HomeMy WebLinkAboutCC Resolution 12716 (Communities Cash Flow Financing Program)RESOLUTION NO. 12716
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2009-2010; THE ISSUANCE AND SALE OF
A 2009-2010 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
oi'temporary notes;
WHEREAS, the legislative body (the "Legislative Body") of the local agency
specified in Section 21 hereof (the "Local Agency") has determined that a sum (the "Principal
Amount"), not to exceed the Maximum Amount of Borrowing specified in Section 21 hereof,
which Principal Amount is to be confirmed and set in the Pricing Confirmation (as defined in
Section 4 hereof), is needed for the requirements of the Local Agency, to satisfy obligations of
the Local Agency, and that it is necessary that said Principal Amount be borrowed for such
purpose at this time by the issuance of a note or notes therefore in anticipation of the receipt of
taxes, income, revenue, cash receipts and other moneys to be received by the Local Agency for
the general fund of the Local Agency attributable to its fiscal year ending June 30, 2010
("Repayment Fiscal Year");
WHEREAS, the Local Agency 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 Legislative Body 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 Local Agency attributable to the Repayment Fiscal Year, and available for the
payment of the principal of the Note and the interest thereon;
WHEREAS, no money has heretofore been borrowed by or on behalf of the
Local Agency through the issuance of tax and revenue 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 the Repayment Fiscal Year;
WHEREAS, pursuant to Section 53856 of the Act, certain moneys which will be
received by the Local Agency during and attributable to the Repayment Fiscal Year can be
pledged for the payment of the principal of the Note and the interest thereon (as hereinafter
provided);
WHEREAS, the Local Agency has determined that it is in the best interests of
the Local Agency to participate in the California Communities Cash Flow Financing Program
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(the "Program"), whereby participating local agencies (collectively, the "Issuers") will
simultaneously issue tax and revenue anticipation notes;
WHEREAS, the Local Agency desires to have its Note marketed together with
some or all of the notes issued by the Issuers participating in the Program;
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") has sponsored the Program and, on behalf of the Issuers, has engaged the
underwriter appointed in Section 20 hereof (the "Underwriter"), for the purpose of structuring
one or more pools of notes or series of note participations (referred to herein as the "Note
Participations", the "Series" and/or the "Series of Note Participations") distinguished by whether
and what type(s) of Credit Instrument (as hereinafter defined) secures notes that are part of each
Series, by the principal amounts of the notes assigned to the Series, by whether interest on the
Series of Note Participations is a fixed rate of interest or a variable rate of interest swapped to a
fixed rate, by whether interest on the Series of Note Participations is includable in gross income
for federal income tax purposes, or by other factors, all of which the Local Agency hereby
authorizes the Underwriter to determine;
WHEREAS, the Program requires the Issuers participating in any particular
Series to deposit their tax and revenue anticipation notes with a trustee, pursuant to a trust
agreement (the "Trust Agreement") among such Issuers, the Local Agency, the Authority and
Wells Fargo Bank, National Association, as trustee (the "Trustee");
WHEREAS, the Program requires the Trustee, pursuant to the Trust Agreement,
to execute and deliver the Note Participations evidencing and representing proportionate,
undivided interests in the payments of principal of and interest on the notes that are part of such
Series;
WHEREAS, the Local Agency desires to have the Trustee execute and deliver a
Series of Note Participations which evidence and represent interests of the Owners, as defined in
the Trust Agreement, thereof in the Note and the Notes issued by other Issuers in such Series;
WHEREAS, as additional security for the Owners of the Note Participations, all
or a portion of the payments by all of the Issuers of their respective notes may or may not be
secured either by an irrevocable letter (or letters) of credit or policy (or policies) of insurance or
other credit instrument (or instruments) (collectively, the "Credit Instrument") issued by the
credit provider or credit providers designated in the Trust Agreement, as finally executed
(collectively, the "Credit Provider"), which may be issued pursuant to a credit agreement or
agreements or commitment letter or letters designated in the Trust Agreement (collectively, the
"Credit Agreement") between the Issuers and the respective Credit Provider;
WHEREAS, the net proceeds of the Note may be invested by the Local Agency
in Permitted Investments (as defined in the Trust Agreement) 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;
WHEREAS, the Program requires that each participating Issuer approve the
Trust Agreement and the alternative Credit Instruments, if any, in substantially the forms
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presented to the Legislative Body, or, in the case of the Credit Instruments, if any, if not
presented, in a form which complies with such requirements and standards as may be determined
by the Legislative Body, with the final form and type of Credit Instrument and corresponding
Credit Agreement, if any, determined upon execution of the Pricing Confirmation by the
Authorized Representative;
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 Note Participations, and (b), if applicable, the fees of the Credit Provider, the Issuer's
allocable share of all Predefault Obligations and the Issuer's Reimbursement Obligations, if any
(each as defined in the Trust Agreement);
WHEREAS, pursuant to the Program, the Note and the Notes issued by other
Issuers participating in the same Series (all as evidenced and represented by a Series of Note
Participations) will be offered for sale through negotiation with the Underwriter pursuant to the
terms and provisions of a purchase agreement, which shall be in substantially the same form as
the purchase agreement presented to this meeting (the "Purchase Agreement");
WHEREAS, the Trust Agreement provides, among other things, that for the
benefit of Owners of Note Participations and the Credit Provider, if any, the Local Agency shall
provide notices of the occurrence of certain enumerated events, if deemed by the Local Agency
to be material.
WHEREAS, the Local Agency has determined that it may be desirable to provide
for the issuance of an additional parity note (the "Parity Note") during the Repayment Fiscal
Year, the principal and interest on which are secured by Pledged Revenues, hereinafter defined,
on a parity with the Note.
WHEREAS, the Local Agency has determined that, in order to reduce interest
costs, it may be desirable to enter into one or more interest rate swaps; and
WHEREAS, it is necessary to engage the services of certain professionals to
assist the Local Agency in its participation in the Program;
NOW, THEREFORE, this Legislative Body hereby finds, determines, declares
and resolves as follows:
Section 1. Recitals. All the above recitals are true and correct.
Section 2. Authorization of Issuance. This Legislative Body hereby determines
to borrow solely for the purpose of anticipating taxes, income, revenue, cash receipts and other
moneys to be received by the Local Agency for the general find of the Local Agency attributable
to the Repayment Fiscal Year, by the issuance of a note or notes, pursuant to the provisions of
the Act, designated the Local Agency's "2009 Tax and Revenue Anticipation Note," with an
appropriate series designation if more than one note is issued (collectively, the "Note"), to be
issued in the form of a fully registered note or notes in 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 13 months thereafter on a date indicated on the face thereof and
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determined in the Pricing Confirmation (the "Maturity Date"), and to bear interest, payable on its
Maturity Date (and if the Maturity Date is more than 12 months from the date of issuance,
payable on the interim interest payment date set forth in the Pricing Confirmation) and computed
upon the basis of a 360 -day year consisting of twelve 30 -day months, or a 365- or 366 -day year,
as the case may be, and actual days elapsed, at a rate or rates, if more than one Note is issued, not
to exceed 12% per annum as detenmined in the Pricing Confirmation and indicated on the face of
the Note (the "Note Rate"). If a Credit Instrument secures in whole or in part the Note or the
Note as evidenced by the Series of Note Participations and all principal of and interest on the
Note is not paid in full at maturity or if payment of principal 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
or claim is not fully reimbursed on such date, such Note shall become a Defaulted Note (as
defined in the Trust Agreement), and the unpaid portion thereof (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 Trust Agreement). If the
Note as evidenced and represented by the Series of Note Participations 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 two sentences, the obligation of the Local Agency with respect to such Defaulted
Note or unpaid Note shall not be a debt or liability of the Local Agency prohibited by
Article XVI, Section 18 of the California Constitution, and the Local Agency shall not be liable
thereon except to the extent of any available revenues attributable to the Repayment Fiscal Year,
as provided in Section 8 hereof. The percentage of the Note as evidenced and represented by the
Series of Note Participations 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 notes (or portions thereof) of all Issuers of Notes
that are part of such Series of Note Participations, expressed as a percentage (but not greater than
100%) as of the maturity date. Both the principal of and interest on the Note shall be payable in
lawful money of the United States of America.
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.
Anything in this Resolution to the contrary notwithstanding, the Pricing
Confirmation (defined below) may specify that a portion of the authorized Principal Amount of
the Note shall be issued as a taxable Note the interest on which is includable in the gross income
of the holder thereof for federal income tax purposes (a "Taxable Note"). In such event, the
Taxable Note shall be issued with an appropriate series designation and other terms reflecting
such taxability of interest income, including without limitation, a taxable Note Rate and a taxable
Default Rate; the term Note, and other terms as appropriate, shall be deemed to include or refer
to such Taxable Note; and the agreements, covenants and provisions set forth in this Resolution
to be performed by or on behalf of the Local Agency shall be for the equal and proportionate
benefit, security and protection of the holder of any Note without preference, priority or
distinction as to security or otherwise of any Note over another Note.
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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 form to be filled in with
appropriate words and figures as determined at closing.
Section 4. Sale of Note, Delegation. The Note Participations (which evidence
an interest in the Note which shall be delivered to the Trustee) shall be sold to the Underwriter
pursuant to the terms and provisions of the Purchase Agreement. The form of the Purchase
Agreement, including the form of the Pricing Confirmation set forth as an exhibit thereto (the
"Pricing Confirmation"), presented to this meeting is hereby approved. The authorized
representatives set forth in Section 21 hereof (each, the "Authorized Representative") 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 Note Rate shall not exceed 12% per annum, and that the Local Agency's pro
rata share of Underwriter's discount on the Note, when added to the Local Agency's share of the
costs of issuance of the Note Participations, shall not exceed 1.0% of the Principal Amount of the
Note 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
upon execution and delivery for all purposes.
Section 5. Program Annroval. The Note shall be combined with notes of other
Issuers into a Series as set forth in the Preliminary Official Statement, hereinafter mentioned, and
shall be sold simultaneously with such other notes of that Series secured by the Credit Instrument
(if any) referred to in the Pricing Confirmation, and shall be evidenced and represented by the
Note Participations which shall evidence and represent proportionate, undivided interests in the
Note in the proportion that the face amount of the Note bears to the total aggregate face amount
of the Note and the notes issued by other Issuers which the Series of Note Participations
represent. Such Note Participations may be delivered in book -entry form.
The forms of Trust Agreement and alternative general types and forms of Credit
Agreements, if any, presented to this meeting are hereby approved, and the Authorized
Representative is hereby authorized and directed to execute and deliver the Trust Agreement and
a Credit Agreement, if applicable, which shall be identified in the Pricing Confirmation, in
substantially one or more of said forms (a substantially final form of Credit Agreement to be
delivered to the Authorized Representative following the execution by the Authorized
Representative of the Pricing Confirmation), with such changes therein as said officer shall
require or approve, such approval of this Legislative Body and such officer to be conclusively
evidenced by the execution of the Trust Agreement and the Credit Agreement, if any. A
description of this undertaking is set forth in the Preliminary Official Statement and will also be
set forth in the Final Official Statement. The Authorized Representative is hereby authorized and
directed to comply with and carry out all of the provisions of the Trust Agreement with respect
to continuing disclosure; provided, however, that failure of the Local Agency to comply with the
Continuing Disclosure Agreement, as defined in Article 11 of the Trust Agreement, shall not be
considered an Event of Default hereunder. Any Credit Agreement identified in the Pricing
Confirmation but not at this time before the Legislative Body shall include reasonable and
customary terms and provisions relating to fees, increased costs of the Credit Provider payable
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by the Local Agency, negative and affirmative covenants of the Local Agency and events of
default. The form of the Preliminary Official Statement presented to this meeting is hereby
approved, and the Underwriter is hereby authorized and directed to cause to be mailed to
prospective bidders the Preliminary Official Statement in connection with the offering and sale
of the Note Participations.
Any one of the Authorized Representatives of the Local Agency is hereby
authorized and directed to provide the Underwriter with such information relating to the Local
Agency as they shall reasonably request for inclusion in the Preliminary Official Statement and
Official Statement. Upon inclusion of the information relating to the Local Agency therein, the
Preliminary Official Statement 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; provided that no representation is made as to the information contained in
the Preliminary Official Statement relating to the other Issuers or any Credit Provider. 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 relating to the
Local Agency might include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, the Local Agency shall promptly notify the Underwriter. The
Authority is hereby authorized and directed, at or after the time of the sale of any Series of Note
Participations, for and in the name and on behalf of the Local Agency, to execute a final Official
Statement in substantially the form of the Preliminary Official Statement presented to this
meeting, with such additions thereto or changes therein as the Authority may approve, such
approval to be conclusively evidenced by the execution and delivery thereof.
The Trustee is authorized and directed to execute Note Participations on behalf of
the Local Agency pursuant to the teens and conditions set forth in the Trust Agreement, in the
aggregate principal amount specified in the Trust Agreement, and substantially in the form and
otherwise containing the provisions set forth in the Form of the Note Participations contained in
the Trust Agreement. When so executed, the Note Participations shall be delivered by the
Trustee to the Underwriter upon payment of the purchase price thereof, pursuant to the terms of
the Trust Agreement.
Subject to Section 8 hereof, the Local Agency hereby agrees that if the Note as
evidenced and represented by the Series of Note Participations 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 Series of Note Participations, and therefore with respect to
all or a portion of the Local Agency's 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 Series of the Note Participations which evidence and represent 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 Note
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Participations will be deemed to have received such principal amount upon deposit of such
moneys with the Trustee.
The Local Agency 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 Local Agency's Note as evidenced and represented by the Series of Note Participations is
secured in whole or in part by a 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
Local Agency 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 amounts will be paid by the Local Agency within
twenty-five (25) days of receipt by the Local Agency of a bill therefor from the Trustee.
Section 6. No Joint Obligation; Owners' Rights. The Note shall be marketed
and sold simultaneously with the notes of other Issuers and shall be aggregated and combined
with notes of other Issuers participating in the Program into a Series of Note Participations
evidencing and representing an interest in several, and not joint, obligations of each Issuer. The
obligation of the Local Agency to Owners is a several and not a joint obligation and is strictly
limited to the Local Agency's repayment obligation under this Resolution and the Note, as
evidenced and represented by such Series of Note Participations.
Owners of Note Participations, to the extent of their interest in the Note, and the
Credit Provider, if any, shall be treated as owners of the Note and shall be entitled to all the
rights and security thereof in accordance with the Trust Agreement, including the right to enforce
the obligations and covenants contained in this Resolution and the Note. The Local Agency
hereby recognizes the right of the Owners and the Credit Provider, if any, acting directly or
through the Trustee to enforce the obligations and covenants contained in the Note, this
Resolution and the Trust Agreement. The Local Agency shall be directly obligated to each
Owner for the principal and interest payments on the Note evidenced and represented by the
Note Participations without any right of counterclaim or offset arising out of any act or failure to
act on the part of the Trustee.
Section 7. Disposition of Proceeds of Note. The moneys received from the sale
of the Note allocable to the Local Agency's share of the costs of issuance (which shall include
any issuance fees in connection with a Credit Instrument applicable to the Note, if any) shall be
deposited in the Costs of Issuance Fund held and invested by the Trustee under the Trust
Agreement and expended on costs of issuance as provided in the Trust Agreement. The moneys
received from the sale of the Note (net of the Local Agency's share of the costs of issuance) shall
be deposited in the Local Agency's Proceeds Subaccount within the Proceeds Fund hereby
authorized to be created pursuant to, and held and invested by the Trustee under, the Trust
Agreement for the Local Agency and said moneys may be used and expended by the Local
Agency for any purpose for which it is authorized to expend funds upon requisition from the
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Proceeds Subaccount as specified in the Trust Agreement. 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 Note Participations allocable to the Local
Agency's Note on deposit in the Proceeds Fund which shall constitute the Local Agency's
Proceeds Subaccount.
Section 8. Source of Pavment. 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 or held by the Local Agency for the general fund of the Local Agency and are
attributable to the Repayment Fiscal Year and which are available for payment thereof. As
security for the payment of the principal of and interest on the Note, the Local Agency hereby
pledges all Unrestricted Revenues (as hereinafter provided, the "Pledged Revenues") which are
received or held by the Local Agency for the general fund of the Local Agency and are
attributable to the Repayment Fiscal Year, and the principal of the Note and the interest thereon
shall constitute a first lien and charge thereon and shall be payable from the first moneys
received by the Local Agency from such Pledged Revenues and, to the extent not so paid, shall
be paid from any other taxes, income, revenue, cash receipts and other moneys of the Local
Agency lawfully available therefor (all as provided for in Sections 53856 and 53857 of the Act).
The term "Unrestricted Revenues" shall mean all taxes, income, revenue (including, but not
limited to, revenue from the state and federal governments), cash receipts, and other moneys,
intended as receipts for the general fund of the Local Agency attributable to the Repayment
Fiscal Year and which are generally available for the payment of current expenses and other
obligations of the Local Agency. The holders of the Notes, Owners and Credit Provider shall
have a first lien and charge on such Unrestricted Revenues as herein provided which are received
or held by the Local Agency and are attributable to the Repayment Fiscal Year.
In order to effect the pledge referenced in the preceding paragraph, the Local
Agency hereby agrees to the establishment and maintenance of a special account of the Local
Agency (the "Payment Account") by the Trustee as the responsible agent to maintain such an
account until the payment of the principal of the Note and the interest thereon, and the Local
Agency further agrees to cause to be deposited 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 Repayment Fiscal Year) until the amount on deposit
in the Payment Account, 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. Any such deposit may take into consideration anticipated investment
earnings on amounts deposited in an Investment Agreement, that is a Permitted Investment, as
defined in the Trust Agreement, through the Maturity Date. Transfers from the Payment
Account shall be made in accordance with the Trust Agreement.
Any Authorized Representative of the Local Agency is hereby authorized to
approve the determination of the Repayment Months and percentages of the principal and
interest due on the Note required to be on deposit in the Payment Account in each Repayment
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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
Legislative Body and such Authorized Representative; provided, however, that the maximum
number of Repayment Months shall be six and the maximum amount of Pledged Revenues
required to be deposited in each Repayment Month shall not exceed fifty percent (50%) of the
aggregate principal and interest due on the Note. In the event on the day in each such
Repayment Month that a deposit to the Payment Account is required to be made, the Local
Agency has not received sufficient unrestricted revenues to 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 Local Agency 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.
Any moneys placed in the Payment Account shall be for the benefit of (i) the
owner of the Note and (ii) (to the extent provided in the Trust Agreement) the Credit Provider, if
any. The moneys in the Payment Account shall be applied only for the purposes for which the
Payment Account is 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 for defeasance of the Note
Participations as set forth in the Trust Agreement) and (to the extent provided in the Trust
Agreement and, if applicable, the Credit Agreement) the payment of all Predefault Obligations
and Reimbursement Obligations owing to the Credit Provider.
The Local Agency hereby directs the Trustee to transfer on the Note Payment
Deposit Date (as defined in the Trust Agreement), any moneys in the Payment Account to the
Note Participation Payment Fund (as defined in the Trust Agreement). In the event that moneys
in the Payment Account 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; and fifth, to pay any Reimbursement Obligations of
the Local Agency and any of the Local Agency's pro rata share of Predefault Obligations owing
to the Credit Provider. Any moneys remaining in or accruing to the Payment Account 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 find of the Local Agency, subject to any other disposition required by
the Trust Agreement, or, if applicable, the Credit Agreement. Nothing herein shall be deemed to
relieve the Local Agency from its obligation to pay its Note in full on the Maturity Date.
Moneys in the Proceeds Subaccount and in the Payment Account shall be invested
by the Trustee pursuant to the Trust Agreement as directed by the Local Agency in Permitted
Investments as described in and under the terms of the Trust Agreement. Any such investment
by the Trustee shall be for the account and risk of the Local Agency, and the Local Agency shall
not be deemed to be relieved of any of its obligations with respect to the Note, the Predefault
Obligations or Reimbursement Obligations, if any, by reason of such investment of the moneys
in its Proceeds Subaccount or the Payment Account.
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The Local Agency shall promptly file with the Trustee and the Credit Provider, if
any, such financial reports at the times and in the forms required by the Trust Agreement. At the
written request of the Credit Provider, if any, the Local Agency shall, within ten (10) Business
Days following the receipt of such written request, file such report or reports to evidence the
transfer to and deposit in the Payment Account required by this Section 8 and provide such
additional financial information as may be required by the Credit Provider, if any.
Anything herein to the contrary notwithstanding, the Local Agency may at any
time during the Repayment Fiscal Year issue a Parity Note, in an amount not to exceed $[NOT
TO EXCEED AMT], secured by a first lien and charge on Pledged Revenues; provided that (i)
such Parity Note shall have the same Repayment Months as the Note, shall be payable as to
principal and interest in such Repayment Months in amounts corresponding on a pro rata basis to
the schedule of principal and interest payable in such Repayment Months on the Note and the
rating on such Parity Note (or related series of note participations if sold into a pool) shall not be
less than the rating on the Series of Note Participations related to the Note and (ii) the Local
Agency shall have received the written consent of the Credit Provider, if any, to the issuance of
the Parity Note by the Local Agency. In the event that the Local Agency issues a Parity Note,
the Local Agency shall make appropriate deposits into the Payment Account with respect to such
Parity Note, and in such event, the Payment Account shall also be held for the benefit of the
holders of the Parity Note.
Section 9. Execution of Note. Any one of the Authorized Representatives of the
Local Agency or any other officer designated by the Legislative Body shall be authorized to
execute the Note by manual or facsimile signature, and the Secretary or Clerk of the Legislative
Body of the Local Agency or any duly appointed assistant thereto shall be authorized to
countersign the Note by manual or facsimile signature. Said officers of the Local Agency are
hereby authorized to cause the blank spaces of the Note to be tilled in as may be appropriate
pursuant to the Pricing Confirmation. Said officers are hereby authorized and directed to cause
the Trustee, as registrar and authenticating agent, to accept delivery of the Note pursuant to the
terms and conditions of the Purchase Agreement and Trust Agreement. In case any officer
whose signature shall appear on any Note shall cease to be such officer 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 Local
Agency, if any.
Section 10. Representations and Covenants of the Local Agenev. The Local
Agency makes the following representations for the benefit of the holder of the note, the owners
of the Note Participations, the Underwriter and the Credit Provider, if any.
(A) The Local Agency is duly organized and existing under and by virtue of
the laws of the State of California and has all necessary power and authority (i) to adopt this
Resolution and perform its obligations thereunder, (ii) to enter into and perform its obligations
under the Purchase Agreement, and (iii) to issue the Note and perform its obligations thereunder.
(B) Upon the issuance of the Note, the Local Agency shall have taken all
action required to be taken by it to authorize the issuance and delivery of the Note and the
OHS West: 260611459.3
40929-605 LAO/LAO 10
performance of its obligations thereunder, and the Local Agency has full legal right, power and
authority to issue and deliver the Note.
(C) The issuance of the Note, the adoption of the Resolution and the execution
and delivery of the Purchase Agreement, Trust Agreement and Credit Agreement, if any, and
compliance with the provisions hereof and thereof will not conflict with or violate any law,
administrative regulation, court decree, resolution, charter, by-laws or other agreement to which
the Local Agency is subject or by which it is bound.
(D) Except as may be required under blue sky or other securities laws of any
state or Section 3(a)(2) of the Securities Act of 1933, there is no consent, approval, authorization
or other order of, or filing with, or certification by, any regulatory authority having jurisdiction
over the Local Agency required for the issuance and sale of the Note or the consummation by the
Local Agency of the other transactions contemplated by this Resolution, except those the Local
Agency shall obtain or perform prior to or upon the issuance of the Note.
(E) The Local Agency has (or will have prior to the issuance of the Note)
duly, regularly and properly adopted a preliminary budget for the Repayment Fiscal Year setting
forth expected revenues and expenditures and has complied with all statutory and regulatory
requirements with respect to the adoption of such budget. The Local Agency hereby covenants
that it shall (i) duly, regularly and properly prepare and adopt its final budget for the Repayment
Fiscal Year, (ii) provide to the Trustee, the Credit Provider, if any, 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.
(F) The sum of the principal amount of the Local Agency's Note plus the
interest payable thereon, on the date of its issuance, will not exceed fifty percent (50%) of the
estimated amounts of the Local Agency's uncollected taxes, income, revenue (including, but not
limited to, revenue from the state and federal governments), cash receipts, and other moneys to
be received by the Local Agency for the general fund of the Local Agency attributable to the
Repayment Fiscal Year all of which will be legally available to pay principal of and interest on
the Note.
(G) The Local Agency (i) has not defaulted within the past twenty (20) years,
and is not currently in default, on any debt obligation and (ii), to the best knowledge of the Local
Agency, has never defaulted on any debt obligation.
(H) The Local Agency's most recent audited financial statements present
fairly the financial condition of the Local Agency as of the date thereof and the results of
operation for the period covered thereby. Except as has been disclosed to the Underwriter and
the Credit Provider, if any, there has been no change in the financial condition of the Local
Agency since the date of such audited financial statements that will in the reasonable opinion of
the Local Agency materially impair its ability to perform its obligations under this Resolution
and the Note. The Local Agency agrees to furnish to the Underwriter, the Authority, the Trustee
and the Credit Provider, if any, promptly, from time to time, such information regarding the
OI IS West 26061 1459 3
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operations, financial condition and property of the Local Agency as such party may reasonably
request.
(I) There is no action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, arbitrator, governmental or other board, body or official, pending
or, to the best knowledge of the Local Agency, threatened against or affecting the Local Agency
questioning the validity of any proceeding taken or to be taken by the Local Agency in
connection with the Note, the Purchase Agreement, the Trust Agreement, the Credit Agreement,
if any, or this Resolution, or seeking to prohibit, restrain or enjoin the execution, delivery or
performance by the Local Agency of any of the foregoing, or wherein an unfavorable decision,
ruling or finding would have a materially adverse effect on the Local Agency's financial
condition or results of operations or on the ability of the Local Agency to conduct its activities as
presently conducted or as proposed or contemplated to be conducted, or would materially
adversely affect the validity or enforceability of, or the authority or ability of the Local Agency
to perform its obligations under, the Note, the Purchase Agreement, the Trust Agreement, the
Credit Agreement, if any, or this Resolution.
(J) Upon issuance of the Note and execution of the Purchase Contract, this
Resolution, the Purchase Contract and the Note will constitute legal, valid and binding
agreements of the Local Agency, enforceable in accordance with their respective 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 Local Agency 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 and
enforcement of the Pledged Revenues in accordance with law for carrying out the provisions of
this Resolution and the Note.
(L) The Local Agency shall not incur any indebtedness secured by a pledge of
its Pledged Revenues unless such pledge is subordinate in all 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, the Local Agency hereby agrees to pay its pro rata share of all Predefault
Obligations and all Reimbursement Obligations attributable to the Local Agency in accordance
with provisions of the Credit Agreement, if any, and/or the Trust Agreement, as applicable.
Prior to the Maturity Date, moneys in the Local Agency's Payment Account and/or Payment
Subaccount shall not be used to make such payments. The Local Agency shall pay such amounts
promptly upon receipt of notice from the Credit Provider that such amounts are due to it.
(N) So long as any Note Participations executed and delivered in connection
with the Notes are Outstanding, or any Predefault Obligation or Reimbursement Obligation is
outstanding, the Local Agency will not create or suffer to be created any pledge of or lien on the
Note other than the pledge and lien of the Trust Agreement.
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(0) The information describing the Local Agency contained in the Official
Statement (excluding the statements and information pertaining to the Credit Provider and
information under the heading "UNDERWRITING" and in the Appendix entitled "BOOK -
ENTRY ONLY SYSTEM"), as of the time of delivery thereof to the Underwriter and at all times
subsequent thereto up to and including the Closing, will be true, complete, correct and final in all
material respects and will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(P) The information contained in the Credit Questionnaire (including the
Cashflow Worksheet therein) (the "Credit Questionnaire") completed by the Local Agency and
submitted to the Authority and the Underwriter, will be at the time submitted and on the Closing
Date true and accurate.
Section 11. Tax Covenants. The Local Agency will 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 under Section 103 of the
Internal Revenue Code of 1986 (the "Code"). Without limiting the generality of the foregoing,
the Local Agency will not make any use of the proceeds of the Note or any other funds of the
Local Agency which would cause the Note 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 Local Agency, with
respect to the proceeds of the Note, will comply with all requirements of such sections of the
Code and all regulations of the United States Department of the Treasury issued or applicable
thereunder to the extent that such requirements are, at the time, applicable and in effect.
The Local Agency 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 Local Agency during calendar year 2009, including the Note, is
not reasonably expected to exceed $11,475,000; or, in the alternative, (ii) covenants that the
Local Agency 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.
Notwithstanding any other provision of this Resolution to the contrary, upon the
Local Agency's failure to observe, or refusal to comply with, the covenants contained in this
Section 11, no one other than the holders or former holders of the Note, the Owners or the
Trustee on their behalf shall be entitled to exercise any right or remedy under this Resolution on
the basis of the Local Agency's failure to observe, or refusal to comply with, such covenants.
The covenants contained in this Section 11 shall survive the payment of the Note.
The provisions of this Section 11 shall not apply to a Taxable Note.
OI IS West 26061 1459 3
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Section 12. Events of Default and Remedies.
If any of the following events occur, it is hereby defined as and declared to be and
to constitute an "Event of Default":
(a) Failure by the Local Agency to make or cause to be made the
transfers and deposits to the Payment Account, or any other payment required to
be paid hereunder, including payment of principal and interest on the Note, on or
before the date on which such transfer, deposit or other payment is due and
payable;
(b) Failure by the Local Agency to observe and perform any covenant,
condition or agreement 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 Local Agency by the
Trustee or the Credit Provider, if applicable, unless the Trustee and the Credit
Provider shall 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 Local Agency contained in this Resolution or the Purchase Agreement
(including the Pricing Confirmation) or in any requisition or any financial report
delivered by the Local Agency or in any instrument furnished in compliance with
or in reference to this Resolution or the Purchase Agreement or in connection
with the Note, is false or misleading in any material respect;
(d) A petition is filed against the Local Agency under any bankruptcy,
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 30 days to protect its
and the Owners' interests;
(e) The Local Agency files a petition in voluntary bankruptcy or
seeking relief under any provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or consents to the filing of
any petition against it under such law; or
(f) The Local Agency admits insolvency or bankruptcy or is generally
not paying its debts as such debts become due, or becomes insolvent or bankrupt
or makes an assignment for the benefit of creditors, or a custodian (including
without limitation a receiver, liquidator or trustee) of the Local Agency or any of
its property is appointed by court order or takes possession thereof and such order
remains in effect or such possession continues for more than 30 days, but the
Trustee shall have the right to intervene in the proceedings prior to the expiration
of such 30 days to protect its and the Owners' interests;
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Whenever any Event of Default referred to in this Section 12 shall have happened
and be continuing, the Trustee shall, in addition to any other remedies provided herein or by law
or under the Trust Agreement, have the right, at its option without any further demand or notice,
to take one or any combination of the following remedial steps:
(a) Without declaring the Note to be immediately due and payable,
require the Local Agency to pay to the Trustee, as holder of the Note, an amount
equal to the principal of the Note and interest thereon to maturity, plus all other
amounts due hereunder, and upon notice to the Local Agency the same shall
become immediately due and payable by the Local Agency without further notice
or demand; and
(b) 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 or to enforce
any other of its rights hereunder.
Notwithstanding the foregoing, if the Local Agency's Note is secured in whole or
in part by a Credit Instrument or if the Credit Provider is subrogated to rights under the Local
Agency's Note, as long as the Credit Provider is not in default of 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 the Credit Provider's prior consent shall be required to any
remedial action proposed to be taken by the Trustee hereunder.
If the Credit Provider is not reimbursed for any drawing, payment or claim, as
applicable, used to pay principal of and interest on the Note due to a default in payment on the
Note by the Local Agency, or if any principal of or interest on the Note remains unpaid after the
Maturity Date, the Note shall be a Defaulted Note, the unpaid portion (including the interest
component, if applicable) thereof or the portion (including the interest component, if applicable)
to which a Credit Instrument applies for which reimbursement on a draw, payment or claim has
not been made shall be deemed outstanding and shall bear interest at the Default Rate until the
Local Agency's obligation on the Defaulted Note is paid in full or payment is duly provided for,
all subject to Section 8 hereof.
Section 13. Trustee. The Trustee is hereby appointed as paying agent, registrar
and authenticating agent for the Note. The Local Agency hereby directs and authorizes the
payment by the Trustee of the interest on and principal of the Note when such become due and
payable, from the Payment Account held by the Trustee in the name of the Local Agency in the
manner set forth herein. The Local Agency hereby covenants to deposit finds in such account 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 day on which it matures. Payment of the Note shall be in
accordance with the terms of the Note and this Resolution.
The Local Agency hereby agrees to maintain as paying agent, registrar and
authenticating agent of the Note, the Trustee under the Trust Agreement.
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Section 14. Annroval of Actions. The aforementioned Authorized
Representatives of the Local Agency are hereby authorized and directed to execute the Note and
cause the Trustee to authenticate and accept delivery of the Note, pursuant to the terms and
conditions of this Resolution and the Trust Agreement. All actions heretofore taken by the
officers and agents of the Local Agency or this Legislative Body with respect to the sale and
issuance of the Note and participation in the Program are hereby approved, confirmed and
ratified, and the Authorized Representatives and agents of the Local Agency are hereby
authorized and directed, for and in the name and on behalf of the Local Agency, to do any and all
things and take any and 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. Each of the Authorized Representatives of the Local Agency
referred to in Section 21 hereof is hereby designated as an "Authorized Local Agency
Representative" under the Trust Agreement.
In the event that the Note or a portion thereof is secured by a Credit Instrument,
any Authorized Representative of the Local Agency is hereby authorized and directed to provide
the Credit Provider, with any and all information relating to the Local Agency as such Credit
Provider may reasonably request.
Section 15. Proceedings Constitute Contract. The provisions of the Note and
of this Resolution shall constitute a contract between the Local Agency and the registered owner
of the Note and the Credit Provider, if any, 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, is a third party
beneficiary of the provisions of this Resolution and the Note.
Section 16. Limited Liabilitv. Notwithstanding anything to the contrary
contained herein or in the Note or in any other document mentioned herein, the Local Agency
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.
Section 17. Amendments. At any time or from time to time, the Local Agency
may adopt one or more Supplemental Resolutions with the written consents of the Authority and
the Credit Provider, if any, but without the necessity for consent of the owner of the Note for any
one or more of the following purposes:
(a) to add to the covenants and agreements of the Local Agency in this
Resolution, other covenants and agreements to be observed by the Local Agency
which are not contrary to or inconsistent with this Resolution as theretofore in
effect;
(b) to add to the limitations and restrictions in this Resolution, other
limitations and restrictions to be observed by the Local Agency which are not
contrary to or inconsistent with this Resolution as theretofore in effect;
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(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 owner of the Note or of the Note Participations executed and delivered in connection with
the Notes.
Any modifications or amendment of this Resolution and of the rights and
obligations of the Local Agency and of the owner of the Note or of the Note Participations
executed and delivered in connection with the Notes may be made by a Supplemental
Resolution, with the written consents of the Authority and the 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
Note Participations executed and delivered in connection with the Notes outstanding at the time
such consent is given; provided, hoivever, that if such modification or amendment will, by its
terms, not take effect so long as the Note or any or of the Note Participations executed and
delivered in connection with the Notes remain outstanding, the consent of the owners of such
Note or of the Note Participations executed and delivered in connection with the Notes 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 of the Note Participations executed and delivered in connection with the Notes, or shall
reduce the percentage of the Note or the owners of all of the Note Participations executed and
delivered in connection with the Notes, 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 18. Severabilitv. 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 19. Appointment of Bond Counsel. The Local Agency approves and
consents to the appointment of the law firm of Orrick, Herrington & Sutcliffe LLP, Los Angeles,
California as Bond Counsel for the Program. The Local Agency acknowledges that Bond
Counsel regularly performs legal services for many private and public entities in connection with
a wide variety of matters, and that Bond Counsel has represented, is representing or may in the
future represent other public entities, underwriters, trustees, rating agencies, insurers, credit
enhancement providers, lenders, financial and other consultants who may have a role or interest
in the proposed financing or that may be involved with or adverse to Local Agency in this or
some other matter. Given the special, limited role of Bond Counsel described above, the Local
01 Is West 26061 1459 3
40929-605 1 AO l AO 17
Agency acknowledges that no conflict of interest exists or would exist, waives any conflict of
interest that might appear to exist, and consents to any and all such relationships.
Section 20. Appointment of Underwriter. The Local Agency approves and
consents to the appointment of Barclays Capital Inc., as senior manager, together with such co -
underwriters, if any, identified in the Purchase Contract, as Underwriter for the Program.
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Section 21. Resolution Parameters.
(a) Name of Local Agency: City of San Rafael
(b) Maximum Amount of Borrowing: $11,475,000.00
(c) Authorized Representatives:
TITLE
(1) City Manager
(2) Finance Officer
(3) City Attorney
Section 22. Effective Date. This Resolution shall take effect from and after its
date of adoption.
I, ESTHER C. BEIRNE, 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
Council of said City on the 20t1i day of April, 2009, by the following vote, to wit:
AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Miller & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
e*Gl� g --- - auz..` ,
ESTHER C. BEIRNE, City Clerk
OHS West, 260611459 3
40929-605 LAOS LAO 19
EXHIBIT A
FORM OF NOTE
CITY OF SAN RAFAEL
2009 TAX AND REVENUE ANTICIPATION NOTE, SERIES'
Date of
Interest Rate Maturity Date Original Issue
% July 1, 2009
First
Reuavment Date
%o (Total of
principal and
interest due on
Note at maturity)
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Second
Revavment Date
1. % (Total of
principal and interest
due on Note at
maturity)
Third
Renavment Date
% (Total of
principal and interest
due on Note at
maturity)**
FOR VALUE RECEIVED, the Local Agency executing this Note (the "Local
Agency") acknowledges itself indebted, 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 each
Interest Payment Date, as defined in the Trust Agreement, at the Interest Rate 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, such principal to be paid upon surrender hereof at the principal corporate trust office of
Wells Fargo Bank, National Association in Los Angeles, California, or its successor in trust (the
"Trustee"). Interest is payable as specified in the Trust Agreement. Interest shall be calculated
on the basis of a 360 -day year, consisting of twelve 30 -day months, in like lawful money from
the date hereof until the maturity date specified above and, if funds are not provided for payment
at maturity, thereafter on the basis of a 360 -day year for actual days elapsed until payment in full
of said principal sum. Both the principal of and interest on this Note shall be payable only to the
registered owner hereof upon surrender of this Note as the same shall fall due; provided,
ho,l,ever, 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 Local Agency fails to pay this Note
If more than one Series is issued under the Program in the Repayment Fiscal Year.
Number of Repayment Dates and percentages to be determined in Pricing Confirmation (as defined in the
Resolution).
OHS West160611459.3
40929-605 LAO/LAO
when due or the Credit Provider (as defined in the Resolution hereinafter described), if any, is
not reimbursed in full for the amount drawn on or paid pursuant to the Credit Instrument (as
defined in the Resolution) to pay all or a portion of this Note on the date of such payment, this
Note shall become a Defaulted Note (as defined and with the consequences set forth in the
Resolution).
It is hereby certified, recited and declared that this Note (the "Note") represents
the authorized issue of the Note in the aggregate principal amount made, executed and given
pursuant to and by authority of certain resolutions of the Legislative Body of the Local Agency
duly passed and adopted heretofore, under and by authority of Article 7.6 (commencing with
Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code
(collectively, the "Resolution"), to all of the provisions and limitations of which the owner of
this Note, by acceptance 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 Local Agency
for the general fund of the Local Agency and are attributable to the Repayment Fiscal Year, as
defined in the Resolution, and which are available for payment thereof. As security for the
payment of the principal of and interest on the Note, the Local Agency has pledged the first
amounts of unrestricted revenues of the Local Agency received on the last day of the Repayment
Months (as defined in the Resolution) identified in the Pricing Confirmation (as defined in the
Resolution) (and any amounts received thereafter attributable to the Repayment Fiscal Year)
until the amount on deposit in the Payment Account (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 (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 Local Agency lawfully available therefor as set
forth in the Resolution. The full faith and credit of the Local Agency is not pledged to the
payment of the principal or interest on this Note.
The Local Agency and the Trustee may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Local Agency and the
Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to
have happened and to have been 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 Local Agency, does not exceed any limit prescribed by the
Constitution or statutes of the State of California.
OFIS West.260611459 3
40929-605 LAO'LAO 2
IN WITNESS WHEREOF, the Legislative Body of the Local Agency has caused
this Note to be executed by the manual or facsimile signature of a duly Authorized
Representative of the Local Agency and countersigned by the manual or facsimile signature of
the Secretary or Clerk of the Legislative Body as of the date of authentication set forth below.
CITY OF SAN RAFAEL
Title:
Countersigned
By:
Title:
OHS West: 260611459.3
40929-605 LAO.'LAO 3
EXHIBIT A
FORM OF NOTE
CITY OF SAN RAFAEL
2009 TAX AND REVENUE ANTICIPATION NOTE, SERIES *'
Interest Rate
First
ReDavment Date
_% (Total of
principal and
interest due on
Note at maturity)
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Maturitv Date
Second
Reuavment Date
_% (Total of
principal and interest
due on Note at
maturity)
Date of
Original Issue
July 1, 2009
Third
Rei)avment Date
_% (Total of
principal and interest
due on Note at
maturity)*'!'
FOR VALUE RECEIVED, the Local Agency executing this Note (the "Local
Agency") acknowledges itself indebted, 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 each
Interest Payment Date, as defined in the Trust Agreement, at the Interest Rate 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, such principal to be paid upon surrender hereof at the principal corporate trust office of
Wells Fargo Bank, National Association in Los Angeles, California, or its successor in trust (the
"Trustee"). Interest is payable as specified in the Trust Agreement. Interest shall be calculated
on the basis of a 360 -day year, consisting of twelve 30 -day months, in like lawful money from
the date hereof until the maturity date specified above and, if funds are not provided for payment
at maturity, thereafter on the basis of a 360 -day year for actual days elapsed until payment in full
of said principal sum. Both the principal of and interest on this Note shall be payable only to the
registered owner hereof upon surrender of this Note 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 Local Agency fails to pay this Note
*' If more than one Series is issued under the Program in the Repayment Fiscal Year.
Number of Repayment Dates and percentages to be determined in Pricing Confirmation (as defined in the
Resolution).
OHS West 260611459 3
40929-605 LA&LAO
when due or the Credit Provider (as defined in the Resolution hereinafter described), if any, is
not reimbursed in full for the amount drawn on or paid pursuant to the Credit Instrument (as
defined in the Resolution) to pay all or a portion of this Note on the date of such payment, this
Note shall become a Defaulted Note (as defined and with the consequences set forth in the
Resolution).
It is hereby certified, recited and declared that this Note (the "Note") represents
the authorized issue of the Note in the aggregate principal amount made, executed and given
pursuant to and by authority of certain resolutions of the Legislative Body of the Local Agency
duly passed and adopted heretofore, under and by authority of Article 7.6 (commencing with
Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code
(collectively, the "Resolution"), to all of the provisions and limitations of which the owner of
this Note, by acceptance 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 Local Agency
for the general fund of the Local Agency and are attributable to the Repayment Fiscal Year, as
defined in the Resolution, and which are available for payment thereof. As security for the
payment of the principal of and interest on the Note, the Local Agency has pledged the first
amounts of unrestricted revenues of the Local Agency received on the last day of the Repayment
Months (as defined in the Resolution) identified in the Pricing Confirmation (as defined in the
Resolution) (and any amounts received thereafter attributable to the Repayment Fiscal Year)
until the amount on deposit in the Payment Account (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 (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 Local Agency lawfully available therefor as set
forth in the Resolution. The full faith and credit of the Local Agency is not pledged to the
payment of the principal or interest on this Note.
The Local Agency and the Trustee may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Local Agency and the
Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to
have happened and to have been 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 Local Agency, does not exceed any limit prescribed by the
Constitution or statutes of the State of California.
OHS West:260611459.3
40929-605 LAO/LAO
IN WITNESS WHEREOF, the Legislative Body of the Local Agency has caused
this Note to be executed by the manual or facsimile signature of a duly Authorized
Representative of the Local Agency and countersigned by the manual or facsimile signature of
the Secretary or Clerk of the Legislative Body as of the date of authentication set forth below.
CITY OF SAN RAFAEL
0
Countersigned
Title:
OHS West:260611459.3
40929-605 LAG LAO
Title:
CERTIFICATE OF THE LOCAL AGENCY
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 4.6 hereof (the "Authorized Representatives") of the local agency identified in
Section 4.6 hereof (the "Local Agency"), acting for and on behalf of the Local Agency, hereby
certify, as of July 1, 2009 (the "Closing Date"), as follows with respect to the 2009 Tax and
Revenue Anticipation Note (the "Note") issued by the Local Agency:
I. CERTIFICATIONS REGARDING CERTAIN LOCAL AGENCY MATTERS
1.1. At all times mentioned herein, the Local Agency is a duly organized, validly
existing and operating local agency (as defined in Section 53850 of the California Government
Code), under the laws of the State of California (the "State"). The Local Agency represents that,
pursuant to Government Code Section 5451, the Resolution creates a valid and binding pledge of
and lien on the Pledged Revenues, as defined in the Resolution for the benefit of the owner of the
Note as security for the payment of the Note to the extent set forth in the Resolution, enforceable
in accordance with the terms thereof.
1.2. The undersigned Authorized Representatives, under the resolution (the
"Resolution") adopted by the legislative body of the Local Agency (the "Legislative Body")
authorizing the borrowing of funds for Fiscal Year 2009-2010, are duly authorized to make this
certification for and on behalf of the Local Agency pursuant to the Resolution.
1.3. Incorporated as part of the transcript for the Note is a true, correct and complete
copy of the Resolution, duly adopted by the Local Agency 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 Local Agency has previously provided the California Statewide Communities
Development Authority (the "Authority") with a true, accurate and complete copy of the
Resolution.
1.4. 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.
1.5. The information contained in the Credit Questionnaire (including the Cashflow
Worksheet therein) (the "Credit Questionnaire") completed by the Local Agency and submitted
to the Authority and Barclays Capital Inc., as senior manager (the "Underwriter") in connection
with the Program, was at the time submitted and is on the date of this Certificate true and
accurate. Representatives of the Local Agency have reviewed the Trust Agreement, hereinafter
defined, including the Continuing Disclosure Agreement set forth in Article XI thereof. The
Local Agency shall notify the Trustee of the occurrence of any "Listed Event" which relates in
any way to the Local Agency, and will otherwise cooperate with the Trustee and the Authority in
satisfying any continuing disclosure obligation.
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1.6. The Local Agency does not have a negative cash balance at the beginning of
Fiscal Year 2009-2010 in its general fund.
1.7. The Local Agency has authorized or acknowledged, by all necessary action, the
execution, delivery, receipt and due performance of the Resolution, the Note, the Note
Participation Purchase Agreement among the Authority, the Underwriters named therein and the
Local Agency (severally and not jointly with other local agencies named therein), including the
Pricing Confirmation Supplement attached thereto (the "Note Participation Purchase
Agreement"), the Trust Agreement, dated as of July 1, 2009 (the "Trust Agreement") among
Wells Fargo Bank, National Association, as trustee (the "Trustee"), the local agencies
participating in the Program (collectively the "Agencies") and the Authority, pertaining to the
execution and delivery by the Trustee of Note Participations, Series 2009A (the "Note
Participations"), the Credit Agreement, as defined in the Trust Agreement, and any and all other
agreements and documents (the "Other Agreements") as may be required to be executed,
delivered and received by the Local Agency, the Authority or the Trustee in order to carry out,
give effect to and consummate the transactions contemplated by the Resolution. The Resolution,
the Note, the Trust Agreement, the Note Participation Purchase Agreement and the Other
Agreements are collectively referred to herein as the "Documents."
1.8. None of the Documents applicable to the Local Agency have been amended,
modified or rescinded by the Local Agency and each of such Documents is in full force and
effect on the date hereof.
1.9. The representations and warranties of the Local Agency 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.
1.10. The Documents have been duly executed and delivered by the duly authorized
officers of the Local Agency, and the Documents, when executed and delivered by the other
parties thereto (where necessary) constitute legal, valid and binding agreements of the Local
Agency, 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.
1.11. The Local Agency 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.
1.12. The Local Agency has deemed and hereby deems the Preliminary Official
Statement dated May _, 2009 with respect to the Note Participations (the "Preliminary Official
Statement") to be final as of its date for purposes of Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934 ("Rule 15c2-12"), except for information permitted to be
omitted therefrom by Rule 15c2-12; provided, however, that the foregoing certification as to the
finality of the Preliminary Official Statement does not include a certification as to the finality of
the statements and information contained in the Preliminary Official Statement relating to any
other local agency or concerning any Credit Provider (as such term is defined in the Resolution).
OHS West:260611462
The Local Agency is in full compliance with each and every undertaking as defined in and
entered into pursuant to Rule 15c2-12.
1.13. The execution, delivery and performance by the Local Agency of the Note, the
Trust Agreement and the Note Participation Purchase Agreement and the execution, delivery and
performance by the Authority and the Trustee of the Trust Agreement and the execution and
delivery of the Note Participations by the Trustee and 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 Local Agency.
1.14. The execution and delivery by the Local Agency of the Documents (and the Local
Agency's obligations thereunder) (i) do not and will not contravene the laws of the State
providing for the organization and government of the Local Agency and (ii) do not and will not
conflict with, or result in the violation of, any applicable law.
1.15. [Intentionally left blank.]
1.16. If prior to the Closing Date the Local Agency should have any reason to believe
that any of the representations or certifications contained herein or in the Documents are not true
and correct, the Local Agency covenants that it will promptly notify Orrick, Herrington &
Sutcliffe LLP ("Bond Counsel").
1.17. No event affecting the Local Agency has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the purposes for which it is to
be used or which it is necessary to disclose therein in order to make the statements and
information therein not misleading in any material respect.
II. CERTIFICATIONS REGARDING TAX MATTERS
2.1. The Local Agency shall not take, or fail to take, any action that would cause
interest on the Note Participations to be included in gross income for federal income tax
purposes or cause the Note Participations to be treated as "arbitrage bonds" within the meaning
of Section 148 of the Internal Revenue Code of 1986 (the "Code"). In addition, the Local
Agency:
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 Note Participations to be treated as
"federally guaranteed," within the meaning of Section 149(b) of the Code;
d) shall not use any proceeds of the Note to repay any principal or interest of any
outstanding tax-exempt obligation of the Local Agency apart from interest that accrues during a
one-year period commencing July 1, 2009;
OHS West 260611462
e) shall not set aside or specifically earmark amounts to be used to satisfy the Local
Agency'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 Local Agency; and
f) shall retain all records relating to the use, investment and repayment of the Note
and Note proceeds.
III. CERTIFICATIONS REGARDING ARBITRAGE AND REBATE
The following are the certifications and the reasonable expectations of the Local Agency,
stated pursuant to Treasury Regulations Section 1.148-2(b), relating to the use and investment of
the proceeds of the Note:
3.1. The Note is being issued in anticipation of taxes or other revenues and will be
spent to pay lawful expenses of the Local Agency payable from its general fund.
3.2. Based upon the Local Agency's cashflow projections which are set forth in
Appendix C of the Official Statement relating to the Note Participations (the "Cashflow
Projections"), the Local Agency expects to allocate the proceeds of the Note to working capital
expenditures within 13 months after July 1, 2009, using the methodology described in the next
section.
3.3. Proceeds of the Note will be allocated to working capital expenditures of the
Local Agency on any date that the Local Agency's working capital expenditures exceed the
Local Agency's "available amounts." "Available amounts" include any cash, investments, or
other amounts held in any fund or account by the Local Agency that is available for the Local
Agency 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 Local Agency expenditures paid out of current revenues during Fiscal
Year 2008-2009 or (ii) the amount that the Local Agency has historically and customarily
maintained as a working capital reserve.
3.4. The funds and accounts maintained by or for the benefit of the Local Agency that
are considered available for payment of the Local Agency'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.
3.5. In preparing its cash flow analysis for Fiscal Year 2009-2010, the Local Agency
has reviewed its Fiscal Year 2008-2009 cash flows and has, where applicable, compared the
Fiscal Year 2008-2009 actual cash flows with the Fiscal Year 2008-2009 cash flows projected
just before the beginning of Fiscal Year 2008-2009. Taking this information into account and
such other information as is available to the Local Agency, the Local Agency believes that the
projected cash flow analysis for Fiscal Year 2009-2010 is reasonable and is based on reasonable
assumptions.
OHS West:260611462
3.6. All of the proceeds of the Note, together with earnings thereon, less amounts
allocable to the Local Agency's costs of issuance set forth in the Note Participation Purchase
Agreement, will be deposited into the Proceeds Fund established under the Trust Agreement.
3.7. The Note will be repaid from the general funds of the Local Agency 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.
3.8. All of the proceeds of the Note, together with earnings thereon, will be deposited
into the Local Agency'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 Local Agency on any given day
during Fiscal Year 2009-2010 for any purpose for which the Local Agency 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
Local Agency expenditures paid out of current revenues during Fiscal Year 2008-2009 or (ii) the
amount that the Local Agency 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 Local Agency 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 Local Agency'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.
3.9. To the best knowledge and belief of the undersigned, there are no other facts,
estimates, or circumstances which would materially change the foregoing statements, and the
foregoing expectations are reasonable.
3.10. The Local Agency understands that Bond Counsel will rely upon this Certificate
in giving its opinion that interest payable with respect to the Note Participations is excluded from
federal gross income.
IV. REQUEST TO TRUSTEE, CERTIFICATIONS RELATING THERETO AND
SIGNATURE CERTIFICATIONS OF THE LOCAL AGENCY
4.1. The Trustee is authorized and is hereby requested to execute and deliver the Note
Participations, upon receipt of the purchase price of the Note of the Local Agency together with
OHS West260611462
the aggregate purchase price of all other notes of Local Agencies participating in the Program,
whose notes will be pooled with the Local Agency's Note in connection with the issuance of the
Note Participations.
4.2. 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.
4.3. Upon the deposit of proceeds as set forth in Section 4.2 hereof, the Trustee is
requested and authorized to pay, from amounts held for the benefit of the Local Agency 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 Note Participation
Purchase Agreement, to the Local Agency by wire or check. If the Local Agency is to receive
such amounts by wire, the Local Agency shall provide the Trustee with appropriate wiring
instructions for the financial institution which will receive such amounts.
4.4. The amount requisitioned hereby will be applied to a purpose for which the Local
Agency is authorized to use and expend funds from the general fund of the Local Agency and
pending such application will be invested in investments which are legal for the investment of
funds of the Local Agency.
4.5. 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.
OHS West260611462
4.6. ** The following named persons are duly elected (or appointed), qualified and acting
officers of the Local Agency 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 Trust Agreement and the Note Participation Purchase Agreement must
appear below):
AUTHORIZED REPRESENTATIVES OF CITY OF SAN RAFAEL:
NAME TITLE SIGNATURE
Ken Nordhoff City Manager
Cindy Mosser Finance Officer
Robert F. Epstein City Attorney
" Please complete the following items of information, including the name of the Local Agency's
Authorized Representatives and the signatures of such Authorized Representatives.
OHS West:260611462
Hawkins Delafield & Wood LLP
Draft of 3/12/09
California Communities Tax and Revenue Anticipation Note Program
Note Participations, Series 2009A-1
Note Participations, Series 2009A-2
Note Participations, Series 2009A-3
Note Participations, Series 2009A-4
Note Participations, Series 2009B
NOTE PARTICIPATION PURCHASE AGREEMENT
June ,2009
California Local Agencies
As listed on Exhibit A hereto
California Statewide Communities Development Authority
1100 K Street, Suite 101
Sacramento, California 95814
The undersigned, Barclays Capital Inc., on behalf of itself and as representative
(the "Representative") of the underwriters listed on the signature page (collectively, the
"Underwriters") offers to enter into the following agreement (this "Note Participation
Purchase Agreement") with the local agencies identified in Exhibit A hereto (severally
and not jointly) (the "Local Agencies") and the California Statewide Communities
Development Authority (the "Authority"), acting as sponsor of the Program (defined
below) and as agent for the Local Agencies (severally and not jointly), which, upon
acceptance of this offer by the Local Agencies and the Authority will be binding upon the
Local Agencies, (severally and not jointly), the Authority and the Underwriters. This
offer is made subject to acceptance of this Note Participation Purchase Agreement by the
Local Agencies and the Authority on or before 5:00 p.m., California time, on the date
hereof, and, if this Note Participation Purchase Agreement is not so accepted, will be
subject to withdrawal by the Underwriters upon notice delivered to the office of the
Authority at any time prior to acceptance hereof by the Authority.
1. Upon the terms and conditions and upon the basis of the representations,
warranties and agreements set forth herein, the Representative hereby agrees to purchase
California Communities Tax and Revenue Anticipation Note Program Note
Participations, Series 2009A-1 (the "Series A-1 Note Participations") in the aggregate
principal amount of $ , the California Communities Tax and Revenue
Anticipation Note Program Note Participations, Series 2009A-2 (the "Series A-2 Note
Participations") in the aggregate principal amount of $ , the California
Communities Tax and Revenue Anticipation Note Program Note Participations, Series
2009A-3 (the "Series A-3 Note Participations") in the aggregate principal amount of
$ , California Communities Tax and Revenue Anticipation Note Program Note
Participations, Series 2009A-4 (the "Series A-4 Note Participations") in the aggregate
55222.3 032699 AGMT
principal amount of $ and the California Communities Tax and Revenue
Anticipation Note Program Note Participations, Series 2009B (the "Series B Note
Participations") in the aggregate principal amount of $ , or such lesser amounts as
(i) the Local Agencies and the Authority, based upon advice of Orrick, Herrington &
Sutcliffe LLP, Special Counsel, determines will generate proceeds in an amount which
will not be subject to either yield restriction (in order for interest to be excluded from
gross income under Section 103 of the Internal Revenue Code or rebate requirements
(under Section 148 of said Code), or (ii) shall be equal to the aggregate principal amount
of Notes (as defined herein) deposited with the Trustee by the Local Agencies pursuant to
the related Trust Agreements. The Series A-1 Note Participations, the Series A-2 Note
Participations, the Series A-3 Note Participations and the Series A-4 Note Participations
are collectively referred to herein as the "Series A Note Participations". The Series B
Note Participations are referred to herein as the "Series B Note Participations." The
Series A Note Participations and the Series B Note Participations are collectively referred
to herein as the "Note Participations". The Authority is the sponsor of the California
Communities Tax and Revenue Anticipation Note Program (the "Program") and serves as
agent to the Local Agencies with respect to certain aspects of their participation in the
Program.
The Note Participations shall be dated the date of initial execution and delivery,
shall mature on the dates, and shall evidence and represent principal of the Notes and
interest accrued thereon from the date of initial issuance of the Notes and execution and
delivery of the Note Participations, which interest shall be payable on certain dates and at
certain rates, all as shown on Exhibit B hereto. The aggregate purchase price to be paid
by the Underwriters for all Series of the Note Participations is hereby agreed to be
$ (representing the principal amount of $ plus original issue premium
of $ less the Underwriters' discount of $ ). The breakdown of the
purchase price by Series is shown in Exhibit B. Such payment and delivery and the other
actions contemplated hereby to take place at the time of such payment and delivery are
referred to as the "Closing."
In connection with the offering and sale of the Note Participations, each of the
several Local Agencies and the Authority hereby ratifies, confirms and approves of the
use and distribution by the Underwriters prior to the date hereof of the Preliminary
Official Statement dated , 2009, relating to the Note Participations (including the
cover page and Appendices thereto, the "Preliminary Official Statement") which, as of its
date, the Local Agencies have deemed final (and hereby confirm and ratify such deeming
final) for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of
1934, as amended, ("Rule 15c2-12") except for information permitted to be omitted
therefrom by Rule 15c2-12. The Authority has deemed final (and hereby confirms and
ratifies such deeming final), as of its date, the sections of the Preliminary Official
Statement entitled "THE AUTHORITY AND THE PROGRAM" and "LITIGATION —
The Authority." On behalf of the Local Agencies, the Authority agrees to deliver to the
Underwriters as many definitive copies of the Preliminary Official Statement, as
amended to conform to the terms of this Note Participation Purchase Agreement and with
such other changes and amendments as are mutually agreed upon by the Underwriters,
the Local Agencies and the Authority (the "Official Statement"), as the Underwriters
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55222.3 032699 AGMT
shall reasonably request as necessary to comply with paragraph (b)(4) of Rule 15c2-12
and with Rule G-2 and all other rules of the Municipal Securities Rulemaking Board. On
behalf of the Local Agencies, the Authority agrees to deliver the final Official Statements
within seven business days after the execution of this Note Participation Purchase
Agreement.
2. The Note Participations shall be delivered and secured under the
provisions of separate Trust Agreements for each Series of Note Participations dated as
of July 1, 2009 (the "Trust Agreements") by and between the Authority and Wells Fargo
Bank, National Association (the "Trustee") and certain Local Agencies named therein.
The principal of and interest evidenced by the Note Participations shall be payable as
provided in the Trust Agreements and as described in the Official Statement. All
capitalized items not defined herein shall have the meanings set forth in the Trust
Agreements. Each Series of Note Participations evidences and represents the tax and
revenue anticipation notes (the "Notes") issued by those California local agencies listed
on Schedule I of the related Trust Agreement, pursuant to and secured by the related
resolution adopted by each Local Agency (collectively, the "Local Agency Resolutions").
The Local Agencies shall irrevocably deposit with and pledge and transfer to the Trustee,
who is the registered owner of each Note for the benefit of the Owners of the Note
Participations and the Credit Provider, as applicable, and such deposit, transfer and
pledge shall constitute a first and exclusive lien on the principal and interest payments of
the Notes for the purpose and on the terms set forth in the related Trust Agreement. The
Note of each Local Agency shall be registered in the name of the Trustee and held by the
Trustee for the benefit of the owners of the related Series of Note Participations to secure
the payment of principal of and interest on the Note Participations. The payment of up to
$ of the principal of and interest on [the Series A-1 Note Participations] shall
also be secured by a letter of credit (the "Credit Instrument") issued by U.S. Bank
National Association (the "Credit Provider"). The issuance of the Notes, and the approval
of the execution and delivery of the Trust Agreements and the Note Participations, have
been duly and validly authorized or acknowledged by the Local Agencies pursuant to the
Local Agency Resolutions.
The Authority on behalf of each Local Agency hereby authorizes the
Underwriters to use and distribute the Trust Agreements, the Local Agency Resolutions,
the Preliminary Official Statement and the Official Statement and the information
contained in each such document in connection with the offering and the sale of the Note
Participations.
3. At 9:00 a.m., California time, on [July 1, 2009], or at such earlier or later
time or date as shall be agreed by the Authority on behalf of each Local Agency and the
Representative (such time and date being herein referred to as the "Closing Date"), the
Trustee at the direction of the Authority on behalf of each Local Agency will deliver to
the Underwriters, for redelivery through The Depository Trust Company ("DTC"), in
New York, New York (or such other location as may be designated by the Underwriters
and approved by the Authority), the Note Participations in the form of one or more (as
may be required by DTC) fully registered Note Participations (which may be typewritten)
duly executed by the manual signature of a representative of the Trustee, and will deliver
3
55222.3 032699 AGMT
or cause to be delivered to the Underwriters in Los Angeles, California (or such other
location as may be designated by the Underwriters and approved by the Authority), the
other documents herein mentioned. It shall be a condition to the obligation of the
Underwriters to purchase, to accept delivery of and to pay for the Note Participations,
that the entire aggregate principal amount of the Note Participations authorized to be
executed and delivered by the Trust Agreements shall be sold and delivered at the
Closing. The Underwriters will accept such delivery and pay the purchase price of the
Note Participations as set forth in Section I herein by wire transfer in immediately
available funds. Notwithstanding the foregoing, neither the failure to print CUSIP
numbers on any Note Participation nor any error with respect thereto shall constitute
cause for a failure or refusal by the Underwriters to accept delivery of and pay for the
Note Participations on the Closing Date in accordance with the terms of this Note
Participation Purchase Agreement. The Note Participations shall be made available to the
Underwriters in New York, New York not later than one business day before the Closing
Date for purposes of inspection and packaging. Upon initial issuance, the ownership of
such Note Participations shall be registered in the registration books kept by the Trustee
in the name of Cede & Co., as the nominee of DTC.
4. Each Local Agency represents, warrants and agrees as follows:
(a) the Local Agency is, and will be at the Closing Date, a duly organized,
validly existing and operating local agency pursuant to the laws of the State of California
(the "State") with full power and authority to observe and perform the covenants and
agreements set forth in the Trust Agreement to which it is a party, and this Note
Participation Purchase Agreement, and to deliver its Note;
(b) by official action of the Local Agency, prior to or concurrently with the
acceptance hereof, the Local Agency (i) has duly authorized the distribution of the
Preliminary Official Statement, approved and authorized the distribution of the Official
Statement, and (ii) adopted the Local Agency Resolution, and authorized and approved
the execution and delivery of the Trust Agreement to which it is a party, and this Note
Participation Purchase Agreement, and the performance of its obligations contained in its
Note, the Trust Agreement to which it is a party, and this Note Participation Purchase
Agreement, and the Local Agency Resolution is in full force and effect and has not been
amended or supplemented as of the date hereof, and, that it will advise the Representative
promptly of any proposal to amend or supplement the Local Agency Resolution;
(c) the adoption of the Local Agency Resolution and the execution and
delivery of this Note Participation Purchase Agreement, the Trust Agreement to which it
is a party and its Note, and compliance with the provisions on the Local Agency's part
contained therein do not and will not conflict with or constitute a breach of or default
under any law, administrative regulation, judgment, decree, statute, indenture, mortgage,
deed of trust, bond, note, resolution, agreement or other instrument to which the Local
Agency is a party or by which the Local Agency or, to its knowledge, any of its
properties are bound; nor will any such execution, delivery, adoption or compliance result
in the creation or imposition of any lien, charge or other security interest or encumbrance
of any nature whatsoever upon any of the properties or assets of the Local Agency which
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materially adversely affects the security for its Note under the terms of any such law,
administrative regulation, judgment, decree, statute, indenture, mortgage, deed of trust
bond, note, resolution, agreement or other instrument;
(d) all consents, approvals and authorizations of governmental or regulatory
authorities or by or on behalf of any creditors or any other third party for the valid
execution and delivery of its Note, the Trust Agreement to which it is a party and this
Note Participation Purchase Agreement, and the performance of the Local Agency's
obligations contained herein and therein, have been obtained and are in full force and
effect;
(e) other than as set forth in the Official Statement, there is no action, suit,
proceeding, inquiry, or investigation, at law or in equity, before or by any court,
governmental agency, public board or body, which has been formally served on the Local
Agency or, to the knowledge of the Local Agency, pending or threatened against the
Local Agency seeking to restrain or enjoin the issuance, sale, execution or delivery of the
Note Participations or the pledge or application of the Notes pursuant to the Trust
Agreement to which it is a party, to an extent which would have a materially adverse
effect on the security for the Note Participations, or in any way contesting or affecting the
validity of any proceedings of the Local Agency taken concerning the issuance or sale of
the Note Participations, the Local Agency Resolution, the Trust Agreement to which it is
a party and this Note Participation Purchase Agreement or any other agreement or
instrument to which the Local Agency is a party or by which the Local Agency or any of
its properties are bound or the federal tax exempt status of interest on the Note
Participations, or contesting in any way the completeness or accuracy of the Preliminary
Official Statement or the Official Statement, as amended or supplemented, or the
existence or powers of the Local Agency relating to the issuance of the Note
Participations, the adoption of the Local Agency Resolution or the execution and delivery
of this Note Participation Purchase Agreement;
(f) all representations and warranties set forth in the Local Agency Resolution
are true and correct on the date hereof and are made for the benefit of the Authority and
the Underwriters as if set forth herein;
(g) a copy of the Local Agency Resolution has been delivered to the Authority
and the Representative, and the Local Agency Resolution will not be amended or
repealed without the consent of the Authority and the Representative, which consent will
not be unreasonably withheld;
(h) the Local Agency is authorized to execute the related Trust Agreement
and to deliver the Note to the Trustee under such Trust Agreement;
(i) the Local Agency has not issued and will not issue any obligation or
obligations, other than the Note or the Parity Notes authorized to be issued by the Local
Agencies pursuant to their respective Local Agency Resolution, to finance the working
capital deficit for which the Note is being issued;
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0) both at the time of acceptance hereof by the Local Agency, and at the
Closing Date and at all times subsequent thereto during the period up to and including
twenty-five (25) days after the end of the underwriting period (as described below), the
Preliminary Official Statement as of its date and the Official Statement (other than
statements or information specifically related to one of the other Local Agencies) are and
will be true, correct and complete in all material respects and the Official Statement
(other than statements or information specifically related to one of the other Local
Agencies) does not and will not, as of the Closing Date and at all times subsequent
thereto during the period up to and including twenty-five (25) days after the end of the
underwriting period (as described below), omit to state any material fact necessary to
make the statements and information contained therein, in the light of the circumstances
under which they were made, not misleading in any material respect; it being further
understood that no such representation or warranty shall apply to statements or
information in the Official Statement concerning DTC contained in Appendix I to the
Official Statement or concerning the Credit Provider under the captions "SECURITY
AND SOURCE OF PAYMENT -The Credit Instrument" and "—The Credit Provider" or
in Appendix J to the Official Statement;
(k) if between the date of this Note Participation Purchase Agreement and
twenty-five (25) days after the end of the underwriting period (as described below) an
event occurs or facts or conditions become known, of which the Local Agency has
knowledge, which in the opinion of the Underwriters, might or would cause the
information in the Official Statement, as then supplemented or amended, to contain an
untrue statement of a material fact or to omit to state a material fact required to be stated
therein or necessary to make the information therein, in the light of the circumstances
under which it was presented, not misleading, the Local Agency will notify the Authority
and the Underwriters, and if in the opinion of the Underwriters such event, fact or
condition requires the preparation and publication of a supplement or amendment to the
Official Statement, the Authority will amend or supplement the Official Statement in a
form and in a manner approved by the Underwriters. Unless otherwise notified by the
Underwriters in writing, the Local Agency can assume that the underwriting period (as
defined in Rule 15c2-12) ends on the Closing Date;
(1) the terms and provisions of this Note Participation Purchase Agreement
and the Trust Agreement to which it is a party comply in all material respects with the
requirements of the Local Agency Resolution, and on the Closing Date the Local Agency
Resolution will be in full force and effect and will not have been supplemented or
amended, and this Note Participation Purchase Agreement constitutes, and the related
Trust Agreement, assuming due authorization, execution and delivery by the other
respective parties thereto, will constitute, the valid and binding obligations of the Local
Agency, enforceable in accordance with its terms, subject to bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and to equitable
principles when equitable remedies are sought;
(m) the Local Agency is not in violation or breach of or default under any
applicable law or administrative rule or regulation of the United States or any state
thereof having jurisdiction over the Local Agency or its properties, or of any department,
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division, agency or instrumentality of any state thereof, or any applicable court judgment
or administrative decree or order, or any lease, note, resolution, indenture, contract,
agreement or other instrument to which the Local Agency is a party or is otherwise (to its
knowledge) subject or bound, or to which any of its property is otherwise subject, which
in any way materially affects the issuance of its Note or the validity thereof, this Note
Participation Purchase Agreement, the Local Agency Resolution or the related Trust
Agreement, or materially adversely affects the ability of the Local Agency to perform any
of its obligations under any thereof;
(n) any certificate signed by an authorized officer of the Local Agency and
delivered to the Underwriters, the Trustee or the Authority shall be deemed a
representation and warranty by the Local Agency in connection with this Note
Participation Purchase Agreement to the Underwriters as to the statements made therein
for the purposes for which such statements are made;
(o) the Local Agency will furnish such information, execute such instruments
and take such other action in cooperation with the Underwriters, as the Underwriters may
reasonably request in order to qualify the Note Participations for offer and sale under the
Blue Sky or securities laws and regulations of such states and other jurisdictions of the
United States as the Underwriters may request; provided, however, that the Local
Agencies will not be required to consent to service of process in any such jurisdiction or
to qualify as a foreign corporation in any such jurisdiction;
(p) upon the terms and conditions and in reliance upon the representations,
warranties and agreements set forth herein, the Local Agency shall deposit with the
Trustee the Note, as described herein and in the Local Agency Resolution. The Note
shall be issued in substantially the form set forth in the Local Agency Resolution, without
coupons in the full principal amount set forth in the Pricing Confirmation attached as
Exhibit C hereto (the "Pricing Confirmation") (the Local Agency and the Authority
acknowledge that the Underwriters have not participated in any of the matters pertaining
to investment of the Note proceeds described in the Pricing Confirmation and that the
Underwriters have no responsibility for such investments or any bidding procedures with
respect thereto);
(q) each Local Agency Resolution creates a valid pledge of, lien on, and
security interest in, the related Note and the other funds and assets purported to be
pledged under such Local Agency Resolution, prior in right to any other pledge, lien or
security interest in the Notes or such other funds and assets;
(r) the Local Agency shall cause the Note, duly executed and authenticated,
together with the other documents hereinafter mentioned, to be delivered to the Trustee at
8:00 a.m., California time, on the closing date set forth in the Pricing Confirmation or at
such other time or date as may be mutually agreeable to the Local Agency, the Authority
and the Representative, at the Los Angeles office of Orrick, Herrington & Sutcliffe LLP,
or such other place as the Local Agency, the Authority and the Representative shall
mutually agree. The proceeds of the purchase price of the related Note Participations set
forth in the Pricing Confirmation shall be deposited in an amount indicated in the Pricing
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Confirmation as the Deposit to Proceeds Fund which shall be held by the Trustee for the
Local Agency and the remainder in the Costs of Issuance Fund held thereunder;
(s) the Local Agency shall undertake pursuant to the related Trust Agreement
to provide notices of certain events, if material, as described in the Preliminary Official
Statement and the Official Statement;
(t) to the extent permitted by law, each Local Agency agrees to indemnify
and hold harmless the Authority and the Underwriters and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Act of 1934, as amended) the Authority or the Underwriters,
and the officers, directors, agents and employees of the Authority and the Underwriters
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 specifically related to one of the other
Local Agencies, or the Authority and the Program) 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 the
Local Agency, or the Authority and the Program) that should be stated therein or that is
necessary to make the statements and information therein not misleading in any material
respect; and
(u) each Local Agency agrees, pursuant to the Trust Agreement to which it is
a party and as described in the Preliminary Official Statement and the Official Statement,
to provide or cause to be provided to the Municipal Securities Rulemaking Board (the
"MSRB") in a timely manner notice of certain material events respecting the Notes and
the related Note Participations. These agreements have been made in order to assist the
Underwriters in complying with the Rule. Each Local Agency has not in the previous
five years failed to comply in any material respect, and is as of the date hereof in
compliance in all material respects, with its disclosure obligations under any prior
undertaking related to the Rule to provide annual reports or notices of material events.
5. The Authority hereby represents and warrants to the Underwriters as
follows:
(a) the Authority is, and will be at the Closing Date, a joint exercise of powers
authority, duly organized and existing pursuant to the laws of the State of California (the
"State") with full power and authority to observe and perform the covenants and
agreements set forth in the Trust Agreements, and this Note Participation Purchase
Agreement;
(b) by official action of the Authority, prior to or concurrently with the
acceptance hereof, the Authority (i) in its capacity as agent of the several Local Agencies
and on their behalf has duly authorized the distribution of the Preliminary Official
Statement, approved and authorized the execution and distribution of the Official
Statement, and (ii) adopted the Authority Resolution, and authorized and approved the
execution and delivery of the Trust Agreements, and this Note Participation Purchase
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Agreement, and the performance of its obligations contained in the Trust Agreements,
and this Note Participation Purchase Agreement, and the Authority Resolution is in full
force and effect and has not been amended or supplemented as of the date hereof, and,
that it will advise the Underwriters promptly of any proposal to amend or supplement the
Authority Resolution;
(c) the adoption of the Authority Resolution and the execution and delivery of
this Note Participation Purchase Agreement and the Trust Agreements, and compliance
with the provisions on the Authority's part contained therein do not and will not conflict
with or constitute a breach of or default under any law, administrative regulation,
judgment, decree, statute, indenture, mortgage, deed of trust, bond, note, resolution,
agreement or other instrument to which the Authority is a party or by which the Authority
or, to its knowledge, any of its properties are bound, nor will any such execution,
delivery, adoption or compliance result in the creation or imposition of any lien, charge
or other security interest or encumbrance of any nature whatsoever upon any of the
properties or assets of the Authority which materially adversely affects the security for
the Note Participations under the terms of any such law, administrative regulation,
judgment, decree, statue, indenture, mortgage, deed of trust bond, note, resolution,
agreement or other instrument, except as provided in the Trust Agreements;
(d) all consents, approvals and authorizations of governmental or regulatory
authorities or by or on behalf of any creditors or any other third party for the valid
execution and delivery of the Trust Agreements and this Note Participation Purchase
Agreement, and the performance of the Authority's obligations contained herein and
therein, have been obtained and are in full force and effect;
(e) other than as set forth in the Official Statement, there is no action, suit,
proceeding, inquiry, or investigation, at law or in equity, before or by any court,
governmental agency, public board or body, which has been formally served on the
Authority or, to the knowledge of the Authority, pending or threatened against the
Authority seeking to restrain or enjoin the issuance, sale, execution or delivery of the
Note Participations or the pledge or application of the Notes pursuant to the Trust
Agreements, to an extent which would have a materially adverse effect on the security for
the Note Participations or in any way contesting or affecting the validity of any
proceedings of the Authority taken concerning the issuance or sale of the Note
Participations, the Authority Resolution, the Trust Agreements and this Note
Participation Purchase Agreement or any other agreement or instrument to which the
Authority is a party or by which the Authority or any of its properties are bound or the
federal tax exempt status of interest on the Note Participations or contesting in any way
the completeness or accuracy of the Preliminary Official Statement or the Official
Statement, as amended or supplemented, or the existence or powers of the Authority
relating to the adoption of the Authority Resolution or the execution and delivery of this
Note Participation Purchase Agreement;
(f) both at the time of acceptance hereof by the Authority and at the Closing
Date and at all times subsequent thereto during the period up to and including twenty-five
(25) days after the end of the underwriting period (as described below), the statements
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and information relating to the Authority contained in the Preliminary Official Statement
as of its date and the Official Statement are and will be true, correct and complete in all
material respects and the Official Statement does not and will not, as of the Closing Date
and at all times subsequent thereto during the period up to and including twenty-five (25)
days after the end of the underwriting period (as described below), omit to state any
material fact necessary to make the statements and information contained therein relating
to the Authority, in the light of the circumstances under which they were made, not
misleading in any material respect;
(g) if between the date of this Note Participation Purchase Agreement and
thirty (30) days after the end of the underwriting period (as described below) an event
occurs or facts or conditions become known, of which the Authority has knowledge,
which in the opinion of the Underwriters, might or would cause the information in the
Official Statement, as then supplemented or amended, to contain an untrue statement of a
material fact or to omit to state a material fact required to be stated therein or necessary to
make the information therein, in the light of the circumstances under which it was
presented, not misleading, the Authority will notify the Underwriters, and if in the
opinion of the Underwriters such event, fact or condition requires the preparation and
publication of a supplement or amendment to the Official Statement, the Authority will
amend or supplement the Official Statement in a form and in a manner approved by the
Underwriters. Unless otherwise notified by the Underwriters in writing, the Authority can
assume that the underwriting period (as defined in Rule 15c2-12) ends on the Closing
Date;
(h) the terms and provisions of this Note Participation Purchase Agreement
and the Trust Agreements comply in all material respects with the requirements of the
Authority Resolution, and on the Closing Date the Authority Resolution will be in full
force and effect and will not have been supplemented or amended, and this Note
Participation Purchase Agreement constitute, and the Trust Agreements, assuming due
authorization, execution and delivery by the other respective parties thereto, will
constitute, the valid and binding obligations of the Authority, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency, moratorium and other
similar laws affecting creditors' rights generally and to equitable principles when
equitable remedies are sought;
(i) the Authority is not in violation or breach of or default under any
applicable law or administrative rule or regulation of the United States or any state
thereof having jurisdiction over the Authority or its properties, or of any department,
division, agency or instrumentality of any state thereof, or any applicable court judgment
or administrative decree or order, or any lease, note, resolution, indenture, contract,
agreement or other instrument to which the Authority is a party or is otherwise (to its
knowledge) subject or bound, or to which any of its property is otherwise subject, which
in any way materially affects this Note Participation Purchase Agreement, the Authority
Resolution or the Trust Agreements, or materially adversely affects the ability of the
Authority to perform any of its obligations under any thereof; and
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any certificate signed by an authorized officer of the Authority and
delivered to the Underwriters or the Trustee shall be deemed a representation and
warranty by the Authority in connection with this Note Participation Purchase Agreement
to the Underwriters as to the statements made therein for the purposes for which made.
6. The Underwriters have entered into this Note Participation Purchase
Agreement in reliance upon the representations, warranties and covenants of each of the
Local Agencies contained in the Local Agency Resolutions and to be contained in the
documents and instruments to be delivered at the Closing (hereinafter referred to
collectively as the "Delivery Certificates") and upon the performance by the Authority
and each of the Local Agencies of their respective obligations hereunder and under the
Authority Resolution, the Local Agency Resolutions and the Trust Agreements
(collectively, the "Documents"), both as of the date hereof and as of the date of the
Closing. Accordingly, the Underwriters' obligation under this Note Participation Purchase
Agreement to purchase, to accept delivery of and to pay for the Note Participations shall
be subject to the performance by each of the Local Agencies and the Authority of their
respective obligations to be performed hereunder and under the Documents to which they
are a party at or prior to the Closing and shall also be subject to the following conditions,
including the delivery by each of the Local Agencies or the Authority, or the Authority
on behalf of each of the Local Agencies, of such documents as are contemplated hereby
in form and substance satisfactory to Hawkins Delafield & Wood LLP, counsel to the
Underwriters, and Orrick, Herrington & Sutcliffe LLP, Special Counsel, and to the
following additional conditions:
(a) The representations and warranties of each of the Local Agencies
contained herein and in its Delivery Certificates shall be true, complete and
correct in all material respects as of the date thereof, and the representations and
warranties of each of the Local Agencies contained in its Local Agency
Resolution shall be true, complete and correct in all material respects on the date
hereof and on and as of the date of the Closing, as if made on the date of the
Closing. The Authority shall inform the Underwriters prior to the Closing if it has
actual knowledge that any of the representations and warranties contained herein
or in any Local Agency's Delivery Certificate, or Local Agency Resolution has
become false or misleading prior to the Closing.
(b) The representations and warranties of the Authority herein are true
and correct as of the date hereof and as of the Closing Date.
(c) At the time of the Closing, all official action of each Local Agency
relating to its Resolution shall be in full force and effect and shall not have been
revoked, amended, modified or supplemented.
(d) The Underwriters shall have the right to terminate the
Underwriters' obligation under this Note Participation Purchase Agreement to
purchase, to accept delivery of and to pay for the Note Participations by notifying
the Authority of their election so to do if, after the execution hereof and prior to
the Closing: (i) the offer, sale and delivery of the Note Participations or the
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market price thereof, in the reasonable opinion of the Representative, has been or
will be materially and adversely affected by an amendment or proposed
amendment to the Constitution of the United States or the State or by any federal
or State legislation or the promulgation or proposed promulgation of any rule or
regulation thereunder or by any decision of any federal, State, or local court or by
any ruling or regulation (final, temporary or proposed) by or on behalf of the
Treasury Department of the United States, the Internal Revenue Service or other
federal or State authority, affecting (1) the federal income status of any of the
Local Agencies or the Authority, its property or income or its obligations
(including the Notes and the Note Participations) or (2) the federal income tax
status of the interest on the Notes or the Note Participations or the validity of the
Notes or the Note Participations or any of the Documents; or (ii) there shall have
occurred any outbreak of hostilities or escalation of hostilities or change in
financial markets other national or international calamity or crisis, in the
reasonable opinion of the Underwriters, would make it impracticable or
inadvisable to proceed with the offer, sale or delivery of the Note Participations
on the terms and in the manner contemplated in the Official Statement; or (iii)
there shall have occurred a general suspension of trading on the New York Stock
Exchange or the declaration of a general banking moratorium by the United States
or authorities of the States of New York or California; or (iv) there shall have
occurred any adverse change or any development involving a prospective change
in the condition, financial or otherwise, of any of the Local Agencies, which, in
the reasonable opinion of the Underwriters, would make it impracticable or
inadvisable to proceed with the offer, sale or delivery of the Note Participations
on the terms and in the manner contemplated in the Official Statement; or (v)
there shall have occurred a default under any federal bankruptcy laws by or
against any state of the United States or any local agency located in the State or
any local agency located in the United States having a population of over
500,000, the effect of which, in the reasonable opinion of the Underwriters, would
make it impracticable or inadvisable to proceed with the offer, sale or delivery of
the Note Participations on the terms and in the manner contemplated in the
Official Statement; or (vi) legislation shall be enacted, or a decision of a court of
competent jurisdiction shall be rendered or any action shall be taken by or on
behalf of, the Securities and Exchange Commission, the California Department of
Corporations or any other federal or state governmental agency having
jurisdiction in the subject matter which, in the opinion of counsel to the
Underwriters, has the effect of requiring registration or qualification of the
issuance, offering or sale of the Note Participations, or of obligations of the
general character of the Note Participations as contemplated hereby, under the
Securities Act of 1933, as amended, or the Trust Agreements under the Trust
Indenture Act of 1939, as amended; or (vii) the New York Stock Exchange or
other national securities exchange, or any governmental authority, shall impose,
as to the Note Participations or obligations of the general character of the Note
Participations, any material restrictions not now in force or being enforced, or
increase materially those now in force, with respect to extension of credit by, or
the charges to the net capital requirements of, underwriters.
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(e) Any event shall have occurred or shall exist which either (i) makes
untrue or incorrect in any material respect any statement or information contained
in or appended to the Official Statement, or (ii) is not reflected in the Official
Statement or Appendices thereto and should be reflected therein in order to make
the statements and information contained therein not misleading in any material
respect (for the purposes of this paragraph the Preliminary Official Statement
shall be deemed to be the Official Statement until such time as a final Official
Statement is printed and delivered to the Underwriters).
(f) Any of the Local Agencies shall fail to deliver its Note to the
Trustee or the Authority shall fail to cause the delivery of, the Note Participations
to the Underwriters as provided herein.
(g) At or prior to the Closing, the Underwriters shall have received the
following documents:
(1) The Official Statement executed on behalf of the Local
Agencies by the Authority by an authorized representative.
(2) Certified copies of the Joint Exercise of Powers Agreement
creating the Authority.
(3) Certified copy of the Authority Resolution.
(4) Executed counterparts of the Trust Agreements.
(5) Certified copy of each Local Agency Resolution.
(6) The unqualified approving opinion, dated the date of the
Closing and addressed to the Local Agencies, of Orrick, Herrington & Sutcliffe
LLP, Special Counsel, in the form attached to the Official Statement as
Appendix H, together with a letter to the Underwriters stating that the
Underwriters are entitled to rely on such approving opinion.
(7) A supplemental opinion, dated the date of the Closing and
addressed to the Underwriters, of Orrick, Herrington & Sutcliffe LLP, Special
Counsel, in form and substance satisfactory to the Underwriters, to the effect that:
(i) the Note Participations are not subject to the registration
requirements of the Securities Act of 1933, as amended, and the Trust
Agreements are exempt from qualification pursuant to the Trust
Agreement Act of 1939, as amended;
(ii) the Purchase Agreement has been duly executed and delivered
by the Authority and is a valid and binding agreement of the Authority;
and
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(iii) the statements contained in the Official Statement in the
sections entitled "DESCRIPTION OF THE NOTE PARTICIPATIONS,"
"SECURITY AND SOURCE OF PAYMENT," and "TAX MATTERS"
and the statements contained in Appendix G to the Note Participations, the
Notes, the Trust Agreements, the Local Agency Resolutions and Special
Counsel's final approving opinion, are accurate in all material respects.
(8) The opinion, dated the date of Closing and addressed to the
Underwriters of Hawkins Delafield & Wood LLP, counsel to the Underwriters, in
form and substance satisfactory to the Underwriters, covering such matters
relating to the transaction contemplated hereby as the Underwriters may
reasonably request.
(9) The opinion, dated the date of Closing and addressed to the
Underwriters, of Orrick, l lerrington & Sutcliffe LLP, counsel to the Authority, in
form and substance satisfactory to the Underwriters, to the effect that:
(i) the Authority is a joint exercise of powers authority duly
organized and validly existing pursuant to the laws of the State of
California;
(ii) the Authority has all requisite power and authority to adopt the
Authority Resolution, and to enter into and perform its covenants and
agreements under the Authority Resolution, the Documents to which it is a
party, and this Note Participation Purchase Agreement;
(iii) the Authority Resolution was duly adopted at a meeting of the
Commission of the Authority which was called and held pursuant to law
and with all public notice required by law at which a quorum was present
and acting throughout;
(iv) the execution, delivery and performance by the Authority of
the Documents to which it is a party, and this Note Participation Purchase
Agreement, have been duly authorized by all necessary action on the part
of the Authority, and the Documents to which the Authority is a party and
this Note Participation Purchase Agreement have been duly executed and
delivered by, and constitute the valid and binding obligations of, the
Authority, enforceable in accordance with its terms, except to the extent
that enforceability may be limited by principles of equity or by
bankruptcy, moratorium, reorganization or other laws applicable to
creditors' rights generally.
(10) A certificate of an authorized officer of the Trustee, dated
the date of Closing in form and substance satisfactory to the Representative, to the
effect that:
(i) the Trustee is a duly organized and validly existing national
banking association under the laws of the United States of America,
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having full right, power and authority to enter into, accept and administer
the trust created under the Trust Agreements and to execute and deliver
the Note Participations in accordance therewith;
(ii) each Trust Agreement has been duly authorized, executed and
delivered by the Trustee and (assuming the due authorization, execution
and delivery thereof by the Local Agencies and the Authority) constitutes
the valid and binding obligation of the Trustee, enforceable in accordance
with its terms, except to the extent that enforceability may be limited by
principles of equity or by bankruptcy, moratorium, reorganization or other
laws applicable to creditors' rights generally; and
(iii) the execution and delivery by the Trustee of the Trust
Agreements and the Note Participations, and the performance by the
Trustee of the terms thereof, do not violate any provision of the Trustee's
Articles of Association or Bylaws or, to the best of such officer's
knowledge after due inquiry, any existing law, regulation or ruling; nor, to
the best of such officer's knowledge after like inquiry, are the Trust
Agreements or the Note Participations in violation of, nor do they cause a
default under, any agreement or instrument to which the Trustee is a party.
(11) One or more certificates, dated the date of Closing and
signed by an authorized officer of each Local Agency, to the effect that, to their
best knowledge, belief and information:
(i) the representations and warranties of the Local Agency
contained in this Note Participation Purchase Agreement are true and
correct in all material respects on and as of the date of the Closing as if
made on the date of the Closing;
(ii) none of the proceedings or authority for the execution and
delivery of the Trust Agreement or the Note by the Local Agency has been
repealed modified, amended, revoked or rescinded; and
(iii) no event affecting the Local Agency has occurred since the
date of the Official Statement which should be disclosed in the Official
Statement for the purposes for which it is to be used or which it is
necessary to disclose therein in order to make the statements and
information therein not misleading in any material respect.
(12) One or more certificates, dated the date of Closing and
signed by an authorized officer of the Authority to the effect that, to their best
knowledge, belief and information:
(i) the representations and warranties of the Authority contained in
this Note Participation Purchase Agreement are true and correct in all
material respects on and as of the date of the Closing as if made on the
date of the Closing;
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(ii) none of the proceedings or authority for the execution and
delivery of the Trust Agreements by the Authority has been repealed
modified, amended, revoked or rescinded; and
(iii) no event affecting the Authority has occurred since the date of
the Official Statement which should be disclosed in the Official Statement
for the purposes for which it is to be used or which it is necessary to
disclose therein in order to make the statements and information therein
not misleading in any material respect.
(13) At the Closing a certificate of each of the participating
Local Agencies executed by an authorized officer of the participating Local
Agency, in form and substance acceptable to the Underwriters and Special
Counsel, dated as of the date of Closing, setting forth facts, estimates and
circumstances concerning the use or application of the proceeds of the Notes
related to the Series A Note Participations and the Series B Note Participations,
and stating in effect that on the basis of such facts, estimates and circumstances in
existence on the date of the Closing, it is not expected that the proceeds of such
Notes will be used in a manner that would cause such Notes to be "arbitrage
bonds" within the meaning of Section 148(a) of the Internal Revenue Code of
1986 (the "Code") and the regulations promulgated thereunder or under the
statutory predecessor of the Code.
(14) At or prior to the Closing, evidence shall be delivered that
the Note Participations shall have been rated " —" by Standard & Poor's
Corporation and " — " by Moody's Investors Service, and that the ratings are in full
and d effect as of the date of Closing.
(15) Evidence that the federal tax information Form 8038-G has
been prepared for each Local Agency;
(16) A copy of the Notice of Sale required to be delivered to the
California Debt and Investment Advisory Commission ("CDIAC") pursuant to
Section 8855(k) of the California Government Code;
(17) A copy of the Credit Instrument issued by the Credit
Provider, which secures the payment when due of up to $ of the
principal of and interest on the [Series A-1 Note Participations], as described in
the Official Statement;
(18) An opinion, dated the date of the Closing and addressed to
the Underwriters and the Authority, of counsel to the Credit Provider, (i) to the
effect that the descriptions of the Credit Provider and of the Credit Instrument
included in the Official Statement are accurate, (ii) to the effect that the Credit
Instrument constitutes a legal, valid and binding obligation of the Credit Provider,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
16
55222.3 032699 AGMT
or equitable principles relating to or limiting creditor's rights generally and by the
application of equitable principles if equitable remedies are sought, and (iii) as to
such other matters as the Underwriters may reasonably request;
(19) An opinion, satisfactory in form and substance to the
Underwriters, of counsel to the Trustee, dated the Closing Date and addressed to
the Underwriters, the Credit Provider, the Trustee, the Local Agencies and the
Authority, to the effect that:
(i) The Trustee is a duly organized and validly existing
national banking association in good standing under the laws of the United States
of America and has full power and authority to undertake the trust of the Trust
Agreements;
(ii) The Trustee has duly authorized, executed and delivered
the Trust Agreements, and by all proper corporate action has authorized
acceptance of the duties of the Trustee under of the Trust Agreements and has
authorized, in its capacity as the Trustee, the acceptance of the deposit of the
Notes and the execution and delivery of the Note Participations;
(iii) Assuming the corporate power and legal authority of, and
the due authorization, execution and delivery by the other parties to the Trust
Agreements, such agreements are valid, legal and binding obligations of the
Trustee enforceable against the Trustee in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles relating to or limiting
creditors' rights generally; and
(iv) The Note Participations have been validly authorized,
executed and delivered by the Trustee pursuant to direction from the Local
Agencies.
(20) A certificate dated the date of the Closing, signed by a duly
authorized officer of the Credit Provider, as to such matters as the Underwriters
may reasonably request;
(21) An opinion, dated the date of Closing, of counsel to each
Local Agency in substantially the form attached hereto as Exhibit D; and
(22) Such legal opinions, certificates, proceedings, instruments
and other documents as Counsel for the Underwriters or Special Counsel may
reasonably request to evidence (i) compliance by the Authority and each of the
Local Agencies with legal requirements, (ii) the truth and accuracy, as of the time
of Closing, of the representations of the Authority and each of the Local Agencies
herein contained or as contained in each Delivery Certificate, (iii) the due
performance or satisfaction by the Authority and each of the Local Agencies at or
prior to such time of all agreements then required to be performed and all
conditions then required to be satisfied by the Authority and each of the Local
17
55222.3 032699 AGMT
Agencies, and (iv) that the information concerning the Local Agencies in the
Official Statement does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading.
All of the opinions, letters, certificates, instruments and other documents
mentioned in this Note Participation Purchase Agreement shall be deemed to be in
compliance with the provisions hereof if, and only if, they are in form and substance
satisfactory to the Underwriters.
If the Authority or the Local Agencies shall be unable to satisfy the conditions to
the obligation of the Underwriters to purchase, to accept delivery of and to pay for the
Note Participations contained in this Note Participation Purchase Agreement, or if the
obligation of the Underwriters to purchase, to accept delivery of and to pay for the Note
Participations shall be terminated for any reason permitted by this Note Participation
Purchase Agreement, this Note Participation Purchase Agreement shall terminate and
neither the Underwriters, the Local Agencies nor the Authority shall be under further
obligation hereunder, and except that the respective obligations of the Authority, the
Local Agencies and the Underwriters set forth in paragraph 7 hereof shall continue in full
force and effect.
7. (a) Upon the delivery of the Note Participations to and payment
thereof from the Underwriters, the Local Agencies shall pay solely from the proceeds of
the Note Participations, all expenses incident to the issuance of the Notes and the Note
Participations, including, but not limited to, (i) the cost of printing and preparation for
printing of the preliminary and final Official Statements, as well as the postage or
delivery costs incurred in connection with distribution of the preliminary and final
Official Statements in connection with the offering of the Note Participations; (ii) the cost
of preparing the definitive Note Participations; (iii) the fees and disbursements of the
Counsel to the Authority, Special Counsel, the Trustee, Trustee's Counsel, the Credit
Provider, Credit Provider's Counsel and the rating agencies and any other experts or
consultants and the fees and expenses of any counsel retained by any such person or firm;
and (iv) Blue Sky registration fees. In the event the Underwriters do not purchase the
Note Participations, the Authority shall be under no obligation to pay any expenses
incident to the issuance of the Note Participations.
(b) The Underwriters shall pay: (i) all advertising expenses in
connection with the offering of the Note Participations; (ii) all other expenses incurred by
them in connection with the offering and distribution of the Note Participations; (iii) the
fees of CUSIP and CDIAC in connection with the Note Participations; and (iv) the fees
and disbursements of Underwriters' Counsel.
8. Any notice or other communication to be given to any of the participating
Local Agencies or the Authority under this Note Participation Purchase Agreement may
be given by delivering the same in writing to California Statewide Communities
Development Authority, 1100 K Street, Suite 101, Sacramento, California 95814,
Attention: Treasurer, and any notice or other communication to be given to the
18
55222.3 032699 AGMT
Underwriters under this Note Participation Purchase Agreement may be given by
delivering the same in writing to Barclays Capital Inc., 10250 Constellation Blvd., 25th
Floor, Los Angeles, California 90067 Attention: Lori Koh.
9. This Note Participation Purchase Agreement is made solely for the benefit
of the Local Agencies, the Authority and the Underwriters, and no other person shall
acquire or have any right hereunder or by virtue hereof. All of the representations,
warranties and agreements of each Local Agency and the Authority contained in this
Note Participation Purchase Agreement and each Local Agency Resolution shall remain
operative and in full force and effect regardless of (i) any investigations made by or on
behalf of the Underwriters, (ii) delivery of any payment for the Note Participations
pursuant to this Note Participation Purchase Agreement and (iii) any termination of this
Note Participation Purchase Agreement.
10. This Note Participation Purchase Agreement shall become effective upon
the execution of the acceptance hereof by a duly authorized signatory of the each Local
Agency which acceptance hereof shall be indicated on the Local Agency's Pricing
Confirmation attached hereto and the Authority and shall be valid and enforceable as of
the time of such acceptance. This Note Participation Purchase Agreement may be
executed by facsimile transmission and in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same document.
19
55222.3 032699 AGMT
11. This Note Participation Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of California.
Accepted this _ , day of „ 2009,
Very truly yours,
BARCLAYS CAPITAL INC.
J.P. MORGAN SECURITIES INC.
E.J. DE LA ROSA & CO., INC.
MERRILL LYNCH, PIERCE FENNER & SMITH
By: BARCLAYS CAPITAL INC.
Lori Koh
Authorized Representative
LOCAL AGENCIES LISTED ON EXHIBIT A
[Authorized Officers of each Local Agency shall
execute this Note Participations Purchase Agreement
by signing Pricing Confirmation in Exhibit C hereto]
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
Authorized Signatory
20
55222.3 032699 AGMT
EXHIBIT A
LOCAL AGENCIES
Series A-1
Series A-2
Series A-3
Series A-4
Series B
55222.3 032699 AGMT
EXHIBIT C
FORM OF PRICING CONFIRMATION SUPPLEMENT
[LOCAL AGENCY]
PRICING INFORMATION
Principal Amount of Note:
Series Designation:
Interest Rate on Note:
Re -Offering Yield:
Purchase Price:
Less: Costs of Issuance:
Underwriters' Discount:
Credit Enhancement:
Deposit to Note Proceeds Account:
IMPORTANT DATES
Resolution Date of Local Agency:
Purchase Date:
Closing Date:
Note Payment Deposit Date:
Coupon Payment Date(s):
Maturity Date:
First Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Second Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Series
INVESTMENT AGREEMENT INFORMATION,
GIC Provider
Long Term Ratings (S&P/Moody's)
Short Term Credit Ratings (S&P/Moody's)
Interest Rate on GIC
GIC Deposit Date(s): , 2009 Amount(s): $
,2009
,2009
12009
,2009
,2009
,2009
C-1
55222.3 032699 AGMT
*By initialing the box at the end of this paragraph, the undersigned Local Agency
certifies that, in connection with the issuance of the Note under the Resolution and after reasonable
inquiry, it is the reasonable expectation of the Local Agency that the aggregate amount of all tax-exempt
obligations (excluding private activity bonds) issued or to be issued by the Local Agency during the 2009
calendar year, including the Note, all other notes and bonds, and all tax-exempt leases, executed or
delivered during the 2009 calendar year will not exceed $5,000,000. (See Section 3.8 of the Certificate of
the Local Agency if the Local Agency is unable to make this certification.) 0
IN WITNESS WHEREOF, the Note Participation Purchase Agreement is agreed to, and
the Pricing Confirmation appearing as Exhibit C is accepted, all on the Purchase Date set forth above.
[LOCAL AGENCY]
Authorized Representative
Print Name of Person Signing
*Please initial the box only if applicable to the Local Agency.
C-2
55222.3 032699 AGMT
EXHIBIT D
[FORM OF LOCAL AGENCY COUNSEL OPINION]
[To Be Placed On Letterhead of Local Agency Counsel
And Completed By Local Agency Counsel]
IM
California Statewide Communities
Development Authority
Sacramento, California
BondLogistix
Los Angeles, California
Barclays Capital Inc.
Los Angeles, California
Wells Fargo Bank, N.A.
Los Angeles, California
Orrick, Herrington & Sutcliffe LLP
Los Angeles, California
U.S. Bank National Association
Re: [Name of Local Agency]
2009 Tax and Revenue Anticipation Note
Ladies and Gentlemen:
[I/We] [am/are] the [City Attorney, County Counsel, Attorney] for the [Name of Local Agency]
(the "Local Agency"), and in such capacity [am/are] familiar with all the facts and circumstances in
connection with that certain resolution of the Local Agency (the "Resolution"), adopted by the [Council,
Board of Supervisors, Board of Directors] of the Local Agency (the "Legislative Body") authorizing the
borrowing of funds for Fiscal Year 2009-10 and the issuance of the Local Agency's 2009-10 Tax and
Revenue Anticipation Note (the "Note"), in connection with the Local Agency's participation in the
California Communities Cash Flow Financing Program (the "Program"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Note Participation Purchase Agreement,
entered into by and between the Local Agency, the California Statewide Communities Development
Authority, the Underwriters and certain other Local Agencies named therein (the "Note Participation
Purchase Agreement").
[I/We] have examined and relied upon such records, documents, certificates, and other matters as
are in [my/our] judgment necessary to enable [me/us] to render the opinions expressed herein. Based on
the foregoing, and with regard to California law and the federal laws of the United States of America,
[1/we] are of the opinion that:
D-1
55222.3 432699 AGMT
The Local Agency is a [municipal corporation, political subdivision, public agency] duly
organized and validly existing under the laws of the State of California;
The Resolution authorizing the borrowing of funds for Fiscal Year 2009-10, the issuance and sale
of the Note and participation in the Program was duly adopted at a meeting of the Legislative Body of the
Local Agency which was called and held pursuant to law with all public notice required by law and at
which a quorum was present and acting throughout, and the Resolution is in full force and effect and has
not been amended, modified, supplemented or rescinded;
ae L(,�,al t is full right and lawful authority to execute and deliver the Note, the Trust
Agre, lent and the Note 1 •ipation Purchase Agreement (the Note, the Trust Agreement and the Note
Participation Purchase Agreement are collectively referred to herein as the "Local Agency Documents")
and the Local Agency has duly authorized, executed and delivered the Local Agency Documents and such
Local Agency Documents are legally valid and binding obligations of the Local Agency enforceable
against the Local Agency in accordance with their respective terms, except as enforcement may be limited
by bankruptcy. ins Ip en, -atorium, or other laws relating to or affecting creditors' rights generally
and the luitable remedies are sought;
The adoption of the Resolution and the execution and delivery of the Local Agency Documents
and compliance with the provisions of the Local Agency Documents under the circumstances
contemplated b� the I o ~al Agency Documents do not and will not conflict with or constitute on the part
of the Loi ..h of or default under any agreement or other instrument applicable to or
hindinr al , ,ency or any of its properties or any existing law, regulation, court order or
consent acc� Le to which the Local Agency or any or its properties is subject; and
There is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any
court, public board or body, pending or, to [my/our] knowledge, threatened against or affecting the Local
Agency: (a) to restrain or enjoin the issuance or delivery of the Local Agency Documents; (b) in any way
°ontesting the existence or powers of the Local Agency with respect to the execution and delivery of the
•v- Documents; (c) wherein an unfavorable decision, ruling, or finding will have a material
adverse ei, in the financial condition of the Local Agency, or the transactions contemplated by the
Local Agenc) )cuments and the Resolution; or (d) which is likely to adversely affect the validity or
enforceability oi, or the authority or the ability of the Local Agency to perform its obligations under the
Local Agency Documents and the Resolution or any other agreement pursuant to which the Local Agency
is a pai,.;, yid which is used or contemplated for use in the consummation of the transactions
contemplated by the Local Agency Documents and the Resolution.
The Underwriters of the Note Participations as described in the Note Participation Purchase
Agreement are entitled to rely on this opinion as though it were addressed to them.
Very truly yours,
[NAME OF LOCAL AGENCY COUNSEL]
LI -A
D-2
55222.3 032699 AGMT
I
CITY OF Mayor
Albert J. Boro
400q Council Members
Greg Brockbank
Damon Connolly
Barbara Heller
Cyr N. Miller
OFFICE OF THE CITY ATTORNEY
Robert F. Epstein, City Attorney
Eric T. Davis, Deputy City Attorney 11
Lisa A. Goldfien, Deputy City Attorney 11
California Statewide Communities
Development Authority
Sacramento, California
July 1, 2009
Orrick, Herrington & Sutcliffe, LLP
Los Angeles, California
Wells Fargo Bank, National Association U.S. Bank National Association
Los Angeles, California New York, New York
RE: City of San Rafael
2009 Tax and Revenue Anticipation Note
Ladies and Gentlemen:
I am the Deputy City Attorney for the City of San Rafael ("City" herein), and in such capacity am
familiar with that certain resolution of City (the "Resolution"), adopted by the City Council of San Rafael
authorizing the borrowing of funds for Fiscal Year 2009-2010 and the issuance of the City of San
Rafael's 2009 Tax and Revenue Anticipation Note (the "Note") in connection with the City of San
Rafael's participation in the California Communities Cash Flow Financing Program (the "Program").
Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Note
Participation Purchase Agreement, entered into among Barclay's Capital Inc., on behalf of itself and as
representative of the other underwriters listed herein, the Local Agencies identified in Exhibit A thereto,
and the California Statewide Communities Development Authority (the "Purchase Agreement").
This opinion letter may only be relied upon by the addressees identified above and the underwriters of the
Note Participation executed and delivered in connection with the Program.
I have examined and relied upon such records, documents, certificates, and other matters as are in my
judgment udgment necessary to enable me to render the opinions expressed herein. Based on the foregoing, and
with regard to California law and the federal laws of the United States of America, I am of the opinion
that:
1. The City of San Rafael is a chartered municipal corporation, duly organized and validly
existing under the laws of the State of California.
1400 Fifth Avenue (P.O. Box 151560) San Rafael, CA 94915-1560
PHONE: (415) 485-3080 FAX: (415) 485-3109 EMAIL: city-attomeyCcDcityofsanrafael,org
California Statewide Communities Development Authority
Wells Fargo Bank, National Association
Orrick, Herrington & Sutcliffe, LLP
U.S. Bank National Association
Page 2
July 1, 2009
2. The Resolution authorizing the borrowing of funds for Fiscal Year 2009-2010, the
issuance and sale of the Note, and participation in the Program, was duly adopted at a meeting of the City
Council of the City which was called and held pursuant to law with all public notice required by law and
at which a quorum was present and acting throughout, and the Resolution is in full force and effect and
has not been amended, modified, supplemented or rescinded.
3. The City has full right and lawful authority to execute and deliver the Note, the Trust
Agreement, the Credit Agreement and the Purchase Agreement, and the City has duly authorized,
executed and delivered the Note, the Trust Agreement, the Credit Agreement and the Purchase
Agreement, and the City has duly authorized, executed and delivered the Note, the Trust Agreement, the
Credit Agreement and the Purchase Agreement, and the Note, the Trust Agreement, the Credit Agreement
and the Purchase Agreement are legally valid and binding obligations of the City enforceable against the
City in accordance with their respective terms, except as enforcement may be limited by bankruptcy,
insolver cy, moratorium, or other la%k a,, lating to or affecting creditors' rights generally and the principles
of eo d* equitable remedies are sough. t.
4. The adoption of the Resolution and the execution and delivery of the Note, the Trust
Agreement, the Credit Agreement and the Purchase Agreement and compliance with the provisions of the
Note i1qt A \greement and the Purchase Agreement under the circumstances
eement, the Credit Agreement and the Purchase Agreement do
.r ili ii or constitute on the part of the City a breach of or default under any
agre.: o-ient or r . er insti ument applicable to or binding upon the City or any of its properties or any
exist htw, rc 11ilati n, court order or consent decree to which the City or any of its properties is subject.
action, suit, proceeding, inquiry or investigation at law or in equity before or
h, )r body, pending, or, to my knowledge, threatened against or affecting the
n u issuance of delivery of the Note, the Trust Agreement, the Credit
tient or the Purchase (b) in any way contesting the existence or powers of the City with
respect to the execution and dell of the Note, the Trust Agreement, the Credit Agreement or the
P rchase A lit, (c) wherein at afavorable decision, ruling, or finding will have a material adverse
al condition of the City, or the transactions contemplated by the Note, the Trust
Agip ,L, the C at Agreement, the Purchase Agreement and the Resolution, or (d) which is likely to
adversely affect the validity or enforceability of, or the authority or the ability of the City to perform its
obligations under, the Note, the Trust Agreement, the Credit Agreement, the Purchase Agreement and the
Resolution or any other agreement pursuant to which the City is a party and which is used or
contemplated for use in the Lonsummation of the transactions contemplated by the Note, the Trust
Agreement, the Credit Agreement, the Purchase Agreement and the Resolution.
Very truly yours,
ERIC T. DAVIS
Deputy City Attorney 11
1400 Fifth Avenue (P.O. Boz 151560) San Rafael, CA 94915-1560
PHONE: (415) 485-3080 / FAX: (415) 485-3109 / EMAIL: city.attomey@cityofsanrafael.org
2009110 CSCDA TRANS Program
Cash Flow Worksheet
Local Agency: City of San Rafael
Does the City of San Rafaelexpect to issue S5 million or more in total tax-exempt obligations in calendar year 2!70,91
Yes j
Does the City of San Rafael expect to issue more than S5 million of TRANS in 2009.' 107
Yes
Large Issuer
CALCULATION
OFBEGINNING
CASH
BALANCE
Cash and Investments (include ALL FUNDS from 06/30/2008 audit)
S 36,047,373
Less Restricted Cash
31,966,591
> (Derived from "Restricted Cash" tab of Worksheet)
S 4,080,782
2008/09
ACTUAL/ESTINIATED
CASH
FLOW
If you wish to split the month of December, change cell H47 to indicate when the second December period begins, and enter L47 and N47 accordingly
Otherwise, simply leave cells L47 and N47 blank
Indicate 2008/09 TRANS
Beginning
(+) plus
(-) minus
Ending
Actual "A" or {+} Amount/
Adjusted Ending
NIonth Cash Balance
Receipts
Disbursements
Cash Balance
Estimated "E" (-) Pledges
Cash Balance
July -08 54,080,782 S
3,193,732
S 6,616,287
5658,227
A
S658,227
August -08 658,227
3,559,919
5,340,885
(1,122,739)
A
(1,122,739)
September -08 (1,122,739)
2,983,203
5,307,526
(3,447,062)
A
(3,447,062)
October -08 (3,447,062)
3,124,427
5,370,349
(5,692,984)
A
(5,692,984)
November -08 (5,692,984)
3,542,073
4,901,090
(7,052,000)
A
(7,052,000)
December 1, 2008 (7,052,000)
353,484
2,940,503
(9,639,020)
A
(9,639,020)
December 15, 2008 (9,639,020)
8,397,771
3,318,531
(4,559,780)
A
(4,559,780)
January -09 (4,559,780)
8,802,692
4,913,913
(671,002)
A 0
(671,002)
February -09 (671,002)
4,888,744
4,850,172
(632,430)
A
(632,430)
March -09 (632,430)
1,585,284
5,120,344
(4,167,490)
A
(4,167,490)
April -09 (4,167,490)
8,349,788
5,827,356
(1,645,058)
E 0
(1,645,058)
May -09 (1,645,058)
7,973,202
4,764,409
1,563,736
E
1,563,736
June -09 1,563,736
5,371208
5,534,719
1,400,225
E
1,400,225
Totals S
62,125,527
S 64,806,083
Lowest Actual cash balance occurs in December -08 in an amount
of -$9,639,020
-<-- (For a Large Issuer, only the first 6 months are considered)
ii PROJECTED
CASH
FLOW
For your convenience, the 2009110 Projected Cash Flow will automatically prepare based on the 2008/09 Cash Flow, if you input assumed growth rates below
However, please adjust the cash flows accordingly
to represent your reasonable
expectations for 2009110 based on projections in your budget.
If you wish to split December, change cell H76 to indicate when the second December period begins, and enter L76 and N76 accordingly Otherwise, leave L76 and N76 blank
Expected Growth Rate of 2009' 10 Receipts over 2008/09
-560%
Expected Growth Rate of 2009/10 Disbursements over 2008/09
-5 60°"
Estimated 200910 General Fund Receipts
S 58,646,497
Estimated 2009/10 General Fund Disbursements S
61,176,943
Beginning
(+) plus
(-) minus
Ending
Pledge Factor (+) Amount/
Ending
Month Cash Balance
Receipts
Disbursements
Cash Balance
(% of repayment) {-} Pledges
Cash Balance
July -09 $1,400,225 S
3,014,883
$ 6,245,775
(51,830,666)
11,475,000
$9,644,334
August -09 (1,830,666)
3,360,564
5,041,795
(3,511,898)
0
7,963,102
September -09 (3,511,898)
2,816,144
5,010,305
(5,706,059)
0
5,768,941
October -09 (5,706,059)
2,949,459
5,069,609
(7,826,210)
0
3,648,790
November -09 (7,826,210)
3,343,717
4,626,629
(9,109,121)
0
2,365,879
December 1, 2009 (9,109,121)
333,689
2,775,835
(11,551268)
0
(76,268)
December 15, 2009 (11,551,268)
7,927,496
3,132,694
(6,756,466)
0
4,718,534
January, 10 (6,756,466)
8,309,741
4,638,734
(3,085,458)
5011, (5,737,500)
2,652,042
February -10 (3,085,458)
4,614,974
4,578,563
(3,049,047)
0
2,688,453
March -10 (3,049,047)
1,496,508
4,833,605
(6,386,144)
0
(648,644)
April -10 (6,386,144)
7,882,200
5,501,024
(4,004,967)
0% 0
1,732,533
May -10 (4,004,967)
7,526,703
4,497,602
(975,866)
50% (5,737,500)
(975,866)
June -10 (975,866)
5,070,420
5,224,774
(1,130,220)
0
(1,130,220)
Totals S
58,646,497
S 61,176,943
Lowest Actual cash balance occurs in December -09 in an amount of -SI 1,551,268
— (Far a Large Issuer, only the first 6 months are considered)
2008/09 DEFICIT
QLEsTiON
Complete this section only if you issued TRANS in the 2008/09 Fiscal Year
2008/09 TRANS Issuer Status Large
Actual Lowest Cash Balance • 1 If, 8 TRAN Amount (9,639,020)1
2008'09 Working Capital Resene (from last year's worksheet) S 1
Did you meet your deficit" 1
411612009 8:49 AM Page 1 013 Prrpami by JPMoraan
2009/70 CSCDA TRANS Program
Cash Flow Worksheet
LocalAgency City of San Rafael
Beginning Balance No explanation is necessary
Projected/Original July 2008 Beginning Balance (from last year's worksheet) {
Actual July 2008 Beginning Balance (from current worksheet) 4,080,782
Difference S 4,080,782
Your Actual Beginning Balance exceeded your projections by
Increase in Receipts between 06-30-09 to 01-01-09 (from last year's worksheet) No explanation is necessary
Projected Total Receipts from 07.01-08 to 12-15-08 (from last yeat's worksheet) { I
Actual Total Receipts from 0701-08 to 12-15-08 (from last year's worksheet) 25,154,609
Difference S 25,154,609
Your Actual Receipts exceeded your projections by
Increase in Receipts between 07-01-08 to 12-15-08 (from last year's worksheet)
No explanation is necessary
Projected Total Disbursements from 07-01.08 to 12-15-08 (from last year's worksheet) I I
Actual Total Disbursements from 07-01-08 to 12-15-08 (from last year's worksheet) 33,795,171
Difference S (33,795,171)
Your Actual Receipts exceeded your projections by
CALCULATION OF
1. Actual/Estimated 2008/09 General Fuad Expenditures S 64,806,083
Less
Intedund Transfers 2,706,955
20l r8 r09 TRANS Repayment (if included in expenditures) -
Adjusted 200&09 General Fund Expenditures S 62,099,128
5'. of Adjusted 2008009 General Fund Expenditures $ 3,104,956
2. Large or Small Issuer
"Large Issuers" are those who expect to issue more than S5 million in tax exempt
obligations (including the 2009/10 TRANs) during the 2009 calendar year
{ Large Issuer
3. Small Issuer Working Capital Reserve
If you are a Small Issuer, your working capital reserve is the amount derived at the end of question I above
4. Large Issuer - Greater of
(a) Average 200&09 monthly balance or
(b) The lesser of projected 2009/10 beginning or ending balance, excluding 2009/10 TRANS
S 525,229 {
5. Large issuer Working Capital Reserve
If you are a Large Issuer, your working capital reserve is the lesser of amounts derived in questions f and 4 above
$ 525,229'
2009/10TRANs SIZING
Working Capital
Safe Harbor
Reserve Sizing
Sizing
6. Maximum Cumulative Cash Flow Deficit
(from 2009/10 Projected Cash Flow)
7, Working Capital Reserve / Safe Harbor
8. 2009/10 TRANs Sizing based on Working Capital Reserve/Safe Harbor
9. Maximum Borrowing Amount (Greater of Working Capital Reserve
Sizing and Safe Harbor Sizing)
10. Miscellaneous Adjustments required by Tax Counsel
a 5% for Small issuers, 10% for Large Issuers
b Expected Interest Earnings on 2009/10 TRAM proceeds to month in
which Maximum Cumulative Cash Flow Deficit is to occur
Expected Investment Rate on 2009/10 TRANS
1.25916 is the suggested rate Please adjust this interest rate to reflect
your expected earnings on your 2009-10 TRANS
11. Estimated Size of 2009/10 TRANs
a Authorized (maximum) TRANS Size as Per Your Resolution
b Preferred TRAM Size if less than Estimated Size
12. Final Sizeof2009/10TRANs
411612001) 8:48 AM
S 11,551,268 S 11,551,268
$ 525,229 S 1,283,474
S 12,076,497 S 12,834,742
IS 12,834,742 1
S 1,283,474
1 25 % IS 72,195
S 11,475,000
I S 11,475,000
I �
I S 11,475,000
Face 2 of 2
Informational for Larne issuer Onlv:
To avoid arbitrage rebate, this approximate
amount of ACTUAL lowest cash balance
must be incurred by 01-01-10
{ (10.949,771) {
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CITY OF SAN RAFAEL
ROUTING SLIP / APPROVAL FORM
INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT,
ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY.
SRRA / SRCC AGENDA ITEM NO. g
DATE OF MEETING: April 20, 2009
FROM: Cindy Mosser All
DEPARTMENT: Finance Department ''0
DATE: April 15, 2009
TITLE OF DOCUMENT: Resolution Authorizing and Approving the Borrowing of Funds for Fiscal Year
2009-2010; the Issuance and Sale of a 2009-2010 Tax and Revenue Anticipation Note and Participation in
the California Communities Cash Flow Financing Program
-n
Department Head (signature)
*** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***
(LOWER HALF OF FORM FOR APPROVALS ONLY)
APPROVED AS COUNCIL / AGENCY
AG!N ITEII:
lit anager (signature)
NOT APPROVED
REMARKS:
APPROVED AS TO FORM:
City Attorney (signature)