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Resolution 1999-07 . . RESOLUTION NO. 99-7 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY PROVIDING FOR THE ISSUANCE OF CITY OF GILROY LIMITED OBLIGATION REFUNDING BONDS OF THE NORTH FOREST STREET REASSESSMENT DISTRICT; PRESCRIBING THE FORM OF SAID BONDS AND CERTAIN TERMS AND PROVISIONS THEREFOR; AUTHORIZING THE EXECUTION OF SAID BONDS; PROVIDING FOR THE COLLECTION OF REASSESSMENTS TO PAY THE PRINCIPAL OF AND INTEREST ON SAID BONDS; APPROVING THE SALE OF SAID BONDS TO THE CITY OF GILROY PUBLIC FACILITIES FINANCING AUTHORITY (WHICH ESTABLISHES THE MATURITIES OF AND INTEREST RATES ON SAID BONDS); AND APPROVING FORM AND SUBSTANCE OF PRELIMINARY OFFICIAL STATEMENT AND EXECUTION OF FINAL OFFICIAL STATEMENT TO BE DERIVED THEREFROM (North Forest Street Reassessment District) WHEREAS, the City Council of the City of Gilroy (the "City"), by proceedings duly had and taken, duly provided for the issuance of the City of Gilroy Limited Obligation Improvement Bonds (the "Original Bonds") of the City's North Forest Street Assessment District (the "Prior Assessment District"), under and pursuant to the conditions and terms of the Improvement Bond Act of 1915, being Division 10 of the California Streets and Highways Code (the "1915 Act"), the unmatured portion of which is now outstanding; and WHEREAS, this City Council has determined to establish a reassessment district to be known as the "North Forest Street Reassessment District" (the "Reassessment District") and to issue Limited Obligation Refunding Bonds (the "Local Obligations") upon the security of the unpaid reassessments levied in the Reassessment District for the purpose of refunding the unmatured portion of the Original Bonds now outstanding, said reassessment proceedings to be conducted and said Local Obligations to be issued under and pursuant to the conditions and terms of the Refunding Act of 1984 for 1915 Improvement Act Bonds, being Division 11.5 of DOCSSFl :320830.1 40964-2-554-12/29/982:04 PM . . the California Streets and Highways Code (the "1984 Act"), and to provide for the levy and collection of annual installments on account of unpaid reassessments as security for the Local Obligations; and WHEREAS, the City has determined pursuant to Section 6588(v) of the Government Code to sell the Local Obligations to the Gilroy Public Facilities Financing Authority (the "Authority") pursuant to a Local Obligation Purchase Contract, dated as of the January 1, 1999 (the "Local Obligation Purchase Contract") by and between the City and the Authority, the form of which Local Obligation Purchase Contract has been filed with the City Clerk for presentation to this City Council, and hereby finds and determines that such sale will result in significant public benefits including demonstrable savings in effective interest rate, bond preparation, bond underwriting discount, original issue disconnt or bond issuance costs and more efficient delivery oflocal agency services to residential and commercial development; and WHEREAS, the Authority intends to issue its 1999 Authority Refunding Revenue Bonds (the "Revenue Bonds") pursuant to an Indenture of Trust, each dated as of January 1, 1999 (the "Indenture"), by and between the Authority and Union Bank of California, N.A. (the "Trustee") for the purpose, among other purposes, of acquiring the Local Obligations; and WHEREAS, there has been presented to this City Council a form of Preliminary Official Statement, describing certain information about the Reassessment District, the Local Obligations, and the Revenue Bonds, and this City Council wishes to approve the form and substance of the Preliminary Official Statement and to authorize the preparation and execution of a final Official Statement to be derived therefrom and to authorize the distribution of the same in connection with the offering of the Revenue Bonds to the public by Redwood Securities Group, Inc., the original purchaser thereof (the "Underwriter"); 1l0CSS~'1 m0830.1 40964-2-SS4-12/29/981 :03 PM 2 . . NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy, as follows: S ecti on 1. The foregoing recitals are true and correct, and this City Council so finds and determines. Section 2. This City Council has reviewed all proceedings heretofore taken relative to the foregoing and has found, as a result of such review, and does hereby find and determine that all acts, conditions and things required by law to exist, to happen and to be performed precedent to and in the issuance of the Local Obligations under the 1984 Act as hereinafter authorized and provided do exist, have happened and have been performed in due time, form and manner as required by the 1984 Act and all other applicable laws, and the City is now authorized pursuant to each and every requirement of law to issue the Local Obligations in the manner and form as provided in this resolution. Section 3. The Local Obligations shall be issued upon and shall represent and shall be secured by said reassessments in accordance with the provisions of the 1984 Act to provide means for refunding the Original Bonds, including payment of all costs of issuing the Local Obligations and the Revenue Bonds. The Local Obligations shall be issued as hereinafter set forth and shall be known as the "City of Gilroy North Forest Street Reassessment District, Limited Obligation Refunding Bonds." The Local Obligations shall be issued as fully registered bonds, shall be of the denomination of$5,000 or any integral multiple of$5,000 (except possibly for the first numbered Local Obligation, which shall be an odd amount if the aggregate principal amount is not evenly divided by $5,000), as determined by the registered owners thereof (not exceeding the principal amount of Local Obligations maturing at anyone time), shall be dated their date of delivery, presently expected to be during the month of January, 1999, and shall DOCSS.'I :320830.1 40964-2-SS4-12/29198 1 :03 PM 3 . . mature and bear interest as hereinafter provided in Exhibit A to the Local Obligation Purchase Contract, as more fully specified in Section 14 ofthis resolution. The Local Obligations shall bear interest from the interest payment date next preceding the date of authentication and registration thereof, unless such date of authentication and registration is on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event they shall bear interest from such interest payment date, or unless such date of authentication and registration is on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event they shall bear interest from their dated date. Such interest shall be payable on September 2, 1999, and thereafter semiannually on March 2 and September 2 of each year until and at the respective maturity dates of the Local Obligations. The interest on and principal of and redemption premiums, if any, on the Local Obligations shall be payable in lawful money of the United States of America at the office of the Finance Director of the City (the "Paying Agent") at 7351 Rosanna Street, Gilroy, California. Payment of the interest on the Local Obligations due on or before the maturity or prior redemption thereof shall be made by check mailed to the registered owners of the Local Obligations at their addresses as they appear at the close of business as of the fifteenth (15th) day of the month prior to each such interest payment date on the registration books maintained by the Paying Agent, and payment of the principal of and redemption premiums, if any, on the Local Obligations shall be made only upon surrender thereof by the registered owners thereof on their maturity dates or on redemption prior to maturity to the Paying Agent; provided that, for the period during which the Trustee, as assignee of the Authority, is the registered owner of the Local Obligations, payment of the principal of and the interest and redemption premiums, if any, DOCSSt"U208J0.1 40964-2-SS4-12/29/98 I :03 PM 4 . . on the Local Obligations will be paid on each March 2 and September 2 payment date by wire transfer to the Trustee or such other party as is specified in writing by the Authority to the Paying Agent. Any Local Obligation may be redeemed in whole or in part in integral multiples of $5,000 of the Local Obligations on the second day of March or September in any year, at the option of the City, upon payment of the principal amount thereof and interest accrued thereon to the date of redemption, together with a redemption premium equal to three percent (3%) of the principal amount redeemed. The City shall proceed pursuant to Part 11.1 of the 1915 Act in determining those Local Obligations or portions thereof to be redeemed and the manner of the redemption thereof, and notice of advance redemption of any Local Obligation shall be given by the City as provided in the 1915 Act. This City Council declares and determines that it does not and will not obligate itself to advance funds from the City treasury to cure any deficiency which may occur at any time in the Redemption Fund created pursuant to Section 10 of this resolution. Section 4. (a) The Local Obligations shall be initially issued and registered in the name of the Trustee, as assignee of the Authority, and shall be executed and delivered in such denominations and numbered in such manner as determined by the Authority and registered in the names of such persons as are requested in such written request of the Authority, subject to the limitations of Section 3 of this resolution; and thereafter, such Local Obligations shall be transferred pursuant to Section 7 of this resolution. (b) The City and the Paying Agent shall be entitled to treat the person in whose name any such Local Obligation is registered as the owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by the Paying Agent or DOCSSFl :320830.1 40964-2-SS4-12I29/98 1 :03 PM 5 . . the City; and the City and the Paying Agent shall have no responsibility for transmitting payments to, commnnication with, notifYing, or otherwise dealing with any persons other than the registered owners of such Local Obligations; and neither the City nor the Paying Agent shall have any responsibility or obligation, legal or otherwise, to any other party, except the registered owner of any such Local Obligations. Section 5. The Local Obligations shall be in substantially the following form, the blanks in said form to be filled in with appropriate words or figures, namely: 1l0CS5F1 :320830.1 40964-2-554-12/29/981 :03 PM 6 . . [FORM OF BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA SANTA CLARA COUNTY REGISTERED REGISTERED NUMBER $ CITY OF GILROY LIMITED OBLIGATION REFUNDING BOND NORTH FOREST STREET REASSESSMENT DISTRICT INTEREST RATE MA TURlTY DATE BOND DATE % September 2, _ January _, 1999 REGISTERED OWNER: UNION BANK OF CALIFORNIA, N.A., AS ASSIGNEE OF THE GILROY PUBLIC FACILITIES FINANCING AUTHORITY PRINCIPAL AMOUNT: DOLLARS Under and by virtue of the "Refunding Act of 1984 for 1915 Improvement Act Bonds," being Division 11.5 of the California Streets and Highways Code (the "Act"), the City of Gilroy in the State of California (the "City") will, out of the Redemption Fund hereinafter referred to, pay to the registered owner set forth above on the maturity date set forth above (subject to the right of prior redemption hereinafter reserved) the principal amount set forth above in lawful money of the United States of America, and in like manner will pay interest from the interest payment date next preceding the date on which this bond is authenticated and registered (unless this bond is authenticated and registered on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated and registered on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event it shall bear interest from the Bond Date set forth above) until payment of such principal sum shall have been discharged, at the interest rate per annum set forth above, payable semiannually on March 2 and September 2 in each year, commencing on September 2,1999. Both the principal hereof and redemption premium hereon are payable at the office of the Finance Director of the City (the "Paying Agent") at 7351 Rosanna Street, Gilroy, California, and the interest hereon is payable by check mailed to the owner hereof at the owner's address as it appears on the registration books of the Paying Agent, or at such address as may have been filed in writing with the Paying Agent for that purpose, at the close of business as of DOCSSFl :320830.1 40964-2-SS4-12129/98 1 :03 PM 7 . . the fifteenth (15th) day of the month next preceding each interest payment date; provided that, for the period during which Union Bank of California, N.A., as assignee of the Gilroy Public Facilities Financing Authority, is the registered owner of this Bond, payment of the principal of and the interest and redemption premium, if any, on this Bond will be made by wire transfer on each March 2 and September 2 payment date to such party as shall be specified in writing by the Authority to the Paying Agent. This bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City under the Act and the resolution providing for its issuance (the "Resolution") for the purpose of providing funds for refunding assessment bonds originally issued to pay for the improvements described in said proceedings, and is secured by the moneys in the Redemption Fund provided in the Resolution and by the unpaid portion of reassessments levied for the payment hereof, and, including principal and interest, is payable exclusively out of said fund. The City Council has declared and determined that it does not and will not obligate itself to advance funds from the City treasury to cure any deficiency which may occur at any time in said Redemption Fund. This bond will continue to bear interest after maturity at the rate above stated; provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said Redemption Fund with which to pay the same. If it is not presented at maturity, interest thereon will run until maturity. This bond, or any portion of it in the amount of five thousand dollars ($5,000) or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least thirty (30) days' notice by registered or certified mail to the registered owner hereof at the owner's address as it appears on the registration books of the Paying Agent by paying principal and accrued interest together with a redemption premium equal to three percent of the principal amount of bonds redeemed. This bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of the Paying Agent, subject to the terms and conditions provided in the Resolution, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer, a new registered bond or bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust. Neither the City nor the Paying Agent shall be required to make such exchange or registration of transfer of bonds during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such payment date, both inclusive. 1J0CSSFl :320830.1 40964-2-SS4-t2/29/98 1:03 PM 8 . . The City and the Paying Agent may treat the registered owner hereof as the absolute owner for all purposes, and the City and the Paying Agent shall not be affected by any notice to the contrary. This bond shall not be entitled to any benefit under the Act or the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Finance Director. IN WITNESS WHEREOF, the City Council of City of Gilroy has caused this bond to be signed manually or in facsimile by the Finance Director of the City and by the City Clerk, and has caused its corporate seal to be impressed hereon manually or in facsimile, all as of the Bond Date set forth above. CITY OF GILROY Finance Director [SEAL] City Clerk IJOCSSFl :320830.1 40964-2-554-12/29/98 ] :03 PM 9 . . [Form of and Certificate of Authentication and Registration] CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the bonds described in the within-mentioned Resolution which has been authenticated and registered on January _,1999. FINANCE DIRECTOR, CITY OF GILORY, as Paying Agent [Form of Assignment] ASSIGNMENT and do(es) hereby irrevocably constitute and appoint to transfer the same on the register of the Finance Director, substitution in the premises. . For value received the undersigned doe es) hereby sell, assign and transfer unto the within Bond attorney as Registrar, with full power of Date: SIGNATURE GUARANTEED: NOTE: The signature(s) must be guaranteed by an eligible guarantor institution. The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Social Security Number, Taxpayer Identification Number or other Identifying Number of Assignee: 1l0CSSFl m0830.1 40964-2-SS4-12/29/981 :03 PM 10 llOCSSFU20830.1 40964-2-SS4-12I29/981 :03 PM 11 . . Section 6. The Finance Director of the City (the "Finance Director") and the City Clerk are hereby authorized and directed, respectively, as such officers to execute each of the Local Obligations on behalf of the City, either manually or in facsimile, and the City Clerk is hereby authorized and directed to affix the official seal of the City thereto either manually or in facsimile; and such signing and sealing as herein provided shall be a sufficient and binding execution of the Local Obligations by the City. In case either of such officers whose signature appears on the Local Obligations shall cease to be such officer before the delivery of the Local Obligations to the purchaser, such signature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until the delivery of the Local Obligations. Only such of the Local Obligations as shall bear thereon a certificate ofregistration and authentication in the forrn hereinabove set forth, executed and dated by the Paying Agent, shall be entitled to any benefits hereunder or be valid or obligatory for any purpose, and such certificate shall be conclusive evidence that the Local Obligations so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefits hereof. Section 7. The Paying Agent shall pay interest on the Local Obligations due on or before the maturity or prior redemption thereof to the registered owners thereof as their names appear at the close of business as of the fifteenth (15th) day of the month next preceding each interest payment date on the registration books required to be kept by the Paying Agent pursuant to this section as the registered owners thereof, such interest to be paid by check mailed to such registered owners at their addresses appearing on such books or at such other addresses as they may have filed in writing with the Paying Agent for that purpose, and to pay to such registered owners the principal of and redemption premiums, if any, on the Local Obligations upon presentation and surrender of the Local Obligations to the Paying Agent at maturity or on . . redemption pnor to maturity; provided that, for the period during which Union Bank of California, N.A., as assignee of the Gilroy Public Facilities Financing Authority, is the registered owner of any Local Obligation, the principal of and the interest and redemption premium, if any, on said Local Obligation shall be paid by wire transfer on the Business Day prior to each March 2 and September 2 payment date to the Trustee or such other party as is specified in writing by the Authority to the Paying Agent. The Paying Agent will keep at his or her office at the City's offices in Gilroy, California, sufficient books for the registration, transfer and exchange of the Local Obligations, and upon presentation for such purpose the Paying Agent shall, under such reasonable regulations as he may prescribe, register or transfer or exchange Local Obligations on such books as hereinafter provided. Any Local Obligation may be transferred or exchanged on such books by the registered owner thereof, in person or by his duly authorized attorney, upon payment by the person requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of such Local Obligation for cancellation accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Paying Agent. Whenever any Local Obligation or Local Obligations shall be surrendered for transfer or exchange, the City shall execute and the Paying Agent shall authenticate and deliver a new Local Obligation or Local Obligations of authorized denominations and of the same maturity date aggregating the principal amount of the Local Obligation or Local Obligations so surrendered. The City and the Paying Agent may deem and treat the registered owner of any Local Obligation as the absolute owner of such Local Obligation for the purpose of receiving payment thereof and for all other purposes, whether such DOCSSFl m0830.1 40964~2~SS4- t 2/29/98 I :03 r:Vl 12 . . Local Obligation shall be overdue or not, and neither the City nor the Paying Agent shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such Local Obligation shall be made only to such registered owner as above provided, which payment shall be valid and effectual to satisfy and discharge liability on such Local Obligation to the extent of the sum or sums so paid. Section 8. The reassessments levied on the respective parcels III the Reassessment District, together with interest thereon computed at the rate specified in the Local Obligations (which interest shall begin to run from the date of the Local Obligations), shall, in accordance with and consistent with the 1984 Act, remain and constitute a trust fund for the redemption and payment of the principal of the Local Obligations and for the interest due thereon, and said reassessments and each installment thereof and the interest and penalties thereon shall constitute a lien against the lots and parcels of land on which they are made until the same be paid. The Finance Director of the City shall furnish or cause to be furnished to the County Auditor of Santa Clara County (the "Auditor") and, as prescribed by the 1984 Act, the Auditor shall keep records in his office showing, the several installments of principal and interest on said reassessments which are to be collected in each year during the term of the Local Obligations; and an annual installment of said reassessments shall be payable and shall be collected in each year corresponding in amount to the amount of Local Obligations unpaid and to accrue that year, which amount shall be sufficient to pay the Local Obligations as the same become due, and an annual installment of interest on said reassessments shall be payable and shall be collected in each year corresponding in amount to the amount of interest which will accrue on the Local Obligations outstanding for such year, which amount shall be sufficient to pay the interest thereon that shall become due in the next succeeding March and September. The DOCSSFl :320830.1 40964-2-SS4-12/29198 1 :03 PM 13 . . annual proportion of said reassessments coming due in any year, together with the annual interest on such reassessments, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property in the City are payable, and said reassessment installments and said annual interest on said reassessments shall be payable and become delinquent on the same dates and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general taxes on real property in the City. Section 9. This City Council hereby covenants for the benefit of (1) the registered owners of the Local Obligations and (2) the registered owners of the Revenue Bonds of the Authority that, not later than October 1 of each year while any of the Local Obligations remaining outstanding, it will order and cause to be commenced and thereafter diligently prosecute judicial foreclosure proceedings to foreclose the lien of any single nnpaid assessment then delinquent in an amount exceeding $10,000 (including principal, interest, late charges and monthly penalties) and to foreclose the lien of all delinquent reassessments whenever the aggregate amount of delinquent installments is greater than five percent (5%) of the total installments billed on the preceding year's tax roll. The City Council hereby further covenants with the registered owners of the Local Obligations and the registered owners of the Revenue Bonds that it will monitor or cause to be monitored the records ofthe Auditor-Controller of Santa Clara County for the purpose of ascertaining the occurrence of any delinquency. Section 10. There is hereby created and established a fund to be known as the "North Forest Street Reassessment District Redemotion Fund," which fund shall be kept by the Finance Director and shall constitute a trust fund for the benefit ofthe registered owners of the Local Obligations, and all sums received by the City which are received from the collection of said reassessments (except for those amounts allocable to administrative expenses), and ofthe interest and penalties thereon, and including amounts paid to the City on account of any prior IJOCSSFI :320830.1 40964-2-554-12/29/98 1 :03 PM 14 . . pay-off and discharge of a reassessment lien (whether in whole or in part), shall upon receipt be deposited in said fund. At the time of the issuance of the Local Obligations, the City shall deposit in the Redemption Fund from the proceeds of sale of the Local Obligations the amount representing the capitalized interest, if any, and the accrued interest, if any, received on the delivery ofthe Local Obligations. All sums to become due for the principal of and the interest on the Local Obligations shall be withdrawn by the Finance Director from said fund for transfer to the Paying Agent for use for the payment ofthe principal of and the interest on the Local Obligations, and the Local Obligations and the interest thereon shall not be paid out of any other funds. Any surplus remaining in said fund after payment of all Local Obligations and the interest thereon shall be applied as directed by the City. Section 11. There is hereby created and established a fund to be known as the "North Forest Street Reassessment District Expense Fund," which fund shall be kept by the Finance Director. After making the deposits in the Redemption Fund as required by Section 10, and after making the payment or payments prescribed by Section 12 of the amounts required for redemption of the remaining outstanding Original Bonds on March 2, 1999, all remaining proceeds of the sale of the Local Obligations, if any, shall be deposited in the Expense Fund and shall be kept separate and distinct from all other City funds. All moneys collected by the City as administrative costs pertaining to administration of the reassessments and the Local Obligations shall also be deposited in the Expense Fund. All money in the Expense Fund shall be disbursed on such dates and in such amounts as are necessary to pay all costs of administering the reassessments and the Local Obligations (as provided under the 1984 Act), including all expenses incident to administering installments and prepayments collected on account of the unpaid reassessments, apportioning the reassessments if necessary in the event of division of any reassessment parcel, and all expenses incident to the calling, retiring or paying of the Local DOCSSFI :320830.1 40964<ZMSS4-12/29/98 1 :03 PM 15 . . Obligations, and including, but not limited to, fees of bond counsel, underwriters, trustees, certified public accountants and rating agencies, arbitrage and rebate service providers, continuing disclosure service providers, administrative expenses of the City and the charges of the Finance Director in connection with the Local Obligations and the Revenue Bonds. Section 12. Upon delivery of the Local Obligations to the Authority, and in lieu of payment by the Authority to the City of that portion of the purchase price of the Local Obligations required for purposes of redemption of the Original Bonds on March 2, 1999, as the amount of said portion is specified in the Indenture pertaining to the Authority's 1999 Refunding Revenue Bonds, the City will provide the Authority with written instructions at the time of such delivery providing for payment of the specified amount to the Paying Agent for the Original Bonds (or to the Escrow Agent in the event a Refunding Escrow Agreement is utilized to accomplish such redemption). Section 13. The City will not take or omit to take any action that would cause the interest on the Local Obligations to be included in gross income for federal income tax purposes. Without limiting the generality ofthe foregoing: (a) The City will not directly or indirectly use or allow the use of more than 10% of the proceeds of the Local Obligations in the trade or business of any nongovernmental persons, and the City will not allow any actions to be taken that would result in the Local Obligations being treated as federally guaranteed pursuant to Section l49(b) of the Internal Revenue Code of 1986, as amended (the "Code"); and (b) The City will not directly or indirectly use or allow the use of the proceeds of the Local Obligations in a manner that would cause the Local Obligations to be arbitrage bonds described in Section 148 of the Code, and in particular, the City will not invest or allow the DOCSSFl:320830.1 40964-2-SS4-12I29/98 1 :03 PM 16 . . investment of proceeds of the Local Obligations in investments with a yield materially higher than the yield on the Local Obligations except as described in the Tax Certificate executed in connection with the issuance of the Local Obligations. In addition, the City will pay from time to time all amounts, if any, required to be rebated to the United States Government pursuant to Section l48(f) of the Code. If the City fails to expend all proceeds of the Local Obligations within six (6) months of the date of issue thereof, or establishes any funds pledged to the payment of the Local Obligations other than as currently provided herein, the City shall contact nationally recognized bond counsel for advice relative to compliance with the rebate requirements of Section 148 of the Code. Section 14. The form and substance of the Local Obligation Purchase Contract on file with the City Clerk and presented to this City Council is hereby approved. The Local Obligation Purchase Contract makes reference to Exhibit A to be attached thereto to set forth and establish, among other things, the Bond Date, the maturity schedule and the interest rates for the Local Obligations. This City Council hereby authorizes the Finance Director to approve Exhibit A after the date of this resolution, provided that as established by said Exhibit A, the Local Obligations shall (a) be structured so as to assure compliance with the requirement of the 1984 Act that annual debt service on the Local Obligations shall be less than the annual debt service for the corresponding year on the remaining outstanding Original Bonds, (b) have a final maturity not later than the final maturity on the remaining outstanding Original Bonds, and (c) be issued in an aggregate principal amount less than the aggregate principal amount of the remaining outstanding Original Bonds. Following attachment of the approved Exhibit A, and subject to such modification and revisions to the body thereof not inconsistent with the essential terms thereof, which Docssn :320830.1 40964-2-SS4-12/29198 1 :03 PM 17 . . modifications shall be approved by the Finance Director (such approval to be conclusively established by execution thereof by the Finance Director), and concurrently with execution thereof by the authorized representative of the Authority, the Finance Director is authorized to execute the Local Obligation Purchase Contract on behalf of the City. Section 15. The form and substance of the Preliminary Official Statement describing the Authority's 1999 Refunding Revenue Bonds and the Local Obligations is hereby approved. The facts contained therein, as of this date, are true and correct in all material respects, and said Preliminary Official Statement neither contains any untrue statement of a material fact nor omits to state any material fact necessary to make any statement therein not misleading in light of the circumstances under which it was made. The Finance Director is authorized to execute a certificate as to finality of the Preliminary Official Statement and to execute the final Official Statement to be derived therefrom. This City Council hereby finds and determines that said Preliminary Official Statement is and shall be deemed "nearly final" for purposes of Rule l5c(2)-12 of the Securities and Exchange Commission, and the Finance Director is hereby authorized to execute a certificate to such effect in the customary form upon request of the Underwriter. The Finance Director is authorized to approve corrections and additions to the Preliminary Official Statement by supplement or amendment thereto, by appropriate insertions, or otherwise as appropriate, provided that such corrections or additions shall be regarded by the Finance Director as necessary to cause the information contained therein to conform to facts material to the Local Obligations or the Revenue Bonds or to the proceedings of this City Councilor the Authority Board or that such corrections or additions are in form rather than in substance. 1l0CSSFl :320830.1 . 40964-2-SS4-12/29/98 I :03 PM 18 DOCSSI'I :320830.1 40964-2-SS4~J2/29/981:03 PM 19 . . Section 16. The form and substance of the Indenture, in the form of such Indenture on file with the City Clerk, is hereby approved. Section 17. The City Clerk is directed to cause the Local Obligations to be typewritten, lithographed, printed or engraved, and to cause the blank spaces thereof to be filled in to comply with the provisions hereof and the terms and conditions of the Local Obligation Purchase Contract (including Exhibit A thereto), and to procure their execution either manually or in facsimile by the proper officers, and thereafter to deliver them, when so executed, to the Paying Agent, who shall authenticate them, and thereafter to deliver them to the purchaser thereof on receipt by the City of the purchase price thereof (subject to portions of the purchase price being paid directly to other parties in accordance with Section 12 hereof). The Finance Director and the City Clerk are further authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a signature certificate in the form customarily required by purchasers of municipal bonds, certifying to the genuineness and due execution of the Local Obligations. The Finance Director and the City Clerk are authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a no-litigation certificate in the form customarily required by purchasers of municipal bonds, certifying to all facts within their knowledge relative to any litigation which mayor might affect the City or said officers or the Local Obligations. The Finance Director is further authorized and directed to make, execute and deliver to the purchaser of the Local Obligations a receipt in the form customarily required by purchasers of municipal bonds, evidencing the payment of the purchase price of the Local Obligations, which receipt shall be conclusive evidence that said purchase price has been paid and has been received by the City (in part) and the party or parties specified pursuant to Section 12 (in part). Any purchaser or subsequent taker or holder of the Local Obligations is hereby . . authorized to rely upon and shall be justified in relying upon such signature certificate, such no- litigation certificate and such receipt with respect to the Local Obligations executed, sold and delivered pursuant to the authority of this resolution. Additionally, the officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents and contracts which they may deem necessary or advisable in order to consummate the sale, execution and delivery of the Local Obligations and otherwise to carry out, give effect to and comply with the terms and intent of this resolution, the Local Obligations, and the Local Obligation Purchase Contract; and any such actions heretofore taken by such officers in connection therewith are hereby ratified, confirmed and approved. Section 18. This City Council hereby covenants for the benefit of the Authority and the holders of the Revenue Bonds, from time to time, to establish and to implement a program of continuing disclosure in compliance with the requirements of Rule 15c(2)-12 of the Securities and Exchange Commission. Without limiting the generality of the foregoing, the Finance Director is hereby authorized and directed to execute an appropriate continuing disclosure undertaking, in a form and containing such matters as are recommended by Orrick, Herrington & Sutcliffe LLP, the City's bond counsel for this proposed refunding, which such undertaking shall provide for preparation and filing of an annual report containing the matters specified in such undertaking and for issuance and publication of notices of material events, if such material events shall occur, pertaining to the Local Obligations and related matters as prescribed by said Rule 15c(2)-12. This City Council hereby further covenants and agrees that it will comply with and carry out all of the provisions of the continuing disclosure undertaking. The estimated cost and expense of such continuing disclosure services shall be included in the DOCSSFl :320830.1 40964-2-SS4-12129/98 1:03 PM 20 . . annual administrative cost assessment to be added to the annual installments billed on account of unpaid reassessments, as provided in the Reassessment Report. Section 19. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 4th day of January, 1999 by the following vote: AYES: COUNCILMEMBERS: ARELLANO, GIFFORD, MORALES, ROWLISON, SPRINGER, and GILROY NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: SUDOL APPROVED: K. A Mike Gilroy, Mayor ATTEST: ~~-' Rhonda Pellin, City Clerk -21- RESOLUTION NO. 99-7 . . 1, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certifY that the attached Resolution No. 99-7 is an original resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council held on the 4th day of January, 1999, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this 5th day ofJanuary, 1999. ~~ City Clerk of the City of Gilroy (Seal)