HomeMy WebLinkAboutCC Resolution 11536 (California Communities Cash Flow Financing Program)CITY OF SAN RAFAEL
LOCAL AGENCY RESOLUTION
NUMBER 11536
RESOLUTION AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF
A 2004-2005 TAX AND REVENUE ANTICIPATION NOTE
THEREFOR AND PARTICIPATION IN THE CALIFORNIA
COMMUNITIES CASH FLOW FINANCING PROGRAM
WHEREAS, local agencies are authorized by Section 53850 to 53858, both
inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6,
Chapter 4, Part 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance
of temporary notes;
WHEREAS, the legislative body (the "Legislative Body") of the local agency
specified in Section 25 hereof (the "Local Agency") has determined that a sum (the "Principal
Amount"), not to exceed the Maximum Amount of Borrowing specified in Section 25 hereof,
which Principal Amount is to be confirmed and set in the Pricing Confirmation (as defined in
Section 4 hereof), is needed for the requirements of the 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 therefor 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, 2005 ("Fiscal
Year 2004-2005");
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 Fiscal Year 2004-2005 and available for the payment
of the principal of the Note and the interest thereon;
WHEREAS, no money has heretofore been borrowed by or on behalf of the
Local Agency through the issuance of tax anticipation notes or temporary notes in anticipation of
the receipt of, or payable from or secured by, taxes, income, revenue, cash receipts or other
moneys for Fiscal Year 2004-2005;
WHEREAS, pursuant to Section 53856 of the Act, certain moneys which will be
received by the Local Agency during and attributable to Fiscal Year 2004-2005 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
(the "Program"), whereby participating local agencies (collectively, the "Issuers") will
simultaneously issue tax and revenue anticipation notes;
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WHEREAS, the Program requires the participating Issuers to sell their tax and
revenue anticipation notes to the California Statewide Communities Development Authority (the
"Authority") pursuant to note purchase agreements (collectively, "Purchase Agreements"), each
between such individual Issuer and the Authority, and dated as of the date of the Pricing
Confirmation, a form of which has been submitted to the Legislative Body;
WHEREAS, the Authority, in consultation with RBC Dain Rauscher, Inc., as
financial advisor for the Program (the "Financial Advisor"), will form one or more pools of notes
(the "Pooled Notes") and assign each note to a particular pool (the "Pool") and sell a series (the
"Series") of bonds (the "Bonds") secured by each Pool pursuant to an indenture (the "Indenture")
between the Authority and Wells Fargo Bank, National Association, as trustee (the "Trustee"),
each Series distinguished by whether or what type(s) of Credit Instrument(s) (as hereinafter
defined) secure(s) such Series, by the principal amounts of the notes assigned to the Pool, by
whether interest on the Series of Bonds is a fixed rate of interest or a variable rate of interest
swapped to a fixed rate by the Authority, or by other factors, and the Local Agency hereby
acknowledges and approves the discretion of the Authority to assign the Note to such Pool and
such Indenture as the Authority may determine;
WHEREAS, as additional security for the owners of each Series of Bonds, all or
a portion of the payments by all of the Issuers of the notes assigned to such Series may or may
not be secured (by virtue or in form of the Bonds, as indicated in the Pricing Confirmation, being
secured in whole or in part) by an irrevocable letter (or letters) of credit or policy (or policies) of
insurance or other credit instrument (or instruments) (collectively, the "Credit Instrument")
issued by the credit provider or credit providers designated in the Indenture, as finally executed
(collectively, the "Credit Provider"), pursuant to a credit agreement or agreements or
commitment letter or letters (collectively, the "Credit Agreement") between the Authority 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 Indenture) or in any other investment permitted by
the laws of the State of California, as now in effect and as hereafter amended, modified or
supplemented from time to time;
WHEREAS, as part of the Program each participating Issuer approves the
Indenture, the alternative forms of Credit Agreements, if any, in substantially the forms
presented to the Legislative Body, with the final form of Indenture, type of Credit Instrument and
corresponding Credit Agreement to be determined and approved by delivery of the Pricing
Confirmation;
WHEREAS, pursuant to the Program each participating Issuer will be
responsible for its share of (a) the fees of the Trustee and the costs of issuing the applicable
Series of Bonds, and (b), if applicable, the fees of the Credit Provider (which shall be payable
from, among other sources, moneys in the Costs of Issuance Fund established and held under the
Indenture), the Issuer's allocable share of all Predefault Obligations and the Issuer's
Reimbursement Obligations, if any (each as defined in the Indenture);
WHEREAS, pursuant to the Program, the underwriter will submit an offer to the
Authority to purchase, in the case of each Pool of Notes, the Series of Bonds which will be
secured by the Indenture to which such Pool will be assigned;
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WHEREAS, it is necessary to engage the services of certain professionals to
assist the Local Agency in its participation in the Program;
NOW, THEREFORE, the Legislative Body hereby finds, determines, declares
and resolves as follows:
Section 1. Recitals. This Legislative Body hereby finds and determines that
all the above recitals are true and correct.
Section 2. Authorization of Issuance. This Legislative Body hereby
determines to borrow solely for the purpose of anticipating taxes, income, revenue, cash receipts
and other moneys to be received by the Local Agency for the general fund of the Local Agency
attributable to Fiscal Year 2004-2005, by the issuance of a note in the Principal Amount under
Sections 53850 et seq. of the Act, designated the Local Agency's "2004 Tax and Revenue
Anticipation Note" (the "Note"), to be issued n the form of one fully registered note at the
Principal Amount thereof, to be dated the date of its delivery to the initial purchaser thereof, to
mature (without option of prior redemption) not more than fifteen months thereafter on a date
indicated on the face thereof and determined in the Pricing Confirmation (the "Maturity Date"),
and to bear interest, payable at maturity (and if the maturity is more than twelve months from the
date of issuance, payable on the interim payment date set forth in the Pricing Confirmation) and
computed upon the basis of a 360 -day year consisting of twelve 30 -day months, or a 365 or 366 -
day year, as the case may be, and actual days elapsed, at a rate not to exceed twelve percent
(12%) per annum as determined in the Pricing Confirmation and indicated on the face of the
Note (the "Note Rate"). If the Series of Bonds issued in connection with the Note is secured in
whole or in part by a Credit Instrument or such Credit Instrument secures the Note in whole or in
part and all principal of and interest on the Note is not paid in full at maturity or if payment of
principal of and/or interest on the Note is paid (in whole or in part) by a draw under, payment by
or claim upon a Credit Instrument which draw, payment or claim is not fully reimbursed on such
date, such Note shall become a Defaulted Note (as defined in the Indenture), and the unpaid
portion (including the interest component, if applicable) thereof (or the portion (including the
interest component, if applicable) thereof with respect to which a Credit Instrument applies for
which reimbursement on a draw, payment or claim has not been fully made) shall be deemed
outstanding and shall continue to bear interest thereafter until paid at the Default Rate (as defined
in the Indenture). If the Note or the Series of Bonds issued in connection with the Note is
unsecured in whole or in part and the Note is not fully paid at maturity, the unpaid portion
thereof (or the portion thereof to which no Credit Instrument applies which is unpaid) shall be
deemed outstanding and shall continue to bear interest thereafter until paid at the Default Rate.
In each case, however, the obligation of the Local Agency with respect to such Defaulted Note or
unpaid Note shall not be a debt or liability of the Local Agency prohibited by Article XVI,
Section 18 of the California Constitution and the Local Agency shall not be liable thereon except
to the extent of any available revenues attributable to Fiscal Year 2004-2005, as provided in
Section 8 hereof. The percentage of the Note to which a Credit Instrument, if any, applies (the
"Secured Percentage") shall be equal to the amount of the Credit Instrument divided by the
aggregate amount of unpaid principal of and interest on the unpaid notes (or portions thereof) of
all Issuers, expressed as a percentage (but not greater than 100%) as of the maturity date.
Both the principal of and interest on the Note shall be payable in lawful money of
the United States of America. The principal of and interest on the Note at maturity shall be paid
upon surrender of the Note at the corporate trust office of Wells Fargo Bank, National
Association in Los Angeles, California.
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The Note shall be issued in conjunction with the note or notes of one or more
other Issuers as part ofthe Program and within the meaning of Section 53853 of the Act.
Section 3. Form of Note. The Note shall be issued in fully registered form
without coupons and shall be substantially in the form and substance set forth in Exhibit A as
attached hereto and by reference incorporated herein, the blanks in said forms to be filled in with
appropriate words and figures.
Section 4. Sale of Note; Delegation. The Note shall be sold to the Authority
pursuant to the Purchase Agreement. The form of the Purchase Agreement, including the form
of the pricing confirmation supplement (the "Pricing Confirmation") set forth as Exhibit A
thereto, presented to this meeting are hereby approved. The authorized representatives set forth
in Section 25 hereof (the "Authorized Representatives") are each hereby authorized and directed
to execute and deliver the Purchase Agreement in substantially said form, with such changes
thereto as such Authorized Representative shall approve, such approval to be conclusively
evidenced by his or her execution and delivery thereof; provided, however, that the Purchase
Agreement shall not be effective and binding on the Local Agency until the execution and
delivery of the Pricing Confirmation. The Authorized Representatives are each hereby further
authorized and directed to execute and deliver the Pricing Confirmation in substantially said
form, with such changes thereto as such Authorized Representative shall approve, such approval
to be conclusively evidenced by his or her execution and delivery thereof; provided, however,
that the interest rate on the Note shall not exceed twelve percent (12%) per annum, the discount
on the Note, when added to the Local Agency's share of the costs of issuance of the Bonds, shall
not exceed one percent (1.0%), and the Principal Amount shall not exceed the Maximum
Amount of Borrowing. Delivery of an executed copy of the Pricing Confirmation by fax or
telecopy shall be deemed effective execution and delivery for all purposes.
Section 5. Program Approval. The Pricing Confirmation shall indicate
whether and what type of Credit Instrument will apply.
The forms of Indenture, alternative general types and forms of Credit
Agreements, if any, presented to this meeting are hereby acknowledged, and it is acknowledged
that the Authority will execute and deliver the Indenture, one or more Credit Agreements, if
applicable, which shall be identified in the Pricing Confirmation, in substantially one or more of
said forms with such changes therein as the Authorized Representative who executes the Pricing
Confirmation shall require or approve (substantially final forms of the Indenture and the Credit
Agreement are to be delivered to the Authorized Representative concurrent with the Pricing
Confirmation), such approval of the Authorized Representative and this Legislative Body to be
conclusively evidenced by the execution of the Pricing Confirmation.
Any one of the Authorized Representatives of the Local Agency is hereby
authorized and directed to provide the Financial Advisor or the underwriter with such
information relating to the Local Agency as the Financial Advisor or the underwriter shall
reasonably request for inclusion in the Preliminary Official Statement and Official Statement of
the Authority. Upon inclusion of the information relating to the Local Agency therein, the
Preliminary Official Statement and Official Statement or such other offering document is, except
for certain omissions permitted by Rule 15c2-12 of the Securities Exchange Act of 1934, as
amended (the "Rule"), hereby deemed final within the meaning of the Rule with respect to the
Local Agency and any Authorized Representative of the Local Agency is authorized to execute a
certificate to such effect. If, at any time prior to the end of the underwriting period, as defined in
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the Rule, any event occurs as a result of which the information contained in the Preliminary
Official Statement or other offering document relating to the 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 Financial Advisor and the underwriter.
Subject to Section 8 hereof, the Local Agency hereby agrees that if the Note shall
become a Defaulted Note, the unpaid portion (including the interest component, if applicable)
thereof or the portion (including the interest component, if applicable) to which a Credit
Instrument applies for which full reimbursement on a draw, payment or claim has not been made
by the Maturity Date shall be deemed outstanding and shall not be deemed to be paid until (i)
any Credit Provider providing a Credit Instrument with respect to the Note or the Series of Bonds
issued in connection with the Note, has been reimbursed for any drawings, payments or claims
made under or from the Credit Instrument with respect to the Note, including interest accrued
thereon, as provided therein and in the applicable Credit Agreement, and, (ii) the holders of the
Note, or Series of the Bonds issued in connection with the Note, are paid the full principal
amount represented by the unsecured portion of the Note plus interest accrued thereon
(calculated at the Default Rate) to the date of deposit of such aggregate required amount with the
Trustee. For purposes of clause (ii) of the preceding sentence, holders of the Series of Bonds
will be deemed to have received such principal amount upon deposit of such moneys with the
Trustee.
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 is secured in whole or in part by a Credit Instrument (by virtue of the
fact that the Series of Bonds is secured 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 The Note will be issued in conjunction with
a note or notes of one or more other Issuers, assigned to secure a Series of Bonds. In all cases,
the obligation of the Local Agency to make payments on or in respect to its Note is a several and
not a joint obligation and is strictly limited to the Local Agency's repayment obligation under
this Resolution and the Note.
Section 7. Disposition of Proceeds of Note. A portion of the moneys
received from the sale of the Note in an amount equal to the Local Agency's share of the costs of
issuance (which shall include any fees and expenses in connection with any Credit Instrument
applicable to the Note or Series of Bonds) shall be deposited in the Costs of Issuance Fund held
and invested by the Trustee under the Indenture and expended as directed by the Authority on
costs of issuance as provided in the Indenture. The balance of the moneys received from the sale
of the Note to the Authority shall be deposited in the Local Agency's Proceeds Subaccount
hereby authorized to be created pursuant to, and held and invested by the Trustee under, the
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Indenture for the Local Agency and said moneys may be used and expended by the Local
Agency for any purpose for which it is authorized to use and expend moneys, upon requisition
from the Proceeds Subaccount as specified in the Indenture. Amounts in the Proceeds
Subaccount are hereby pledged to the payment of the Note. The Trustee will not create
subaccounts within the Proceeds Fund, but will keep records to account separately for proceeds
of the Bonds allocable to the Local Agency's Note on deposit in the Proceeds Fund which shall
constitute the Local Agency's Proceeds Subaccount.
Section 8. Source of Payment.
(A) The principal amount of the Note, together with the interest thereon, shall
be payable from taxes, income, revenue (including, but not limited to, revenue from the state and
federal governments), cash receipts and other moneys which are received by the Local Agency
for the general fund of the Local Agency and are attributable to Fiscal Year 2004-2005 and
which are available for payment thereof. As security for the payment of the principal of and
interest on the Note, the Local Agency hereby pledges certain unrestricted revenues (as
hereinafter provided, the "Pledged Revenues") which are received by the Local Agency for the
general fund of the Local Agency and are attributable to Fiscal Year 2004-2005, 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 Fiscal Year 2004-2005 and which are generally available for the
payment of current expenses and other obligations of the Local Agency. The Noteholders,
Bondholders and Credit Provider shall have a first lien and charge on such certain unrestricted
revenues as hereinafter provided which are received by the Local Agency and are attributable to
Fiscal Year 2004-2005.
In order to effect the pledge referenced in the preceding paragraph, the Local
Agency hereby agrees and covenants to establish and maintain a special account within the Local
Agency's general fund to be designated the "2004 Tax and Revenue Anticipation Note Payment
Account" (the "Payment Account") and further agrees and covenants to maintain the Payment
Account until the payment of the principal of the Note and the interest thereon. Notwithstanding
the foregoing, if the Local Agency elects to have Note proceeds invested in Permitted
Investments to be held by the Trustee pursuant to the Pricing Confirmation, a subaccount of the
Payment Account (the "Payment Subaccount") shall be established for the Local Agency under
the Indenture and proceeds credited to such account shall be pledged to the payment of the Note.
The Trustee need not create a Subaccount, but may keep a record to account separately for
proceeds of the Note so held and invested by the Trustee which record shall constitute the Local
Agency's Proceeds Subaccount. Transfers from the Payment Subaccount shall be made in
accordance with the Indenture. The Local Agency agrees to transfer to and deposit in the
Payment Account the first amounts received in the months specified in the Pricing Confirmation
as Repayment Months (each individual month a "Repayment Month" and collectively
"Repayment Months") (and any amounts received thereafter attributable to Fiscal Year 2004-
2005) until the amount on deposit in the Payment Account, together with the amount, if any, on
deposit in the Payment Subaccount, and taking into consideration anticipated investment
earnings thereon to be received by the Maturity Date, is equal in the respective Repayment
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Months identified in the Pricing Confirmation to the percentage of the principal and interest due
on the Note specified in the Pricing Confirmation. In making such transfer and deposit, the
Local Agency shall not be required to physically segregate the amounts to be transferred to and
deposited in the Payment Account from the Local Agency's other general fund moneys, but,
notwithstanding any commingling of fluids for investment or other purposes, the amounts
required to be transferred to and deposited in the Payment Account shall nevertheless be subject
to the lien and charge created herein.
Any one of the Authorized Representatives of the 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 and/or
the Payment Subaccount in each Repayment Month, all as specified in the Pricing Confirmation,
by executing and delivering the Pricing Confirmation, such execution and delivery to be
conclusive evidence of approval by this 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.
(B) Any moneys placed in the Payment Account or the Payment Subaccount
shall be for the benefit of (i) the holder of the Note and the holders of Bonds issued in connection
with the Notes and (ii) (to the extent provided in the Indenture) the Credit Provider, if any. The
moneys in the Payment Account and the Payment Subaccount shall be applied only for the
purposes for which such Accounts are created until the principal of the Note and all interest
thereon are paid or until provision has been made for the payment of the principal of the Note at
maturity with interest to maturity (in accordance with the requirements for defeasance of the
Bonds as set forth in the Indenture) and, if applicable, (to the extent provided in the Indenture
and, if applicable, the Credit Agreement) the payment of all Predefault Obligations and
Reimbursement Obligations owing to the Credit Provider.
(C) The Local Agency hereby directs the Trustee to transfer on the Note
Payment Deposit Date (as defined in the Indenture), any moneys in the Payment Subaccount to
the Bond Payment Fund (as defined in the Indenture). In addition, on the Note Payment Deposit
Date, the moneys in the Payment Account shall be transferred by the Local Agency to the
Trustee, to the extent necessary (after crediting any transfer pursuant to the preceding sentence),
to pay the principal of and/or interest on the Note, to make payments to a Swap Provider, if any,
as defined in the Indenture, pursuant to a Swap Agreement, if any, as defined in the Indenture, or
to reimburse the Credit Provider for payments made under or pursuant to the Credit Instrument.
In the event that moneys in the Payment Account and/or the Payment Subaccount are insufficient
to pay the principal of and interest on the Note in full when due, such moneys shall be applied in
the following priority: first to pay interest on the Note; second to pay principal of the Note; third
to reimburse the Credit Provider for payment, if any, of interest with respect to the Note; fourth
to reimburse the Credit Provider for payment, if any, of principal with respect to the Note; and
fifth to pay any Reimbursement Obligations of the Local Agency and any of the Local Agency's
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pro rata share of Predefault Obligations owing to the Credit Provider. Any moneys remaining in
or accruing to the Payment Account and/or the Payment Subaccount after the principal of the
Note and the interest thereon and any Predefault Obligations and Reimbursement Obligations, if
applicable, have been paid, or provision for such payment has been made, shall be transferred to
the general fund of the Local Agency, subject to any other disposition required by the Indenture,
or, if applicable, the Credit Agreement. Nothing herein shall be deemed to relieve the Local
Agency from its obligation to pay its Note in full on the Maturity Date.
(D) Moneys in the Proceeds Subaccount and in the Payment Subaccount shall
be invested by the Trustee pursuant to the Indenture as directed by the Local Agency in
Permitted Investments as described in and under the terms of the Indenture. Any such
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 Subaccount.
(E) 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.
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 Authorized Representative of the
Local Agency, is hereby authorized to cause the blank spaces of the Note to be filled in as may
be appropriate pursuant to the Pricing Confirmation. The Authorized Representative is hereby
authorized and directed to cause the Authority to assign the Note to the Trustee, pursuant to the
terms and conditions of the Purchase Agreement, this Resolution and the Indenture. In case any
Authorized Representative whose signature shall appear on any Note shall cease to be an
Authorized Representative before the delivery of such Note, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery. The Note need not bear the seal of the Local Agency, if any.
Section 10. Intentionally Left Blank. This section has been included to
preserve the sequence of section numbers for cross-referencing purposes.
Section 11. Representations and Covenants of the Local Agency.
The Local Agency makes the following representations for the benefit of the
holder of the Note, the owners of the Bonds 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 to (i) adopt this
Resolution and perform its obligations thereunder, (ii) enter into and perform its obligations
under the Purchase Agreement, and (iii) issue the Note and perform its obligations thereunder.
(B) (i) Upon the issuance of the Note, the Local Agency shall have taken all
action required to be taken by it to authorize the issuance and delivery of the Note and the
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performance of its obligations thereunder, and (ii) the Local Agency has full legal right, power
and authority to issue and deliver the Note.
(C) The issuance of the Note, the adoption of the Resolution and the execution
and delivery of the Purchase Agreement, and compliance with the provisions hereof and thereof
do not conflict with, breach or violate any law, administrative regulation, court decree,
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 Fiscal Year 2004-2005 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 Fiscal Year
2004-2005, (ii) provide to the Trustee, the Credit Provider, if any, the Financial Advisor and the
underwriter, promptly upon adoption, copies of such final budget and of any subsequent
revisions, modifications or amendments thereto and (iii) comply with all applicable laws
pertaining to its budget.
(F) The sum of the principal amount of the Local Agency's Note plus the
interest payable thereon, on the date of its issuance, shall not exceed fifty percent (50%) of the
estimated amounts of the Local Agency's uncollected taxes, income, revenue (including, but not
limited to, revenue from the state and federal governments), cash receipts, and other moneys to
be received by the Local Agency for the general fund of the Local Agency attributable to Fiscal
Year 2004-2005, 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.
(IT) 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 Financial Advisor
and 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 filrrush to the Authority, the
Financial Advisor, the underwriter, the Trustee and the Credit Provider, if any, promptly, from
time to time, such information regarding the operations, financial condition and property of the
Local Agency as such party may reasonably request.
(I) 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
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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 Indenture, 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 fmding 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 Indenture, the Credit
Agreement, if any, or this Resolution.
(n 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 h✓ 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 Indenture, as applicable. Prior to the
Maturity Date, moneys in the Local Agency's Payment Account and/or Payment Subaccount
shall not be used to make such payments. The Local Agency shall pay such amounts promptly
upon receipt of notice from the Credit Provider that such amounts are due to it.
(N) So long as any Bonds issued in connection with the Notes are
Outstanding, or any Predefault Obligation or Reimbursement Obligation is outstanding, the
Local Agency will not create or suffer to be created any pledge of or lien on the Note other than
the pledge and lien of the Indenture.
Section 12. Tax Covenants. (A) The Local Agency shall not take any action
or fail to take any action if such action or failure to take such action would adversely affect the
exclusion from gross income of the interest payable on the Note or Bonds under Section 103 of
the Internal Revenue Code of 1986 (the "Code"). Without limiting the generality of the
foregoing, the Local Agency shall not make any use of the proceeds of the Note or Bonds or any
other funds of the Local Agency which would cause the Note or Bonds to be an "arbitrage bond"
within 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
DOCSLA 1:466083.1 -10-
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.
(B) 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 2004, including the
Note, is not reasonably expected to exceed $5,000,000; or, in the alternative, (ii) covenants that
the Local Agency will take all legally 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.
(C) Notwithstanding any other provision of this Resolution to the contrary,
upon the Local Agency's failure to observe, or refusal to comply with, the covenants contained
in this Section 12, no one other than the holders or former holders of the Note, the owners of the
Bond, the Credit Provider, if any, 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 Note.
(D) The covenants contained in this Section 12 shall survive the payment of
Section 13. Events of Default and Remedies.
If any of the following events occurs, it is hereby defined as and declared to be
and to constitute an "Event of Default":
(A) Failure by the 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 all agree in writing to an extension of such time
prior to its expiration;
(C) Any warranty, representation or other statement by or on behalf of the
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
Agreemerrt 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
DOCSLA I :466083.1 -11-
expiration of such thirty (30) days to protect its and the Bond Owners' (or Noteholders')
interests;
(E) The Local Agency files a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter
in 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 cr 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 thirty (30) days to protect its and the Bond Owners' or Noteholders' interests.
Whenever any Event of Default referred to in this Section 13 shall have happened
and be continuing, the Trustee, as holder of the Note, shall, in addition to any other remedies
provided herein or by law or under the Indenture, if applicable, have the right, at its option
without any further demand or notice, to take one or any combination of the following remedial
steps:
(1) Without declaring the Note to be immediately due and payable, require the
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
(2) Take whatever other action at law or in equity (except for acceleration of
payment on the Note) which may appear necessary or desirable to collect the amounts then due
and thereafter to become due hereunder and under the Note or to enforce any other of its rights
hereunder.
Notwithstanding the foregoing, if the Local Agency's 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 has not failed to comply with its payment
obligations under the Credit Instrument, the Credit Provider shall have the right to direct the
remedies upon any Event of Default hereunder, and 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.
DOCSLA 1:466083.1 -12-
Section 14. Trustee. The Local Agency hereby directs and authorizes the
payment by the Trustee of the interest on and principal of the Note when such become due and
payable, from amounts received by the Trustee from the Local Agency in the manner set forth
herein. The Local Agency hereby covenants to deposit funds in such account or fund, as
applicable, at the time and in the amount specified herein to provide sufficient moneys to pay the
principal of and interest on the Note on the Note Payment Deposit Date. Payment of the Note
shall be in accordance with the terms of the Note and this Resolution.
Section 15. Sale of Note. The Note shall be sold to the Authority, in
accordance with the terms of the Purchase Agreement, hereinbefore approved, and issued
payable to the Trustee, as assignee of the Authority.
Section 16. Intentionally Left Blank. This section has been included to
preserve the sequence of section numbers for cross-referencing purposes.
Section 17. Approval of Actions. The aforementioned Authorized
Representatives of the Local Agency are hereby authorized and directed to execute the Note and
cause the Trustee to accept delivery of the Note, pursuant to the terms and conditions of the
Purchase Agreement and the Indenture. All actions heretofore taken by the officers and agents
of the 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. The
Authorized Representatives of the Local Agency referred to above in Section 4 hereof are hereby
designated as "Authorized Local Agency Representatives" under the Indenture.
In the event that the Note or a portion thereof is secured by a Credit Instrument,
any one of the Authorized Representatives 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 18. Proceedings Constitute Contract. The provisions of the Note
and of this Resolution shall constitute a contract between the Local Agency and the registered
owner of the Note, and such provisions shall be enforceable by mandamus or any other
appropriate suit, action or proceeding at law or in equity in any court of competent jurisdiction,
and shall be irrepealable. The Credit Provider, if any, is a third party beneficiary of the
provisions of this Resolution and the Note.
Section 19. Limited Liability. Notwithstanding anything to the contrary
contained herein or in the Note or in any other document mentioned herein or related to the Note
or to any Series of Bonds to which the Note may be assigned, the 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 20. 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
DOCSLA I :466083.1 -13-
the Note or of the Bonds issued in connection with the Note for any one or more of the following
purposes:
(A) to add to the covenants and agreements of the 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;
(C) to confirm, as further assurance, any pledge under, and the subjection to
any lien or pledge created or to be created by, this Resolution, of any monies, securities or funds,
or to establish any additional funds or accounts to be held under this Resolution;
(D) to cure any ambiguity, supply any omission, or cure or correct any defect
or inconsistent provision in this Resolution; or
(E) to amend or supplement this Resolution in any other respect;
provided, however, that any such Supplemental Resolution does not adversely affect the interests
of the owners of the Note or of the Bonds issued in connection with the Notes.
Any modifications or amendment of this Resolution and of the rights and
obligations of the Local Agency and of the owner of the Note or of the Bonds issued in
connection with the Note may be made by a Supplemental Resolution, with the written consents
of the Authority 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 Bonds issued in connection with the
Note outstanding at the time such consent is given; provided, however, that if such modification
or amendment will, by its terms, not take effect so long as the Note or any Bonds issued in
connection with the Note remain outstanding, the consent of the owners of such Note or of such
Bonds shall not be required. No such modification or amendment shall permit a change in the
maturity of the Note or a reduction of the principal amount thereof or an extension of the time of
any payment thereon or a reduction of the rate of interest thereon, or a change in the date or
amounts of the pledge set forth in this Ibsolution, without the consent of the owners of such
Note or the owners of all the Bonds issued in connection with the Note, or shall reduce the
percentage of the Note or Bonds the consent of the owners of which is required to effect any
such modification or amendment, or shall change or modify any of the rights or obligations of
the Trustee without its written assent thereto.
Section 21. Severability. In the event any provision of this Resolution shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 22. Appointment of Bond Counsel. The law firm of Orrick,
Herrington & Sutcliffe LLP, Los Angeles, California is hereby appointed as Bond Counsel for
the Program. The 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
DOCSLA 1:466083.1 -14-
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 Agency acknowledges that no
conflict of interest exists or would exist, waives any conflict of interest that might appear to
exist, and consents to any and all such relationships.
Section 23. Appointment of Financial Advisor and Underwriter. RBC
Dain Rauscher, Inc., Los Angeles, California is hereby appointed as financial advisor for the
Program. Lehman Brothers, Inc., together with such co -underwriters, if any, identified in the
Purchase Contract, is hereby appointed as underwriter for the Program.
Section 24. Effective Date. This Resolution shall take effect from and after its
date of adoption.
Section 25. Resolution Parameters.
(A) Name of Local Agency: City of San Rafael
(B) Maximum Amount of Borrowing: $5,000,000
(C) Authorized Representatives:
TITLE
1. City Manager
2. Assistant City Manager
3. City Clerk
[Attach form of Certification of the Secretary or Clerk, as appropriate, with
respect to the Resolution.]
DOCSLA1:466083.1 -15-
I, JEANNE M. LEONCINI, City 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 held on the Yd day of May, 2004,
by the following vote, to wit:
AYES: COUNCIL MEMBERS: Cohen, Heller, Miller, Phillips & Mayor Boro
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
JEAWNE M. LEONCINI, City Clerk
-16-
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Purchase Agreement"), dated as of the
purchase date (the "Purchase Date") specified in Exhibit A attached hereto and made a part hereof,
entered into by and between the signatory local agency designated in Exhibit A (the "Local Agency")
and the California Statewide Communities Development Authority (the "Authority"), for the sale and
delivery of the principal amount specified in Exhibit A of the Local Agency's 2004 Tax and Revenue
Anticipation Note (the "Note") to be issued in conjunction with the notes of other Issuers (as hereinafter
defined) participating in the Program (as hereinafter defined), as determined in the Pricing Confirmation
(as hereinafter defined), pooled with notes of other Issuers and assigned to secure a series (the "Series")
of bonds (the "Bonds") designated in Exhibit A;
WITNESSETH:
WHEREAS, local agencies are authorized by Sections 53850 to 53858, both
inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4,
Part 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary
notes;
WHEREAS, the legislative body of the Local Agency (the "Legislative Body") has
heretofore adopted its resolution finding that the Local Agency needs to borrow fluids in its fiscal year
ending June 30, 2005 ("Fiscal Year 2004-2005") in the principal amount set forth in Exhibit A and that
it is necessary that said sum be borrowed at this time by the issuance of a note therefor in anticipation of
the receipt of taxes, income, revenue, cash receipts and other moneys to be received by the Local
Agency during or attributable to Fiscal Year 2004-2005;
WHEREAS, the Local Agency has adopted a resolution or resolutions (collectively or
singularly, as applicable, the "Resolution") authorizing the issuance and sale of the Note in the name and
on behalf of the Local Agency;
WHEREAS, the Local Agency has detennined that it is in the best interests of the
Local Agency to participate in the California Communities Cash Flow Financing Program (the
"Program"), whereby participating local agencies (the "Issuers") will simultaneously issue tax and
revenue anticipation promissory notes for purchase by the Authority;
WHEREAS, under the Program, the Authority will form one or more pools of notes
(the "Pooled Notes") and assign each note to a particular pool (the "Pool") and sell a Series of Bonds
secured by each Pool pursuant to an indenture, dated as of July 1, 2004 (the "Indenture"), by and
between the Authority and Wells Fargo Bank, National Association (the "Trustee"), and sell each such
Series to Lehman Brothers, Inc., as representative of the underwriters of the Program (collectively, the
"Underwriter");
DOCSLA 1:466105.1
40929-320 W W B
WHEREAS, if so indicated in Exhibit A, the payment by the Local Agency of its Note
will be secured in whole or in part (jointly, but not severally, with notes of the other participating Issuers
assigned to the same Series of Bonds) by a letter of credit, policy of insurance, proceeds received from
a separate bond issue issued by the Authority for such purpose (the "Reserve Fund") or other credit
instrument (collectively, the "Credit Instrument") to be issued by the entity or entities designated in
Exhibit A as the credit provider (the "Credit Provider");
WHEREAS, such Credit Instrument may be issued pursuant to a reimbursement
agreement, commitment letter, indenture or other agreement (the "Credit Agreement") as identified in
Exhibit A;
WHEREAS, in order to participate in the Program, the Local Agency has agreed to be
responsible for its share of the fees and expenses of the Trustee, and, if applicable, the Credit Provider,
and the costs of issuing the Bonds, and the costs, if applicable, of issuing the Credit Instrument, which
anticipated fees, expenses and costs of issuance will be deducted from the purchase price set forth in
Exhibit A and which unanticipated fees, expenses and costs of issuance will be billed to the Local
Agency as the same may arise;
WHEREAS, the costs of issuance which will be deducted from the purchase price set
forth in Exhibit A for the Local Agency shall not exceed one percent (1%) of the principal amount of
each Note; and
WHEREAS, pursuant to the Program, the Authority is submitting this offer to purchase
the Note pursuant to this Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1 _ 0hligation to Pnrchase. Upon the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein, the Authority shall
purchase from the Local Agency, and the Local Agency shall sell to the Authority, the Note, as
described herein and in the Resolution.
Sectinn 2- Purchase Price. The purchase price of the Note shall be the purchase
price set forth in the pricing confirmation attached hereto as Exhibit A (the "Pricing Confirmation"). The
Note shall bear interest at an interest rate per annum set forth in the Pricing Confirmation, which is
hereby agreed to by and between the Authority and the Local Agency by its duly authorized
representative executing this Purchase Agreement on behalf of the Local Agency.
Sectinn 3_ Adimtments to Pringal Amount of Nnte. and Pnrchase Prire,
The Authority and the Local Agency hereby agree that the principal amount of the Note purchased by
the Authority and sold to the Authority by the Local Agency pursuant to this Purchase Agreement may
be reduced, as determined by the Authority and each Local Agency, based upon the advice of Orrick,
Herrington & Sutcliffe LLP ("Bond Counsel'), in order that the proceeds produced from such sale of
such Note will be an amount which will not be subject to either (i) yield restriction (in order for interest
to be excluded from gross income under Section 103 of the Internal Revenue Code of 1986, as
amended (the "Code")) or (ii) a rebate requirement (under Section 148 of the Code). The Authority
DOCSLA 1:466105.1
40929-320 W W B
and the Local Agency hereby further agree that the purchase price of the Note shall be reduced as a
result of any reduction of the principal amount of the Note required by this section.
Section 4. Di -livery of and Payment for the Note. The delivery of the Note
(the "Closing") shall take place at 8:00 a.m., California time, on the closing date set forth in the Pricing
Confirmation or at such other time or date as may be mutually agreeable to the Local Agency, the
Authority and the Underwriter, at the Los Angeles office of Orrick, Herrington & Sutcliffe LLP or such
other place as the Local Agency, the Authority and the Underwriter shall mutually agree. At the
Closing, the Local Agency shall cause the Note to be delivered to the Authority, duly executed and
authenticated, together with the other documents hereinafter mentioned, and the proceeds of the
purchase price of the Note set forth in the Pricing Confirmation shall be deposited in an amount
indicated in the Pricing Confirmation as the Deposit to Proceeds Fund which shall be held by the
Trustee for the Local Agency and the remainder in the Costs of Issuance Fund held thereunder.
If at any time prior to 90 days after the Closing Date, any event occurs as a result of
which information relating to the Local Agency included in the official statement of the Authority relating
to the Series of Bonds to which the Note is assigned (the "Official Statement") contains an untrue
statement of a material fact or omits to state any material fact necessary to make the statements therein
in light of the circumstances under which they were made, not misleading, the Local Agency shall
promptly notify the Authority and the Underwriter thereof, and if, in the opinion of the Authority or the
Underwriter, such event requires the preparation and publication of a supplement or amendment to the
Official Statement, the Local Agency shall cooperate with the Authority and the Underwriter in the
preparation of an amendment or supplement to the Official Statement in a form and in a manner
approved by the Authority and the Underwriter, and all reasonable expenses incurred thereby shall be
paid by the Local Agency.
Sectinn S- The Note, The Note shall be issued in substantially the form set forth
in the Resolution, without coupons in the full principal amount set forth in Exhibit A.
Section F_ Re= rPsentations and Warranties of the Local Age nryThe Local
Agency represents and warrants to the Authority and the Underwriter that:
(a) All representations and warranties set forth in the Resolution are true and
correct on the date hereof and are made for the benefit of the Authority and the Underwriter as if set
forth herein.
(b) The information relating to the Local Agency included in the Official Statement
does not contain any untrue statement of a material fact or omit to state any material fact necessary to
make the statements therein in light of the circumstance under which they were made not misleading.
(c) A copy of the Resolution has been delivered to the Authority and the
Underwriter, and the Resolution will not be amended or repealed without the consent of the Authority
and the Underwriter, which consent will not be unreasonably withheld.
(d) The Local Agency acknowledges that the Authority is authorized to execute the
Indenture, to assign the Note to the Trustee under the Indenture and to issue the Series of Bonds
pursuant to the Indenture.
DOCKA 1:466105.1
40929-320 WWB 3
(e) The Local Agency shall provide the required Payment Account Deposit
Certification (upon a request therefor) in accordance with Section 5.06 of the Indenture.
(D The Local Agency has not issued and will not issue any obligation or
obligations, other than the Note, to finance the working capital deficit for which the Note is being issued.
Seetinn 7_ C'nnditinnc PrPet-dent to the Closing. Conditions precedent to the
Closing are as follows:
(a) The execution and delivery of the Note consistent with the Resolution.
(b) Delivery of a legal opinion addressed to the Local Agency (with a reliance letter
addressed to the Authority and the Underwriter), dated the date of closing of Bond Counsel with
respect to the validity of the Bonds in form and substance acceptable to the Authority and the
Underwriter.
(c) Delivery of a legal opinion, dated the date of Closing, of counsel to the Local
Agency, with respect to the due authorization, execution and delivery of the Note, in form and
substance acceptable to Bond Counsel.
(d) Approval by the Credit Provider of the credit of the Local Agency and inclusion
of the Local Agency's Note in the assignment, together with notes of other Issuers, to a Series of
Bonds, to secure the Series of Bonds, which approval in the event the Credit Instrument is the Reserve
Fund shall be evidenced by the issuance of an "SP -1+" rating with respect to the applicable Series of
Bonds by Standard & Poor's Ratings Services.
(e) Delivery of each certificate, document, instrument and opinion required by the
agreement between the Authority and the Underwriter for the sale by the Authority and purchase by the
Underwriter of the Series of Bonds to which the Pooled Note is assigned.
(D Delivery of such other certificates, instruments or opinions as Bond Counsel
may deem necessary or desirable to evidence the due authorization, execution and delivery of
documents pertaining to this transaction and the legal, valid and binding nature thereof or as may be
required by the Credit Agreement, as well as compliance of all parties with the terms and conditions
thereof.
Seetinn R- Fvents Permitting the Authority to Terminnte. The Authority may
terminate its obligation to purchase the Note at any time before the Closing if any of the following
Occurs:
(a) Any legislative, executive or regulatory action (including the introduction of
legislation) or any court decision which, in the judgment of the Authority, casts sufficient doubt on the
legality of obligations such as the Note, and the tax-exempt status of interest on obligations such as the
Bonds, so as to impair materially the marketability or to reduce materially the market price of such
obligations;
(b) Any action by the Securities and Exchange Commission or a court which would
require registration of the Note, the Bonds or any instrument securing the Note or Bonds under the
DOCSLA 1:466105.1
40929-320 W W B 4
Securities Act of 1933, as amended, in connection with the public offering thereof, or qualification of the
Resolution or the Indenture under the Trust Indenture Act of 1939, as amended;
(c) Any restriction on trading in securities, or any banking moratorium, or the
inception or escalation of any war or major military hostilities which, in the judgment of the Authority,
substantially impairs the ability of the Underwriter to market the Bonds; or
(d) The Underwriter terminates its obligation to purchase the Series of Bonds to
which the Note is assigned pursuant to its agreement with the Authority for the purchase of such Series
of Bonds.
Neither the Underwriter nor the Authority shall be responsible for the payment of any
fees, costs or expenses of the issuance, offering and sale of the Local Agency's Note except the
Underwriter shall be responsible for California Debt and Investment Advisory Commission fees and for
its own internal costs. The fees, costs and expenses that are categorized in the "Costs of Issuance"
definition in the Indenture shall be paid from the Costs of Issuance Fund. The Local Agency shall pay
any additional costs attributable to it as set forth in the Resolution other than the fees, costs and
expenses so payable from the applicable Costs of Issuance Fund.
Sectinn 9_ Tndomnificatinn. To the extent permitted by law, the Local Agency
agrees to indemnify and hold harmless the Authority and the Underwriter and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20
of the Securities Act of 1934, as amended) the Authority or the Underwriter, and the officers, directors,
agents and employees of the Authority and the Underwriter against any and all losses, claims, damages,
liabilities and expenses arising out of any statement or information in the Preliminary Official Statement
or in the Official Statement (other than statements or information regarding an Issuer other than the
Local Agency) 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) that should be stated therein or that is necessary to make the statements
and information therein not misleading in any material respect.
Section 10_ Credit Agreement. The Local Agency shall comply with all lawful and
proper requests of the Authority in order to enable the Authority to comply with all of the terms,
conditions and covenants binding upon it under the Credit Agreement.
Section 11- Nooses. Any notices to be given to the Underwriter under the
Purchase Agreement shall be given in writing to Lehman Brothers, Inc., 1100 Glendon Avenue, Suite
1101, Los Angeles, CA 90024, Attention: Mr. Kevin O'Brien. Any notices to be given to the
Authority under the Purchase Agreement shall be given in writing to the Authority, 1100 "K" Street,
Suite 101, Sacramento, CA 95814, Attention: Secretary.
gectinn 12. Nn Assignment. The Purchase Agreement has been made by the
Local Agency and the Authority, and no person other than the Local Agency and the Authority or their
successors or assigns and the Underwriter shall acquire or have any right under or by virtue of the
Purchase Agreement. All of the representations, warranties and agreements contained in the Purchase
Agreement shall survive the delivery of and payment by the Authority for the Note and any temunation
of the Purchase Agreement.
DOCSLA 1:466105.1
40929-320 W W B
Sectinn 13_ Applicahle Law The Purchase Agreement shall be interpreted,
governed and enforced in accordance with the laws of the State of California.
Section 14. Effectiveness. The Purchase Agreement shall become effective upon
the execution hereof by the Authority and execution of the Pricing Confirmation by the Local Agency,
and the Purchase Agreement, including the Pricing Confirmation, shall be valid, binding and enforceable
from and after the time of such effectiveness.
SPefinn 15_ geyerahift. In the event any provision of the Purchase Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 16_ Head�ingg. Any headings preceding the text of several sections hereof
shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall
they affect its meaning, construction or effect.
DOCSLA 1:466105.1
40929-320 W W D 6
Rection 17_ Execution in Counterparts. This Purchase Agreement may be
executed and entered into in several counterparts, each of which shall be deemed an original, and all of
which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to
be executed by their duly authorized representatives as of the Purchase Date set forth in Exhibit A
attached hereto and incorporated herein.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
0
Member of the Commission
of the Authority
DOCSLA 1:466105.1
40929-320 W W B 7
Pricing Confumation Supplement
Local Agency: City of Say: Rafael
Pricing Information
Principal Amount of Note:
Interest Rate on Note:
Re -Offering Yield:
Purchase Price
Default Rate:
Purchase Price:
Less: Cost of Issuance:
Credit Enhancement:
Deposit to Note Proceeds Account:
In:portant Dates
Resolution Date of Local Agency:
Purchase Date:
Closing Date:
Maturity Date:
Interest Payment Date(s):
Note Payment Deposit Date:
First Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Second Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Investment Agreement Information
GIC Provider
Long Term Ratings (S&P/Moody's)
Short Term Credit Ratings (S&P./Moody's)
Interest Rate on GIC
DOCSLA L466105.1
40929-320 W W B A- l
S
* 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
2004 calendar year, including the Note, all other notes and bonds, and all tax-exempt leases, executed
or delivered during the 2004 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). ❑
IN WITNESS WHEREOF, the Purchase Agreement, including this Pricing
Confirmation, is agreed and accepted to on the Purchase Date set forth above.
CITY OF SAN RAFAEL
Authorized Representative
Print Name of Person Signing
* Please initial the box mly if applicable to the Local Agency
A-2
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 Section4.7 hereof (the "Authorized Representatives") of the local agency identified in
Section4.7 hereof (the "Local Agency"), acting for and on behalf of the Local Agency, hereby
certify, as of July 1, 2004 (the "Closing Date"), as follows with respect to the 2004 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 Section53850 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 2004-2005, are duly authorized to make this
certification for and on behalf of the Local Agency pursuant to the Resolution.
1.3. Attached hereto as Exhibit A 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 RBC Dain Rauscher Inc. as financial advisor (the "Financial Advisor") in
connection with the Program, was at the time submitted and is on the date of this Certificate true
and accurate. Representatives of the Local Agency have reviewed the Indenture, 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.
1.6. The Local Agency does not have a negative cash balance at the beginning of
Fiscal Year 2004-2005 in its general fund.
DOCSLA L•466230.1
40929.320 W W B
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 Purchase
Agreement by and between the Authority and the Local Agency (severally and not jointly with
other local agencies), including the Pricing Confirmation Supplement attached thereto (the
"Purchase Agreement"), the Indenture, dated as of July 1, 2004 (the "Indenture"), by and
between Wells Fargo Bank, National Association (the "Trustee") and the Authority, pertaining to
the issuance of the California Statewide Communities Development Authority 2004 Local
Agency Tax and Revenue Anticipation Bonds, Series A (the "Bonds"), and any and all other
agreements and documents (the "Other Agreements") as may be required to be executed,
delivered and received by the Local Agency or the Authority in order to carry out, give effect to
and consummate the transactions contemplated by the Resolution. The Resolution, the Note, the
Indenture, the Purchase Agreement, and the Other Agreements are collectively referred to herein
as the "Documents."
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 Purchase Agreement and the Note of the Local Agency have been duly
executed and delivered by the duly authorized officers of the Local Agency, and the Note and the
Purchase Agreement, when executed and delivered by the other parties thereto (where necessary)
and the obligations of the Local Agency under the Indenture 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, 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 execution, delivery and performance by the Local Agency of the Note and the
Purchase Agreement and the execution, delivery and performance by the Authority of the
Indenture and the Bonds and, in each case the borrowing thereunder or in connection therewith
(and the application of the proceeds thereof) have been duly authorized or acknowledged by all
necessary action on the part of the Local Agency.
1.13. The Local Agency has full power and authority to acknowledge the Authority's
execution and delivery of the Indenture. The execution and delivery by the Authority of the
Indenture (and the 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.
2
1. 14. The Local Agency covenants that upon receipt from the Trustee of a request to
confirm that amounts constituting such Local Agency's repayment obligation described in
Section 8 of the Resolution have been transferred to and set aside in the Payment Account (as
defined in the Resolution), the Local Agency shall within five (5) Business Days (as defined in
the Indenture) after the date of such request, confirm such transfer to the Trustee by submitting
the Payment Account Deposit Certification in the form set forth in Exhibit C of the Indenture.
1.15. 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 notify Orrick, Herrington & Sutcliffe LLP,
("Bond Counsel").
II. CERTIFICATIONS REGARDING TAX MATTERS
2.1. The Local Agency shall not take any actions (or fail to take any actions) that
would cause interest on the Bonds to be included in gross income for federal income tax
purposes. Without limiting the generality of the foregoing, the 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 Bonds to be treated as "federally
guaranteed," within the meaning of Section 149(b) of the Internal Revenue Code of 1986 (the
"Code");
d) shall not use any proceeds of the Note to repay any principal or interest of any
outstanding tax-exempt obligation of the Local Agency apart from interest that accrues during a
one-year period commencing July 1, 2004;
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 take no actions that would cause the Bonds to be treated as "arbitrage
bonds," within the meaning of Section 148 of the Code.
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 Bonds (the "Cashflow Projections"), the
3
Local Agency expects to allocate the proceeds of the Note to working capital expenditures within
13 months after July 1, 2004, 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 2003-2004 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 2004-2005, the Local Agency
has reviewed its Fiscal Year 2003-2004 cash flows and has, where applicable, compared the
Fiscal Year 2003-2004 actual cash flows with the Fiscal Year 2003-2004 cash flows projected
just before the beginning of Fiscal Year 2003-2004. 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 2004-2005 is reasonable and is based on reasonable
assumptions.
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 Purchase Agreement, will be
deposited into the Proceeds Fund established under the Indenture.
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. If the Local Agency is unable to make the small issuer certification set forth in the
Pricing Confirmation Supplement, then the Agency hereby makes the following certifications:
All of the proceeds of the Note, together with earnings thereon, will be deposited into the 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
2004-2005 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 (109-1o) 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 2003-2004 or (ii) the amount that the Local
4
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 on the Bonds is excluded from federal gross income.
IV. REQUEST TO AUTHORITY AND TRUSTEE, CERTIFICATIONS RELATING
THERETO AND SIGNATURE CERTIFICATIONS OF THE LOCAL AGENCY
4.1. The Trustee is hereby requested and authorized to authenticate and deliver the
2004 Tax and Revenue Anticipation Note of the Local Agency upon receipt of the purchase price
thereof. The Trustee is also hereby requested and authorized to authenticate and deliver the
Bonds upon receipt thereof from the Authority.
4.2. It is hereby acknowledged that the Authority is authorized to issue the Bonds,
upon receipt of the purchase price of the Note of the Local Agency together with the aggregate
purchase price of all other notes of the other Local Agencies participating in the Program and
whose notes will be pooled with the Local Agency's Note in connection with the issuance of the
Bonds.
4.3. The Trustee is hereby directed to deposit the proceeds of the Note in the amounts
as set forth in the Pricing Confirmation Supplement into the Costs of Issuance Fund and in the
Proceeds Fund.
4.4. Upon the deposit of proceeds as set forth in Section4.3 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 Purchase Agreement, to
the Local Agency by [wire/check (circle one)]. 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
4.5. 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.
4.6. As of the date hereof, no event has occurred and is continuing which constitutes
an Event of Default under the Resolution or would constitute an Event of Default but for the
requirement that notice be given, or time elapse, or both.
4.7. ** 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 iespective
names below and by execution hereof each certifies that the signatures of the other officer or
officers hereto are the genuine signatures of such officer or officers (signatures of the officers
executing the Note, the Purchase Agreement and the Amended and Restated Joint Exercise of
Powers Agreement relating to the Authority (if applicable) must appear below):
AUTHORIZED REPRESENTATIVES OF CITY OF SAN RAFAEL:
NAME TITLE SIGNATURE
ROD GOULD
KEN NORDHOFF
JEANNE M. LEONCINI
City Manager
Assistant City Manager
City Clerk
Please complete the following items of information, including the name of the Local Agency's
Authorized Representatives and the signatures of such Authorized Representatives.
EXHIBIT A
CITY OF SAN RAFAEL
2004 TAX AND REVENUE ANTICIPATION NOTE, [SERIES _]*
Date of
Interest Rate Maturity Date Original Issue
REGISTERED OWNER:
PRINCIPAL AMOUNT: $5,000,000
FOR VALUE RECEIVED, the Local Agency designated above (the "Local
Agency"), acknowledges itself indebted to and promises to pay to the registered owner identified
above, or registered assigns, on the maturity date set forth above, the principal sum specified
above in lawful money of the United States of America, and to pay interest thereon [on
, 2004 and] at maturity at the rate of interest specified above (the "Note Rate").
Principal of and interest on this Note are payable in such coin or currency of the United States as
at the time of payment is legal tender for payment of private and public debts. Principal and
interest at maturity shall be paid upon surrender hereof at the principal corporate trust office of
Wells Fargo Bank, National Association in Los Angeles, California, or its successor in trust (the
"Trustee"). Interest shall be calculated on the basis of a 360 -day year, consisting of twelve 30 -
day months. Both the principal of and interest on this Note shall be payable only to the
registered owner hereof as the same shall fall due; provided, however, no interest shall be
payable for any period after maturity during which the holder hereof fails to properly present this
Note for payment. If the Local Agency fails to pay this Note when due or the Credit Provider (as
defined in the Resolution hereinafter described and in that certain Indenture of Trust, dated as of
1, 2004 (the "Indenture"), by and between the California Statewide Communities
Development Authority and Wells Fargo Bank National Association, as trustee), if any, is not
reimbursed in full for the amount drawn on or paid pursuant to the Credit Instrument (as defined
in the Resolution and the Indenture) to pay all or a portion (including the interest component, if
applicable) of this Note on the date of such payment, this Note shall become a Defaulted Note
(as defined in the Resolution and the Indenture and with the consequences set forth in the
Resolution and the Indenture, including, without limitation, that this Note as a Defaulted Note
(and any related reimbursement obligation with respect to a credit instrument) shall bear interest
at the Default Rate, as defined in the Indenture).
It is hereby certified, recited and declared that this Note represents the authorized
issue of the Note in the aggregate principal amount authorized, executed and delivered pursuant
to and by authority of certain resolutions of the 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
If more than one Series of Bonds is issued under the Program in Fiscal Year 2004-2005 and if the Note
is pooled with notes issued by other Issuers (as defined in the Resolution).
DOCSLA 1:466083.1 A- I
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 Fiscal Year 2004-2005 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 Fiscal Year 2004-2005) 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 of or
interest on this Note.
The Local Agency and the Trustee may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Local Agency and the
Trustee shall not be affected by any notice to the contrary.
DOCSLA 1:466083.1 A-2
It is hereby certified that all of the conditions, things and acts required to exist, to
have happened and to have been performed precedent to and in the issuance of this Note do exist,
have happened and have been performed in due time, form and manner as required by the
Constitution and statutes of the State of California and that the amount of this Note, together
with all other indebtedness of the Local Agency, does not exceed any limit prescribed by the
Constitution or statutes of the State of California.
IN WITNESS WHEREOF, the Legislative Body of the Local Agency has caused
this Note to be executed by the manual or facsimile signature of a duly Authorized
Representative of the Local Agency and countersigned by the manual or facsimile signature of
the Secretary or Clerk of the Legislative Body as of the date of authentication set forth below.
CITY OF SAN RAFAEL
En
Title:
Countersigned
Title:
DOCSLA I :466083.1 A-3
CITY OF
Mayor
400q
AlbertJ. Boro
Council Members
Paul M. Cohen
Barbara Heller
Cyr N. Miller
Gary O. Phillips
OFFICE OF THE CITY ATTORNEY
Gary T. Ragghianti, City Attorney
Clark E. Guinan, Assistant City Attorney
Eric T. Davis, Deputy City Attorney
California Statewide Communities
Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Orrick, Herrington & Sutcliffe, LLP
Los Angeles, California
July 1, 2004
RBC Dain Rauscher, Inc.
Los Angeles, California
Financial Security Assurance Inc.
New York, New York
RE: City of San Rafael
2004/2005 Tax and Revenue Anticipation Note
Ladies and Gentlemen:
I am the Assistant 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 fiends for Fiscal Year 2004-2005 and the issuance of the City of
San Rafael's 2004 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 Purchase Agreement, entered into by and between the City of San Rafael and the California
Statewide Communities Development Authority (the "Purchase Agreement") relating to the Note.
This opinion letter may only be relied upon by the addressees identified above and the underwriters
of the bonds issued by the California Statewide Communities Development Authority in connection
with the Program.
I have examined and relied upon such records, documents, certificates, and other matters as are in
my judgment 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:
1400 Fifth Avenue (P.O. Dox 151560) San Rafael, CA 94915--1560
PHONE: (415) 435-3030 ' FAX: (415) 455-3109 1 email: city.attomeyia ci.san-rafael.ca.us
California Statewide Comms{. _--s. Development Authority, Sacramento, Cahfu a
RiSC Dain Rauscher, Inc.. Los Angeles, Callfbrlliil
Wells largo Bank, National Association, Los Angeles, Califbrnia
Financial Security Assurance Inc., New fork, Nei\ York
Orrick, Herrington &C Sutcliffe, LI,P, Los Angeles, California
Page 2
7-1-04
1. The City of San Ratael is a chartered municipal corporation, duly organized and
validly existing under the laws of the State of California.
2. The Resolution authorizing a) the borrowing of funds for Fiscal Year 2004-2005, b)
the issuance and sale of the Note, and e) 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
fiull 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 and the
Purchase Agreement, and the City has duly authorized, executed and delivered the Note and the
Purchase Agreement and the Note and the Purchase Agreement are legally valid and binding
obligations of City enforceable against City in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium, or other laws relating to or
affecting creditors' rights generally and the principles of equity if equitable remedies are sought.
4. The adoption of the Resolution and the execution and delivery of the Note and the
Purchase Agreement and compliance with the provisions of the Note and the Purchase Agreement
under the circumstances contemplated by the Note and the Purchase Agreement do not and will not
conflict with or constitute on the part of City a breach of or default under any agreement or other
instrument applicable to or binding upon City or any of its properties or any existing law, regulation,
court order or consent decree to which the City or any of its properties is subject.
5. 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 knowledge, threatened against or affecting
City a) to restrain or enjoin the issuance of delivery of the Note or the Purchase Agreement, b) in any
way contesting the existence or powers of City with respect to the execution and delivery of the Note
or the Purchase Agreement, c) wherein an unfavorable decision, ruling, or finding will have a
material adverse effect on the financial condition of City, or the transactions contemplated by the
Note, the Purchase Agreement and the Resolution, or (1) which is likely to adversely affect the
validity or enforceability of, or the authority or the ability of City to perform its obligations under,
the Note, the Purchase Agreement and the Resolution or any other agreement pursuant to which City
is a party and which is used or contemplated for use in the consummation of the transactions
contemplated by the Note, the Purchase Agreement and the Resolution.
Ve/i+.truly yo /1NN
L'CLARK E
Assistant City Attorney
1400 Pilch AVC11uC (11.0. Box 151560) San Rafael, CA 94915-1560
PI IONF: (4 15) 485-30£0 i FAX: (415) 455-3109 , email: city.attorney(i)ct.san-rafacl.cei.us
Local Agency:
2004-05 CSCDA TRANs Program
Cash Flow Worksheet
CITY OF SAN RAFEL
Do you expect to issue more than $5 million in tax-exempt obligations
(including the 2004 TRANs) during the 2004 calendar year (1/1 - 12/31/05)7
Cash and Investments (include ALL FUNDS from 6/30/03 audit) $54,534,274
Less: Restricted Cash 49,565,901 IFor each Restricted Cash item, provide a description of the restriction in the space
provided on the second tab of this worksheet, called "Restricted Cash'
Adjusted Available Cash (7/1/03) _ $4,968,373 1
Lowest actual cash balance mm/dd/yy
Indicate
"A" for Actual or
"E" for Estimated
A
A
A
A
A
A
A
A
A
2003 TRAN Adjusted
(+) Amount/ Ending
1-) Pledges Cash Balance
E
E
2003 TRAN Issuer status (large or small):
$3,937,948
3,237,857
1,759,036
1,783,034
1,584,554
(439,928)
4,607,555
5,644,516
6,164,930
5,667,741
5,170,552
4,673,363
4,176,174
and amount ($439,928) (For a "Large Issuer', only the first six months are considered)
2004.05 Cash Flows wall be automatically prepared based on the 2003-04 Actual/Estimated Cash Flow, if the following information is provided
Estimated 2004-05 General Fund Receipts
Beginning
(+) plus
(-) minus
Ending
Month
Cash Balance
Receipts
Disbursements
Cash Balance
July, 2003
$4,968,373
$3,425,110
$4,455,536
$3,937,948
August, 2003
3,937,948
2,505,705
3,205,796
3,237,857
September, 2003
3,237,857
2,066,521
3,545,342
1,759,036
October, 2003
1,759,036
3,136,998
3,113,000
1,783,034
November, 2003
1,783,034
2,616,215
2,814,696
1,584,554
December 1-15, 2003
1,584,554
396,857
2,421,339
(439,928)
December 16-31, 2003
(439 928)
6,511,548
1,464,064
4,607,555
January, 2004
4,607,555
4,307,790
3,270,829
5,644,516
February, 2004
5,644,516
3,743,334
3,222,920
6,164,930
March, 2004
6,164,930
2,913,162
3,410,351
5,667,741
April, 2004
5,667,741
2,913,162
3,410,351
5,170,552
May, 2004
5,170,552
2,913,162
3,410,351
4,673,363
June, 2004
4,673,363
2,913,162
3,410,351
4,176,174
Total
7,298,213
$40,362,728
$41,154,927
3,367,064
Lowest actual cash balance mm/dd/yy
Indicate
"A" for Actual or
"E" for Estimated
A
A
A
A
A
A
A
A
A
2003 TRAN Adjusted
(+) Amount/ Ending
1-) Pledges Cash Balance
E
E
2003 TRAN Issuer status (large or small):
$3,937,948
3,237,857
1,759,036
1,783,034
1,584,554
(439,928)
4,607,555
5,644,516
6,164,930
5,667,741
5,170,552
4,673,363
4,176,174
and amount ($439,928) (For a "Large Issuer', only the first six months are considered)
2004.05 Cash Flows wall be automatically prepared based on the 2003-04 Actual/Estimated Cash Flow, if the following information is provided
Estimated 2004-05 General Fund Receipts
$0
Estimated 2004-05 General Fund Disbursements
542,995.570
2004 TRAN
Adjusted
Beginning
(+) plus
(-) minus
Ending
Pledge Factor (+) Amount/
Ending
Month Cash Balance
Receipts
Disbursements
Cash Balance
I% of repayment) i-) Pledges
Cash Balance
July, 2004 $4,176,174
$3,288,450
$4,654,808
$2,809,816
$4,970,000
$7,779,816
August, 2004 2,809,816
2,226,469
3,349,174
1,687,111
6,657,111
September, 2004 1,687,111
1,789,630
3,703,906
(227,166)
4,742,834
October, 2004 (227 166)
2,976,984
3,252,228
(502,410)
4,467,590
November, 2004 (502.410)
2,329,125
2,940,582
(1,113,867)
3,856,133
December 1-_, 2004 (1,113,867)
415,538
2,529,633
(3,227,961)
1,742,039
December _-31, 2004 (3 227 961)
8,802,414
1,529,544
4,044,908
9,014,908
January, 2005 4,044,908
4,185,421
3,417,116
4,813,213
50% (2,485,000)
7,298,213
February, 2005 4,813,213
3,485,993
3,367,064
4,932,142
7,417,142
March, 2005 4,932,142
2,701,583
3,562,878
4,070,846
6,555,846
April, 2005 4,070,846
4,440,581
3,562,878
4,948,549
50% (2,485,000)
4,948,549
May, 2005 4,948,549
2,701,583
3,562,878
4,087,254
4,087,254
June, 2005 4,087,254
2,918,958
3,562,878
3,443,333
3,443,333
Total
$42,262,729
$42,995,570
Lowest projected cash balance mm/dd/yy
and amount
($3,227,961)
(For a "Large Issuer", only the first six months are considered)
2003-04 Deficit
Question
Complete this section ONLY If you Issued TRANs in the 2003-04 Fiscal Year.
2003 TRAN issuer status (large or small):
0
Lowest cash balance projected for the 2003 TRAN wast
I expected to occur on
(From last year's Worksheet. Enter deficit as a negative number)
Actual lowest cash balance was: I (3439.928) I Actual low point was
$439,928
LOWER
or percent of the projection.
If the actual lowest cash balance was HIGHER than the projection, please explain. Please mention specific timing and/or amounts of discrepancies.
CITY OF SAN RAFEL
List cash resources of the Local Agency not included in General Fund Cash Flow, but can be loaned to General Fund on a short-term basis (up to six months).
Do not include highly restricted funds such as bond proceeds, deferred compensation or funds held by a trustee.
Can the Cash be
Loaned to the Audited Projected Projected
Fund Names and/or Numbers General Fund? Cash Balance Cash Balance Cash Balance
Fund Type (within the Fund Type) (Yes/No) (1) as of 6130103 as of 6130104 as of 6130/05
TOTAL
(1) If "No" -- Fund should not be included on list
1. Actual/Estimated 2003-04 General Fund Expenditures
Less:
Interfund Transfers
2003 TRANS Repayment (if included in expenditures)
Adjusted 2003-04 General Fund Expenditures
5% ofAdjusted 2003-04 General Fund Expenditures
2. Large or Small Issuer
Do you expect to issue more than $5 million in tax-exempt oblitations
(including the 2004 TRANS) during the 2004 calendar year?
3. Small Issuer Working Capital Reserve
If "no" to question 2, enter the amount derived at the end of
question 1, above. This is your working capital reserve.
4. Large Issuer - Greater of (a) Average 2003.04 monthly balance or
(b) the Lesser of projected 2003-04 Beginning or Ending Balance.
If "yes" to question 2, please calculate average beginning
or ending monthly cash balance for 2003-04 fiscal year
(excluding 2003 TRANs). Enter whichever is greater of (a) or (b) above.
5. Large Issuer Working Capital Reserve
If "yes" to question 2, enter the lesser of amounts derived
in questions 1 or 4. This is your working capital reserve.
6. Maximum Cumulative Cash Flow Deficit
(from 2004-05 Cash Flow Projection)
plus:
7. Working Capital Reserve / Safe Harbor
B. 2004 TRAN Sizing based on Working Capital Reserve/Safe Harbor
9. Maximum Borrowing Amount (Greater of Working Capital Reserve
Sizing and Safe Harbor Sizing)
less:
10. Miscellaneous Adjustments required by Tax Counsel
a. 5% for Small Issuers, 10% for Large Issuers
b. Expected Interest Earnings on 2004 TRAN proceeds to month in which
Maximum Cumulative Cash Flow Deficit is to occur.
Expected Interest Rate on Investment of 2004 TRANS
11. Recommended Size of 2004 TRANS
11 a. Authorized (maximum) TRAN Size as Per Your Resolution
11b Preferred TRAN Size if less than Recommended Size
12. Final Size of 2004 TRAN
$5,285,708 1
264,285
50,214
2.00%
$4,970,000 �I
_ $4,970,000
$0
Informational for Large Issuer Only:
Approximate amount of ACTUAL lowest cash
balance which must be incurred by 12/3112004
to avoid arbitrage rebate
0111
$0 $0
'Working Capital
$41,154,927
_ $41,154,927
times .05 $2,057,746
0
2,057,746
4,099,955
2,057,746
1` TRAN Sizing
Working Capital
Safe Harbor
Reserve Sizing
Sizing
$3,227,961
$3,227,961
+ 2,057,746
358,662
_ $5,285,708
$3,586,624
$5,285,708 1
264,285
50,214
2.00%
$4,970,000 �I
_ $4,970,000
$0
Informational for Large Issuer Only:
Approximate amount of ACTUAL lowest cash
balance which must be incurred by 12/3112004
to avoid arbitrage rebate
0111