credit 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 under the Reserve Credit Instrument with respect to the Note, including interest accrued thereon, as provided therein and in the Reserve Credit Agreement, and (ii) the holders of the Note, or Series of Bonds issued in connection with the Note, are paid the full principal amount represented by the unsecured portion of the Note plus interest accrued thereon (calculated at the Default Rate) to the date of deposit of such aggregate required amount with the Trustee. For the purposes of clause (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. The City of San Rafael agrees to pay or cause to be paid, in addition to the amounts payable under the Note, any fees or expenses of the Trustee and, to the extent permitted by law, if the City of San Rafael'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 hereof) or (ii) arising out of any other event (other than an event arising solely as a result of or otherwise attributable to a default by any other Issuer). In the case described in (ii) above with respect to Predefault Obligations, the City of San Rafael shall owe only the percentage of such fees, expenses 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 DOCSLA1:299175.1 40929-205 JC'6 -6- amounts will be paid by the City of San Rafael within twenty-five (25) days of receipt by the City of San Rafael 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 City of San Rafael to make payments on or in respect to its Note is a several and not a joint obligation and is strictly limited to the City of San Rafael'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 City of San Rafael'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 City of San Rafael's Proceeds Subaccount hereby authorized to be created pursuant to, and held and invested by the Trustee under, the Indenture for the City of San Rafael and said moneys may be used and expended by the City of San Rafael 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 Note. The Trustee will not create subaccounts within the Proceeds Fund, but will keep records to account separately for proceeds of the Bonds allocable to the City of San Rafael's Note on deposit in the Proceeds Fund which shall constitute the City of San Rafael's Proceeds Subaccount. Section 8. Source of Payment. (A) The principal amount of the Note, together with the interest thereon, shall be payable from taxes, income, revenue (including, but not limited to, revenue from the state and federal governments), cash receipts and other moneys which are received by the City of San Rafael for the general fund of the City of San Rafael 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 City of San Rafael hereby pledges certain unrestricted revenues (as hereinafter provided, the "Pledged Revenues") which are received by the City of San Rafael for the general fund of the City of San Rafael 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 City of San Rafael from such Pledged Revenues, and, to the extent not so paid, shall be paid from any other taxes, income, revenue, cash receipts and other moneys of the City of San Rafael lawfully available therefor (all as provided for in Sections 53856 and 53857 of the Act). The term "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 City of San Rafael attributable to Fiscal Year 1999-2000 and which are generally available for the payment of current expenses and other obligations of the City of San Rafael. 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 City of San Rafael and are attributable to Fiscal Year 1999-2000. DOCSLA 1:299175.1 40929-205 JCG -7- In order to effect the pledge referenced in the preceding paragraph, the City of San Rafael hereby agrees and covenants to establish and maintain a special account within the City of San Rafael's general fund to be designated the "1999-2000 Tax and Revenue Anticipation Note Payment 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 City of San Rafael elects to have Note proceeds invested in Permitted Investments to be held by the Trustee pursuant to the Pricing Confirmation, a subaccount of the Payment Account (the "Payment Subaccount") shall be established for the City of San Rafael 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 separately for proceeds of the Note so held and invested by the Trustee which record shall constitute the City of San Rafael's Proceeds Subaccount. Transfers from the Payment Subaccount shall be made in accordance with the Indenture. The City of San Rafael agrees to transfer to and deposit in the Payment Account the first amounts received in the months specified in the Pricing Confirmation as Repayment Months (each individual month a "Repayment Month" and collectively "Repayment Months") (and any amounts received thereafter attributable to Fiscal Year 1999-2000) until the amount on deposit in the Payment Account, together with the amount, if any, on deposit in the Payment Subaccount, is equal in the respective Repayment Months identified in the Pricing Confirmation to the percentage of the principal and interest due on the Note specified in the Pricing Confirmation. In making such transfer and deposit, the City of San Rafael shall not be required to physically segregate the amounts to be transferred to and deposited in the Payment Account from the City of San Rafael's other general fund moneys, but, notwithstanding any commingling of funds for investment or other purposes, the amounts required to be transferred to and deposited in the Payment Account shall nevertheless be subject to the lien and charge created herein. Any one of the Authorized Representatives of the City of San Rafael is hereby authorized to approve the determination of the Repayment Months and percentages of the principal and interest due on the Note required to be on deposit in the Payment Account and/or the Payment Subaccount in each Repayment Month, all as specified in the Pricing Confirmation, by executing and delivering the Pricing Confirmation, such execution and delivery to be conclusive evidence of approval by this City Council and such Authorized Representative; provided, however, that the maximum number of Repayment Months shall be six and the maximum amount of Pledged Revenues required to be deposited in each Repayment Month shall not exceed 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 City of San Rafael has not received sufficient unrestricted revenues to permit the deposit into the Payment Account of the full amount of Pledged Revenues to be deposited in the Payment Account from said unrestricted revenues in said month, then the amount of any deficiency shall be satisfied and made up from any other moneys of the City of San Rafael lawfully available for the payment of the principal of the Note and the interest thereon, as and when such other moneys are received or are otherwise legally available. (B) Any moneys placed in the Payment Account or the Payment Subaccount shall be for the benefit of (i) the holder of the Note and the holders of Bonds issued in connection with the Notes, (ii) (to the 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, if any. 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 principal of the Note at maturity with interest to maturity (in accordance with the requirements DOCSLA1:299175.1 40929-205 JC6 -8- 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 City of San Rafael 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 City of San Rafael to the Trustee, to the extent necessary (after crediting any transfer pursuant to the preceding sentence), to pay the principal of and/or interest on the Note or to reimburse the Credit Provider for payments made under or pursuant to the 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 respect to the Note; fourth to reimburse the Credit Provider for payment, if any, of principal with respect to the Note; fifth to reimburse the Reserve 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 payment, if any, of principal with respect to the Note; and seventh to pay any Reimbursement Obligations of the City of San Rafael and any of the City of San Rafael's pro rata share of Predefault Obligations owing to 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 Subaccount after the principal of the Note and the interest thereon and any Predefault Obligations 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 City of San Rafael, subject to any other disposition required by the Indenture, or, if applicable, the Credit Agreement. Nothing herein shall be deemed to relieve the City of San Rafael from its obligation to pay its Note in full on the Maturity Date. (D) Moneys in the Proceeds Subaccount and in the Payment Subaccount shall be invested by the Trustee pursuant to the Indenture as directed by the City of San Rafael in Permitted Investments as described in and under the terms of the Indenture. Any such investment by the Trustee shall be for the account and risk of the City of San Rafael, and the City of San Rafael 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 City of San Rafael 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 information as may be required by the Credit Provider, if any, or the Reserve Credit Provider, if any. Section 9. Execution of Note. The City Manager of the City Of San Rafael, or his designee, shall be authorized to execute the Note by manual signature and the Clerk of the City Council of the City of San Rafael, or any duly appointed assistant thereto, shall be authorized to countersign the Note by manual signature. Said Authorized Representative of the City of San Rafael, is hereby authorized to cause the blank spaces of the Note to be filled in as may be appropriate pursuant to the Pricing Confirmation. The Authorized Representative is DOCSLA1:299175.1 40929-205 JC6 -9- hereby authorized and directed to cause the Authority to assign the Note to the Trustee, pursuant to the terms and 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 sufficient for all purposes, the same as if such officer had remained in office until delivery. The Note need not bear the seal of the City of San Rafael, if any. Section 10. Intentionally Left Blank. This section has been included to preserve the sequence of section numbers for cross-referencing purposes. Section 11. Representations and Covenants of the City of San Rafael. The City of San Rafael makes 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, if any: (A) The City of San Rafael 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 Agreement, and (iii) issue the Note and perform its obligations thereunder. (B) (i) Upon the issuance of the Note, the City of San Rafael shall have taken all action required to be taken by it to authorize the issuance and delivery of the Note and the performance of its obligations thereunder, and (ii) the City of San Rafael 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, resolution, charter, by-laws or other agreement to which the City of San Rafael 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 City of San Rafael required for the issuance and sale of the Note or the consummation by the City of San Rafael of the other transactions contemplated by this Resolution, except those the City of San Rafael shall obtain or perform prior to or upon the issuance of the Note. (E) The City of San Rafael has (or will have prior to the issuance of the Note) duly, regularly and properly adopted a preliminary budget for Fiscal Year 1999-2000 setting forth expected revenues and expenditures and has complied with all statutory and regulatory requirements with respect to the adoption of such budget. The City of San Rafael 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 subsequent revisions, modifications or amendments thereto and (iii) comply with all applicable laws pertaining to its budget. UOCSLA 1:299175.1 40929-205 JCG -10- (F) The sum of the principal amount of the City of San Rafael'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 City of San Rafael'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 City of San Rafael for the general fund of the City of San Rafael attributable to Fiscal Year 1999-2000, all of which will be legally available to pay principal of and interest on the Note. (G) The City of San Rafael (i) has not defaulted within the past twenty (20) years, and is not currently in default, on any debt obligation and (ii), to the best knowledge of the City of San Rafael, has never defaulted on any debt obligation. (H) The City of San Rafael's most recent audited financial statements present fairly the financial condition of the City of San Rafael as of 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, there has been no change in the financial condition of the City of San Rafael since the date of such audited financial statements that will in the reasonable opinion of the City of San Rafael materially impair its ability to perform its obligations under this Resolution and the Note. The City of San Rafael agrees to furnish to the Authority, the Financial Advisor, the underwriter, the Trustee, the Credit Provider, if any, and the Reserve Credit Provider, if any, promptly, from time to time, such information regarding the operations, financial condition and property of the City of San Rafael 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 City of San Rafael, threatened against or affecting the City of San Rafael questioning the validity of any proceeding taken or to be taken by the City of San Rafael in connection with the Note, the Purchase Agreement, the Indenture, the Credit Agreement, if any, the Reserve Credit Agreement, if any, or this Resolution, or seeking to prohibit, restrain or enjoin the execution, delivery or performance by the City of San Rafael of any of the foregoing, or wherein an unfavorable decision, ruling or finding would have a materially adverse effect on the City of San Rafael's financial condition or results of operations or on the ability of the City of San Rafael 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 City of San Rafael to perform its 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 the Note will constitute legal, valid and binding agreements of the City of San Rafael, enforceable in accordance with their respective terms, except as such enforceability may be limited by bankruptcy or other laws affecting creditors' rights generally, the application of equitable principles if equitable remedies are sought, the exercise of judicial discretion in appropriate cases and the limitations on legal remedies against local agencies, as applicable, in the State of California. (K) The City of San Rafael and its appropriate officials have duly taken, or will take, all proceedings necessary to be taken by them, if any, for the levy, receipt, collection DOCSLA 1:299175.1 40929-205 JC6 -11- and enforcement of the Pledged Revenues in accordance with law for carrying out the provisions of this Resolution and the Note. (L) The City of San Rafael 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. (M) So long as the Credit Provider, if any, is not in payment default under the Credit Instrument or the Reserve Credit Provider, if any, is not in default under the corresponding Reserve Credit Agreement, the City of San Rafael hereby agrees to pay its pro rata share of all Predefault Obligations and all Reimbursement Obligations attributable to the City of San Rafael 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 City of San Rafael's Payment Account and/or Payment Subaccount shall not be used to make such payments. The City of San Rafael shall pay such amounts promptly upon receipt of notice from the Credit Provider or from the Reserve Credit Provider, if applicable, that such amounts are due to it. (1) So long as any Bonds issued in connection with the Notes are Outstanding, or any Predefault Obligation or Reimbursement Obligation is outstanding, the City of San Rafael will not create or suffer to be created any pledge of or lien on the Note other than the pledge and lien of the Indenture. Section 12. Tax Covenants. The City of San Rafael 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 generality of the foregoing, the City of San Rafael shall not make any use of the proceeds of the Note or Bonds or any other funds of the City of San Rafael which would cause the Note or Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, a "private activity bond" within the meaning of Section 141(a) of the Code, or an obligation the interest on which is subject to federal income taxation because it is "federally guaranteed" as provided in Section 149(b) of the Code. The City of San Rafael, 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. (A) The City of San Rafael hereby (i) represents that the aggregate face amount of all tax-exempt obligations (including any tax-exempt leases, but excluding private activity bonds), issued and to be issued by the City of San Rafael during calendar year 1999, including the Note, is not reasonably expected to exceed $5,000,000; or, in the alternative. (ii) covenants that the City of San Rafael will take all legally permissible steps necessary to ensure that all of the gross proceeds of the Note will be expended no later than the day that is six months after the date of issuance of the Note so as to satisfy the requirements of Section 148(f)(4)(B) of the Code. (B) Notwithstanding any other provision of this Resolution to the contrary, upon the City of San Rafael's failure to 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, the owners of the Bond, the Credit Provider, if any, the Reserve Credit Provider, if any, or the DOCSLA1:299175.1 40929-205 JC6 -12- Trustee on their behalf shall be entitled to exercise any right or remedy under this Resolution on the basis of the City of San Rafael's failure to observe, or refusal to comply with, such covenants. the Note. (C) The covenants contained in this Section 12 shall survive the payment of 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 City of San Rafael 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 City of San Rafael to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Resolution, for a period of fifteen (15) days after written notice, specifying such failure and requesting that it be remedied, is given to the City of San Rafael by the Trustee, the Credit Provider, if applicable, or the Reserve Credit Provider, if applicable, unless the Trustee and the Credit Provider or the Reserve Credit Provider, if applicable, shall all agree in writing to an extension of such time prior to its expiration; (C) Any warranty, representation or other statement by or on behalf of the City of San Rafael contained in this Resolution or the Purchase Agreement (including the Pricing Confirmation) or in any requisition or any financial report delivered by the City of San Rafael 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 City of San Rafael under any bankruptcy, reorganization, arrangement, 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 City of San Rafael files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any petition against it under such law; or (F) The City of San Rafael admits insolvency or bankruptcy or is generally not paying its debts as such debts become due, or becomes insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including without limitation a receiver, liquidator or trustee) of the City of San Rafael 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. UOCSLA1:299175.1 40929-205 JC6 -13- Whenever any Event 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 by law or under the Indenture, if applicable, have the right, at its option without any further demand or notice, to take one or any combination of the following remedial steps: (1) Without declaring the Note to be immediately due and payable, require the City of San Rafael to pay to the Trustee, as holder of the Note, an amount equal to the principal of the Note and interest thereon to maturity, plus all other amounts due hereunder, and upon notice to the City of San Rafael the same shall become immediately due and payable by the City of San Rafael without 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 City of San Rafael's Note 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 City of San Rafael's Note, as long as the Credit Provider has not failed to comply with its payment obligations under the Credit Instrument, the Credit Provider shall have the right to direct the remedies upon any Event of Default hereunder, and, not withstanding the foregoing, if a Reserve Credit Instrument is applicable, as long as the Reserve Credit Provider has not failed to comply with its payment obligations under the Reserve Credit Agreement, the Reserve Credit Provider shall have the right (prior to the Credit Provider) 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 required to any remedial action proposed to be taken by the Trustee hereunder. If the Credit Provider is not reimbursed for any drawing, payment or claim, as applicable, used to pay principal of and interest on the Note due to a default in payment on the Note by the City of San Rafael, 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) thereof or the portion (including the interest component, if applicable) to which a Credit Instrument applies for which reimbursement on a draw, payment or claim has not been made shall be deemed outstanding and shall bear interest at the Default Rate until the City of San Rafael's obligation on the Defaulted Note is paid in full or payment is duly provided for, all subject to Section 8 hereof. If the Credit Instrument is the Reserve Fund and the Reserve Bonds are secured by the Reserve Credit Instrument and all principal of and interest on the Note is not paid in full by the Reserve Principal Payment Date, the Defaulted Note shall become a 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 Drawing has not been fully made) shall be deemed outstanding and shall bear interest at the Default Rate until the City of San Rafael's obligation on the Defaulted Reserve Note is paid in full or payment is duly provided for, all subject to Section 8 hereof. DOCS LA 1:299175.1 40929-205 JC6 44- Section 14. Trustee. The City of San Rafael 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 received by the Trustee from the City of San Rafael in the manner set forth herein. The City of San Rafael hereby covenants to deposit funds in such account or fund, as applicable, at the time and in the amount specified 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 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 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 Representatives of the City of San Rafael are hereby authorized and directed to execute the Note and cause the Trustee to accept delivery of the Note, pursuant to the terms and conditions of the Purchase Agreement and the Indenture. All actions heretofore taken by the officers and agents of the City of San Rafael or this City Council 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 City of San Rafael are hereby authorized and directed, for and in the name and on behalf of the City of San Rafael, 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 them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Note in accordance with, and related transactions contemplated by, this Resolution. The Authorized Representatives of the City of San Rafael referred to above in Section 4 hereof are hereby designated as "Authorized City of San Rafael Representatives" under the Indenture. In the event that the Note or a portion thereof is secured by a Credit Instrument, any one of the Authorized Representatives of the City of San Rafael is hereby authorized and directed to provide the Credit Provider and, if applicable, the Reserve Credit Provider, with any and all information relating to the City of San Rafael 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 City of San Rafael 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 irrepealable. The Credit Provider, if any, and the Reserve Credit Provider, if any, are third party beneficiaries of the provisions of this Resolution and the Note. Section 19. Limited Liability. Notwithstanding anything to the contrary contained herein or in the Note or in any other document mentioned herein or related to the Note or to any Series of Bonds to which the Note may be assigned, the City of San Rafael shall not have any liability hereunder or by reason hereof or in connection with the transactions contemplated hereby except to the extent payable from moneys available therefor as set forth in Section 8 hereof. DOCSLA 1:299175.1 40929-205 JC 6 -15- Section 20. Amendments. At any time or from time to time, the City of San Rafael may adopt one or more Supplemental Resolutions with the written consents of the Authority, the Credit Provider, if any, and the Reserve Credit Provider, if any, but without the necessity for consent of the owner of the Note or of the Bonds issued in connection with the Note for any one or more of the following purposes: (A) to add to the covenants and agreements of the City of San Rafael in this Resolution, other covenants and agreements to be observed by the City of San Rafael 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 City of San Rafael which are not contrary to or inconsistent with this Resolution as theretofore in effect; (C) to confirm, as further assurance, any pledge under, and the 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 (E) to amend or supplement this Resolution in any other respect; provided, however, that any such Supplemental Resolution does not adversely affect the interests of the owners of the Note or of the Bonds issued in connection with the Notes. Any modifications or amendment of this Resolution and of the rights and obligations of the City of San Rafael and of the owner of the Note or of the Bonds issued in connection with the Note may be made by a Supplemental Resolution, with the written consents of the Authority, the Credit Provider, if any, and the Reserve Credit Provider, if any, and with the written consent of the owners of at least a majority in principal amount of the Note and of the Bonds issued in connection with the Note outstanding at the time such consent is given; provided, however, that if such modification or amendment will, by its terms, 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 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 Resolution, 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 firm of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California is hereby appointed as Bond Counsel for the Program. The City of San Rafael acknowledges that Bond Counsel regularly performs legal DOCSLA 1:299175.1 40929-205 JC6 -16- services for many private and public entities in connection with a wide variety of matters, and that Bond Counsel has represented, is representing or may in the future represent other public entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders, financial and other consultants who may have a role or interest in the proposed financing or that may be involved with or adverse to City of San Rafael in this or some other matter. Given the special, limited role of Bond Counsel described above the City of San Rafael 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 -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 City of San Rafael: CITY OF SAN RAFAEL (B) Maximum Amount of Borrowing: FIVE MILLION DOLLARS (C) Authorized Representatives: TITLE 1. City Manager 2. Assistant City Manager/Treasurer 3. City Clerk 4. Assistant City Attorney I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City on Monday the 19" day of April, 1999, by the following vote, to wit: AYES: COUNCILMEMBERS: Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Cohen /J JEANNE M. LEONCINI, City Clerk DOCSLA1:299175.1 40929-205 JC'6 -17- Local Agency: Cash Flow Worksheet City of San Rafael All Cash and Investments (from 6/30/98 audit) Less: Restricted Cash Restricted General Fund Special Revenue Fund Internal Services Fund Debt Service Fund Trust and Agency Fund(s) Enterprise Funds(s) Other (specify) Capital Project Other (specify) Employee Benefit Other (specify) Adjusted Available Cash (7/1/98) _ 1998-99Actual/Estimated 45.163,174 4,110.244 16,479,887 2,182,998 2,227,511 11,923,880 0 7.373,715 232,765 0 632,174 Cash Flow 1999 TRAN Adjusted Beginning (+) plus (-) minus Ending Actuall (+) Amount/ Ending Month Cash Balance Receipts Disbursements Cash Balance Estimated (c) F) Pledges Cash Balance July, 1998 (a) $632,174 $2,081,317 $2,867,883 ($154,392) A ($154,392) August, 1998 (154,392) 2,351,875 3,103,034 (905,551) A (905,551) September, 1998 (905,551) 2,374,764 2,653,895 (1,184,682) A (1,184,682) October, 1998 (1,184,682) 2,286,325 3,250,981 (2,149,338) A (2,149,338) November, 1998 (2,149,338) 2,177,378 2,821,167 (2,793,127) A (2,793,127) December 1-31,1998 (2,793,127) 5,519,293 3,194,376 (468,210) A (468,210) December_-_ 1998 (468,210) 0 0 (468,210) A (468,210) January, 1999 (468,210) 3,010,692 2,852,605 (310,123) A (310,123) February, 1999 (310,123) 3,094,704 2,754,585 29,996 A 29,996 March, 1999 29,996 2,634,548 3,117,453 (452,909) A (452,909) April, 1999 (452,909) 4,430,851 2,623,387 1,354,555 E 1,354,555 May, 1999 1,354,555 2,430,851 2,623,387 1,162,019 E 1,162,019 June, 1999 1,162,019 2,630,851 2,623,387 1,169,483 E 1,169,483 Total $35,023,449 $34,486,140 1999-2000 Cash FlowProjection 1999-2000 Cash Flows will be automatically prepared based on the 1998-99 Actual/Estimated Cash Flow, if the following information is provided: Estimated 1999-2000 General Fund Receipts $35 590 000 Estimated 1999-2000 General Fund Disbursements $3559000 1999TRAN Adjusted Beginning (+) plus (-) minus Ending Pledge Factor (+) Amountl Ending Month Cash Balance Receipts Disbursements Cash Balance I% of repayment) 1-) Pledges Cash Balance July, 1999 (b) 1 $1,169,483 $2,114,985 2,959,680 $324,788 $3,850,000 $4,174,788 August, 1999 324,788 2,389,920 3,202,358 (487,651) 3,362,349 September, 1999 (487,651) 2,413,179 2,738,843 (813,315) 3,036,685 October, 1999 (813,315) 2,323,309 3,355,041 (1,845,047) 2,004,953 November, 1999 (1,845,047) 2,212,600 2,911,469 (2,543,916) 1,306,084 December_-_ 1999 (2,543,916) 5,608,575 3,296,624 (231,965) 3,618,035 December__, 1999 (231,965) 0 0 (231,965) 3,618,035 January, 2000 (231,965) 3,059,394 2,943,913 (116,485) 50% (1,925,000) 1,808,515 February, 2000 (116,485) 3,144,765 2,842,756 185,524 2,110,524 March, 2000 185,524 2,677,165 3,217,239 (354,549) 1,570,451 April, 2000 (354,549) 4,502,526 2,707,358 1,440,618 50% (1,925,000) 1,440,618 May, 2000 1,440,618 2,470,173 2,707,358 1,203,433 1,203,433 June, 2000 1,203,433 2,673,409 2,707,358 1,169,483 1,169,483 Total $35,590,000 $35,590,000 (a) Adjusted Available Cash (7/1/99) must equal July, 1998 Beginning Cash Balance on 199&99 ActuaVEstimaled Cash Flow. (b) June, 1999 Ending Cash Balance must equal July, 1999 Beginning Cash Balance, If not, please explain adjustments (c) Circle 'A" for Actual or 'E" for Estimated figures. Alternative Cash Resources Working Capital page 2 List other cash resources of the Local Agency not Included in General Fund Cash Flow. (1) $2,543,916 (from 1999-2000 Cash Flow Projection) plus: Cash Balance Projected Balance Projected Balance Source (Fundi Account as of 6130198 as of 6/30/99 as of 6/3012000 Restricted General Fund $2,664,988 $1,584,516 $1,500,000 Sppecial Revenue Fund 16,479,887 14,436,000 14,000,000 Internal Services Fund 2,182,998 3,475,000 3,500,000 Trust and Agent�. Fund(s) 0 11. Recommended Size of 1999 TRANS =IF $3.850,00011 Enterprise Funds(s� 0 12 Final Size of 1999 TRAN = 1 $3.850,000 1 Other (specify) Capital Projects 7,373,715 5,878,000 4,000,000 TOTAL (1) Do not include bond proceeds, deferred compensation, or other highly restricted funds 1. Actual/Estimated 1998-99 General Fund Expenditures Less: Interfund Transfers 1998 TRANS Repayment (if included in expenditures) Adjusted 1998-99 General Fund Expenditures 5% of Adjusted 1996-99 General Fund Expenditures 2. Large or Small Issuer Do you expect to issue more than $5 million in lax exempt obligations (including the 1999 TRANS) during the $35,590,000 3,675,000 0 $31,915,000 times .05 $1,595,750 1999 calendar year? enter yes or no 3. Small Issuer Working Capital Reserve If "no" to question 2, enter the amount derived at the end of question 1, above. This is your working capital reserve. 4. Large Issuer - Greater of (a) Average 1998-99 monthly balance or (b) the Lesser of projected 1998-99 Beginning or Ending Balance. If "yes" to question 2, please calculate average beginning or ending monthly cash balance for 1998-99 fiscal year (excluding 1998 TRANS). Enter whichever is greater of (a) or (b) above. 6. Large Issuer Working Capital Reserve If "yes" to question 2, enter the lesser of amounts derived in questions 1 or 4. This is your working capital reserve. NO I 1,595,750 I 28,701,588 25,373,516 23,000,000 Safe Harbor Shing $2,543,916 282,657 $2,826,573 Working Capital Reserve Sizing 6. Maximum Cumulative Cash Flow Deficit $2,543,916 (from 1999-2000 Cash Flow Projection) plus: 7. Working Capital Reserve / Safe Harbor + 1,595,750 8. 1999 TRAN Sizing based an Working Capital Reserve/Safe Harbor = $4,139,666 9. Maximum Borrowing Amount (Greater of Working Capital Reserve Sizing and Safe Harbor Sizing) I $4,139,666 less: 10. Miscellaneous Adjustments required by Tax Counsel a. 5% for Small Issuers, 10% for Large Issuers 206,983 b. Expected Interest Earnings on 1999 TRAN proceeds to month in which Maximum Cumulative Cash Flow Deficit is to occur. 81,931 Expected Interest Rate on Investment of 1999 TRANS 5.00% 11. Recommended Size of 1999 TRANS =IF $3.850,00011 1 l Preferred TRAN Size if less than Recommended Size = p II 12 Final Size of 1999 TRAN = 1 $3.850,000 1 28,701,588 25,373,516 23,000,000 Safe Harbor Shing $2,543,916 282,657 $2,826,573 EXHIBIT A CITY OF SAN RAFAEL 1999-2000 TAX AND REVENUE ANTICIPATION NOTE, [SERIES 1'' Date of Interest Rate Maturitv Date Original Issue REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS FOR VALUE RECEIVED, the City of San Rafael designated above (the "City of San Rafael"), acknowledges itself indebted to and promises to pay to the registered owner identified above, or registered assigns, on the maturity date set forth above, 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 legal tender for payment of private and public debts. Principal and interest at maturity shall be paid upon surrender hereof at the principal corporate trust office of U.S. Trust Company of California, 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. 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 interest shall be payable for any period after maturity during which the holder hereof fails to properly present this Note for payment. If the City of San Rafael 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 between the California Statewide Communities Development Authority and U.S. Trust Company of California, N.A., as trustee), if any, is not reimbursed in full for the amount drawn on or paid pursuant to the Credit Instrument (as defined in the Resolution and the Indenture) to pay all or a portion (including the interest component, if applicable) of this Note on the date of such payment, this Note shall become a Defaulted Note (as defined in the Resolution and the Indenture and with the consequences set 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 issue of the Note in the aggregate principal amount authorized, executed and delivered pursuant to and by authority of certain resolutions of the City of San Rafael duly passed and adopted heretofore, under and by authority of Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code (collectively, the "Resolution"), to 'If more than one Series of Bonds is issued under the Program in Fiscal Year 1999-2000 and if the Note is pooled with notes issued by other Issuers (as defined in the Resolution). DOCSLA1:299175.1 40929-205 JCb A-1 all of the provisions and limitations of which the owner of this Note, by acceptance hereof, assents and agrees. 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 City of San Rafael for the general fund of the City of San Rafael 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 City of San Rafael has pledged the first amounts of unrestricted revenues of the City of San Rafael 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 Payment 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 Confirmation (as defined in the Resolution) (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 be paid from any other moneys of the City of San Rafael lawfully available therefor as set forth in the Resolution. The full faith and credit of the City of San Rafael is not pledged to the payment of the principal of or interest on this Note. The City of San Rafael 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 hereon and for all other purposes, and the City of San Rafael and the Trustee shall not be affected by any notice to the contrary. DOCSLA 1:299175.1 40929-205 JC6 A-2 It is hereby certified that all of the conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance 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 that the amount of this Note, together with all other indebtedness of the City of San Rafael, does not exceed any limit prescribed by the Constitution or statutes of the State of California. IN WITNESS WHEREOF, the City Council of the City of San Rafael has caused this Note to be executed by the manual signature of a duly Authorized Representative of the City of San Rafael and countersigned by the manual signature of the Clerk of the City Council as of the date of authentication set forth below. Countersigned Jeanne M. Leoncini, Clerk of the City of San Rafael Dated: CITY OF SAN RAFAEL By: Rod Gould City Manager Dated: DOCSLA 1:299175.1 40929-205106 A-3 1W141811-110 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, entered into by and between the signatory local agency designated in Exhibit A (the "City of San Rafael") and the California Statewide Communities Development Authority (the "Authority"), for the sale and delivery of the principal amount specified in Exhibit A of the City of San Rafael's 1999-2000 Tax and Revenue Anticipation Note (the "Note") to be issued in conjunction with the notes of other Issuers (as hereinafter defined) participating in the Program (as hereinafter defined), as determined in the Pricing Confirmation (as hereinafter defined), pooled with notes of other Issuers and assigned 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 Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4, Part 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary notes; WHEREAS, the City Council of the City of San Rafael (the "City Council") has heretofore adopted its resolution finding that the City of San Rafael needs to borrow 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 borrowed 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 the City of San Rafael during or attributable to Fiscal Year 1999-2000; WHEREAS, on the resolution date set forth in Exhibit A, the City of San Rafael 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 City of San Rafael; WHEREAS, the City of San Rafael has determined that it is in the best interests of the City of San Rafael to participate in the California 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 form one or more pools of notes (the "Pooled Notes") and assign each 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 1, 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"); ©1999, Orrick, Herrington & Sutcliffe LLP. All rights reserved. DOCSLA 1299672.1 40929-205 JC6 WHEREAS, if so indicated in Exhibit A, the payment by the City of San Rafael 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 "Credit Instrument") to be issued by the 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 agreement, commitment letter, indenture or other agreement (the "Credit Agreement") as identified in Exhibit A; WHEREAS, in order to participate in the Program, the City of San Rafael 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 applicable, of issuing the Credit Instrument, 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 City of San Rafael 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 City of San Rafael shall not exceed one percent (1%) 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: Section 1. Obligation to Purchase. Upon the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Authority shall purchase from the City of San Rafael, and the City of San Rafael shall sell to the Authority, the Note, as described herein and in the Resolution. Section 2. Purchase Price. The purchase price of the Note shall be the purchase price set forth in the pricing confirmation attached hereto as Exhibit A (the "Pricing Confirmation"). The Note shall bear interest at an interest rate per annum set forth in the Pricing Confirmation, which is hereby agreed to by and between the Authority and the City of San Rafael by its duly authorized representative executing this Purchase Agreement on behalf of the City of San Rafael. Section 3. Adiustments to Principal Amount of Note and Purchase Price. The Authority and the City of San Rafael hereby agree that the principal amount of the Note purchased by the Authority and sold to the Authority by the City of San Rafael pursuant to this Purchase Agreement may be reduced, as determined by the Authority and each City of San Rafael, based upon the advice of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), in order DOCSLA 1:299672.1 40929-205 JC6 2 that the proceeds produced from such sale of such Note will be an amount which will not be subject to either (i) yield restriction (in order for interest to be excluded from gross income under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code")) or (ii) a rebate requirement (under Section 148 of the Code). The Authority and the City of San Rafael 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 Pavment 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 City of San Rafael, the Authority and the Underwriter, at the Los Angeles office of Orrick, Herrington & Sutcliffe LLP or such other place as the City of San Rafael, the Authority and the Underwriter shall mutually agree. At the Closing, the City of San Rafael 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 Confirmation as the Deposit to Proceeds Fund which shall be held by the Trustee for the City of San Rafael 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 relating to the City of San Rafael included in the official statement of 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 City of San Rafael shall promptly notify the Authority and the Underwriter thereof, and if, in the opinion of the Authority or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City of San Rafael shall cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in a form and in a manner approved by the Authority and the Underwriter, and all reasonable expenses incurred thereby shall be paid by the City of San Rafael. 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 Citv of San Rafael. The City of San Rafael 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 information relating to the City of San Rafael included in the Official Statement does not contain any untrue statement of a material fact or omit to state any material DOCSLA 1:299672.1 40929-205 JC6 3 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 City of San Rafael acknowledges that the Authority is authorized to execute the Indenture, to assign the Note to the Trustee under the Indenture and to issue the Series of Bonds pursuant to the Indenture. (e) The City of San Rafael shall provide the required Payment Account Deposit Certification (upon a request therefor) in accordance with Section 5.06 of the Indenture. (f) The City of San Rafael 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 issued. Section 7. Conditions Precedent to the Closing. Conditions precedent to the Closing are as follows: (a) The execution and delivery of the Note consistent with the Resolution. (b) Delivery of a legal opinion addressed to the City of San Rafael (with a reliance letter addressed to the Authority and the Underwriter), dated the date of closing of Bond Counsel with respect to the validity of the Note in form and substance acceptable to the Authority and the Underwriter. (c) Delivery of a legal opinion, dated the date of Closing, of counsel to the City of San Rafael, 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 of the credit of the City of San Rafael and inclusion of the City of San Rafael's Note in the assignment, together with notes of other Issuers, to a Series of Bonds, to secure the Series of Bonds, which approval in the event the Credit Instrument 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 Services. (e) Delivery of each certificate, document, instrument and opinion required by the agreement between the Authority and the Underwriter for the sale by the Authority and purchase by the Underwriter of the Series of Bonds to which the Pooled Note is assigned. (f) Delivery of such other certificates, instruments or opinions as Bond Counsel may deem necessary or desirable to evidence the due authorization, execution and delivery of documents pertaining to this transaction and the legal, valid and binding nature DOCSLA 1:299672.1 40929-205 JC6 4 thereof or as may be required by the Credit Agreement, as well as compliance of all parties with the terms and conditions thereof. Section 8. Events Permitting the Authoritv 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 court decision which, in the judgment of the Authority, casts sufficient doubt on the legality of obligations such as the 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 and sale of the City of San Rafael's Note except the Underwriter shall be responsible for California Debt and Investment Advisory Commission fees and for its own internal costs. The fees, costs and expenses that are categorized in the "Costs of Issuance" definition in the Indenture shall be paid from the Costs of Issuance Fund. The City of San Rafael 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. Section 9. Indemnification. To the extent permitted by law, the City of San Rafael agrees to indemnify and hold harmless the Authority and the Underwriter 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 statement or information in the Preliminary Official Statement or in the Official Statement (other than statements or information regarding an Issuer other than the City of San Rafael) that is untrue or incorrect in any material respect or the omission or alleged omission therefrom of any statement or information (other than statements or information regarding an Issuer other than DOCSLAI :299672.1 40929-205 JC6 5 the City of San Rafael) that should be stated therein or that is necessary to make the statements and information therein not misleading in any material respect. Section 10._ Credit Agreement. The City of San Rafael shall comply with all lawful and proper requests of the Authority in order to enable 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 Agreement shall be given in writing to Morgan Stanley & Co. Incorporated, Attention: 555 California Street, Suite 2200, San Francisco, CA 94104. Any notices to be given to the Authority under the Purchase Agreement shall be given in writing to the Authority, 1100 'W' Street, Suite 101, Sacramento, CA 95814, Attention: Secretary. Any notices to be given to the City of San Rafael shall be given in writing to the address specified in Exhibit A. Section 12. No Assi nment. The Purchase Agreement has been made by the City of San Rafael and the Authority, and no person other than the City of San Rafael 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. All of the representations, warranties and agreements 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. Applicable Law. The Purchase Agreement shall be interpreted, governed and enforced in accordance with the laws of the State of California. Section 14. Effectiveness. The Purchase Agreement shall become effective upon the execution hereof by the Authority and execution of the Pricing Confirmation by the City of San Rafael, and the Purchase Agreement, including the Pricing Confirmation, shall be valid, binding and enforceable from and after the time of such effectiveness. Section 15. Severabilitv. In the event any provision of the Purchase Agreement 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 16. Headings. Any headings preceding the text of several sections hereof shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. Section 17. Execution in Counterparts. This Purchase Agreement may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. DOCSLA 1:299672.1 40929-205 JC6 6 IN WITNESS 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 hereto and incorporated herein. CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 0-0 Member of the Commission of the Authority CITY OF SAN RAFAEL un Rod Gould, City Manager DOCSLA1:299672.1 40929-205JC6 7 11: Pricing Confirmation Supplement CITY OF SAN RAFAEL Pricing Information Principal Amount of Note: Interest Rate on Note: Re -Offering Yield: Purchase Price Default Rate: Purchase Price: Less: Cost of Issuance: % Credit Enhancement: % Deposit to Note Proceeds Account: Important Dates Resolution Date of City of San Rafael: Purchase Date: Closing Date: Maturity Date: Interest Payment Date(s): Note Payment Deposit Date: First Pledge Month Ending: Pledge Amount: Pledge Percentage: Second Pledge Month Ending: Pledge Amount: Pledge Percentage: Investment Agreement Information GIC Provider Long Term Ratings (S&P/Moody's) Short Term Credit Ratings (S&P/Moody's) Interest Rate on GIC nOCSLA 1:299672.1 40929-205 JC6 A -i ` By initialing the box at the end of this paragraph, the undersigned City of San Rafael certifies that, in connection with the issuance of the Note under the Resolution and after reasonable inquiry, it is the reasonable expectation of the City of San Rafael that the aggregate amount of all tax-exempt obligations (excluding private activity bonds) issued or to be issued by the City of San Rafael during the 1999 calendar year, including the Note, all other notes and bonds, and all tax-exempt leases, executed or delivered during the 1999 calendar year will not exceed $5,000,000 (See Section 3.8 of the Certificate of the City of San Rafael if the City of San Rafael is unable to make this certification). ❑ Investment Alternative - Initial the appropriate box relating to the investment of proceeds received from the issuance and delivery of the City of San Rafael's Note: Initial One Box Yes, the undersigned directs the Trustee to invest the proceeds received from the issuance and delivery of the City of San Rafael's Note in the Guaranteed Investment Yes Contract described on page A-1. (Do not wire the proceeds as previously directed in Section 4.7 of the Certificate of the City of San Rafael.) No, do not invest the proceeds received from the issuance and delivery of the City of San Rafael's Note in the Guaranteed Investment contract, wire the proceeds as directed in Section 4.7 of the Certificate of the City of San No E] Rafael. IN WITNESS WHEREOF, the Purchase Agreement, including this Pricing Confirmation, is agreed and accepted to on the Purchase Date set forth above. CITY OF SAN RAFAEL M_ Rod Gould, City Manager ` Please initial the box only if applicable to the Local Agency. ©1999, Orrick, Herrington & Sutcliffe LLP. All rights reserved. DOCSLA 1:290017.1 40929-205 WWB DOCSLA 1:296905.1 40929-205 JC6 DOCSLA 1:299672.1 40929-205 !C6 A-2 AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY THIS AGREEMENT, dated as of June 1, 1988, by and among the parties executing this Agreement (all such parties, except those which have withdrawn in accordance with Section 13 hereof, being herein referred to as the "Program Participants"): WITNESSETH WHEREAS, pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State of California (the "Joint Exercise of Powers Act"), two or more public agencies may by agreement jointly exercise any power common to the contracting parties; and WHEREAS, each of the Program Participants is a "public agency" as that term is defined in Section 6500 of the Government Code of the State of California, and WHEREAS, each of the Program Participants is empowered to promote economic development, including, without limitation, the promotion of opportunities for the creation or retention of employment, the stimulation of economic activity, and the increase of the tax base, within its boundaries; and WHEREAS, a public entity established pursuant to the Joint Exercise of Powers Act is empowered to issue industrial development bonds pursuant to the California Industrial Development Financing Act (Title 10 (commencing with Section 91500 of the Government Code of the State of California)) (the "Act') and to otherwise undertake financing programs under the Joint Exercise of Powers Act or other applicable provisions of law to promote economic development through the issuance of bonds, notes, or other evidences of indebtedness, or certificates of participation in leases or other agreements (all such instruments being herein collectively referred to as `Bonds'l; and WHEREAS, in order to promote economic development within the State of California, the County Supervisors Association of California ("CSAC"), together with the California Manufacturers Association, has established the Bonds for Industry program (the "Program"). WHEREAS, in furtherance of the Program, certain California counties (collectively, the "Initial Participants') have entered into that certain Joint Exercise of Powers Agreement dated as of November 18, 1987 (the "Initial Agreement'D, pursuant to which the California Counties Industrial Development Authority has been established as a separate entity under the Joint Exercise of Powers Act for the purposes and with the powers specified in the Initial Agreement; and WHEREAS, the League of California Cities ("LCC") has determined to join as a sponsor of the Program and to actively participate in the administration of the Authority; and DOCSLA I :298114.1 40929-205 JC6 WHEREAS, the Initial Participants have determined to specifically authorize the Authority to issue Bonds pursuant to Article 2 of the Joint Exercise of Powers Act ("Article 2") and Article 4 of the Joint Exercise of Powers Act ("Article 4"), as well as may be authorized by the Act or other applicable law; and WHEREAS, the Initial Participants desire to rename the California Counties Industrial Development Authority to better reflect the additional sponsorship of the Program; and WHEREAS, each of the Initial Participants has determined that it is in the public interest of the citizens within its boundaries, and to the benefit of such Initial Participant and the area and persons served by such Initial Participant, to amend and restate in its entirety the Initial Agreement in order to implement the provisions set forth above; and WHEREAS, it is the desire of the Program Participants to use a public entity established pursuant to the Joint Exercise of Powers Act to undertake projects within their respective jurisdictions that may be financed with Bonds issued pursuant to the Act, Article 2, Article 4, or other applicable provisions of law; and WHEREAS, the projects undertaken will result in significant public benefits, including those public benefits set forth in Section 91502.1 of the Act, an increased level of economic activity, or an increased tax base, and will therefore serve and be of benefit to the inhabitants of the jurisdictions of the Program Participants; NOW, THEREFORE, the Program Participants, for and in consideration of the mutual promises and agreements herein contained, do agree to amend and restate the Initial Agreement in its entirety to provide as follows: Section 1. Pumose. This Agreement is made pursuant to the provisions of the Joint Exercise of Powers Act, relating to the joint exercise of powers common to public agencies, in this case being the Program Participants. The Program Participants each possess the powers referred to in the recitals hereof. The purpose of this Agreement is to establish an agency for, and with the purpose of, issuing Bonds to finance projects within the territorial limits of the Program Participants pursuant to the Act, Article 2, Article 4, or other applicable provisions of law; provided, however that nothing in this Agreement shall be construed as a limitation on the rights of the Program Participants to pursue economic development outside of this Agreement, including the rights to issue Bonds through industrial development authorities under the Act, or as otherwise permitted by law. Within the various jurisdictions of the Program Participants such purpose will be accomplished and said powers exercised in the manner hereinafter set forth. Section 2. Term. _2_ DOCSLA t :298114.1 40929-205 JC6 This Agreement shall become effective in accordance with Section 18 as of the date hereof and shall continue in full force and effect for a period of forty (40) years from the date hereof, or until such time as it is terminated in writing by all the Program Participants; provided, however, that this Agreement shall not terminate or be terminated until the date on which all Bonds or other indebtedness issued or caused to be issued by the Authority shall have been retired, or full provision shall have been made for their retirement, including interest until their retirement date. Section 3. Authority. A. CREATION AND POWERS OF AUTHORITY. (1) Pursuant to the Joint Exercise of Powers Act, there is hereby created a public entity to be known as the "California Statewide Communities Development Authority" (the "Authority"), and said Authority shall be a public entity separate and apart from the Program Participants. Its debts, liabilities and obligations do not constitute debts, liabilities or obligations of any party to this Agreement. B. COMMISSION. The Authority shall be administered by a Commission (the "Commission") which shall consist of seven members, each serving in his or her individual capacity as a member of the Commission. The Commission shall be the administering agency of this Agreement, and, as such, shall be vested with the powers set forth herein, and shall execute and administer this Agreement in accordance with the purposes and functions provided herein Four members of the Commission shall be appointed by the governing body of CSAC and three members of the Commission shall be appointed by the governing body of LCC. Initial members of the Commission shall serve a term ending June 1, 1991. Successors to such members shall be selected in the manner in which the respective initial member was selected and shall serve a term of three years. Any appointment to fill an unexpired term, however, shall be for such unexpired term. The term of office specified above shall be applicable unless the term of office of the respective member is terminated as hereinafter provided, and provided that the term of any member shall not expire until a successor thereto has been appointed as provided herein. Each of CSAC and LCC may appoint an alternate member of the Commission for each member of the Commission which it appoints. Such alternate member may act as a member of the Commission in place of and during the absence or disability of such regularly appointed member. All references in this Agreement to any member of the Commission shall be deemed to refer to and include the applicable alternate member when so acting in place of a regularly appointed member. Each member or alternate member of the Commission may be removed and replaced at any time by the governing body by which such member was appointed. Any -3- DOCSLA 1:298114.1 40929-205 JC6 individual, including any member of the governing body or staff of CSAC or BCC, shall be eligible to serve as a member or alternate member of the Commission. Members and alternate members of the Commission shall not receive any compensation for serving as such but shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a member or alternate member, if the Commission shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose. C. OFFICERS; DUTIES; OFFICIAL BONDS. The Commission shall elect a Chair, a Vice -Chair, and a Secretary of the Authority from among its members to serve for such term as shall be determined by the Commission. The Commission shall appoint one or more of its officers or employees to serve as treasurer, auditor, and controller of the Authority (the "Treasurer') pursuant to Section 6505.6 of the Joint Exercise of Powers Act to serve for such term as shall be determined by the Commission. Subject to the applicable provisions of any resolution, indenture or other instrument or proceeding authorizing or securing Bonds (each such resolution, indenture, instrument and proceeding being herein referred to as an "Indenture') providing for a trustee or other fiscal agent, the Treasurer is designated as the depositary of the Authority to have custody of all money of the Authority, from whatever source derived. The Treasurer of the Authority shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Exercise of Powers Act. The Treasurer of the Authority is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond with the Secretary of the Authority in the amount specified by resolution of the Commission but in no event less than $1,000. If and to the extent permitted by law, any such officer may satisfy this requirement by filing an official bond in at least said amount obtained in connection with another public office. The Commission shall have the power to appoint such other officers and employees as it may deem necessary and to retain independent counsel, consultants and accountants. The Commission shall have the power, by resolution, to the extent permitted by the Joint Exercise of Powers Act or any other applicable law, to delegate any of its functions to one or more of the members of the Commission or officers or agents of the Authority and to cause any of said members, officers or agents to take any actions and execute any documents or instruments for and in the name and on behalf of the Commission or the Authority. D. MEETINGS OF THE COMMISSION. -4- DOCSLA I :298114.1 40929-205 JC6 (1) ReLrular Meeting=s. The Commission shall provide for its regular meetings; provided, however, it shall hold at least one regular meeting each year. The date, hour and place of the holding of the regular meetings shall be fixed by resolution of the Commission and a copy of such resolution shall be filed with each party hereto. (2) Special Meeting=s. Special meetings of the Commission may be called accordance with the provisions of Section 54956 of the Government Code of the State of California. (3) Ralnh M. Brown Act. All meetings of the Commission, including, without limitation, regular, adjourned regular, special, and adjourned special meetings shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (commencing with Section 54950 of the Government Code of the State of California). (4) Minutes. The Secretary of the Authority shall cause to be kept minutes of the regular, adjourned regular, special, and adjourned special meetings of the Commission and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each member of the Commission. (5) Ouorum. A majority of the members of the Commission which includes at least one member appointed by the governing body of each of CSAC and LCC shall constitute a quorum for the transaction of business. No action may be taken by the Commission except upon the affirmative vote of a majority of the members of the Commission which includes at least one member appointed by the governing body of each of CSAC and LCC, except that less than a quorum may adjourn a meeting to another time and place. E. RULES AND REGULATIONS. The Authority may adopt, from time to time, by resolution of the Commission such rules and regulations for the conduct of its meetings and affairs as may be required. Section 4. Powers. The Authority shall have any and all powers relating to economic development authorized by law to each of the parties hereto and separately to the public entity herein created, -5- DOCSLAl:298114.1 40929-205JC6 including, without limitation, the promotion of Opportunities for the creation and retention of employment the stimulation of economic activity, and the increase of the tax base, within the 'jurisdictions of such parties. Such powers shall include the common powers specified in this Agreement and may be exercised in the manner and according to the method provided in this Agreement. All such powers common to the parties are specified as powers of the Authority. The Authority is hereby authorized to do all acts necessary for the exercise of such powers, including, but not limited to, any or all of the following: to make and enter into contracts; to employ agents and employees; to acquire, construct, provide for maintenance and operation of, or maintain and operate, any buildings, works or improvements; to acquire, hold or dispose of property wherever located; to incur debts, liabilities or obligations; to receive gifts, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and any governmental entity; to sue and be sued in its own name; and generally to do any and all things necessary or convenient to the promotion of economic development, including without limitation the promotion of opportunities for the creation or retention of employment, the stimulation of economic activity, and the increase of the tax base, all as herein contemplated. Without limiting the generality of the foregoing, the Authority may issue or cause to be issued bonded and other indebtedness, and pledge any property or revenues as security to the extent permitted under the Joint Exercise of Powers Act, including Article 2 and Article 4, the Act or any other applicable provision of law. The manner in which the Authority shall exercise its powers and perform its duties is and shall be subject to the restrictions upon the manner in which a California county could exercise such powers and perform such duties until a California general law city shall become a Program Participant, at which time it shall be subject to the restrictions upon the manner in which a California general law city could exercise such powers and perform such duties. The manner in which the Authority shall exercise its powers and perform its duties shall not be subject to any restrictions applicable to the manner in which any other public agency could exercise such powers or perform such duties, whether such agency is a party to this Agreement or not. Section 5. Fiscal Year. For the purposes of this Agreement, the term "Fiscal Year" shall mean the fiscal year as established from time to time by the Authority, being, at the date of this Agreement, the period from July 1 to and including the following June 30, except for the first Fiscal Year which shall be the period from the date of this Agreement to June 30, 1988. Section 6. Disposition of Assets. At the end of the term hereof or upon the earlier termination of this Agreement as set forth in Section 2 hereof, after payment of all expenses and liabilities of the Authority, all property of the Authority both real and personal shall automatically vest in the Program Participants and shall thereafter remain the sole property of the Program Participants; provided, however, that any surplus money on hand shall be returned in proportion to the contributions made by the Program Participants. -6- DOCSLA 1:298114.1 40929-205 JC6 Section 7. Bonds. The Authority shall issue Bonds for the purpose of exercising its powers and raising the funds necessary to cant' out its purposes under this Agreement. Said Bonds may, at the discretion of Authority, be issued in series. The services of bond counsel, financing consultants and other consultants and advisors working on the projects and/or their financing shall be used by the Authority. The fees and expenses of such counsel, consultants, advisors, and the expenses of CSAC, LCC, and the Commission shall be paid from the proceeds of the Bonds or any other unencumbered funds of the Authority available for such purpose. Section 8. Bonds Only Limited kind Snecial Oblieations of Authority. The Bonds, together with the interest and premium, if any, thereon, shall not be deemed to constitute a debt of any Program Participant, CSAC, or LCC or pledge of the faith and credit of the Program Participants, CSAC, LCC, or the Authority. The Bonds shall be only special obligations of the Authority, and the Authority shall under no circumstances be obligated to pay the Bonds or the respective project costs except from revenues and other funds pledged therefor. Neither the Program Participants, C5AC, LCC, nor the Authority shall be obligated to pay the principal of, premium, if any, or interest on the Bonds, or other costs incidental thereto, except from the revenues and funds pledged therefor, and neither the faith and credit nor the taxing power of the Program Participants nor the faith and credit of CSAC, LCC, or the Authority shall be pledged to the payment of the principal of, premium, if any, or interest on the Bonds nor shall the Program Participants, CSAC, LCC, or the Authority in any manner be obligated to make any appropriation for such payment. No covenant or agreement contained in any Bond or Indenture shall be deemed to be a covenant or agreement of any member of the Commission, or any officer, agent or employee of the Authority in his individual capacity and neither the Commission of the Authority nor any officer thereof executing the bonds shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of any Bonds. Section 9. Local Aunroval. A copy of the application for financing of a project shall be filed by the Authority with the Program Participant in whose jurisdiction the project is to be located. The Authority shall not issue Bonds with respect to any project unless the governing body of the Program Participant in whose jurisdiction the project is to be located, or its duly authorized designee, shall approve, conditionally or unconditionally, the project, including the issuance of Bonds therefor. Action to approve or disapprove a project shall be taken within 45 days of the filing with the Program Participant. Certification of approval or disapproval shall be made by the clerk of the -7- DOCSLA l :298114.1 40929-205JC6 governing body of the Program Participant, or by such other officer as may be designated by the applicable Program Participant, to the Authority. Section 10. Accounts and Res. All funds of the Authority shall be strictly accounted for. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice and by any provision of any Indenture (to the extent such duties are not assigned to a trustee of Bonds). The books and records of the Authority shall be open to inspection at all reasonable times by each Program Participant. The Treasurer of the Authority shall cause an independent audit to be made of the books of accounts and financial records of the Agency by a certified public accountant or public accountant in compliance with the provisions of Section 6505 of the Joint Exercise of Powers Act. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of accounts and records is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with each Program Participant and also with the county auditor of each county in which a Program Participant is located. Such report shall be filed within 12 months of the end of the Fiscal Year or Years under examination. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants in making an audit pursuant to this Section, shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for that purpose. In any Fiscal Year the Commission may, by resolution adopted by unanimous vote, replace the annual special audit with an audit covering a two-year period. The Treasurer of the Authority, within 120 days after the close of each Fiscal Year, shall give a complete written report of all financial activities for such Fiscal Year to each of the Program Participants to the extent such activities are not covered by the reports of the trustees for the Bonds. The trustee appointed under each Indenture shall establish suitable funds, furnish financial reports and provide suitable accounting procedures to carry out the provisions of said Indenture. Said trustee may be given such duties in said Indenture as may be desirable to carry out this Agreement. Section 11. Funds. Subject to the applicable provisions of each Indenture, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have the custody of and disburse Authority funds pursuant to the accounting procedures developed under Section 10 hereof, and shall make the disbursements required by this -8- DOCSLA 1:298114.1 40929-205 JC6 Agreement or otherwise necessary to carry out any Of the provisions or purposes of this Agreement. Section 12. Notices. Notices and other communications hereunder to the Program Participants shall be sufficient if delivered to the clerk of the governing body of each Program Participant. Section 13. Withdrawal and Addition of Parties. A Program Participant may withdraw from Agreement upon written notice to the Commission; provided, however, that no such withdrawal shall result in dissolution of the Authority so long as any Bonds remain outstanding under an Indenture. Any such withdrawal shall be effective only upon receipt of the notice of withdrawal by the Commission which shall acknowledge receipt of such notice of withdrawal in writing and shall file such notice as an amendment to this Agreement effective upon such filing. Qualifying public agencies may be added as parties to this Agreement and become Program Participants upon: (i) the filing by such public agency of an executed counterpart of this Agreement, together with a certified copy of the resolution of the governing body of such public agency approving this Agreement and the execution and delivery hereof; and (ii) adoption of a resolution of the Commission approving the addition of such public agency as a Program Participant. Upon satisfaction of such conditions, the Commission shall file such executed counterpart of this Agreement as an amendment hereto, effective upon such filing. Section 14. Indemnification. To the full extent permitted by law, the Commission may authorize indemnification by the Authority of any person who is or was a member or alternate member of the Commission, or an officer, employee or other agent of the Authority, and who was or is a party or is threatened to be made a party to a proceeding by reason of the fact that such person is or was such a member or alternate member of the Commission, or an officer, employee or other agent of the Authority, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful and, in the case of an action by or in the right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. Section 15. Cotributions or Advances. Contributions or advances of public funds and of the use of personnel, equipment or property may be made to the Authority by the parties hereto for any of the purposes of this Agreement. Payment of public funds may be made to defray the cost of any such contribution. Any such advance may be made subject to repayment, and in such case shall be repaid, in the -9- DOCSLA 1:298114.1 40929-205 JC6 manner agreed upon by the Authority and the party making such advance at the time of such advance. Section 16. Immunities. All of the privileges and immunities from liabilities, exemptions from laws, ordinances and rules, all pension, relief, disability, workers' compensation, and other benefits which apply to the activity of officers, agents or employees of Program Participants when performing their respective functions within the territorial limits of their respective public agencies, shall apply to them to the same degree and extent while engaged as members of the Commission or otherwise as an officer, agent or other representative of the Authority or while engaged in the performance of any of their functions or duties extraterritorially under the provisions of this Agreement. Section 17. Amendments. Except as provided in Section 13 above, this Agreement shall not be amended, modified, or altered except by a written int=ent duly executed by each of the Program Participants. Section 18. Effectiveness. This Agreement shall become effective and be in full force and effect and a legal, valid and binding obligation of each of the Program Participants at 9:00 a.m., California time, on the date that the Commission shall have received from each of the Initial Participants an executed counterpart of this Agreement, together with a certified copy of a resolution of the governing body of each such Initial Participant approving this Agreement and the execution and delivery hereof. Section 19. Partial Invalidity. If any one or more of the terms, provisions, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. Section 20. 5uccessoim. This Agreement shall be binding upon and shall inure to the benefit of the successors of the parties hereto. Except to the extent expressly provided herein, no party may assign any right or obligation hereunder without the consent of the other parties. Section 21. Miscellaneous. 40- DOCSLA 1:298114.1 40929-205 ]C6 This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section referred to. Wherever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. This Agreement is made in the State of California, under the Constitution and laws of such state and is to be so construed. This Agreement is the complete and exclusive statement of the agreement among the parties hereto, which supersedes and merges all prior proposals, understandings, and other agreements, including, without limitation, the Initial Agreement, whether oral, written, or implied in conduct, between and among the parties relating to the subject matter of this Agreement. -11- DOCSLA I :298114.1 40929-205 JC6 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized, and their official seals to be hereto affixed, as of the day and year first above written. Program Participant: MY OF SAN RAFAEL [SEAL] Name: ROD GOITLD Title: CITY MANAGER Dated: April 19, 1999 ATTEST: By. 1,-,- �-A. Name: JEANNE M. LEONCINI Title: CITY CLERK -12- DOCSLAI :2981 1 4.1 10929-205 JC 6 CERTIFICATE OF THE CITY OF SAN RAFAEL In connection with the California Communities Cash Flow Financing Program (the "Program"), the undersigned duly elected (or appointed) and qualified officers identified in and executing Section 4.8 hereof (the "Authorized Representatives") of the City of San Rafael identified in Section 4.8 hereof (the "City of San Rafael"), acting for and on behalf of the City of San Rafael, hereby certify, as of July 1, 1999 (the "Closing Date"), as follows with respect to the 1999 Tax and Revenue Anticipation Note (the "Note") issued by the City of San Rafael: I. CERTIFICATIONS REGARDING CERTAIN CITY OF SAN RAFAEL MATTERS I.1. At all times mentioned herein, the City of San Rafael is a duly organized, validly existing and operating City of San Rafael (as defined in Section 53850 of the California Government Code), under the laws of the State of California (the "State"). I.2. The undersigned Authorized Representatives, under the resolution (the "Resolution") adopted by the legislative body of the City of San Rafael (the "Legislative Body") authorizing the borrowing of funds for Fiscal Year 1999-2000, are duly authorized to make this certification for and on behalf of the City of San Rafael pursuant to the Resolution. I.3. Attached hereto as Exhibit A is a true, correct and complete copy of the Resolution, duly adopted by the City of San Rafael after an agenda of the meeting of the Legislative Body at which such Resolution was adopted was posted at least 72 hours before said meeting, at a location freely accessible to members of the public, and all of the members of the Legislative Body had due notice of said meeting and a quorum thereof were present at said meeting. The City of San Rafael has previously provided the California Statewide Communities Development Authority (the "Authority") with a true, accurate and complete copy of the Resolution. I.4. The Resolution has not been amended or revoked and is in full force and effect on the date hereof, and there is no proceeding of the Legislative Body in conflict with or in any way altering the Resolution. I.5. The information contained in the Credit Questionnaire (including the Cashflow Worksheet therein) (the "Credit Questionnaire") completed by the City of San Rafael and submitted to the Authority and Sutro & Co. Incorporated as financial advisor (the "Financial Advisor") in connection with the Program, was at the time submitted and is on the date of this Certificate true and accurate. I.6. The City of San Rafael does not have a negative cash balance at the beginning of Fiscal Year 1999-2000 in its general fund. I.7. The City of San Rafael has authorized or acknowledged, by all necessary action, the execution, delivery, receipt and due performance of the Resolution, the Note, the Purchase Agreement by and between the Authority and the City of San Rafael (severally and not jointly with other local agencies), including the Pricing Confirmation Supplement attached thereto (the "Purchase Agreement"), the Indenture, dated as of July 1, 1999 (the "Indenture"), by and DOCSLA1:299177.1 40929-205 106 "Purchase Agreement"), the Indenture, dated as of July 1, 1999 (the "Indenture"), by and between U.S. Trust Company of California, N.A. (the "Trustee") and the Authority, pertaining to the issuance of the California Statewide Communities Development Authority 1999 City of San Rafael Tax and Revenue Anticipation Bonds, Series _ (the "Bonds"), and any and all other agreements and documents (the "Other Agreements") as may be required to be executed, delivered and received by the City of San Rafael or the Authority in order to carry out, give effect to and consummate the transactions contemplated by the Resolution. The Resolution, the Note, the Indenture, the Purchase Agreement, and the Other Agreements are collectively referred to herein as the "Documents." I.8. None of the Documents applicable to the City of San Rafael have been amended, modified or rescinded by the City of San Rafael and each of such Documents is in full force and effect on the date hereof. I.9. The representations and warranties of the City of San Rafael set forth in the applicable Documents were on the date made and are on the date hereof true and accurate as though made on and as of the date hereof. I.10. The Purchase Agreement and the Note of the City of San Rafael have been duly executed and delivered by the duly authorized officers of the City of San Rafael, and the Note and the Purchase Agreement, when executed and delivered by the other parties thereto (where necessary) and the obligations of the City of San Rafael under the Indenture will constitute legal, valid and binding agreements of the City of San Rafael, enforceable in accordance with their respective terms, except as such enforceability may be limited by bankruptcy or other laws affecting creditors' rights, the application of equitable principles if equitable remedies are sought, the exercise of judicial discretion in appropriate cases and the limitations on legal remedies against public entities in the State. . I.11. The City of San Rafael has complied with all provisions of applicable law in connection with the adoption of the Resolution and the transactions contemplated under the Resolution and the documents approved thereby. I.12. The execution, delivery and performance by the City of San Rafael of the Note and the Purchase Agreement and the execution delivery and performance by the Authority of the Indenture and the Bonds and, in each case the borrowing thereunder or in connection therewith (and the application of the proceeds thereof) have been duly authorized or acknowledged by all necessary action on the part of the City of San Rafael. I.13. The City of San Rafael has full power and authority to acknowledge the Authority's execution and delivery of the Indenture. The execution and delivery by the Authority of the Indenture (and the City of San Rafael's obligations thereunder) (i) do not and will not contravene the laws of the State providing for the organization and government of the City of San Rafael and (ii) do not and will not conflict with, or result in the violation of, any applicable law. I.14. The City of San Rafael covenants that upon receipt from the Trustee of a request to confirm that amounts constituting such City of San Rafael's repayment obligation described in DOCSLA 1:299177.1 40929-205 JC6 2 Section 8 of the Resolution have been transferred to and set aside in the Payment Account (as defined in the Resolution), the City of San Rafael shall within five (5) Business Days (as defined - in the Indenture) after the date of such request, confirm such transfer to the Trustee by submitting the Payment Account Deposit Certification in the form set forth in Exhibit C of the Indenture. I.15. If prior to the Closing Date the City of San Rafael should have any reason to believe that any of the representations or certifications contained herein or in the Documents are not true and correct, the City of San Rafael covenants that it will notify Orrick, Herrington & Sutcliffe LLP, ("Bond Counsel"). II. CERTIFICATIONS REGARDING TAX MATTERS 11. 1. The City of San Rafael shall not take any actions (or fail to take any actions) that would cause interest on the Bonds to be included in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the City of San Rafael: a) shall not allow the use of any proceeds of the Note to be used in the trade or business of any nongovernmental person; b) shall not loan any proceeds of the Note to any nongovernmental person; C) shall take no actions that would cause the Bonds to be treated as "federally guaranteed," within the meaning of Section 149(b) of the Internal Revenue Code of 1986 (the "Code"); d) shall not use any proceeds of the Note to repay any principal or interest of any outstanding tax-exempt obligation of the City of San Rafael apart from interest that accrues during a one-year period commencing July _, 1999; e) shall not set aside or specifically earmark amounts to be used to satisfy the City of San Rafael's repayment obligation described in Section 8 of the Resolution earlier than the date which is one year prior to the final maturity date of the Note of the City of San Rafael; and f) shall take no actions that would cause the Bonds to be treated as "arbitrage bonds," within the meaning of Section 148 of the Code. DOCSLA 1:299177.1 40929-205 JCG 3 III. CERTIFICATIONS REGARDING ARBITRAGE AND REBATE The following are the certifications and the reasonable expectations of the City of San Rafael, stated pursuant to Treasury Regulations Section 1.148-2(b), relating to the use and investment of the proceeds of the Note: I1.2. The Note is being issued in anticipation of taxes or other revenues and will be spent to pay lawful expenses of the City of San Rafael payable from its general fund. II.3. Based upon the City of San Rafael's cashflow projections which are set forth in Appendix E of the Official Statement relating to the Bonds (the "Cashflow Projections"), the City of San Rafael expects to allocate the proceeds of the Note to working capital expenditures within 13 months after July 1, 1999, using the methodology described in the next section. 11.4. Proceeds of the Note will be allocated to working capital expenditures of the City of San Rafael on any date that the City of San Rafael's working capital expenditures exceed the City of San Rafael's "available amounts." "Available amounts" include any cash, investments, or other amounts held in any fund or account by the City of San Rafael that is available for the City of San Rafael to use for working capital expenditures without legislative or judicial action and without a legislative, judicial, or contractual requirement that those amounts be reimbursed. "Available amounts" do not include proceeds of the Notes or amounts held in a reasonable working capital reserve that is limited to either ten percent (10%) of the amount of the Note or the lesser of either (i) five percent (5%) of the City of San Rafael expenditures paid out of current revenues during Fiscal Year 1998-1999 or (ii) the amount that the City of San Rafael has historically and customarily maintained as a working capital reserve. II.5. The funds and accounts maintained by or for the benefit of the City of San Rafael that are considered available for payment of the City of San Rafael's expenditures have been described in the Credit Questionnaire, and their cash balances as of the date of issue have been taken into account in the Cashflow Projections. II.6. In preparing its cash flow analysis for Fiscal Year 1999-2000, the City of San Rafael has reviewed its Fiscal Year 1998-1999 cash flows and has, where applicable, compared the Fiscal Year 1998-1999 actual cash flows with the Fiscal Year 1998-1999 cash flows projected just before the beginning of Fiscal Year 1998-1999. Taking this information into account and such other information as is available to the City of San Rafael, the City of San Rafael believes that the projected cash flow analysis for Fiscal Year 1999-2000 is reasonable and is based on reasonable assumptions. 11.7. All of the proceeds of the Note, together with earnings thereon, less amounts allocable to the City of San Rafael's costs of issuance set forth in the Purchase Agreement, will be deposited into the Proceeds Fund established under the Indenture. 11.8. The Note will be repaid from the general funds of the City of San Rafael received after all Note Proceeds are spent as described above. The moneys to be so used will be separately accounted for until used to repay the Note. DOCSLA I :299177.1 40929-205 JC6 4 II.9. If the City of San Rafael is unable to make the small issuer certification set forth in the Pricing Confirmation Supplement, then the Agency hereby makes the following certifications: All of the proceeds of the Note, together with earnings thereon, will be deposited into the City of San Rafael's General Fund (the "General Fund") or a special fund created solely to hold proceeds of the Note (the "Special Note Fund"). Note proceeds, together with earnings thereon, so deposited may be withdrawn and expended by the City of San Rafael on any given day during Fiscal Year 1999-2000 for any purpose for which the City of San Rafael is authorized to expend funds from its General Fund, but only after exhausting all funds that are available amounts as of such given day, and for purposes of this requirement, available amounts excludes amounts that are held or set aside in a reasonable working capital reserve that is limited to either ten percent (10%) of the amount of the Note or the lesser of either (i) five percent (5%) of the City of San Rafael expenditures paid out of current revenues during Fiscal Year 1998-1999 or (ii) the amount that the City of San Rafael has historically and customarily maintained as a working capital reserve; provided, that if on the date that is five (5) months from the date of issuance of the Note or on any date thereafter, it appears that all remaining amounts in the Special Note Fund (or, if appropriate, all remaining proceeds of the Note, including earnings thereon, held in the General Fund) will not have been so withdrawn and spent by the date that is six (6) months from the date of issuance of the Note, the City of San Rafael shall promptly notify Bond Counsel and, to the extent of its power and authority, comply with the instructions from Bond Counsel as to the means of satisfying the rebate requirements of Section 148 of the Code. The working capital reserve shall be funded with any revenues of the City of San Rafael's General Fund but will not be funded with proceeds of the Note. The working capital reserve will be tracked and administered as a separate account or subaccount within the General Fund. On the basis of the facts, estimates and circumstances in existence on the date of delivery, it is not expected that the proceeds of the Note will be used in a manner that would cause the Note to be an issue of arbitrage bonds within the meaning of Section 148 of the Code. II.10. To the best knowledge and belief of the undersigned, there are no other facts, estimates, or circumstances which would materially change the foregoing statements, and the foregoing expectations are reasonable. II. 11. The City of San Rafael understands that Bond Counsel will rely upon this Certificate in giving its opinion that interest on the Bonds is excluded from federal gross income. III. REQUEST TO AUTHORITY AND TRUSTEE, CERTIFICATIONS RELATING THERETO AND SIGNATURE CERTIFICATIONS OF THE CITY OF SAN RAFAEL I11.1. The Trustee is hereby requested and authorized to authenticate and deliver the 1999-2000 Tax and Revenue Anticipation Note of the City of San Rafael upon receipt of the purchase price thereof. The Trustee is also hereby requested and authorized to authenticate and deliver the Bonds upon receipt thereof from the Authority. III.2. It is hereby acknowledged that the Authority is authorized to issue the Bonds, upon receipt of the purchase price of the Note of the City of San Rafael together with the aggregate purchase price of all other notes of the other Local Agencies participating in the DOCSLA 1:299177.1 40929-205 JCG 5 Program and whose notes will be pooled with the City of San Rafael's Note in connection with the issuance of the Bonds. III.3. The Trustee is hereby directed to deposit the proceeds of the Note in the amounts as set forth in the Pricing Confirmation Supplement into the Costs of Issuance Fund and in the Proceeds Fund. IIIA. Upon the deposit of proceeds as set forth in Section 4.3 hereof, the Trustee is requested and authorized to pay, from amounts held for the benefit of the City of San Rafael in the Proceeds Account within the Proceeds Fund, the amounts on deposit in such Proceeds Account, as indicated in Schedule I of the Pricing Confirmation Supplement to the Purchase Agreement, to the City of San Rafael by wir check (circle one)]. If the City of San Rafael is to receive such amounts by wire, payment is requested to be received by the financial institution as indicated in Section 4.7 hereof. III.5. The amount requisitioned hereby will be applied to a purpose for which the City of San Rafael is authorized to use and expend funds from the general fund of the City of San Rafael and pending such application will be invested in investments which are legal for the investment of funds of the City of San Rafael. 111.6. As of the date hereof, no event has occurred and is continuing which constitutes an Event of Default under the Resolution or would constitute an Event of Default but for the requirement that notice be given, or time elapse, or both. E11.7. ' Payments made to the City of San Rafael by wire transfer, if requested by the City of San Rafael pursuant to Section 4.4 hereof, will be received on behalf of the City of San Rafael by the following financial institution: Name and Address of Bank: West America Bank San Rafael Main Office 1108 Fifth Avenue San Rafael, Calif. 94901 Name of Contact Person at Bank: Karl H. Pittman Assistant Vice President ABA Routing No.: Account No. Please complete the relevant information relating to the City of San Rafael's financial institution if the City of San Rafael has requested payment by wire transfer pursuant to Section 4.4 hereof. DOCSLA 1:299177.1 40929-205 JC6 6 1111.8. "The following named persons are duly elected (or appointed), qualified and acting officers of the City of San Rafael presently holding the offices set forth opposite their respective names below and by execution hereof each certifies that the signatures of the other officer or officers hereto are the genuine signatures of such officer or officers (signatures of the officers executing the Note, the Purchase Agreement and the Amended and Restated Joint Exercise of Powers Agreement relating to the Authority (if applicable) must appear below): AUTHORIZED REPRESENTATIVES OF THE CITY OF SAN RAFAEL: NAME TITLE SIGNATURE Rod Gould Kenneth Nordhoff Jeanne M. Leoncini Clark E. Guinan DOCSLA 1:299177.1 40929-205 JC6 City Manager —6� Assistant City Manager/Treasurer City Clerk Assistant City Attorney