CC Resolution 12621 •
RESOLUTION NO. 12621
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CAMPBELL AUTHORIZING THE ISSUANCE AND SALE OF
GENERAL OBLIGATION BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $20,000,000,
INCREASING THE REVENUE ESTIMATE IN FUND 448
(MEASURE 0 CAPITAL PROJECTS) TO ACCOUNT FOR
ANTICIPATED MEASURE 0 BOND PROCEEDS IN FISCAL
YEAR 2020-21, AND AUTHORIZING ACTIONS RELATED
THERETO
WHEREAS, an election was duly and regularly held in the City of Campbell (the
"City") on November 6, 2018, for the purpose of submitting Measure 0 (the "Bond
Measure") to the qualified electors of the City; and
WHEREAS, the abbreviated form of the Bond Measure was:
"To provide a police emergency operations center that is fully operational during
a disaster and an innovative library in seismically safe, accessible, and energy
efficient facilities meeting current safety codes, shall the City of Campbell's
measure to issue $50,000,000 in general obligation bonds with projected levies
of $0.019 per $100 ($19 per $100,000) of assessed value, generating an
estimated average of$3,025,000 annually to repay bonds through maturity, with
citizen oversight and all funds spent locally, be adopted?"; and
WHEREAS, the City is empowered under Article 4.5 of Chapter 3 of Part 1 of
Division 2 of Title 5 of the Government Code of the State of California (the "Bond Law")
to its issue general obligation bonds which are authorized by two-thirds of the electors
voting on the proposition; and
WHEREAS, more than two-thirds of the electors voting at an election held on
November 6, 2018, voted for the Bond Measure, authorizing the issuance by the City of
general obligation bonds in the aggregate principal amount of $50,000,000 for the
purpose of providing funds for the acquisition and improvement of City facilities; and
WHEREAS, the City Council wishes at this time to authorize the issuance and
sale of an initial series of general obligation bonds under such authority in the aggregate
principal amount of not to exceed $20,000,000 (the "Bonds") under this Resolution and
in conformity with the Bond Law; and
WHEREAS, as required by Government Code Section 5852.1 enacted January
1, 2018 by Senate Bill 450, attached hereto as Appendix B is the information relating to
the Bonds that has been obtained by the City Council and is hereby disclosed and made
public; and
WHEREAS, the City Council previously approved a Debt Management and
Disclosure Policy which complies with Government Code Section 8855, and the delivery
of the Bonds will be in compliance with said policy;
action, such execution, countersigning or action may be taken on behalf of such officer
by any person designated by such officer to act on his or her behalf in the case such
officer shall be absent or unavailable.
SECTION 9.08. Effective Date of Resolution. This Resolution becomes effective
upon the date of its passage and adoption.
BE IT FURTHER RESOLVED that the City Council authorizes increase the FY
2020-21 revenue estimate in account 448.518.6020 by $10,000,000 to account for
anticipated Measure 0 Property bond proceeds in Fiscal Year 2020-21.
* * * * * * * * * *
The foregoing resolution was adopted by the City Council of the City Campbell,
California on July 21, 2020 by the following:
AYES: Councilmembers: Waterman, Bybee, Gibbons, Landry
NOES: Councilmembers: None
ABSTAIN: Councilmembers: None
ABSENT: Councilmembers: Resnikoff
Susan 1. La dry
ayor
ATTEST:
%aim (bAktn
Andrea Sanders
Acting City Clerk
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APPENDIX A
FORM OF BOND
REGISTERED BOND NO. R- ***$***
CITY OF CAMPBELL
ELECTION OF 2018 GENERAL OBLIGATION BOND, SERIES 2020
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP
% per annum September 1, 20 , 2020
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The CITY OF CAMPBELL, a general law city and municipal corporation duly
organized and existing under the Constitution and laws of the State of California (the
"City"), for value received, hereby promises to pay to the Registered Owner named
above, or registered assigns, the Principal Amount set forth above on the Maturity Date
set forth above, together with interest thereon at the Interest Rate set forth above,
calculated on a 30/360 day basis, until the Principal Amount hereof is paid or provided
for, such interest to be paid on March 1 and September 1 of each year, commencing
[March 1, 2021] (the "Interest Payment Dates"). This Bond will bear interest from the
Interest Payment Date next preceding the date of authentication hereof, unless (a) it is
authenticated as of a business day following the 15th day of the month immediately
preceding any Interest Payment Date and on or before such Interest Payment Date, in
which event it shall bear interest from such Interest Payment Date, or (b) it is
authenticated on or before [February 15, 2021], in which event it shall bear interest from
the Dated Date set forth above.
Principal, interest and redemption premium (if any) are payable in lawful money
of the United States of America to the person in whose name this Bond is registered (the
"Registered Owner") on the Bond registration books maintained by the Paying Agent,
initially The Bank of New York Mellon Trust Company, N.A.. Principal hereof and any
redemption premium hereon are payable upon presentation and surrender of this Bond
at the principal corporate trust office of the Paying Agent. Interest hereon is payable by
check mailed by the Paying Agent on each Interest Payment Date to the Registered
Owner of this Bond by first-class mail at the address appearing on the Bond registration
books at the close of business on the 15th day of the calendar month next preceding
such Interest Payment Date (the "Record Date"); provided, however, that at the written
request of the registered owner of Bonds in an aggregate principal amount of at least
$1,000,000, which written request is on file with the Paying Agent prior to any Record
Date, interest on such Bonds shall be paid on each succeeding Interest Payment Date
by wire transfer in immediately available funds to such account of a financial institution
within the United States of America as shall be specified in such written request.
This Bond is one of a series of $ aggregate principal amount of bonds
(collectively, the "Bonds") issued for the purpose of raising money to finance the
acquisition and improvement of City facilities, and to pay all necessary legal, financial,
engineering and contingent costs in connection therewith. The Bonds have been issued
under authority of and under the laws of the State of California, and the requisite two-
thirds vote of the electors of the City cast at an election held on November 6, 2018, upon
the question of issuing bonds in the aggregate principal amount of $50,000,000, and
under a resolution of the City Council of the City adopted on July 21, 2020 (the "Bond
Resolution"). The Bonds are payable as to both principal and interest from the proceeds
of the levy of ad valorem taxes on all property subject to such taxes in the City, which
taxes are unlimited as to rate or amount.
The principal of and interest and redemption premium, if any, on this Bond do not
constitute a debt of the County, the State of California, or any of its political subdivisions
other than the City, or any of the officers, agents and employees thereof, and neither the
County, the State of California, any of its political subdivisions other than the City, nor
any of the officers, agents and employees thereof shall be liable hereon. In no event
shall the principal of and interest and redemption premium, if any, on this Bond be
payable out of any funds or properties of the City other than ad valorem taxes levied
upon all taxable property in the City.
The Bonds are issuable only as fully registered bonds in the denominations of
$5,000 or any integral multiple thereof. This Bond is exchangeable and transferable for
bonds of other authorized denominations at the principal corporate trust office of the
Paying Agent, by the Registered Owner or by a person legally empowered to do so,
upon presentation and surrender hereof to the Paying Agent, together with a request for
exchange or an assignment signed by the Registered Owner or by a person legally
empowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms,
limitations and conditions provided in the Bond Resolution. Any tax or governmental
charges shall be paid by the transferor. The City and the Paying Agent may deem and
treat the Registered Owner as the absolute owner of this Bond for the purpose of
receiving payment of or on account of principal or interest and for all other purposes, and
neither the City nor the Paying Agent shall be affected by any notice to the contrary.
The Bonds maturing on or before September 1, , are not subject to
redemption prior to their respective stated maturities. The Bonds maturing on or after
September 1, , are subject to redemption prior to maturity, at the option of the City,
in whole or in part among maturities on such basis as designated by the City and by lot
within a maturity, from any available source of funds, on September 1, , and on any
date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to
be redeemed together with accrued interest thereon to the date fixed for redemption,
without premium.
The Bonds maturing on September 1, 20_, September 1, 20_ and September
1, 20_ (the "Term Bonds") are subject to redemption prior to their stated maturity date,
without a redemption premium, in part by lot, from mandatory sinking fund payments on
each September 1, on and after September 1, 20_ in the principal amounts as set forth
in the following tables:
$ Term Bond Due September 1, 20_
Payment Date Payment
(September 1) Amount
$ Term Bond Due September 1, 20_
Payment Date Payment
(September 1) Amount
$ Term Bond Due September 1, 20_
Payment Date Payment
(September 1) Amount
The Paying Agent shall give notice of the redemption of the Bonds at the
expense of the City. Such notice shall specify: (a) that the Bonds or a designated
portion thereof are to be redeemed, (b) the numbers and CUSIP numbers of the Bonds
to be redeemed, (c) the date of notice and the date of redemption, (d) the place or
places where the redemption will be made, and (e) descriptive information regarding the
Bonds including the dated date, interest rate and stated maturity date. Such notice shall
further state that on the specified date there shall become due and payable upon each
Bond to be redeemed, the portion of the principal amount of such Bond to be redeemed,
together with interest accrued to said date, the redemption premium, if any, and that
from and after such date interest with respect thereto shall cease to accrue and be
payable.
Notice of any redemption of Bonds shall be mailed by first class mail, postage
prepaid, at least 20 days but not more than 60 days prior to the date fixed for
redemption, to the respective Owners of any Bonds designated for redemption, at their
addresses appearing on the bond registration books maintained by the Paying Agent;
but such mailing shall not be a condition precedent to such redemption and failure to
mail or to receive any such notice shall not affect the validity of the proceedings for the
redemption of such Bonds or the cessation of accrual of interest thereon from and after
the redemption date.
The City may provide conditional notices of optional redemption, and the City is
entitled to rescind any notice of optional redemption of the Bonds by written notice to the
Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall
mail notice of such rescission of redemption in the same manner as the original notice of
redemption. Any notice of redemption shall be cancelled and annulled if for any reason
funds will not be or are not available on the date fixed for redemption. The City and the
Paying Agent have no liability to the Owners or any other party related to or arising from
such rescission.
Neither the City nor the Paying Agent will be required: (a) to issue or transfer any
Bond during a period beginning with the opening of business on the 15th calendar day
next preceding either any Interest Payment Date or any date of selection of any Bond to
be redeemed and ending with the close of business on the Interest Payment Date or a
day on which the applicable notice of redemption is given, or (b) to transfer any Bond
which has been selected or called for redemption in whole or in part.
Reference is made to the Bond Resolution for a more complete description of the
provisions, among others, with respect to the nature and extent of the security for the
Bonds, the rights, duties and obligations of the City, the Paying Agent and the
Registered Owners, and the terms and conditions upon which the Bonds are issued and
secured. The owner of this Bond assents, by acceptance hereof, to all of the provisions
of the Bond Resolution.
It is certified, recited and declared that all acts and conditions required by the
Constitution and laws of the State of California to exist, to be performed or to have been
met precedent to and in the issuing of the Bonds in order to make them legal, valid and
binding general obligations of the City, have been performed and have been met in
regular and due form as required by law; that payment in full for the Bonds has been
received; that no statutory or constitutional limitation on indebtedness or taxation has
been exceeded in issuing the Bonds; and that due provision has been made for levying
and collecting ad valorem property taxes on all of the taxable property within the City in
an amount sufficient to pay principal and interest when due, and for levying and
collecting such taxes.
This Bond shall not be valid or obligatory for any purpose and shall not be
entitled to any security or benefit under the Bond Resolution until the Certificate of
Authentication below has been manually signed by the Paying Agent.
Unless this Bond is presented by an authorized representative of The Depository
Trust Company ("DTC"), to the City or the Paying Agent for registration of transfer,
exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
IN WITNESS WHEREOF, the City of Campbell has caused this Bond to be
executed by the facsimile signature of its Mayor and attested by the facsimile signature
of its City Clerk, all as of the date stated above.
CITY OF CAMPBELL
By
May
Attest:
A ' Q I/l�.
ity Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the Bond Resolution referred to
herein.
Date of Authentication: , 2020
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Paying Agent
By
Authorized Signatory
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint
attorney, to transfer the same on the registration books of the Bond
Registrar, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an Note: The signature(s) on this Assignment must
eligible guarantor institution. correspond with the name(s)as written on the face
of the within Bond in every particular without
alteration or enlargement or any change
whatsoever.
APPENDIX B
REQUIRED DISCLOSURES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
1. Estimated True Interest Cost of the Bonds: 2.60%
2. Estimated finance charge of the Bonds, being the sum of all fees
and charges paid to third parties, in the amount of approximately
$271,250. Such amount consists of costs of issuing the Bonds in the
amount of approximately $204,250 together with estimated
underwriter's compensation in the amount of$67,000.
3. Estimated proceeds of the Bonds expected to be received by the
City for deposit to the Project Fund, net of proceeds for Costs of
Issuance in (2) above to paid, capitalized interest and reserves (if
any) from the principal amount of the Bonds: $20,000,000.
4. Estimated Total Payment Amount for the Bonds, being the sum of
all debt service to be paid on the Bonds to final maturity:
$30,430,000.
*All amounts and percentages are estimates, and are made in good faith by the City
based on information available as of the date of adoption of this Resolution. Estimates
include certain assumptions regarding federally taxable interest rates available in the bond
market at the time of pricing the Bonds.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Campbell, as follows:
ARTICLE I
DEFINITIONS; AUTHORITY
SECTION 1.01. Definitions. The terms defined in this Section 1.01, as used and
capitalized herein, shall, for all purposes of this Resolution, have the meanings given
them below, unless the context clearly requires some other meaning.
"Bond Counsel" means (a) Jones Hall, A Professional Law Corporation, and (b)
any other attorney or firm of attorneys nationally recognized for expertise in rendering
opinions as to the legality and tax-exempt status of securities issued by public entities.
"Bond Law" means Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code of the State of California, commencing with Section 53506 of said
Code, or such other law pursuant to which the Bonds may be issued, as in effect on the
date of adoption hereof and as amended hereafter.
"Bond Measure" means Measure 0 submitted to and approved by more than the
requisite 2/3 of voters on November 6, 2018, under which he issuances of the Bonds
has been authorized.
"Bond Purchase Agreement" means the Contract of Purchase between the City
and the Underwriter, under which the Underwriter agrees to purchase the Bonds and
pay the purchase price therefor.
"Bonds" means the City of Campbell Election of 2018 General Obligation Bonds,
Series 2020, authorized to be issued under this Resolution in the aggregate principal
amount of not to exceed $20,000,000.
"City" means the City of Campbell, a general law city and municipal corporation
organized under the Constitution and laws of the State of California, and any successor
thereto.
"City Representative" means the Mayor, the City Manager, the Finance Director
and any other officer of the City authorized by resolution of the City Council of the City to
act on behalf of the City with respect to this Resolution and the Bonds.
"Closing Date" means the date upon which there is a delivery of the Bonds in
exchange for the amount representing the purchase price of the Bonds by the
Underwriter.
"Continuing Disclosure Certificate" means the Continuing Disclosure Certificate
to be executed and delivered by a City Representative on the Closing Date.
•
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"Costs of Issuance" means all items of expense directly or indirectly payable by
or reimbursable to the City and related to the authorization, issuance, sale and delivery
of the Bonds, including but not limited to the costs of preparation and reproduction of
documents, printing expenses, filing and recording fees, initial fees and charges of the
Paying Agent and its counsel, legal fees and charges, fees and disbursements of
consultants and professionals, rating agency fees, fees and charges for the preparation,
execution and safekeeping of the Bonds, fees and charges for preparation, execution
and safekeeping of the Bonds and any other cost, charge or fee in connection with the
original issuance of the Bonds.
"County" means the County of Santa Clara, a political subdivision of the State of
California, duly organized and existing under the Constitution and laws of the State of
California.
"Debt Service Fund" means the account established and held by the City under
Section 4.03.
"Depository" means (a) initially, DTC, and (b) any other Securities Depository
acting as Depository under Section 2.09.
"Depository System Participant" means any participant in the Depository's book-
entry system.
"DTC" means The Depository Trust Company, New York, New York, and its
successors and assigns.
"Federal Securities" means United States Treasury notes, bonds, bills or
certificates of indebtedness, or any other obligations the timely payment of which is
directly or indirectly guaranteed by the faith and credit of the United States of America.
"Interest Payment Date" means [March 1, 2021], and the first day of each
succeeding March and September, or such other dates determined by a City
Representative in connection with the pricing of the Bonds.
"Outstanding," when used as of any particular time with reference to Bonds,
means all Bonds except: (a) Bonds theretofore canceled by the Paying Agent or
surrendered to the Paying Agent for cancellation; (b) Bonds paid or deemed to have
been paid within the meaning of Section 9.02; and (c) Bonds in lieu of or in substitution
for which other Bonds shall have been authorized, executed, issued and delivered by the
City under this Resolution.
"Owner," whenever used herein with respect to a Bond, means the person in
whose name the ownership of such Bond is registered on the Registration Books.
"Paying Agent" means the Paying Agent appointed by the City and acting as
paying agent, registrar and authenticating agent for the Bonds, its successors and
assigns, and any other corporation or association which may at any time be substituted
in its place, as provided in Section 6.01.
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"Principal Office" means the office or offices of the Paying Agent for the payment
of the Bonds and the administration of its duties hereunder, as such office or offices shall
be identified in a written notice filed with the City by the Paying Agent.
"Protect Fund" means the fund established and held by the City under Section
4.02.
"Record Date" means the 15th day of the month preceding an Interest Payment
Date, whether or not such day is a business day.
"Registration Books" means the records maintained by the Paying Agent for the
registration of ownership and registration of transfer of the Bonds under Section 2.08.
"Resolution" means this Resolution, as originally adopted by the City Council on
July 21, 2020, and including all amendments hereto and supplements hereof which are
duly adopted by the City Council from time to time in accordance herewith.
"Securities Depositories" means DTC; and, in accordance with then current
guidelines of the Securities and Exchange Commission, such other securities
depositories as the City may designate.
"Supplemental Resolution" means any resolution supplemental to or amendatory
of this Resolution, adopted by the City in accordance with Article VIII.
"Tax Code" means the Internal Revenue Code of 1986 as in effect on the Closing
Date or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the Closing Date, together with applicable, temporary and final
regulations promulgated, and applicable official public guidance published, under said
Code.
"Underwriter" means Stifel, Nicolaus & Company, Incorporated, as original
purchaser of the Bonds upon the negotiated sale thereof, as designated pursuant to
Section 3.01.
"Written Request of the City" means an instrument in writing signed by a City
Representative or by any other officer of the City duly authorized to act on behalf of the
City under a written certificate of a City Representative.
SECTION 1.02. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall
include the plural and vice versa and the use of the neuter, masculine, or feminine
gender is for convenience only and shall be deemed to include the neuter, masculine or
feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are
solely for convenience of reference, do not constitute a part hereof and shall not affect
the meaning, construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to
the corresponding Articles, Sections or subdivisions of this Resolution; the words
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"herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this
Resolution as a whole and not to any particular Article, Section or subdivision hereof.
SECTION 1.03. Authority for this Resolution; Findings. This Resolution is entered
into under the provisions of the Bond Law. It is hereby certified that all of the things,
conditions and acts required to exist, to have happened or to have been performed
precedent to and in the issuance of the Bonds do exist, have happened or have been
performed in due and regular time and manner as required by the laws of the State of
California, and that the amount of the Bonds, together with all other indebtedness of the
City, does not exceed any limit prescribed by any laws of the State of California.
ARTICLE II
THE BONDS
SECTION 2.01. Authorization. Bonds in the aggregate original principal amount
of not to exceed $20,000,000 are hereby authorized by the City to be issued by the City
under and subject to the terms of the Bond Law and this Resolution, for the purpose of
raising money to finance the acquisition and improvement of City facilities, as provided in
the Bond Measure, and to pay the Costs of Issuance incurred in connection therewith.
This Resolution constitutes a continuing agreement between the City and the Owners of
all of the Bonds issued or to be issued hereunder and then Outstanding to secure the full
and final payment of principal of and interest and premium, if any, on all Bonds which
may be Outstanding hereunder, subject to the covenants, agreements, provisions and
conditions herein contained. The Bonds may be issued in one or more series as tax-
exempt and/or taxable bonds are designated the "City of Campbell Election of 2018
General Obligation Bonds, Series 2020."
SECTION 2.02. Terms of Bonds.
(a) Principal Amount of Bonds. The Bonds are authorized to be issued in the
aggregate principal amount of not to exceed $20,000,000.
(b) Form; Numbering. The Bonds will be issued in fully registered form, without
coupons, in authorized denominations of $5,000 each or any integral multiple thereof.
The Bonds will be lettered and numbered as the Paying Agent prescribes.
(c) Date of Bonds. The Bonds will be dated as of the Closing Date.
(d) CUSIP Identification Numbers. "CUSIP" identification numbers will be
imprinted on the Bonds, but such numbers do not constitute a part of the contract
evidenced by the Bonds and no error or omission with respect thereto will constitute
cause for refusal of the Underwriter to accept delivery of and pay for the Bonds. In
addition, failure on the part of the City to use such CUSIP numbers in any notice to
Owners of the Bonds will not constitute an event of default or any violation of the City's
contract with such Owners and will not impair the effectiveness of any such notice.
(e) Determination of Maturities and Interest Rates. The Bonds shall mature (or,
alternatively, be subject to mandatory sinking fund redemption as hereinafter provided)
on September 1 in each year, as determined upon the sale thereof as provided in the
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Bond Purchase Agreement. The exact principal amount of the Bonds maturing on
September 1 in each year shall be determined upon the sale of the Bonds, in
accordance with the Bond Purchase Agreement.
Each Bond will bear interest at the respective rates to be determined upon the
sale of the Bonds in accordance with Article III. Interest on the Bonds is payable from
the Interest Payment Date next preceding the date of authentication thereof unless:
• a Bond is authenticated as of an Interest Payment Date, in which
event it will bear interest from such date,
• a Bond is authenticated prior to an Interest Payment Date and after
the close of business on the preceding Record Date, in which event it
will bear interest from such Interest Payment Date,
• a Bond is authenticated on or before the first Record Date, in which
event it shall bear interest from the Closing Date, or
• at the time of authentication of a Bond, interest is in default thereon, in
which event it will bear interest from the Interest Payment Date to
which interest has previously been paid or made available for
payment thereon.
(f) Manner of Payment. Interest on the Bonds (including the final interest
payment upon maturity) is payable by check of the Paying Agent mailed to the Owner
thereof at such Owner's address as it appears on the Registration Books at the close of
business on the preceding Record Date; except that at the written request of the Owner
of at least $1,000,000 aggregate principal amount of the Bonds, which written request is
on file with the Paying Agent as of any Record Date, interest on such Bonds shall be
paid by wire transfer on the succeeding Interest Payment Date to an account in the
United States of America as shall be specified in such written request. Principal of and
premium (if any) on the Bonds is payable in lawful money of the United States of
America upon presentation and surrender at the Principal Office of the Paying Agent.
(g) Provisions of Bond Purchase Agreement to Control. Notwithstanding the
foregoing provisions of this Section and the following provisions of Section 2.03, any of
the terms of the Bonds may be established or modified under the Bond Purchase
Agreement. In the event of a conflict or inconsistency between this Resolution and the
Bond Purchase Agreement relating to the terms of the Bonds, the provisions of the Bond
Purchase Agreement will be controlling.
SECTION 2.03. Redemption.
(a) Optional Redemption. The Bonds shall be subject to redemption prior to
maturity, at the option of the City, in whole or in part among maturities on such basis as
designated by the City and by lot within a maturity, from any available source of funds,
on the dates and upon payment of a redemption price (equal to the principal amount of
Bonds to be redeemed together with a redemption premium, if any) as determined upon
the sale of the Bonds in accordance with the Bond Purchase Agreement.
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(b) Mandatory Sinking Fund Redemption. If and to the extent specified in the
Bond Purchase Agreement, any maturity of the Bonds will be designated as "Term
Bonds"which are subject to mandatory sinking fund redemption on September 1 in each
of the years and in the respective principal amounts set forth in such bid, at a
redemption price equal to 100% of the principal amount of the Bonds to be redeemed, in
each case without premium, together with interest accrued thereon to the redemption
date. If some but not all of the Term Bonds have been redeemed under the preceding
subsection (a) of this Section, the aggregate principal amount of Term Bonds to be
redeemed in each year under this subsection (b) shall be reduced on a pro rata basis in
integral multiples of $5,000, as designated in written notice filed by the City with the
Paying Agent.
(c) Selection of Bonds for Redemption. Whenever less than all of the
Outstanding Bonds of any one maturity are designated for redemption, the Paying Agent
shall select the Outstanding Bonds of such maturity to be redeemed by lot in any
manner deemed fair by the Paying Agent. For purposes of such selection, each Bond
shall be deemed to consist of individual Bonds of $5,000 denominations which may be
separately redeemed.
(d) Redemption Procedure. The Paying Agent shall cause notice of any
redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more
than 60 days prior to the date fixed for redemption, (i) to the Securities Depositories and
the Municipal Securities Rulemaking Board, and (ii) to the respective Owners of any
Bonds designated for redemption, at their addresses appearing on the Registration
Books. Such mailing shall not be a condition precedent to such redemption and failure
to mail or to receive any such notice shall not affect the validity of the proceedings for
the redemption of Bonds. The City is entitled to send a redemption notice that declares
that the redemption is conditional upon the availability of moneys to accomplish the
redemption, and the City may rescind any notice of optional redemption of the Bonds by
written notice to the Paying Agent on or prior to the date fixed for redemption, and the
Paying Agent shall mail notice of such rescission of redemption in the same manner as
the original notice of redemption was sent under this section. Any notice of redemption
shall be cancelled and annulled if for any reason funds will not be or are not available on
the date fixed for redemption. The City and the Paying Agent shall have no liability to the
Owners or any other party related to or arising from such rescission.
Such notice shall state the redemption date and the redemption price and, if less
than all of the then Outstanding Bonds are to be called for redemption, shall designate
the serial numbers of the Bonds to be redeemed by giving the individual number of each
Bond or by stating that all Bonds between two stated numbers, both inclusive, or by
stating that all of the Bonds of one or more maturities have been called for redemption,
and shall require that such Bonds be then surrendered at the Principal Office of the
Paying Agent for redemption at the said redemption price, giving notice also that further
interest on such Bonds will not accrue from and after the redemption date.
Upon surrender of Bonds redeemed in part only, the City shall execute and the
Paying Agent shall authenticate and deliver to the Owner, at the expense of the City, a
new Bond or Bonds, of the same maturity, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the Bond or Bonds.
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From and after the date fixed for redemption, if notice of such redemption has
been duly given and funds available for the payment of the principal of and interest (and
premium, if any) on the Bonds so called for redemption have been duly provided, such
Bonds so called will cease to be entitled to any benefit under this Resolution other than
the right to receive payment of the redemption price, and no interest will accrue thereon
on or after the redemption date specified in such notice. The Paying Agent shall cancel
all Bonds redeemed under this Section 2.03, and shall submit to the City a certificate of
cancellation.
SECTION 2.04. Form of Bonds. The form of the Bonds, including the form of the
Paying Agent's Certificate of Authentication and the form of Assignment to appear
thereon, with necessary or appropriate variations, omissions and insertions, as permitted
or required by this Resolution, are set forth in Appendix A attached hereto.
SECTION 2.05. Execution of Bonds. The Bonds shall be executed on behalf of
the City by the facsimile signatures of its Mayor and City Clerk, or officials acting in those
roles, who are in office on the date of adoption of this Resolution or at any time
thereafter. If any officer whose signature appears on any Bond ceases to be such officer
before delivery of the Bonds to the Underwriter, such signature will nevertheless be as
effective as if the officer had remained in office until the delivery of the Bonds to the
Underwriter. Any Bond may be signed and attested on behalf of the City by such
persons as at the actual date of the execution of such Bond are the proper officers of the
City although at the nominal date of such Bond any such person does not serve as such
officer of the City.
Only those Bonds bearing a Certificate of Authentication in the form set forth in
Appendix A attached hereto, executed and dated by the Paying Agent, will be valid or
obligatory for any purpose or entitled to the benefits of this Resolution, and such
Certificate of Authentication of the Paying Agent constitutes conclusive evidence that the
Bonds so registered have been duly authenticated, registered and delivered hereunder
and are entitled to the benefits of this Resolution.
SECTION 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms,
be transferred, upon the Registration Books, by the person in whose name it is
registered, in person or by his duly authorized attorney, upon surrender of such Bond for
cancellation at the Principal Office at the Paying Agent, accompanied by delivery of a
written instrument of transfer in a form approved by the Paying Agent, duly executed.
The City may charge a reasonable sum for each new Bond issued upon any transfer.
Whenever any Bond or Bonds is surrendered for transfer, the City shall execute
and the Paying Agent shall authenticate and deliver a new Bond or Bonds, for like
aggregate principal amount.
SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal
Office of the Paying Agent for a like aggregate principal amount of Bonds of authorized
denominations and of the same maturity. The City may charge a reasonable sum for
each new Bond issued upon any exchange.
SECTION 2.08. Registration Books. The Paying Agent shall keep or cause to be
kept sufficient books for the registration and transfer of the Bonds, which shall at all
times be open to inspection by the City upon reasonable notice; and, upon presentation
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for such purpose, the Paying Agent shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be registered or transferred, on said books,
Bonds as herein before provided.
SECTION 2.09. Book-Entry System. Except as provided below, DTC will be the
Owner of all of the Bonds, and the Bonds will be registered in the name of Cede & Co.
as nominee for DTC. The Bonds shall be initially executed and delivered in the form of a
single fully registered Bond for each maturity date of the Bonds in the full aggregate
principal amount of the Bonds maturing on such date. The Paying Agent and the City
may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered
in its name for all purposes of this Resolution, and neither the Paying Agent nor the City
shall be affected by any notice to the contrary. The Paying Agent and the City shall not
have any responsibility or obligation to any Depository System Participant, any person
claiming a beneficial ownership interest in the Bonds under or through DTC or a
Depository System Participant, or any other person which is not shown on the register of
the City as being an owner, with respect to the accuracy of any records maintained by
DTC or any Depository System Participant or the payment by DTC or any Depository
System Participant by DTC or any Depository System Participant of any amount in
respect of the principal or interest with respect to the Bonds. The City shall cause to be
paid all principal and interest with respect to the Bonds only to DTC, and all such
payments shall be valid and effective to fully satisfy and discharge the City's obligations
with respect to the principal and interest with respect to the Bonds to the extent of the
sum or sums so paid. Except under the conditions noted below, no person other than
DTC shall receive a Bond. Upon delivery by DTC to the City of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede & Co., the
term "Cede & Co." in this Resolution shall refer to such new nominee of DTC.
If the City determines that it is in the best interest of the beneficial owners that
they be able to obtain Bonds and delivers a written certificate to DTC and the City to that
effect, DTC shall notify the Depository System Participants of the availability through
DTC of Bonds. In such event, the City shall issue, transfer and exchange Bonds as
requested by DTC and any other owners in appropriate amounts. DTC may determine
to discontinue providing its services with respect to the Bonds at any time by giving
notice to the City and discharging its responsibilities with respect thereto under
applicable law. Under such circumstances (if there is no successor securities
depository), the City shall be obligated to deliver Bonds as described in this Resolution.
Whenever DTC requests the City to do so, the City will cooperate with DTC in taking
appropriate action after reasonable notice to (a) make available one or more separate
Bonds evidencing the Bonds to any Depository System Participant having Bonds
credited to its DTC account or (b) arrange for another securities depository to maintain
custody of certificates evidencing the Bonds.
Notwithstanding any other provision of this Resolution to the contrary, so long as
any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments
with respect to the principal and interest with respect to such Bond and all notices with
respect to such Bond shall be made and given, respectively, to DTC as provided as in
the representation letter delivered on the date of issuance of the Bonds.
SECTION 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond
becomes mutilated the City, at the expense of the Owner of said Bond, shall execute,
and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like
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maturity and principal amount in exchange and substitution for the Bond so mutilated,
but only upon surrender to the Paying Agent of the Bond so mutilated. The Paying
Agent shall cancel every mutilated Bond so surrendered to it. If any Bond is lost,
destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the
City and, if such evidence is satisfactory to the City and the City receives satisfactory
indemnity, the City, at the expense of the Owner, shall execute, and the Paying Agent
shall thereupon authenticate and deliver, a new Bond of like maturity and principal
amount in lieu of and in substitution for the Bond so lost, destroyed or stolen.
The City may require payment of a sum not exceeding the actual cost of
preparing each new Bond issued under this Section and of the expenses which may be
incurred by the City and the Paying Agent. Any Bond issued under the provisions of this
Section 2.10 in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an
original additional contractual obligation of the City whether or not the Bond so alleged to
be lost, destroyed or stolen is at any time enforceable by anyone, and such Bond will be
equally and proportionately entitled to the benefits of this Resolution with all other Bonds
issued under this Resolution.
Notwithstanding any other provision of this Section 2.10, in lieu of delivering a
new Bond for which principal has or is about to become due for a Bond which has been
mutilated, lost, destroyed or stolen, the Paying Agent may make payment of such Bond
in accordance with its terms.
ARTICLE III
SALE OF BONDS
SECTION 3.01. Negotiated Sale of Bonds. Pursuant to Section 53508.7 of the
Bond Law, the City Council hereby authorizes the negotiated sale of the Bonds to the
Underwriter. The Bonds shall be sold pursuant to the Bond Purchase Agreement in
substantially the form on file with the City Clerk, with such changes therein, deletions
therefrom and modifications thereto as a City Representative may approve, such
approval to be conclusively evidenced by the execution and delivery by a City
Representative of the Bond Purchase Agreement, provided that the Bond Purchase
Agreement shall contain the following terms:
(i) the Bonds shall bear a rate of interest of not to exceed 5.00% per
annum and the final maturity shall not exceed the limits contained
in the Bond Law; and
(iii) the Underwriter's discount shall not exceed 0.375% of the
principal amount of the Bonds.
The City Council hereby authorizes a City Representative to execute and deliver
the final form of the Bond Purchase Agreement in the name and on behalf of the City.
In accordance with Section 53508.7 of the Bond Law, the City Council has
determined to sell the Bonds at negotiated sale for the following reasons: (a) a
negotiated sale provides more flexibility to choose the time and date of the sale which is
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often advantageous in the municipal bond market; (b) the involvement of the Underwriter
in preparing documents, rating agency presentations and structuring bonds generally
enhances the quality and results of the bond offering; (c) a negotiated sale will permit the
time schedule for the issuance and sale of the Bonds to be expedited, if necessary; (d) a
negotiated sale provides the City access to the underwriter's trading desk for providing
estimates of the cost of various bond structures (yields, discounts, premiums and
maturities) for the purpose of evaluating alternative potential bond structures with the
goal of producing the best match between City objectives and investor acceptance and
demand; and (e) a negotiated sale provides time for underwriters to educate potential
investors about the City and the Bonds with the goal of maximizing investor orders and
reducing interest cost on the day of bond pricing.
As required pursuant to Section 53509.5 of the Bond Law, after the sale of the
Bonds, the City Council will present actual cost information of the sale at its next
scheduled public meeting.
SECTION 3.02. Official Statement. The City Council hereby approves and deems
final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934 (the
"Rule"), the Preliminary Official Statement describing the Bonds in substantially the form
on file with the City Clerk. A City Representative is hereby authorized to execute an
appropriate certificate stating the City Council's determination that the Preliminary
Official Statement has been deemed final within the meaning of such Rule. Distribution
of the Preliminary Official Statement in connection with the sale of the Bonds is hereby
approved. Each City Representative is hereby authorized and directed to approve any
changes in or additions to a final form of said Official Statement, and the execution
thereof by a City Representative shall be conclusive evidence of the approval of any
such changes and additions. The City Council hereby authorizes the distribution of the
final Official Statement. The final Official Statement shall be executed in the name and
on behalf of the City by a City Representative.
SECTION 3.03. Costs of Issuance Custodian Agreement. The City shall pay the
costs of issuing the Bonds from proceeds of the Bonds received from the Underwriter.
The City Council hereby authorizes a City Representative to execute on behalf of the
City a Costs of Issuance Custodian Agreement with a custodian for costs of issuance.
As provided in said agreement, amounts provided for payment of the costs of issuing the
Bonds shall be deposited thereunder and the payment of costs shall be requisitioned by
a City Representative in accordance with said agreement.
SECTION 3.04. Paying Agency Agreement. The City Council hereby authorizes a
City Representative to execute, on behalf of the City, a Paying Agency Agreement with
the Paying Agent.
Section 3.05. Professional Services. The City Council hereby approves and
confirms the engagement of NHA Advisors, LLC, to act as the City's municipal advisor in
connection with the issuance and sale of the Bonds, and the engagement of Jones Hall,
A Professional Law Corporation, to act as the City's bond counsel and disclosure
counsel in connection with the issuance of the Bonds.
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ARTICLE IV
FUNDS AND ACCOUNTS
SECTION 4.01. Application of Proceeds of Sale of Bonds. On the Closing Date,
the proceeds of sale of the Bonds shall be paid by the Underwriter to the City, and shall
be applied on the Closing Date as follows: (a) the City shall cause to be transferred an
amount required to pay the estimated Costs of Issuance to a custodian, to be held and
administered in accordance with the agreement which is approved under Section 3.03;
(b) after making the transfer described in the preceding clause (a), the City shall deposit
in the Debt Service Fund any remaining original issue premium received by the City on
the sale of the Bonds; and (c) the City shall deposit the remainder of such proceeds in
the Project Fund.
SECTION 4.02. Project Fund. The City Council hereby establishes a special fund
to be held by the City separate and apart from all other funds of the City, to be known as
the Project Fund. The proceeds from the sale of the Bonds, to the extent required under
Section 4.01(b), shall be deposited by the City in the Project Fund, and shall be
expended by the City solely for the payment of the costs of acquisition or improvement
of real property for which the Bond proceeds are authorized to be expended under the
Bond Measure. All interest and other gain arising from the investment of amounts
deposited to the Project Fund shall be retained in the Project Fund and used for the
purposes thereof. Any amounts remaining on deposit in the Project Fund and not
needed for the purposes thereof shall be withdrawn from the Project Fund and
transferred to the Debt Service Fund, to be applied to pay the principal of, interest and
premium (if any) on the Bonds.
SECTION 4.03. Debt Service Fund. The City Council hereby establishes a
special fund to be held by the City separate and apart from all other funds of the City, to
be known as the Debt Service Fund. All taxes levied by the County, as directed by the
City herein, for the payment of the principal of and interest and premium (if any) on the
Bonds in accordance with Section 5.03 shall be deposited in the Debt Service Fund by
the City promptly upon the receipt thereof from the County. The Debt Service Fund is
hereby pledged for the payment of the principal of and interest and premium (if any) on
the Bonds when and as the same become due. The City shall transfer amounts in the
Debt Service Fund, to the extent necessary to pay the principal of and interest on the
Bonds as the same become due and payable, to the Paying Agent as required to pay
the principal of and interest and premium (if any) on the Bonds. Alternatively, the City
may direct the County to transfer such taxes, in whole or in part, directly to the Paying
Agent for the purpose of making payments of principal of and interest and premium (if
any) on the Bonds.
If, after payment in full of the Bonds, any amounts remain on deposit in the Debt
Service Fund, the City shall transfer such amounts to its general fund, to be applied
solely in a manner which is consistent with the requirements of applicable state and
federal tax law.
SECTION 4.04. Investments. The City shall invest all moneys held in any of the
funds or accounts established with it hereunder in accordance with the investment
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policies of the City, as such policies shall exist at the time of investment, and in
accordance with Section 53601 of the California Government Code.
The City covenants that all investments of amounts deposited in any fund or
account created by or under this Resolution, or otherwise containing proceeds of the
Bonds, shall be acquired and disposed of at the Fair Market Value thereof. For
purposes of this Section, the term "Fair Market Value" shall mean, with respect to any
investment, the price at which a willing buyer would purchase such investment from a
willing seller in a bona fide, arm's length transaction (determined as of the date the
contract to purchase or sell the investment becomes binding) if the investment is traded
on an established securities market (within the meaning of Section 1273 of the Tax
Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a
bona fide arm's length transaction (as described above) if (i) the investment is a
certificate of deposit that is acquired in accordance with applicable regulations under the
Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or
reinvestment provisions and a specifically negotiated interest rate (for example, a
guaranteed investment contract, a forward supply contract or other investment
agreement) that is acquired in accordance with applicable regulations under the Tax
Code, or (iii) the investment is a United States Treasury Security - State and Local
Government Series that is acquired in accordance with applicable regulations of the
United States Bureau of Public Debt.
ARTICLE V
OTHER COVENANTS OF THE CITY;
SECURITY FOR THE BONDS
SECTION 5.01. Punctual Payment. The City shall punctually pay, or cause to be
paid, the principal of and interest on the Bonds, in strict conformity with the terms of the
Bonds and of this Resolution, and shall faithfully observe and perform all of the
conditions, covenants and requirements of this Resolution and of the Bonds. Nothing
herein contained prevents the City from making advances of its own moneys howsoever
derived to any of the uses or purposes permitted by law.
SECTION 5.02. Extension of Time for Payment. In order to prevent any
accumulation of claims for interest after maturity, the City will not, directly or indirectly,
extend or consent to the extension of the time for the payment of any claim for interest
on any of the Bonds and will not, directly or indirectly, approve any such arrangement by
purchasing or funding said claims for interest or in any other manner.
SECTION 5.03. Security for the Bonds. The Bonds are general obligations of the
City and the City has the power, is obligated and hereby covenants to levy ad valorem
taxes upon all property within the City subject to taxation by the City, without limitation of
rate or amount, for the payment of the Bonds and the interest thereon, in accordance
with the Bond Law and Section 43632 of the of the Government Code of the State of
California. Amounts in the general fund of the City are not pledged to the payment of the
Bonds. However, nothing herein limits the ability of the City to provide for payment of
the principal of and interest and premium (if any) on the Bonds from any source of
legally available funds of the City. Any amounts so advanced by the City from legally
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available funds may be reimbursed from ad valorem property taxes subsequently
collected under this Section 5.03.
SECTION 5.04. Books and Accounts; Financial Statement. The City will keep, or
cause to be kept, proper books of record and accounts, separate from all other records
and accounts of the City in which complete and correct entries are made of all
transactions relating to the Bonds. Such books of record and accounts shall at all times
during business hours be subject to the inspection of the Paying Agent and the Owners
of not less than 10% in aggregate principal amount of the Bonds then Outstanding, or
their representatives authorized in writing.
SECTION 5.05. Protection of Security and Rights of Bond Owners. The City will
preserve and protect the security of the Bonds and the rights of the Bond Owners, and
will warrant and defend their rights against all claims and demands of all persons. From
and after the sale and delivery of any of the Bonds by the City, the City may not contest
the authorization, issuance, sale or repayment of the Bonds.
SECTION 5.06. Tax Covenants.
(a) Private Activity Bond Limitation. The City shall assure that the proceeds of
the Bonds are not so used as to cause the Bonds to satisfy the private business tests of
Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the
Tax Code.
(b) Federal Guarantee Prohibition. The City shall not take any action or permit
or suffer any action to be taken if the result of the same would be to cause any of the
Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Tax
Code.
(c) No Arbitrage. The City shall not take, or permit or suffer to be taken by
the Paying Agent or otherwise, any action with respect to the proceeds of the Bonds
which, if such action had been reasonably expected to have been taken, or had been
deliberately and intentionally taken, on the Closing Date would have caused the Bonds
to be "arbitrage bonds"within the meaning of Section 148 of the Tax Code.
(d) Maintenance of Tax-Exemption. The City shall take all actions necessary
to assure the exclusion of interest on the Bonds from the gross income of the Owners of
the Bonds to the same extent as such interest is permitted to be excluded from gross
income under the Tax Code as in effect on the Closing Date.
(e) Rebate of Excess Investment Earnings to United States. The City shall
calculate or cause to be calculated excess investment earnings with respect to the
Bonds which are required to be rebated to the United States of America under Section
148(f) of the Tax Code, and shall pay the full amount of such excess investment
earnings to the United States of America in such amounts, at such times and in such
manner as may be required under the Tax Code, if and to the extent such Section 148(f)
is applicable to the Bonds. Such payments shall be made by the City from any source of
legally available funds of the City. The City shall keep or cause to be kept, and retain or
cause to be retained for a period of six years following the retirement of the Bonds,
records of the determinations made under this subsection (e). In order to provide for the
administration of this subsection (e), the City may provide for the employment of
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independent attorneys, accountants and consultants compensated on such reasonable
basis as the City may deem appropriate.
SECTION 5.07. Continuing Disclosure. The City hereby covenants and agrees
that it will comply with and carry out all of the provisions of the Continuing Disclosure
Certificate, which a City Representative is hereby authorized and directed to execute
and deliver on the Closing Date. Notwithstanding any other provision of this Resolution,
failure of the City to comply with the Continuing Disclosure Certificate will not be
considered a default by the City hereunder or under the Bonds; however, any
Participating Underwriter (as such term is defined in the Continuing Disclosure
Certificate) or any holder or beneficial owner of the Bonds may, take such actions as
may be necessary and appropriate to compel performance, including seeking mandate
or specific performance by court order. The City Council hereby authorizes a City
Representative to execute and deliver the final form of the Continuing Disclosure
Certificiate in the name and on behalf of the City.
SECTION 5.08. CDIAC Annual Reporting. The City hereby covenants and agrees
that it will comply with the provisions of California Government Code Section 8855
subdivision (k) with respect to annual reporting to the California Debt and Investment
Advisory Commission. Said reporting will occur at the times and include the types of
information as set forth therein. Notwithstanding any other provision of this Resolution,
failure of the City to comply with said reporting does not constitute a default by the City
hereunder or under the Bonds.
SECTION 5.09. Further Assurances. The City will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be
reasonably necessary or proper to carry out the intention or to facilitate the performance
of this Resolution, and for the better assuring and confirming unto the Owners of the
Bonds of the rights and benefits provided in this Resolution.
ARTICLE VI
THE PAYING AGENT
SECTION 6.01. Appointment of Paying Agent. The Bank of New York Mellon
Trust Company, N.A., is hereby appointed to act as Paying Agent for the Bonds. The
Paying Agent undertakes to perform such duties, and only such duties, as are
specifically set forth in this Resolution, and even during the continuance of an event of
default with respect to the Bonds, no implied covenants or obligations shall be read into
this Resolution against the Paying Agent. The Paying Agent shall signify its acceptance
of the duties and obligations imposed upon it by this Resolution by executing and
delivering to the City a certificate to that effect.
The City may remove the Paying Agent initially appointed, and any successor
thereto, and may appoint a successor or successors thereto, but any such successor
shall be a bank or trust company doing business and having an office in the State of
California, having a combined capital (exclusive of borrowed capital) and surplus of at
least $50,000,000, and subject to supervision or examination by federal or state
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authority. If such bank or trust company publishes a report of condition at least annually,
under law or under the requirements of any supervising or examining authority above
referred to, then for the purposes of this Section 6.01 the combined capital and surplus
of such bank or trust company shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
The Paying Agent may at any time resign by giving written notice to the City and
the Bond Owners of such resignation. Upon receiving notice of such resignation, the
City shall promptly appoint a successor Paying Agent by an instrument in writing. Any
resignation or removal of the Paying Agent and appointment of a successor Paying
Agent becomes effective upon acceptance of appointment by the successor Paying
Agent.
Any bank, national association, federal savings association, or trust company into
which the Paying Agent may be merged or converted or with which it may be
consolidated or any bank, national association, federal savings association, or trust
company resulting from any merger, conversion or consolidation to which it shall be a
party or any bank, national association, federal savings association, or trust company to
which the Paying Agent may sell or transfer all or substantially all of its corporate trust
business, provided such bank, federal savings association, or trust company shall be
eligible as described in this Section 6.01 shall be the successor to such Paying Agent,
without the execution or filing of any paper or any further act, anything herein to the
contrary notwithstanding.
SECTION 6.02. Paying Agent May Hold Bonds. The Paying Agent may become
the Owner of any of the Bonds in its own or any other capacity with the same rights it
would have if it were not Paying Agent.
SECTION 6.03. Liability of Paying Agent. The recitals of facts, covenants and
agreements herein and in the Bonds contained shall be taken as statements, covenants
and agreements of the City, and the Paying Agent assumes no responsibility for the
correctness of the same, nor makes any representations as to the validity or sufficiency
of this Resolution or of the Bonds, nor shall incur any responsibility in respect thereof,
other than as set forth in this Resolution. The Paying Agent is not liable in connection
with the performance of its duties hereunder, except for its own negligence or willful
default.
In the absence of bad faith, the Paying Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Paying Agent and conforming to the
requirements of this Resolution.
The Paying Agent has no liability for any error of judgment made in good faith by
a responsible officer of its corporate trust department in the absence of the negligence of
the Paying Agent.
No provision of this Resolution requires the Paying Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it has reasonable grounds
for believing that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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The Paying Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the Paying
Agent is not responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 6.04. Notice to Paying Agent. The Paying Agent may rely and shall be
protected in acting or refraining from acting upon any notice, resolution, request,
consent, order, certificate, report, warrant, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or proper
parties. The Paying Agent may consult with counsel, who may be of counsel to the City,
with regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in
good faith and in accordance therewith.
Whenever in the administration of its duties under this Resolution the Paying
Agent deems it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of bad faith on the part of
the Paying Agent, be deemed to be conclusively proved and established by a certificate
of the City, and such certificate will be full warrant to the Paying Agent for any action
taken or suffered under the provisions of this Resolution upon the faith thereof, but in its
discretion the Paying Agent may, in lieu thereof, accept other evidence of such matter or
may require such additional evidence as to it may seem reasonable.
SECTION 6.05. Compensation; Indemnification. The City will pay to the Paying
Agent from time to time reasonable compensation for all services rendered under this
Resolution, and also all reasonable expenses, charges, counsel fees and other
disbursements, including those of their attorneys, agents and employees, incurred in and
about the performance of their powers and duties under this Resolution. The City further
agrees to indemnify the Paying Agent against any liabilities which it may incur in the
exercise and performance of its powers and duties hereunder which are not due to its
negligence or bad faith.
ARTICLE VII
REMEDIES OF BOND OWNERS
SECTION 7.01. Remedies of Bond Owners. Upon the happening and
continuation of any default by the City hereunder or under the Bonds, any Bond Owner
has the right, for the equal benefit and protection of all Bond Owners similarly situated:
(a) by mandamus, suit, action or proceeding, to compel the City and its
members, officers, agents or employees to perform each and every
term, provision and covenant contained in this Resolution and in the
Bonds, and to require the carrying out of any or all such covenants
and agreements of the City and the fulfillment of all duties imposed
upon it;
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(b) by suit, action or proceeding in equity, to enjoin any acts or things
which are unlawful, or the violation of any of the Bond Owners'
rights; or
(c) by suit, action or proceeding in any court of competent jurisdiction,
to require the City and its members and employees to account as if
it and they were the trustees of an express trust.
SECTION 7.02. Remedies Not Exclusive. No remedy herein conferred upon the
Owners of Bonds is exclusive of any other remedy. Each remedy is cumulative and
shall be in addition to every other remedy given hereunder or thereafter conferred on the
Bond Owners.
ARTICLE VIII
AMENDMENT OF THIS RESOLUTION
SECTION 8.01. Amendments Effective Without Consent of the Owners. For any
one or more of the following purposes and at any time or from time to time, the City
Council may by Supplemental Resolution amend this Resolution in whole or in part,
without the consent of any of the Bond Owners:
(a) to add to the covenants and agreements of the City in this
Resolution, other covenants and agreements to be observed by the
City which are not contrary to or inconsistent with this Resolution as
theretofore in effect;
(b) to confirm, as further assurance, any pledge under, and to subject to
any lien or pledge created or to be created by, this Resolution, of
any moneys, securities or funds, or to establish any additional funds
or accounts to be held under this Resolution;
(c) to cure any ambiguity, supply any omission, substitute any party or
cure or correct any defect or inconsistent provision in this
Resolution, which in any event does not materially adversely affect
the interests of the Bond Owners, in the opinion of Bond Counsel
filed with the City; or
(d) if applicable, to make such additions, deletions or modifications as
may be necessary to assure compliance with the applicable
provisions of the Tax Code relating to the rebate of excess
investment earnings to the United States or otherwise as may be
necessary to assure that the interest on the Bonds remains
excludable from gross income of the Owners thereof for federal
income tax purposes, in the opinion of Bond Counsel filed with the
City.
SECTION 8.02. Amendments Effective With Consent to the Owners. Any
modification or amendment of this Resolution and of the rights and obligations of the City
and of the Owners of the Bonds, in any particular, may be made by a Supplemental
Resolution, with the written consent of the Owners of a majority in aggregate principal
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amount of the Bonds Outstanding at the time such consent is given. Without the
consent of the Owners of all affected Bonds, no such modification or amendment may
(a) change the maturity of the principal of any Bonds or any interest payable thereon, (b)
reduce the principal amount of the Bonds or the rate of interest thereon, (c) reduce the
percentage of Bonds the consent of the Owners of which is required to effect any such
modification or amendment, (d) change any of the provisions in Section 7.01 relating to a
default by the City hereunder or under the Bonds, (e) reduce the amount of moneys
pledged for the repayment of the Bonds. Without the consent of the Paying Agent, no
such modification or amendment may change or modify any of the rights or obligations
of the Paying Agent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Benefits of Resolution Limited to Parties. Nothing in this
Resolution, expressed or implied, is intended to give to any person other than the City,
the Paying Agent and the Owners of the Bonds, any right, remedy, claim under or by
reason of this Resolution. Any covenants, stipulations, promises or agreements in this
Resolution contained by and on behalf of the City shall be for the sole and exclusive
benefit of the Owners of the Bonds.
SECTION 9.02. Defeasance.
(a) Discharge of Resolution. Bonds may be paid by the City, in whole or in part,
in any of the following ways provided that the City also pays or causes to be paid any
other sums payable hereunder by the City:
(i) by paying or causing to be paid the principal of and interest on such
Bonds, as and when the same become due and payable;
(ii) by irrevocably depositing, in trust, at or before maturity, money or
securities in the necessary amount to pay such Bonds as provided
in Section 9.02(c); or
(iii) by delivering such Bonds to the Paying Agent for cancellation by it.
If the City pays all Outstanding Bonds and also pays or causes to be paid all
other sums payable hereunder by the City, then and in that case, at the election of the
City (evidenced by a certificate of a City Representative filed with the Paying Agent,
signifying the intention of the City to discharge all such indebtedness and this
Resolution), and notwithstanding that any Bonds have not been surrendered for
payment, this Resolution, all taxes and other assets pledged under this Resolution and
all covenants, agreements and other obligations of the City under this Resolution shall
cease, terminate, become void and be completely discharged and satisfied, except only
as provided in Section 9.02(b). In such event, upon request of the City, the Paying
Agent shall cause an accounting for such period or periods as may be requested by the
City to be prepared and filed with the City and shall execute and deliver to the City all
such instruments as may be necessary to evidence such discharge and satisfaction, and
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the Paying Agent shall pay over, transfer, assign or deliver to the City all moneys or
securities or other property held by it under this Resolution which are not required for the
payment of Bonds not theretofore surrendered for such payment.
(b) Discharge of Liability on Bonds. Upon the deposit, in trust, at or before
maturity, of money or securities in the necessary amount to pay any Outstanding Bond
Bonds as provided in Section 9.02(c), then all liability of the City in respect of such Bond
will cease and be completely discharged, except only that thereafter the Owner thereof
is entitled only to payment of the principal of and interest on such Bond by the City, and
the City remains liable for such payment, but only out of such money or securities
deposited with the Paying Agent as aforesaid for such payment, provided further,
however, that the provisions of Section 9.02(d) apply in all events.
The City may at any time surrender to the Paying Agent for cancellation by it any
Bonds previously issued and delivered, which the City acquires in any manner
whatsoever, and such Bonds, upon such surrender and cancellation, will be deemed
paid and retired.
(c) Deposit of Money or Securities with Paving Agent. Whenever in this
Resolution it is provided or permitted that there be deposited with or held in trust by the
Paying Agent money or securities in the necessary amount to pay any Bonds, the
money or securities so to be deposited or held may include money or securities held by
the Paying Agent in the funds and accounts established under this Resolution and must
be:
(i) lawful money of the United States of America in an amount equal to
the principal amount of such Bonds and all unpaid interest thereon
to maturity; or
(ii) Federal Securities the principal of and interest on which when due,
in the opinion of a certified public accountant delivered to the City,
will provide money sufficient to pay the principal of and all unpaid
interest to maturity on the Bonds to be paid, as such principal and
interest become due.
(d) Payment of Bonds After Discharge of Resolution. Notwithstanding any
provisions of this Resolution, any moneys held by the Paying Agent in trust for the
payment of the principal of, or interest on, any Bonds and remaining unclaimed for two
years after the principal of all of the Bonds has become due and payable, if such
moneys were so held at such date, or two years after the date of deposit of such moneys
if deposited after said date when all of the Bonds became due and payable, shall, upon
request of the City, be repaid to the City free from the trusts created by this Resolution,
and all liability of the Paying Agent with respect to such moneys shall thereupon cease.
Before the repayment of such moneys to the City as aforesaid, the Paying Agent may (at
the cost of the City) first mail to the Owners of all Bonds which have not been paid at the
addresses shown on the Registration Books a notice in such form as may be deemed
appropriate by the Paying Agent, with respect to the Bonds so payable and not
presented and with respect to the provisions relating to the repayment to the City of the
moneys held for the payment thereof.
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SECTION 9.03. Execution of Documents and Proof of Ownership by Bond
Owners. Any request, declaration or other instrument which this Resolution may require
or permit to be executed by Bond Owners may be in one or more instruments of similar
tenor, and shall be executed by Bond Owners in person or by their attorneys appointed
in writing.
Except as otherwise herein expressly provided, the fact and date of the execution
by any Bond Owner or their attorney of such request, declaration or other instrument, or
of such writing appointing such attorney, may be proved by the certificate of any notary
public or other officer authorized to take acknowledgments of deeds to be recorded in
the state in which he purports to act, that the person signing such request, declaration or
other instrument or writing acknowledged to him the execution thereof, or by an affidavit
of a witness of such execution, duly sworn to before such notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered
Bonds and the amount, maturity, number and date of holding the same are proved by
the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond
binds all future Owners of such Bond in respect of anything done or suffered to be done
by the City or the Paying Agent in good faith and in accordance therewith.
SECTION 9.04. Waiver of Personal Liability. No City Council member, officer,
agent or employee of the City has any individual or personal liability for the payment of
the principal of or interest on the Bonds. Nothing herein contained relieves any City
Council member, officer, agent or employee from the performance of any official duty
provided by law.
SECTION 9.05. Destruction of Canceled Bonds. Whenever in this Resolution
provision is made for the surrender to the City of any Bonds which have been paid or
canceled under the provisions of this Resolution, a certificate of destruction duly
executed by the Paying Agent constitutes the equivalent of the surrender of such
canceled Bonds and the City is entitled to rely upon any statement of fact contained in
any certificate with respect to the destruction of any such Bonds therein referred to.
SECTION 9.06. Partial Invalidity. If any section, paragraph, sentence, clause or
phrase of this Resolution is for any reason held illegal or unenforceable, such holding
will not affect the validity of the remaining portions of this Resolution. The City hereby
declares that it would have adopted this Resolution and each and every other section,
paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds
pursuant hereto irrespective of the fact that any one or more sections, paragraphs,
sentences, clauses, or phrases of this Resolution may be held illegal, invalid or
unenforceable.
SECTION 9.07. Execution of Documents. Each City Representative, and any and
all other officers of the City, are each authorized and directed in the name and on behalf
of the City to make any and all certificates, requisitions, agreements, notices, consents,
warrants and other documents, which they or any of them might deem necessary or
appropriate in order to consummate the lawful issuance, sale and delivery of the Bonds,
including an agreement for paying agent services. Whenever in this Resolution any
officer of the City is authorized to execute or countersign any document or take any
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