REVISED COMPLETED BOARD ORDER7 �Before the Board of Supervisors in and for the
County of Monterey, State of California
Agreement No. A-12011; Resolution No. 11-210
a. Approve the local agency resolution and approve the
borrowing of funds for fiscal year 2011-12; the
issuance and sale of Tax and Revenue Anticipation
Note therefore, at the maximum legal amount, but
not to exceed $60 million, through participation in
the California Communities Cash Flow Financing
Program; and
b. Authorize the County Debt Manager to execute the
required documents
Upon motion of Supervisor Salinas, seconded by Supervisor Armenta, and carried by
those members present, the Board hereby;
a. Approved the Local Agency Resolution No. 11-210 and approve the borrowing of
funds for fiscal year 2011-12; the issuance and sale of Tax and Revenue
Anticipation Note therefore, at the maximum legal amount, but not to exceed $60
million, through participation in the California Communities Cash Flow
Financing Program; and
b. Authorized the County Debt Manager to execute the required documents.
PASSED AND ADOPTED on this 14r" day of June, 2011, by the following vote, to wit:
AYES: Supervisors Armenta, Calcagno, Salinas, Parker, and Potter
NOES: None
ABSENT: None
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California, hereby
certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made and entered
in the minutes thereof of Minute Book 75 for the meeting on June 14, 2011.
Dated: June 24, 2011 Gail T. Borkowski, Clerk of the Board of Supervisors
Revised: July 7, 2011 County of Monterey, State of California
By
51
Deputy
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REVISED COMPLETED BOARD ORDER7 �51
COUNTY OF MONTEREY
LOCAL AGENCY RESOLUTION
RESOLUTION NUMBER 11-210
RESOLUTION AUTHORIZING AND APPROVING THE BORROWING
OF FUNDS FOR FISCAL YEAR 2011-2012; THE ISSUANCE AND SALE
OF A 2011-2012 TAX AND REVENUE ANTICIPATION NOTE
THEREFOR AT THE MAXIMUN LEGAL AMOUNT, BUT NOT TO
EXCEED $60,000,000, THROUGH 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 22 hereof the Local Agency") has determined that a sum the Principal
Amount"), not to exceed the Maximum Amount of Borrowing specified in Section 22 hereof,
which Principal Amount is to be confirmed and set in the Pricing Confirmation as defined in
Section 4 hereof), is needed for the requirements of the Local Agency, to satisfy obligations of
the Local Agency, and that it is necessary that said Principal Amount be borrowed for such
purpose at this time by the issuance of a note or notes therefore in anticipation of the receipt of
taxes, income, revenue, cash receipts and other moneys to be received or accrued by the Local
Agency for the general fund of the Local Agency, and provided for or attributable to its fiscal
year ending June 30, 2012 Repayment Fiscal Year");
WHEREAS, the Local Agency hereby determines to borrow, for the purposes set
forth above, the Principal Amount by the issuance of the Note, as hereinafter defined;
WHEREAS, it appears, and this Legislative Body hereby finds and determines,
that the Principal Amount, when added to the interest payable thereon, does not exceed 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 provided for or attributable to the Repayment Fiscal Year, and available for the payment
of the principal of the Note and the interest thereon;
WHEREAS, no money has heretofore been borrowed by or on behalf of the
Local Agency through the issuance of tax and revenue anticipation notes or temporary notes in
anticipation of the receipt of, or payable from or secured by, taxes, income, revenue, cash
receipts or other moneys for the Repayment Fiscal Year;
WHEREAS, pursuant to Section 53856 of the Act, certain moneys which will be
received or accrued by the Local Agency and provided for or attributable to the Repayment
Fiscal Year can be pledged for the payment of the principal of the Note and the interest thereon
as hereinafter provided);
OHS WEST:261153322.1
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REVISED COMPLETED BOARD ORDER7 �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") may
simultaneously issue tax and revenue anticipation notes, or alternatively, each may issue its note
on a stand-alone basis, dependent on market conditions;
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 the note purchase agreements collectively, the 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 and the underwriter identified in Section 21 hereof
the Underwriter"), will form one or more pools of notes the Pooled Notes") and assign each
note to a particular pool, which assignment and grouping may include a single note to a
particular pool the Pool"), and sell a series the Series") of bonds, which may include with
respect to a single Pool, a series of senior bonds and a series of subordinate 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"), and each Series distinguished by
whether or what type(s) of Credit Instrument as hereinafter defined) secures such notes that are
part of each 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, by whether interest on the series of Bonds is includable in gross
income for federal income tax purposes, or by other factors, all of which 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, in consultation with the Underwriter may determine;
WHEREAS, as additional security for the Owners of the Bonds, all or a portion
of the payments by the Local Agency or by the other Issuers of their respective notes assigned to
such Series may or may not be secured either by an irrevocable letter or letters) of credit or
policy or policies) of insurance or other credit instrument or instruments) collectively, the
Credit Instrument") issued by the credit provider or credit providers designated in the Indenture,
as finally executed collectively, the Credit Provider"), which may be issued pursuant to a credit
agreement or agreements or commitment letter or letters designated in the Indenture
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, the Program requires that each participating Issuer approve the
Indenture and the alternative forms of Credit Instruments, if any, in substantially the forms
presented to the Legislative Body, or, in the case of the Credit Instruments, if any, if not
presented, in a form which complies with such requirements and standards as may be determined
by the Legislative Body, with the final form of Indenture and type of Credit Instrument and
OHS WEST: 261153322.1 2
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REVISED COMPLETED BOARD ORDER7 �corresponding Credit Agreement, if any, determined upon execution of the Pricing Confirmation
by the Authorized Representative;
WHEREAS, pursuant to the Program, in the event that other Issuers participate
with the Local Agency in a Series of Bonds sold into a pool, 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), and in the event that the
Note is sold on a stand-alone basis, the Local Agency will be responsible for 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, all Predefault Obligations and the Issuer's Reimbursement Obligations, if
any;
WHEREAS, pursuant to the Program, the Note and the Notes issued by other
Issuers, if any, participating in the same Series all as represented by a Series of Bonds) which
will be secured by the Indenture to which such Pool will be assigned, will be offered for sale
through negotiation with the Underwriter or directly to a purchaser or purchasers under the terms
of a placement and/or bond purchase agreement approved by one or more authorized
representatives set forth in Section 22 hereof each, an Authorized Representative");
WHEREAS, the Indenture provides, among other things, that for the benefit of
Owners of Bonds and the Credit Provider, if any, the Local Agency shall provide notices of the
occurrence of certain enumerated events, if deemed by the Local Agency to be material;
WHEREAS, the Local Agency has determined that it may be desirable to provide
for the issuance of an additional parity note the Parity Note") during the Repayment Fiscal
Year, the principal and interest on which are secured by Pledged Revenues, hereinafter defined,
on a parity with the Note; and
WHEREAS, it is necessary to engage the services of certain professionals to
assist the Local Agency in its participation in the Program;
NOW, THEREFORE, this Legislative Body hereby finds, determines, declares
and resolves as follows:
Section 1. Recitals. All the above recitals are true and correct.
Section 2. Authorization of Issuance. This Legislative Body hereby determines
to borrow solely for the purpose of anticipating taxes, income, revenue, cash receipts and other
moneys to be received or accrued by the Local Agency for the general fund of the Local Agency
and provided for or attributable to the Repayment Fiscal Year, by the issuance of a note or notes,
pursuant to the provisions of the Act, designated the Local Agency's 2011 Tax and Revenue
Anticipation Note," with an appropriate series designation if more than one note is issued
collectively, the Note"), to be issued in the form of a fully registered note or notes in the
Principal Amount thereof, to be dated the date of its delivery to the initial purchaser thereof, to
mature with or without option of prior redemption at the election of the Local Agency) not more
OHS WEST:26 1 1 53322.1 3
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REVISED COMPLETED BOARD ORDER7 �than 15 months thereafter on a date indicated on the face thereof and determined in the Pricing
Confirmation the Maturity Date"), and to bear interest, payable on its Maturity Date and if the
Maturity Date is more than 12 months from the date of issuance, payable on the interim interest
payment date set forth in the Pricing Confirmation) and computed upon the basis of a 360-day
year consisting of twelve 30-day months, or a 365- or 366-day year, as the case may be, and
actual days elapsed, at a rate or rates, if more than one Note is issued, not to exceed 12% per
annum as 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
and/or interest on the Note is paid in whole or in part) by a draw under, payment by or claim
upon a Credit Instrument which draw or claim is not fully reimbursed on such date, such Note
shall become a Defaulted Note as defined in the Indenture), and the unpaid portion thereof
including the interest component, if applicable) thereof or the portion including the interest
component, if applicable) thereof with respect to which a Credit Instrument applies for which
reimbursement on a draw, payment or claim has not been fully made) shall be deemed
outstanding and shall continue to bear interest thereafter until paid at the Default Rate as defined
in the 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 set forth in the preceding two sentences, the obligation of the Local Agency with
respect to such Defaulted Note or unpaid Note shall not be a debt or liability of the Local Agency
prohibited by Article XVI, Section 18 of the California Constitution, and the Local Agency shall
not be liable thereon except to the extent of any available revenues provided for or attributable to
the Repayment Fiscal Year, as provided in Section 8 hereof. The percentage of the Note or the
Series of Bonds issued in connection with 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 notes or portions thereof) of all Issuers
of Notes that are part of such Series of Bonds, expressed as a percentage but not greater than
100%) as of the maturity date. Both the principal of and interest on the Note shall be payable in
lawful money of the United States of America.
The Note may be issued in conjunction with the note or notes of one or more
other Issuers, if any, as part of the Program and within the meaning of Section 53853 of the Act.
Anything in this Resolution to the contrary notwithstanding, the Pricing
Confirmation defined below) may specify that a portion of the authorized Principal Amount of
the Note shall be issued as a taxable Note the interest on which is includable in the gross income
of the holder thereof for federal income tax purposes a Taxable Note"). In such event, the
Taxable Note shall be issued with an appropriate series designation and other terms reflecting
such taxability of interest income, including without limitation, a taxable Note Rate and a taxable
Default Rate; the term Note, and other terms as appropriate, shall be deemed to include or refer
to such Taxable Note; and the agreements, covenants and provisions set forth in this Resolution
to be performed by or on behalf of the Local Agency shall be for the equal and proportionate
benefit, security and protection of the holder of any Note without preference, priority or
distinction as to security or otherwise of any Note over another Note.
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REVISED COMPLETED BOARD ORDER7 �Section 3. Form of Note. The Note shall be issued in fully registered form
without coupons and shall be substantially in the form and substance set forth in Exhibit A, as
attached hereto and by reference incorporated herein, the blanks in said form to be filled in with
appropriate words and figures as determined at closing.
Section 4. Sale of Note; Delegation. The Note may be sold to the Authority
pursuant to the terms and provisions of the Purchase Agreement. The form of the Purchase
Agreement, including the form of the pricing confirmation set forth as an exhibit thereto the
Pricing Confirmation"), presented to this meeting is hereby approved; provided, however, in the
event one or more Authorized Representatives decides it is in the best interest of the Local
Agency to pursue a private placement of a Series of Bonds, an Authorized Representative may
approve a different form of one or more Purchase Agreements and/or Pricing Confirmation. The
Authorized Representatives are each hereby authorized and directed to execute and deliver such
Purchase Agreement or Purchase Agreements and/or 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, i)
that the Purchase Agreement shall not be effective and binding on the Local Agency until the
execution and delivery of the Pricing Confirmation, ii) that the interest rate on the Note shall not
exceed 12% per annum, iii) that the Local Agency's pro rata share of Underwriter's discount on
the Note, when added to the Local Agency's share of the costs of issuance of the Bonds, shall not
exceed 1.0% of the Principal Amount of the Note and iv) that the Principal Amount shall not
exceed the Maximum Amount of Borrowing. Notwithstanding the foregoing, there shall be no
Underwriter's discount in the event of a private placement of the Series of Bonds, but such
private placement will be subject to a placement fee to be approved by an Authorized Officer.
Delivery of an executed copy of the Pricing Confirmation by fax or telecopy shall be deemed
effective upon execution and delivery for all purposes.
Section 5. Program Approval. The Note may be combined with notes of other
Issuers, if any, into a Series of Bonds, as may be described and set forth in the Preliminary
Official Statement, hereinafter mentioned, and sold simultaneously with such other notes of that
Series secured by the Credit Instrument if any) referred to in the Pricing Confirmation.
The forms of Indenture and alternative general types and forms of Credit
Agreements, if any, presented to this meeting or otherwise to the Legislative Body, are hereby
approved, and it is acknowledged that the Authority will execute and deliver the Indenture and a
Credit Agreement, if applicable, which shall be identified in the Pricing Confirmation, in
substantially one or more of said forms a substantially final form of Credit Agreement to be
delivered to the Authorized Representative following the execution by the Authorized
Representative of the Pricing Confirmation), with such changes therein as said officer shall
require or approve, such approval of this Legislative Body and such officer to be conclusively
evidenced by the execution of the Indenture and the Credit Agreement, if any. A description of
this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the
final Official Statement. The Authorized Representative is hereby authorized and directed to
comply with and carry out all of the provisions of the Indenture with respect to continuing
disclosure; provided, however, that failure of the Local Agency to comply with the Continuing
Disclosure Agreement, as defined in Article XI of the Indenture, shall not be considered an
Event of Default hereunder. Any Credit Agreement identified in the Pricing Confirmation but not
OHS WEST:261153322.1 5
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REVISED COMPLETED BOARD ORDER7 �at this time before the Legislative Body shall include reasonable and customary terms and
provisions relating to fees, increased costs of the Credit Provider, if any, payable by the Local
Agency, negative and affirmative covenants of the Local Agency and events of default. The
proposed form of preliminary offering document, which may be cast as a preliminary official
statement, preliminary private offering memorandum or preliminary limited offering
memorandum the Preliminary Official Statement") relating to the Series of Bonds, in
substantially the form presented to this meeting or otherwise to the Legislative Body, is hereby
approved with such changes, additions, completion and corrections as any Authorized
Representative may approve, and the Underwriter is hereby authorized and directed to cause to
be mailed to prospective bidders the Preliminary Official Statement in connection with the
offering and sale of the Series of Bonds. Such Preliminary Official Statement, together with any
supplements thereto, shall be in form deemed final" by the Local Agency for purposes of Rule
15c2-12, promulgated by the Securities and Exchange Commission the Rule"), unless
otherwise exempt, but is subject to revision, amendment and completion in a final official
statement, private offering memorandum or limited offering memorandum the Official
Statement"). The Official Statement in substantially said form is hereby authorized and
approved, with such changes therein as any Authorized Representative may approve. The
Authorized Representative is hereby authorized and directed, at or after the time of the sale of
any Series of Bonds, for and in the name and on behalf of the Local Agency, to execute a final
Official Statement in substantially the form of the Preliminary Official Statement presented to
this meeting, with such additions thereto or changes therein as the Authorized Representative
may approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Any one of the Authorized Representatives of the Local Agency is hereby
authorized and directed to provide the Underwriter with such information relating to the Local
Agency as they shall reasonably request for inclusion in the Preliminary Official Statement and
Official Statement of the Authority. Upon inclusion of the information relating to the Local
Agency therein, the Preliminary Official Statement is, except for certain omissions permitted by
the Rule, hereby deemed final within the meaning of the Rule; provided that no representation is
made as to the information contained in the Preliminary Official Statement relating to the other
Issuers, if any, or any Credit Provider. If, at any time prior to the end of the underwriting period,
as defined in the Rule, any event occurs as a result of which the information contained in the
Preliminary Official Statement relating to the Local Agency might include an untrue statement of
a material fact or omit to state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, the Local Agency shall
promptly notify the Underwriter. The Authority is hereby authorized and directed, at or after the
time of the sale of any Series of Bonds, for and in the name and on behalf of the Local Agency,
to execute a final Official Statement in substantially the form of the Preliminary Official
Statement presented to this meeting, with such additions thereto or changes therein as the
Authority may approve, such approval to be conclusively evidenced by the execution and
delivery thereof.
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
OHS WEST:261153322.1 6
BIB]
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FO96183-U03
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EXCEED-U012
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CALIFORNIA-U012
COMMUNITIES-U012
CASH-U012
FLOW-U012
FINANCING-U012
PROGRAM;-U012
B.-U012
AUTHORIZE-U012
THE-U012
COUNTY-U012
DEBT-U012
MANAGER-U012
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EXECUTE-U012
THE-U012
REQUIRED-U012
DOCUMENTS.-U012
REVISED COMPLETED BOARD ORDER7 �i) any Credit Provider providing a Credit Instrument with respect to the Note or the Series of
Bonds issued in connection with the Note, and therefore with respect to all or a portion of the
Local Agency's Note, has been reimbursed for any drawings, payments or claims made under or
from the Credit Instrument with respect to the Note, including interest accrued thereon, as
provided therein and in the applicable Credit Agreement, and ii) the holders of the Note or the
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; Owners' Rights. The Note shall be marketed
and sold on either a stand-alone basis or simultaneously with the notes of other Issuers, if any,
and aggregated and combined with notes of such other Issuers participating in the Program, and
assigned to secure a Series of Bonds, representing an interest in several, and not joint, obligations
of each such Issuer. The obligation of the Local Agency to Owners is a several and not a joint
obligation and is strictly limited to the Local Agency's repayment obligation under this
Resolution and the Note.
Owners of Bonds, to the extent of their interest in the Note, and the Credit
Provider, if any, shall be treated as owners of the Note and shall be entitled to all the rights and
security thereof in accordance with the Indenture, including the right to enforce the obligations
and covenants contained in this Resolution and the Note. The Local Agency hereby recognizes
the right of the Owners and the Credit Provider, if any, acting directly or through the Trustee to
enforce the obligations and covenants contained in the Note, this Resolution and the Indenture.
The Local Agency shall be directly obligated to each Owner for the principal and interest
payments on the Note without any right of counterclaim or offset arising out of any act or failure
to act on the part of the Trustee.
Section 7. Disposition of Proceeds of Note. The moneys received from the sale
of the Note allocable to the Local Agency's costs related to the issuance of the Notes and Series
of Bonds if sold on a stand-alone basis) or the Local Agency's share of the costs of issuance
which shall include any issuance fees in connection with a Credit Instrument applicable to the
OHS WEST:26 1 1 53322.1 7
BIB]
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COMPLETED-U02
BOARD-U02
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LI21329-U03
FO96183-U03
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FO99828-U03
MG99866-U03
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AI102904-U03
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REVISED COMPLETED BOARD ORDER7 �Note, if any) shall be deposited in the Costs of Issuance Fund held and invested by the Trustee
under the Indenture and expended on costs of issuance as provided in the Indenture. The moneys
received from the sale of the Note net of the Local Agency's costs related to the issuance of the
Notes and Series of Bonds if sold on a stand-alone basis) or the Local Agency's share of the
costs of issuance) shall be deposited in the Local Agency's Proceeds Subaccount within the
Proceeds Fund hereby authorized to be created pursuant to, and held and invested by the Trustee
under, the 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 expend funds 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. 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
accrued, received or held by the Local Agency for the general fund of the Local Agency and are
provided for or attributable to the Repayment Fiscal Year and which are available for payment
thereof. As security for the payment of the principal of and interest on the Note, the Local
Agency hereby pledges all Unrestricted Revenues as hereinafter provided, the Pledged
Revenues") which are accrued, received or held by the Local Agency for the general fund of the
Local Agency and are provided for or attributable to the Repayment Fiscal Year, and the
principal of the Note and the interest thereon shall constitute a first lien and charge thereon and
shall be payable from the first moneys received by the Local Agency from such Pledged
Revenues and, to the extent not so paid, shall be paid from any other taxes, income, revenue,
cash receipts and other moneys of the Local Agency lawfully available therefor all as provided
for in Sections 53856 and 53857 of the Act). The term Unrestricted Revenues" shall mean all
taxes, income, revenue including, but not limited to, revenue from the state and federal
governments), cash receipts, and other moneys, intended as receipts for the general fund of the
Local Agency provided for or attributable to the Repayment Fiscal Year and which are generally
available for the payment of current expenses and other obligations of the Local Agency. The
holders of the Notes, Owners and Credit Provider, if any, shall have a first lien and charge on
such Unrestricted Revenues as herein provided which are accrued, received or held by the Local
Agency and are provided for or attributable to the Repayment Fiscal Year. The Local Agency
may incur indebtedness secured by a pledge of its Pledged Revenues subordinate to the pledge of
Pledged Revenues hereunder and may issue subordinate tax and revenue anticipation notes.
In order to effect the pledge referenced in the preceding paragraph, the Local
Agency hereby agrees to the establishment and maintenance of a special account of the Local
Agency the Payment Account") by the Trustee as the responsible agent to maintain such an
account until the payment of the principal of the Note and the interest thereon, and the Local
Agency further agrees to cause to be deposited an amount in the Payment Account on the last
Business Day of the months specified in the Pricing Confirmation as Repayment Months each
individual month a Repayment Month" and collectively Repayment Months") and, if
necessary, any amounts received thereafter provided for or attributable to the Repayment Fiscal
OHS WEST:2 6 1 1 533 22.1 8
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REVISED-U02
COMPLETED-U02
BOARD-U02
ORDER-U02
LI21329-U03
FO96183-U03
FO96184-U03
FO99828-U03
MG99866-U03
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AI102904-U03
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6/6/2011-U011
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MILLION,-U012
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MANAGER-U012
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REVISED COMPLETED BOARD ORDER7
�Year) so that the amount on deposit in the Payment Account, is equal in the respective
Repayment Months identified in the Pricing Confirmation to the percentage of the principal and
interest due on the Note specified in the Pricing Confirmation. Any such deposit may take into
consideration anticipated investment earnings on amounts deposited in an Investment
Agreement, that is a Permitted Investment, as defined in the Indenture, through the Maturity
Date. Transfers from the Payment Account shall be made in accordance with the Indenture.
Any Authorized Representative of the Local Agency is hereby authorized to
approve the determination of the Repayment Months and percentages of the principal and
interest due on the Note required to be on deposit in the Payment Account in each Repayment
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. In the event on the day in each such Repayment
Month that a deposit to the Payment Account is required to be made, the Local Agency has not
received sufficient unrestricted revenues to permit the deposit into the Payment Account of the
full amount of Pledged Revenues to be deposited in the Payment Account from said unrestricted
revenues in said month, then the amount of any deficiency shall be satisfied and made up from
any other moneys of the Local Agency lawfully available for the payment of the principal of the
Note and the interest thereon, as and when such other moneys are received or are otherwise
legally available.
Any moneys placed in the Payment Account shall be for the benefit of i) the
owner of the Note and the holders of Bonds issued in connection with the Notes ii) to the extent
provided in the Indenture) the Credit Provider, if any. The moneys in the Payment Account shall
be applied only for the purposes for which the Payment Account is created until the principal of
the Note and all interest thereon are paid or until provision has been made for the payment of the
principal of the Note at maturity with interest to maturity in accordance with the requirements
for defeasance of the Bonds as set forth in the Indenture) and 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, if any.
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 Account to the Bond
Payment Fund as defined in the Indenture). In the event that moneys in the Payment Account
are insufficient to pay the principal of and interest on the Note in full when due, such moneys
shall be applied in the following priority: first, to pay interest on the Note; second, to pay
principal of the Note; third, to reimburse the Credit Provider for payment, if any, of interest with
respect to the Note; fourth, to reimburse the Credit Provider for payment, if any, of principal
with respect to the Note; and fifth, to pay any Reimbursement Obligations of the Local Agency
and any of the Local Agency's pro rata share of Predefault Obligations owing to the Credit
Provider, if any. Any moneys remaining in or accruing to the Payment Account after the
principal of the Note and the interest thereon and any Predefault Obligations and Reimbursement
Obligations, if applicable, have been paid, or provision for such payment has been made, shall be
transferred to the general 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.
OHS WEST:261153322.1 9
BIB]
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FO96183-U03
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REVISED COMPLETED BOARD ORDER7
�Moneys in the Proceeds Subaccount and in the Payment Account 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 Account.
The Local Agency shall promptly file with the Trustee and the Credit Provider, if
any, such financial reports at the times and in the forms required by the Indenture. At the written
request of the Credit Provider, if any, the Local Agency shall, within ten 10) Business Days
following the receipt of such written request, file such report or reports to evidence the transfer
to and deposit in the Payment Account required by this Section 8 and provide such additional
financial information as may be required by the Credit Provider, if any.
Anything herein to the contrary notwithstanding, the Local Agency may at any
time during the Repayment Fiscal Year issue a Parity Note, secured by a first lien and charge on
Pledged Revenues; provided that i) the Local Agency shall have received confirmation from
each rating agency rating the outstanding Note or Series of Bonds related to the Note, that the
issuance of such Parity Note or related series of bonds if sold into a pool) will not cause a
reduction or withdrawal of such rating agency's rating on the outstanding Note or Series of
Bonds related to the Note, ii) the maturity date of any such Parity Note shall be later than the
outstanding Note and iii) the Local Agency shall have received the written consent of the Credit
Provider, if any, to the issuance of the Parity Note. In the event that the Local Agency issues a
Parity Note, the Local Agency shall make appropriate deposits into the Payment Account with
respect to such Parity Note, and in such event, the Payment Account shall also be held for the
benefit of the holders of the Parity Note.
Section 9. Execution of Note. Any one of the Authorized Representatives of the
Local Agency or any other officer designated by the Legislative Body shall be authorized to
execute the Note by manual or facsimile signature, and the Secretary or Clerk of the Legislative
Body of the Local Agency or any duly appointed assistant thereto shall be authorized to
countersign the Note by manual or facsimile signature. Said officers of the Local Agency are
hereby authorized to cause the blank spaces of the Note to be filled in as may be appropriate
pursuant to the Pricing Confirmation. Said officers are hereby authorized and directed to cause
the Trustee, as registrar and authenticating agent, to accept delivery of the Note pursuant to the
terms and conditions of the Purchase Agreement and Indenture. In case any officer whose
signature shall appear on any Note shall cease to be such officer before the delivery of such
Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if
such officer had remained in office until delivery. The Note need not bear the seal of the Local
Agency, if any.
OHS WEST:261153322.1 10
BIB]
40732-U01
REVISED-U02
COMPLETED-U02
BOARD-U02
ORDER-U02
LI21329-U03
FO96183-U03
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MG99866-U03
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DO103551-U03
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6/28/2011-U04
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16658-U05
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THROUGH-U012
PARTICIPATION-U012
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REVISED COMPLETED BOARD ORDER7
�Section 10. 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, the Underwriter and the Credit Provider, if any.
A) The Local Agency is duly organized and existing under and by virtue of
the laws of the State of California and has all necessary power and authority i) to adopt this
Resolution and perform its obligations thereunder, ii) to enter into and perform its obligations
under the Purchase Agreement, and iii) to issue the Note and perform its obligations thereunder.
B) Upon the issuance of the Note, the Local Agency shall have taken all
action required to be taken by it to authorize the issuance and delivery of the Note and the
performance of its obligations thereunder, and the Local Agency has full legal right, power and
authority to issue and deliver the Note.
C) The issuance of the Note, the adoption of the Resolution and the execution
and delivery of the Purchase Agreement, Indenture and Credit Agreement, if any, and
compliance with the provisions hereof and thereof will not conflict with or violate any law,
administrative regulation, court decree, resolution, charter, by-laws or other agreement to which
the Local Agency is subject or by which it is bound.
D) Except as may be required under blue sky or other securities laws of any
state or Section 3(a)(2) of the Securities Act of 1933, there is no consent, approval, authorization
or other order of, or filing with, or certification by, any regulatory authority having jurisdiction
over the Local Agency required for the issuance and sale of the Note or the consummation by the
Local Agency of the other transactions contemplated by this Resolution, except those the Local
Agency shall obtain or perform prior to or upon the issuance of the Note.
E) The Local Agency has or will have prior to the issuance of the Note)
duly, regularly and properly adopted a preliminary budget for the Repayment Fiscal Year setting
forth expected revenues and expenditures and has complied with all statutory and regulatory
requirements with respect to the adoption of such budget. The Local Agency hereby covenants
that it shall i) duly, regularly and properly prepare and adopt its final budget for the Repayment
Fiscal Year, ii) provide to the Trustee, the Credit Provider, if any, and the Underwriter or
holder of the Series of Bonds in the event of a private placement), promptly upon adoption,
copies of such final budget and of any subsequent revisions, modifications or amendments
thereto and iii) comply with all applicable laws pertaining to its budget.
F) The sum of the principal amount of the Local Agency's Note plus the
interest payable thereon, on the date of its issuance, will not exceed 85% 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
or accrued by the Local Agency for the general fund of the Local Agency and provided for or
attributable to the Repayment Fiscal Year all of which will be legally available to pay principal
of and interest on the Note.
OHS WEST:261153322.1 11
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REVISED COMPLETED BOARD ORDER7
�G) The Local Agency i) has not defaulted within the past twenty 20) years,
and is not currently in default, on any debt obligation and ii), to the best knowledge of the Local
Agency, has never defaulted on any debt obligation.
H) The Local Agency's most recent audited financial statements present
fairly the financial condition of the Local Agency as of the date thereof and the results of
operation for the period covered thereby. Except as has been disclosed to the Underwriter and
the Credit Provider, if any, and in the Preliminary Official Statement and to be set forth in the
final Official Statement, there has been no change in the financial condition of the Local Agency
since the date of such audited financial statements that will in the reasonable opinion of the Local
Agency materially impair its ability to perform its obligations under this Resolution and the
Note. The Local Agency agrees to furnish to the Underwriter or holders of the Series of Bonds
in the event of a private placement), the Authority, 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
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 finding would have a materially adverse effect on the Local Agency's financial
condition or results of operations or on the ability of the Local Agency to conduct its activities as
presently conducted or as proposed or contemplated to be conducted, or would materially
adversely affect the validity or enforceability of, or the authority or ability of the Local Agency
to perform its obligations under, the Note, the Purchase Agreement, the Indenture, the Credit
Agreement, if any, or this Resolution.
J) Upon issuance of the Note and execution of the Purchase Agreement, this
Resolution, the Purchase Agreement including the Pricing Confirmation) and the Note will
constitute legal, valid and binding agreements of the Local Agency, enforceable in accordance
with their respective terms, except as such enforceability may be limited by bankruptcy or other
laws affecting creditors' rights generally, the application of equitable principles if equitable
remedies are sought, the exercise of judicial discretion in appropriate cases and the limitations on
legal remedies against local agencies, as applicable, in the State of California.
K) The Local Agency and its appropriate officials have duly taken, or will
take, all proceedings necessary to be taken by them, if any, for the levy, receipt, collection and
enforcement of the Pledged Revenues in accordance with law for carrying out the provisions of
this Resolution and the Note.
L) Except for Parity Notes, if any, pursuant to Section 8 hereof, 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.
OHS WEST:26 1 1 53 3 22.1 12
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REVISED COMPLETED BOARD ORDER7 �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.
0) The information describing the Local Agency contained in the Official
Statement excluding the statements and information pertaining to the Credit Provider, if any,
and information under the heading UNDERWRITING" or PLACEMENT" and in the
Appendix entitled BOOK-ENTRY ONLY SYSTEM"), as of the time of delivery thereof to the
Underwriter and at all times subsequent thereto up to and including the Closing, will be true,
complete, correct and final in all material respects and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
P) The information contained in the Credit Questionnaire including the
Cashflow Worksheet therein) the Credit Questionnaire") completed by the Local Agency and
submitted to the Authority and the Underwriter or holders of the Series of Bonds in the event of
a private placement), will be at the time submitted and on the Closing Date true and accurate.
Section 11. Tax Covenants. The Local Agency will not take any action or fail
to take any action if such action or failure to take such action would adversely affect the
exclusion from gross income of the interest payable on the Note or Bonds under Section 103 of
the Internal Revenue Code of 1986, as amended the Code"). Without limiting the generality of
the foregoing, the Local Agency will 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 taxation because it is federally guaranteed" as provided in Section 149(b) of the
Code. The Local Agency, with respect to the proceeds of the Note, will comply with all
requirements of such sections of the Code and all regulations of the United States Department of
the Treasury issued or applicable thereunder to the extent that such requirements are, at the time,
applicable and in effect.
The Local Agency hereby i) represents that the aggregate face amount of all tax-
exempt obligations including any tax-exempt leases, but excluding private activity bonds),
issued and to be issued by the Local Agency during calendar year 2011, 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
OHS WEST: 26 1 1 53 3 22.1 13
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REVISED COMPLETED BOARD ORDER7 �proceeds of the Note will be expended no later than the day that is six months after the date of
issuance of the Note so as to satisfy the requirements of Section 148(f)(4)(B) of the Code.
Notwithstanding any other provision of this Resolution to the contrary, upon the
Local Agency's failure to observe, or refusal to comply with, the covenants contained in this
Section 11, no one other than the holders or former holders of the Note, the Owners, 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 covenants contained in this Section 11 shall survive the payment of the Note.
The provisions of this Section 11 shall not apply to a Taxable Note.
Section 12. Events of Default and Remedies.
If any of the following events occur, it is hereby defined as and declared to be and
to constitute an Event of Default":
a) Failure by the Local Agency to make or cause to be made the
transfers and deposits to the Payment Account, or any other payment required to
be paid hereunder, including payment of principal and interest on the Note, on or
before the date on which such transfer, deposit or other payment is due and
payable;
b) Failure by the Local Agency to observe and perform any covenant,
condition or agreement on its part to be observed or performed under this
Resolution, for a period of fifteen 15) days after written notice, specifying such
failure and requesting that it be remedied, is given to the Local Agency by the
Trustee or the Credit Provider, if applicable, unless the Trustee and the Credit
Provider shall agree in writing to an extension of such time prior to its expiration;
c) Any warranty, representation or other statement by or on behalf of
the Local Agency contained in this Resolution or the Purchase Agreement
including the Pricing Confirmation) or in any requisition or any financial report
delivered by the Local Agency or in any instrument furnished in compliance with
or in reference to this Resolution or the Purchase Agreement or in connection
with the Note, is false or misleading in any material respect;
d) A petition is filed against the Local Agency under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect and is not
dismissed within 30 days after such filing, but the Trustee shall have the right to
intervene in the proceedings prior to the expiration of such 30 days to protect its
and the 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,
OHS WEST:261153322.1 14
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REVISED COMPLETED BOARD ORDER7 �arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or consents to the filing of
any petition against it under such law; or
f) The Local Agency admits insolvency or bankruptcy or is generally
not paying its debts as such debts become due, or becomes insolvent or bankrupt
or makes an assignment for the benefit of creditors, or a custodian including
without limitation a receiver, liquidator or trustee) of the Local Agency or any of
its property is appointed by court order or takes possession thereof and such order
remains in effect or such possession continues for more than 30 days, but the
Trustee shall have the right to intervene in the proceedings prior to the expiration
of such 30 days to protect its and the Bond Owners' or Noteholders') interests;
Whenever any Event of Default referred to in this Section 12 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, have the right, at its option without any further
demand or notice, to take one or any combination of the following remedial steps:
a) Without declaring the Note to be immediately due and payable,
require the Local Agency to pay to the Trustee, as holder of the Note, an amount
equal to the principal of the Note and interest thereon to maturity, plus all other
amounts due hereunder, and upon notice to the Local Agency the same shall
become immediately due and payable by the Local Agency without further notice
or demand; and
b) Take whatever other action at law or in equity except for
acceleration of payment on the Note) which may appear necessary or desirable to
collect the amounts then due and thereafter to become due hereunder or to enforce
any other of its rights hereunder.
Notwithstanding the foregoing, if the Local Agency's Note is secured in whole or
in part by a Credit Instrument or if the Credit Provider is subrogated to rights under the Local
Agency's Note, as long as the Credit Provider is not in default of its payment obligations under
the Credit Instrument, the Credit Provider, if any, 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.
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REVISED COMPLETED BOARD ORDER7 �Section 13. Trustee. The Trustee is hereby appointed as paying agent and
registrar for the Note. The Local Agency hereby directs and authorizes the payment by the
Trustee of the interest on and principal of the Note when such become due and payable, from the
Payment Account held by the Trustee in the name of the Local Agency in the manner set forth
herein. The Local Agency hereby covenants to deposit funds in such account at the time and in
the amount specified herein to provide sufficient moneys to pay the principal of and interest on
the Note on the day on which it matures. Payment of the Note shall be in accordance with the
terms of the Note and this Resolution.
The Local Agency hereby agrees to maintain as paying agent and registrar of the
Note, the Trustee under the Indenture.
Section 14. Sale of Note; Payment of Certain Expenses if Sale Does Not
Occur. The Note shall be sold to the Authority, in accordance with the terms of the Purchase
Agreement, hereinbefore approved, issued and payable to the Trustee, as assignee of the
Authority. In the event that the Local Agency determines not to proceed with the issuance and
sale of its Note, the Local Agency will nevertheless be responsible for the fees of the rating
agencies and other direct out-of-pocket expenses incurred in connection with the Program.
Section 15. 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 this
Resolution, 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. Each of the Authorized Representatives of the Local Agency
referred to in Section 22 hereof is hereby designated as an Authorized Local Agency
Representative" under the Indenture.
In the event that the Note or a portion thereof is secured by a Credit Instrument,
any Authorized Representative of the Local Agency is hereby authorized and directed to provide
the Credit Provider, with any and all information relating to the Local Agency as such Credit
Provider may reasonably request.
Section 16. Proceedings Constitute Contract. The provisions of the Note and
of this Resolution shall constitute a contract between the Local Agency and the registered owner
of the Note and the Credit Provider, if any, and such provisions shall be enforceable by
mandamus or any other appropriate suit, action or proceeding at law or in equity in any court of
competent jurisdiction, and shall be irrepealable. The Credit Provider, if any, is a third party
beneficiary of the provisions of this Resolution and the Note.
OHS WEST:261153322.1 16
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REVISED COMPLETED BOARD ORDER7 �Section 17. 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 18. Amendments. At any time or from time to time, the Local Agency
may adopt one or more Supplemental Resolutions with the written consents of the Authority and
the Credit Provider, if any, but without the necessity for consent of the owner of the Note 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 owner 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 Notes may be made by a Supplemental Resolution, with the written consents
of the Authority and the Credit Provider, if any, and with the written consent of the owners of at
least a majority in principal amount of the Note and of the Bonds issued in connection with the
Notes 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 or of the Bonds issued
in connection with the Notes remain outstanding, the consent of the owners of such Note or of
the Bonds issued in connection with the Notes shall not be required. No such modification or
amendment shall permit a change in the maturity of the Note or a reduction of the principal
amount thereof or an extension of the time of any payment thereon or a reduction of the rate of
interest thereon, or a change in the date or amounts of the pledge set forth in this Resolution,
without the consent of the owners of such Note or the owners of all of the Bonds issued in
connection with the Notes, or shall reduce the percentage of the Note or the owners of all of the
OHS WEST:261153322.1 17
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REVISED COMPLETED BOARD ORDER7 �Bonds issued in connection with the Notes, the consent of the owners of which is required to
effect any such modification or amendment, or shall change or modify any of the rights or
obligations of the Trustee without its written assent thereto.
Section 19. 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 20. Appointment of Bond Counsel. The Local Agency approves and
consents to the appointment of the law firm of Orrick, Herrington & Sutcliffe LLP, Los Angeles,
California as Bond Counsel for the Program. The Local Agency acknowledges that Bond
Counsel regularly performs legal services for many private and public entities in connection with
a wide variety of matters, and that Bond Counsel has represented, is representing or may in the
future represent other public entities, underwriters, trustees, rating agencies, insurers, credit
enhancement providers, lenders, financial and other consultants who may have a role or interest
in the proposed financing or that may be involved with or adverse to Local Agency in this or
some other matter. Given the special, limited role of Bond Counsel described above, the Local
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 21. Appointment of Underwriter. The Local Agency approves and
consents to the appointment of Citigroup Global Markets Inc., as senior manager, together with
E. J. De La Rosa & Co., Inc, as co-managers, collectively as Underwriter for the Program.
Resolution Parameters.
Name of Local Agency: County of Monterey
Maximum Amount of Borrowing: $60,000,000
Authorized Representatives:
TITLE
1) Chief Administrative Officer
2) Auditor-Controller
3) County Debt Manager
Section 23. Effective Date. This Resolution shall take effect from and after its
date of adoption.
Attach form of Certification of the Secretary or Clerk, as appropriate, with
respect to the Resolution.]
OHS WEST:261153322.1 18
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REVISED COMPLETED BOARD ORDER7 �51
EXHIBIT A
FORM OF NOTE
COUNTY OF MONTEREY
2011 TAX AND REVENUE ANTICIPATION NOTE, SERIES
Interest Rate
First
Repayment Date
% Total of
principal and
interest due on
Note at maturity)
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Maturity Date
Second
Repayment Date
% Total of
principal and interest
due on Note at
maturity)
*1
Date of
Original Issue
2011
Third
Repayment Date
% Total of
principal and interest
due on Note at
maturity) **/
FOR VALUE RECEIVED, the Local Agency executing this Note the Local
Agency") acknowledges itself indebted, and promises to pay, to the registered owner identified
above, or registered assigns, on the maturity date set forth above, the principal sum specified
above in lawful money of the United States of America, and to pay interest thereon on each
Interest Payment Date, as defined in the Indenture, at the Interest Rate specified above the
Note Rate"). Principal of and interest on this Note are payable in such coin or currency of the
United States as at the time of payment is legal tender for payment of private and public debts,
such principal to be paid upon surrender hereof at the principal corporate trust office of Wells
Fargo Bank, National Association in Los Angeles, California, or its successor in trust the
Trustee"). Interest is payable as specified in the Indenture. Interest shall be calculated on the
basis of a 360-day year, consisting of twelve 30-day months, in like lawful money from the date
hereof until the maturity date specified above and, if funds are not provided for payment at
maturity, thereafter on the basis of a 360-day year for actual days elapsed until payment in full of
said principal sum. Both the principal of and interest on this Note shall be payable only to the
registered owner hereof upon surrender of this Note as the same shall fall due; provided,
however, no interest shall be payable for any period after maturity during which the holder
hereof fails to properly present this Note for payment. If the Local Agency fails to pay this Note
/ If more than one Series is issued under the Program in the Repayment Fiscal Year.
Number of Repayment Dates and percentages to be determined in Pricing Confirmation as defined in the
Resolution).
OHS WEST:261153322.1 A-1
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REVISED COMPLETED BOARD ORDER7 �when due or the Credit Provider as defined in the Resolution hereinafter described), if any, is
not reimbursed in full for the amount drawn on or paid pursuant to the Credit Instrument as
defined in the Resolution) to pay all or a portion of this Note on the date of such payment, this
Note shall become a Defaulted Note as defined and with the consequences set forth in the
Resolution).
It is hereby certified, recited and declared that this Note the Note") represents
the authorized issue of the Note in the aggregate principal amount made, executed and given
pursuant to and by authority of certain resolutions of the Legislative Body of the Local Agency
duly passed and adopted heretofore, under and by authority of Article 7.6 commencing with
Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code
collectively, the Resolution"), to all of the provisions and limitations of which the owner of
this Note, by acceptance hereof, assents and agrees.
The principal of the Note, together with the interest thereon, shall be payable from
taxes, income, revenue, cash receipts and other moneys which are received or accrued by the
Local Agency for the general fund of the Local Agency and are provided for or attributable to
the Repayment Fiscal Year, as defined in the Resolution, and which are available for payment
thereof. As security for the payment of the principal of and interest on the Note, the Local
Agency has pledged certain unrestricted revenues of the Local Agency which are to be deposited
on the last business day of the Repayment Months as defined in the Resolution) identified in the
Pricing Confirmation as defined in the Resolution) and, if necessary, any amounts received
thereafter attributable to the Repayment Fiscal Year) so that the amount on deposit in the
Payment Account as defined in the Resolution) in each such month, is equal to the
corresponding percentages of principal of and interest due on the Note as set forth in the Pricing
Confirmation such pledged amounts being hereinafter called the Pledged Revenues"), and the
principal of the Note and the interest thereon shall constitute a first lien and charge thereon and
shall be payable from the Pledged Revenues, and to the extent not so paid shall be paid from any
other moneys of the Local Agency lawfully available therefor as set forth in the Resolution. The
full faith and credit of the Local Agency is not pledged to the payment of the principal or interest
on this Note.
The Local Agency and the Trustee may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Local Agency and the
Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to
have happened and to have been performed precedent to and in the issuance of this Note do exist,
have happened and have been performed in due time, form and manner as required by the
Constitution and statutes of the State of California and that the amount of this Note, together
with all other indebtedness of the Local Agency, does not exceed any limit prescribed by the
Constitution or statutes of the State of California.
OHS WEST:26 1 1 53322.1 A-2
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REVISED COMPLETED BOARD ORDER7 �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.
COUNTY OF MONTEREY
By:
Title:
itle: Clerk of the Bo
PASSED AND ADOPTED on this 14t1, day of June, 2011, upon motion of Supervisor Salinas,
seconded by Supervisor Armenta by the following vote, to wit:
AYES: Supervisors Armenta, Calcagno, Salinas, Parker, and Potter
NOES: None
ABSENT: None
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California, hereby
certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made and entered
in the minutes thereof of Minute Book 75 for the meeting on June 14, 2011.
Dated: June 24, 2011 Gail T. Borkowski, Clerk of the Board of Supervisors
County of Monterey, State of California
Deputy
OHS WEST:261153322.1 A-3
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REVISED COMPLETED BOARD ORDER7 �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 2011
Tax and Revenue Anticipation Note the Note") which may 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), and which may be 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 funds in its fiscal
year ending June 30, 2012 Fiscal Year 2011-2012") 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
or accrued by the Local Agency and provided for or attributable to Fiscal Year 2011-2012;
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 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") may simultaneously
issue tax and revenue anticipation notes, or alternatively, each may issue its note on a stand-alone
basis, dependent on market conditions;
WHEREAS, the Authority, in consultation with Citigroup Global Markets Inc., as
representative of the underwriters of the Program collectively, the Underwriter"), will form one or
more pools of notes the Pooled Notes") and assign each note to a particular pool, including a
single note to a particular pool the Pool"), and sell a series the Series") of bonds, which may
include with respect to a single Pool, a series of senior bonds and a series of subordinate 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"), and each Series
distinguished by whether or what type(s) of Credit Instrument as hereinafter defined) secures such
notes that are part of each 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
OHS WEST:261117558.1
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REVISED COMPLETED BOARD ORDER7 �swapped to a fixed rate by the Authority, by whether interest on the series of Bonds is includable in
gross income for federal income tax purposes, or by other factors, all of which 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, in consultation with the Underwriter may determine;
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, if any) by a letter of credit, policy of
insurance 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, if any, 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. Obligation to Purchase. Upon the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein, the Authority shall
purchase from the Local Agency, and the Local Agency shall sell to the Authority, the Note, as
described herein and in the Resolution.
Section 2. Purchase Price. The purchase price of the Note shall be the
purchase price set forth in the pricing confirmation attached hereto as Exhibit A the Pricing
Confirmation"). The Note shall bear interest at an interest rate per annum set forth in the Pricing
Confirmation, which is hereby agreed to by and between the Authority and the Local Agency by
its duly authorized representative executing this Purchase Agreement on behalf of the Local
Agency.
Section 3. Adjustments to Principal Amount of Note and Purchase Price.
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
OHS WEST:261117558.1 2
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REVISED COMPLETED BOARD ORDER7 �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 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. Delivery 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.
Section 5. The Note. The Note shall be issued in substantially the form set
forth in the Resolution, without coupons in the full principal amount set forth in Exhibit A.
Section 6. Representations and Warranties of the Local Agency. The
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 Preliminary
Official Statement and 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.
OHS WEST:261117558.1 3
BIB]
40732-U01
REVISED-U02
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REVISED COMPLETED BOARD ORDER7 �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.
Section 7. Conditions Precedent to the Closing. Conditions precedent to the
Closing are as follows:
a) The execution and delivery of the Note consistent with the Resolution.
b) Delivery of a legal opinion addressed to the 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) 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.
e) 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.
Section 8. Events Permitting the Authority to Terminate. The Authority
may terminate its obligation to purchase the Note at any time before the Closing if any of the
following occurs:
a) Any legislative, executive or regulatory action including the introduction
of legislation) or any court decision which, in the judgment of the Authority, casts sufficient
doubt on the legality of obligations such as the Note, and the tax-exempt status of interest on
obligations such as the Bonds, so as to impair materially the marketability or to reduce materially
the market price of such obligations;
b) Any action by the Securities and Exchange Commission or a court which
would require registration of the Note, the Bonds or any instrument securing the Note or Bonds
under the Securities Act of 1933, as amended, in connection with the public offering thereof, or
qualification of the Resolution or the Indenture under the Trust Indenture Act of 1939, as
amended;
OHS WEST:261117558.1 4
BIB]
40732-U01
REVISED-U02
COMPLETED-U02
BOARD-U02
ORDER-U02
LI21329-U03
FO96183-U03
FO96184-U03
FO99828-U03
MG99866-U03
AS99892-U03
AS99896-U03
AI102904-U03
DO103551-U03
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16658-U05
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AGENCY-U07
RESOLUTION-U07
APPROVE-U07
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BORROWING-U07
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FUNDS-U07
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YEAR-U07
2011-12;-U07
111-AUDITOR-U08
PAPURELLO-U09
MARIA-U09
PAPURELLOM-U10
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ISSUANCE-U012
SALE-U012
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TAX-U012
REVENUE-U012
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MAXIMUM-U012
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EXCEED-U012
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MILLION,-U012
THROUGH-U012
PARTICIPATION-U012
IN-U012
THE-U012
CALIFORNIA-U012
COMMUNITIES-U012
CASH-U012
FLOW-U012
FINANCING-U012
PROGRAM;-U012
B.-U012
AUTHORIZE-U012
THE-U012
COUNTY-U012
DEBT-U012
MANAGER-U012
TO-U012
EXECUTE-U012
THE-U012
REQUIRED-U012
DOCUMENTS.-U012
REVISED COMPLETED BOARD ORDER7 �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.
Section 9. Indemnification. 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
regarding the Local Agency that is untrue or incorrect in any material respect or the omission or
alleged omission therefrom of any statement or information regarding 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. Notices. Any notices to be given to the Underwriter under the
Purchase Agreement shall be given in writing to Citigroup Global Markets Inc., Public Finance,
444 S. Flower Street, 27th Floor, Los Angeles, California 90071, Attention: Catherine W.
Bando. 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.
Section 12. No 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 termination of the Purchase Agreement.
OHS WEST:261117558.1 5
BIB]
40732-U01
REVISED-U02
COMPLETED-U02
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LI21329-U03
FO96183-U03
FO96184-U03
FO99828-U03
MG99866-U03
AS99892-U03
AS99896-U03
AI102904-U03
DO103551-U03
C11-U03
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HANCOCKD-U04
16658-U05
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RESOLUTION-U07
APPROVE-U07
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BORROWING-U07
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FUNDS-U07
FISCAL-U07
YEAR-U07
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PAPURELLO-U09
MARIA-U09
PAPURELLOM-U10
6/6/2011-U011
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ISSUANCE-U012
SALE-U012
OF-U012
TAX-U012
REVENUE-U012
ANTICIPATION-U012
NOTE-U012
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AT-U012
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MAXIMUM-U012
LEGAL-U012
AMOUNT,-U012
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EXCEED-U012
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MILLION,-U012
THROUGH-U012
PARTICIPATION-U012
IN-U012
THE-U012
CALIFORNIA-U012
COMMUNITIES-U012
CASH-U012
FLOW-U012
FINANCING-U012
PROGRAM;-U012
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AUTHORIZE-U012
THE-U012
COUNTY-U012
DEBT-U012
MANAGER-U012
TO-U012
EXECUTE-U012
THE-U012
REQUIRED-U012
DOCUMENTS.-U012
REVISED COMPLETED BOARD ORDER7 �Section 13. Applicable Law. The Purchase Agreement shall be interpreted,
governed and enforced in accordance with the laws of the State of California.
Section 14. Effectiveness. The Purchase Agreement shall become effective
upon the execution hereof by the Authority and execution of the Pricing Confirmation by the
Local Agency, and the Purchase Agreement, including the Pricing Confirmation, shall be valid,
binding and enforceable from and after the time of such effectiveness.
Section 15. Severability. In the event any provision of the Purchase
Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
Section 16. Headings. Any headings preceding the text of several sections
hereof shall be solely for convenience of reference and shall not constitute a part of this
Agreement, nor shall they affect its meaning, construction or effect.
OHS WEST:261117558.1 6
BIB]
40732-U01
REVISED-U02
COMPLETED-U02
BOARD-U02
ORDER-U02
LI21329-U03
FO96183-U03
FO96184-U03
FO99828-U03
MG99866-U03
AS99892-U03
AS99896-U03
AI102904-U03
DO103551-U03
C11-U03
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ORDERS-U03
6/28/2011-U04
HANCOCKD-U04
16658-U05
7-U06
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AGENCY-U07
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APPROVE-U07
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BORROWING-U07
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FISCAL-U07
YEAR-U07
2011-12;-U07
111-AUDITOR-U08
PAPURELLO-U09
MARIA-U09
PAPURELLOM-U10
6/6/2011-U011
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ISSUANCE-U012
SALE-U012
OF-U012
TAX-U012
REVENUE-U012
ANTICIPATION-U012
NOTE-U012
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THE-U012
MAXIMUM-U012
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EXCEED-U012
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MILLION,-U012
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FLOW-U012
FINANCING-U012
PROGRAM;-U012
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DEBT-U012
MANAGER-U012
TO-U012
EXECUTE-U012
THE-U012
REQUIRED-U012
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REVISED COMPLETED BOARD ORDER7 �Section 17. Execution in Counterparts. This Purchase Agreement may be
executed and entered into in several counterparts, each of which shall be deemed an original, and
all of which shall constitute but one and the same instrument.
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
By:
Authorized Signatory
OHS WEST:261117558.1
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EXECUTE-U012
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DOCUMENTS.-U012
REVISED COMPLETED BOARD ORDER7 �EXHIBIT A
Pricing Confirmation Supplement
Local Agency)
Pricing Information
Principal Amount of Note:
Interest Rate on Note:
Re-Offering Yield:
Purchase Price
Default Rate:
Purchase Price:
Less: Cost of Issuance:
Credit Enhancement: %
Deposit to Note Proceeds Account:
Important Dates
Resolution Date of 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
OHS WEST:261117558.1 A-1
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REVISED COMPLETED BOARD ORDER7 �* 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 2011 calendar year, including the Note, all other notes and bonds, and all
tax-exempt leases, executed or delivered during the 2011 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.
LOCAL AGENCY]
By:
Authorized Representative
Print Name of Person Signing
* Please initial the box only if applicable to the Local Agency
OHS WEST:261 1 1 7558.1 A-2
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SIGNED BOARD REPORT"�|E��MONTEREY COUNTY BOARD OF SUPERVISORS
MEETING: June 14, 2011
AGENDA NO:
SUBJECT: a. Approve the local agency resolution and approve the borrowing of funds for fiscal
year 2011-12; the issuance and sale of Tax and Revenue Anticipation Note therefore, at the
maximum legal amount, but not to exceed $60 million, through participation in the California
Communities Cash Flow Financing Program and
b. Authorize the County Debt Manager to execute the required documents.
DEPARTMENT: Auditor-Controller
RECOMMENDATION:
a. Approve the local agency resolution and approve the borrowing of funds for fiscal year
2011-12; the issuance and sale of Tax and Revenue Anticipation Note therefore, at the
maximum legal amount, but not to exceed $60 million, through participation in the
California Communities Cash Flow Financing Program, and
b. Authorize the County Debt Manager to execute the required documents.
SUMMARY:
The County of Monterey requires short term financing to provide cash flows to fund operating
expenditures due to delayed State funding, delay in property tax receipts, and a dramatic increase
in property tax delinquencies precipitated by the slowing economy and the current housing
market difficulties. During previous years, it has been determined that the California State
Communities Development Authority CSCDA") Cash Flow Financing program has provided
the lowest cost method of providing cash flow borrowing.
DISCUSSION:
The County of Monterey is a member of the CSCDA, a joint powers authority sponsored by the
California State Association of Counties and the League of California Cities, formed to provide
local governments and private entities access to low-cost, tax-exempt financing for projects that
provide a tangible public benefit, contribute to social and economic growth, and improve the
overall quality of life in local communities throughout California. An application for
participation has been submitted on behalf of Monterey County by the debt manager for
participation in the 2011-12 TRAN program. The resolution format is supplied by CSCDA. The
resolution authorized various financing documentation, including a purchase agreement and a
trust agreement which is on file in the Auditor-Controller's office. The resolution authorizes the
Auditor-Controller, County Debt Manager, and CAO to sign financing documentation in
connection with the issuance of the TRANs. The resolution also appoints the law firm of Orrick,
Herrington, and Sutcliffe as bond counsel to the County of Monterey.
Prior to this year, due to limitations on the old accounting system and payroll priorities
associated with the implementation of the countywide Enterprise Resource Project, the County
used accrual based trial balances to report cash flow. Those reports did not accurately tie to
actual cash receipts and disbursements. This deficiency was reported to the ratings agencies last
year with the pledge to address proper reporting for the FY11-12 TRAN season. The Auditor-
Controller's office recently completed work with CGI to successfully implement a cash flow
reporting system which accurately accounts for daily cash flows in the general fund.
The exact issuance date will be determined by market forces, but will occur prior to the end of
September when cash balances approach their traditionally lowest levels. Choosing to issue in
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SIGNED BOARD REPORT"�|E��August 2010 resulted in the County receiving a yield of 0.33%. July 1 issuer yields ranged
significantly higher from 0.75% to 1.5%. Diminished investment opportunity and lesser interest
costs predicate the strategy of delaying issuance again this year. By watching market activity,
the County plans to issue in late August or early September when demand for tax exempt paper
is higher and supplies are lower, resulting in lower anticipated net costs for the TRAN.
OTHER AGENCY INVOLVEMENT:
The Budget Committee and the County Administrative Office have been kept apprised of the
potential TRAN issuance.
FINANCING:
Preliminary cash flow analysis indicates Monterey County qualifies for a TRAN of
approximately $50 million. Utilizing a projected coupon rate of 2.0%, the expected yield is
0.5%, resulting in net interest costs of approximately $260,000. The cost of issuance expenses
are estimated at $152,883, bringing the total TRAN cost to approximately $412,833. Investment
of the proceeds will be determined at the time of issuance based on actual cash needs and then
available investment opportunities. Upon issuance of the 10-11 TRAN, proceeds were
immediately needed in the general fund, negating investment earnings. Similar cash pressures
should be prevalent during FY12, therefore minimizing any investment returns. Provided funds
are available prior to being needed to cover cash shortfalls in the general fund, those proceeds
may be placed in the Treasury Pool, another approved pooled investment, or some other
investment vehicle like a guaranteed investment contract. For conservative estimate purposes,
arbitrage calculations will assume an annualized return while invested in approved set aside
investments from January to April of 0.12%.
Michael J. MiIIQPA, CISA
Auditor-Controller
Date: May 24, 2011
Attachments:
Resolution
Purchase Agreement
BIB]
40723-U01
SIGNED-U02
BOARD-U02
REPORT-U02
LI21329-U03
FO96183-U03
FO96184-U03
FO99828-U03
MG99866-U03
AS99892-U03
AS99896-U03
AI102904-U03
DO103552-U03
C10-U03
BOARD-U03
REPORTS-U03
6/28/2011-U04
HANCOCKD-U04
16658-U05
7-U06
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THE-U07
LOCAL-U07
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FUNDS-U07
FISCAL-U07
YEAR-U07
2011-12;-U07
111-AUDITOR-U08
PAPURELLO-U09
MARIA-U09
PAPURELLOM-U10
6/6/2011-U011
THE-U012
ISSUANCE-U012
SALE-U012
OF-U012
TAX-U012
REVENUE-U012
ANTICIPATION-U012
NOTE-U012
THEREFORE,-U012
AT-U012
THE-U012
MAXIMUM-U012
LEGAL-U012
AMOUNT,-U012
TO-U012
EXCEED-U012
$60-U012
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IN-U012
THE-U012
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COUNTY-U012
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