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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 OI IS West 2606 1 1459 3 40929-605 LAO LAO (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 OI IS West, 26061 1459 3 40929-605 LAG LAO 2 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 OIiS West 26061 1459 3 40929-605 LAO'LAO 3 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. OI IS West 26061 1459 3 40929-605 LAO LAO 4 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 OHS West 2606114593 40929-605 LAULAO 5 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 OI IS West: 260611459.3 40929-605 LAO/LAO 6 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 OHS West 2606114593 40929-605 LAO./LAO 7 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 OHS West. 260611459.3 40929-605 LAO./LAO 8 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. OI IS West 26061 1459 3 40929-605 LAO'LAO 9 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 40929-605 LAO,'I AO 1 1 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. OHS West 260611459 3 40929-605 LAO/LAO 1 (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 40929-605 1 AO r I AO 13 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; OFIS West 260611459 3 40929-605 LAOI AO 14 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. 0115 West 26061 1459 3 10929-605 LAG"I AO 15 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; OHS West 26061 1459 3 40929-605 LAOIAO 16 (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. OHS West:260611459 3 40929-605 LAO LAO 18 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. OHS West260611462, I 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 2 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 4 55222.3 032699 AGMT 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; 5 55222.3 032699 AGMT 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, 6 55222.3 032699 AGMT 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 7 55222.3 032699 AGMT 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 8 55222.3 032699 AGMT 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 9 55222.3 032699 AGMT 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 10 55222.3 032699 AGMT 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 11 55222.3 032699 AGMT 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. 12 55222.3 032699 AGMT (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 13 55222.3 032699 AGMT (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, 14 55222.3 032699 AGMT 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; 15 55222.3 032699 AGMT (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) { pnparrd by J!"Mmean U Y � C � N G 0. w m S mw Y Y m Z a a�� 9 0 F pe 4i C C C 'a 'IZ C u u u u � � � v Y v V V u° �°u u Y Y a u c o .� °o 0 0 'o- O O a o y>} > } u u C7 Y c m c c o a 'u s> �i .v �i Z a °> >` a a a a a> i 0 0 0 0 0 0 m"'uuaa�aDaa�a"a"oaa�D��E U v, u" Eaawuv�� T T T T �' T Y 3 w. pp ttqq G a +.+pa� Tia .n Ti�pp.pnp i5s.ip'�' fu^ G is yap a a ..op Y .-7 r-7 9U u Y •5 v v v v v v a p � '` y v, v, � a 'S S a 5 F a 5 5 a �' S D"' C `ot y a a c c c •c •c rn c O 2 6 a b to, a E c o T o T o o C o C o o 0 Y •Q �� 9 �+ � 3 y N Y Y Y Y Y Y V V V V v" U 4' OlTi � c y UU E ryry _ _ N 99 vMi W N Alr C W O 41 N O. h °A+ N lO Q M1 Q 4'r F Vt �D m F.m A M .O m P,F '� � n r � .A N A A,M M N NMF M W"' .-• C^I O� N N m•�Q CI Q'.- h N D� Q N CI 1 Q CUC O u '° � C C " p r^� rM^' m vQi N. 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"s c m S •c 'u •� v 'ii o o m � n .y o '� u r:. _> c c c c� n'•� u C c" F Y i b .c y OF„ � o •E� .� c ° a u o ° e D E •c 'c n 'c o y�,i W aE d a�nu�o. $�4, Y•r rnOc7 .aw 4$c.w W a,Ufa CJ aL� z O d> c c b C U Y a m Y Y Y1 1 1 4 LL C>= Y Y° rGj y G C C G a ii u Y" u y > >> >>r > u >Y Y t41 U L Y > > O O O O O U° C o Ci o C C 6 {r1 •- m 9 �U4YI U T- OnU C 6 T() rY>r UU 4 U U> Y Ue U U ° U 4 aan`.aaaaaaa�aaa D D D o D 0 7Ra a -_ a m a _rs -g a •a m E �', Y, v Yi u Y 4 6 �."+N fL Q W v t��t U C uUl SSw V C NN UN 41 N 4%I Vi NN of yy N N yNC ❑ (SQUUUUU V V . ..°. fi C � N M Q v5 Ki F m P O� N M^ h b F m P O N M Q 4� .Y F m A CJ •- N M Q �/'i 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)