HomeMy WebLinkAbout1983-093
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San Bernardino
60,009-40-16
CITY OF SAN BERNARDINO
RESOLUTION NO, 83-93
RESOLUTION OF THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNAR-
DINO, CALIFORNIA, AUTHORIZING THE
ISSUANCE OF SEWER REVENUE REFUNDING
BONDS, ISSUE OF 1983, OF SAID CITY
AND PROVIDING THE TERMS AND CONDI-
TIONS FOR THE ISSUANCE OF SAID
REFUNDING BONDS
DIS310.1(et)
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Recitals
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San Bernardino
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TABLE OF CONTENTS
Page
1
Section 1. Definitions.....................
5
Section 2.
Section 3 .
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Amount, Issuance, Purpose
and Nature of Bonds............. 9
Equality of Bonds, Pledge
of Revenues..................... 10
No General City Liability....... 13
Description of Bonds............ 13
Interest. . . . . . . . . . . . . . . . . . . . . . . . 14
Place of Payment.. .............. 15
Forms of Bonds and Conversion... 15
Execution of Bonds.............. 16
Types of Bonds, Registration
and Exchange.................... 17
Bond Register................... 18
Call and Redemption of Bonds
Prior to Maturity............... 18
Funds and Accounts.............. 23
Disposition of Bond
Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 24
Sewer Fund...................... 26
Maintenance and Operation
Account. . . . . . . . . . . . . . . . . . . . . . . . . 26
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Section 17. Bond Service Fund....... ........ 27
Page
Section 18. Reserve Fund... ................. 28
Section 19. Surplus......................... 29
Section 20. Deposit and Investment of
Moneys in Funds................. 30
Section 21. Covenants...... ................. 32
Covenant l. Punctual Payment. ..
Covenant 2. Discharge Claims. . .
Covenant 3. Accomplish Purpose.
Covenant 4. Operate Enterprise
in Efficient and
Economical Manner. .
Covenant 5. Against Sale...... .
Covenant 6. Insurance......... .
32
32
33
33
33
34
Covenant 7. Records and
Accounts........... 35
Covenant 8. No Free Service.... 37
Covenant 9. Rates and
Charges............ 38
Covenant 10. Compliance with
Conditions
Precedent.......... 39
Covenant 11. Eminent Domain
Proceeds..... ...... 39
Covenant 12. Power to Issue
Bonds and Make
Pledges............ 41
(ii)
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Page
Covenant 13. Further Assurances. 41
Covenant 14. Unconditional
Obligation......... 41
Covenant 15. Agreement and
Performance
Thereof............ 42
Covenant 16. Non-Arbitrage...... 42
Section 22. Issuance of Parity, Refunding
and Additional Bonds............ 42
Section 23. The Fiscal Agent and The Paying
Agents. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 24.
Section 25.
Section 26.
Section 27.
Section 28.
Section 29.
Section 30.
Section 31.
Section 32.
Section 33.
Exhibit A.
Exhibit B.
Lost, Stolen, Destroyed or
Mutilated Bonds................. 47
Cancellation of Bonds........... 48
Events of Default and Remedies.. 48
Supplemental Resolutions........ 51
Consent of Bondholders.......... 53
Execution of Instruments by
Bondholders and Proofs of
Ownership of Bonds.............. 56
Miscellaneous. . . . . . . . . . . . . . . . . . . 58
Future Contracts................ 59
Severability.................... 59
Effective Date.................. 60
Form of Bearer Bond............. 61
Form of Fully Registered Bond... 66
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DIS310.1(et)
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNAR-
DINO, CALIFORNIA, AUTHORIZING THE
ISSUANCE OF SEWER REVENUE REFUNDING
BONDS, ISSUE OF 1983, OF SAID CITY
AND PROVIDING THE TERMS AND CONDI-
TIONS FOR THE ISSUANCE OF SAID
REFUNDING BONDS
WHEREAS, pursuant to Ordinance No. 2170, a
special municipal election was held in the City of San
Bernardino (the "City") on June 11, 1957, for the
purpose of submitting to the qualified voters of said
City the proposition of issuing sewer revenue bonds of
said city in the amount of $4,900,000 pursuant to the
City Charter and the Revenue Bond Law of 1941 (Chapter
6, Part 1, Division 2, Title 5 of the Government Code
of the State of California) for the following purposes,
to wit:
The acquisition, construction and financing
by the City of San Bernardino of additions to and
improvements (other than repairs) of the sewage
collection, treatment and disposal system of said
city, consisting of a new sewage treatment plant,
trunk, interceptor and outfall sewers, a sewer
ventilating system, pumping stations, effluent
reclamation works with pumping stations, pipelines
and spreading grounds, and including the acquisi-
tion of all land, easements, pipe, pumps, machin-
ery, equipment and other property necessary for
any of the foregoing, and including engineering,
inspection and legal fees, costs of the issuance
of the revenue bonds, bond reserve funds and other
costs and expenses incidental to or connected with
such acquisition, construction and financing;
WHEREAS, said proposition was approved by the
votes of more than a majority of all the voters voting
on said proposition at said special election, and this
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City was authorized to issue said bonds as provided in
said Revenue Bond Law of 1941; and
WHEREAS, pursuant to Resolution No. 4708, the
Mayor and Common Council of the City issued $3,000,000
of said authorized amount of Bonds designated, maturing
and being callable and redeemable prior to maturity as
follows:
Designation: SEWER REVENUE BONDS, ELECTION 1957,
SERIES 1.
Date: April 1, 1958.
Maturities and Interest Rate:
Year of
Maturity
April 1 of
Principal
Amount
Interest
Rate
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1988
$ 70,000
50,000
55,000
55,000
60,000
60,000
65,000
70,000
70,000
75,000
75,000
80,000
85,000
90,000
90,000
1,950,000
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
3.4%
Redemption Date and Premiums
April 1, 1983
3/4%
; and
WHEREAS, pursuant to Resolution No. 5532, the
Mayor and Common Council of the City issued $1,000,000
of said authorized amount of Bonds designated, maturing
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and being callable and redeemable prior to maturity as
follow:
Designation: SEWER REVENUE BONDS, ELECTION 1957,
SERIES 2
Date: April 1, 1960
Maturities:
Year of
Maturity
April 1 of
Principal
Amount
Interest
Rate
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1990
$ 15,000
20,000
20,000
25,000
25,000
25,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
660,000
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
Retired
4%
Redemption Dates and Premiums
April 1, 1983
3/4%
i and
WHEREAS, pursuant to Resolution No. 9335, the
Mayor and Common Council of the City issued $900,000 of
said authorized amount of Bonds designated, maturing
and being callable and redeemable prior to maturity as
follows:
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Designation: SEWER REVENUE BONDS, ELECTION 1957,
SERIES 3
Date: October 1, 1968
Maturities and Interest Rate:
Year of
Maturity Principal Interest
April 1 of Amount Rate
1969 $ 40,000 Retired
1970 15,000 Retired
1971 15,000 Retired
1972 15,000 Retired
1973 20,000 Retired
1974 20,000 Retired
1975 20,000 Retired
1976 20,000 Retired
1977 20,000 Retired
1978 20,000 Retired
1979 20,000 Retired
1980 20,000 Retired
1981 20,000 Retired
1982 25,000 Retired
1983 25,000 4.80
1984 25,000 4.90
1985 30,000 4.90
1986 30,000 4.90
1987 30,000 4.90
1988 30,000 5.00
1989 40,000 5.00
1990 40,000 5.00
1991 40,000 5.00
1992 40,000 5.00
1993 40,000 5.10
1994 40,000 5.10
1995 50,000 5.10
1996 50,000 5.10
1997 50,000 5.10
1998 50,000 5.10
Callable Option: The Bonds maturing on or prior to
April 1, 1984, shall not be subject to call or redemp-
tion prior to maturity. The Bonds maturing on or after
April 1, 1985, or any of them, may be called before
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maturity and redeemed, at the option of the City, on
April 1, 1982, or on any interest payment date there-
after prior to maturity, at a redemption price for each
redeemable Bond equal to the principal amount thereof
plus one-fourth of one percent fore each year, or
fraction of a year, from the redemption date to the
maturity date;
WHEREAS, this Mayor and Common Council deems
it necessary to issue and sell at this time a suffi-
cient amount of Sewer Revenue Refunding Bonds to refund
the outstanding portion of said above-described issues
of Bonds (hereinafter sometimes referred to as the
"Refunded Bonds").
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Definitions. As used in this
resolution the following terms shall have the following
meanings, unless the context otherwise requires:
"Bonds" or "said Bonds" means the "City of
San Bernardino, Sewer Revenue Refunding Bonds, Issue of
1983", authorized by this Resolution.
"Bondholder" or "Holder of Bonds" or any
similar term, means any person who shall be (i) the
holder of any Outstanding Bearer Bond, or (ii) the
registered owner or his duly authorized attorney,
trustee, representative or assign of any Outstanding
Fully Registered Bond. For the purpose of Bondholders'
voting rights or consents, Bonds owned by or held for
the account of the City, directly or indirectly, shall
not be counted.
"Charter" or "City Charter" means the City
Charter of the City of San Bernardino.
"City" means the City of San Bernardino,
California.
"City Treasurer" or "Treasurer", "Treasurer
of the City" means the officer who is then performing
functions of Treasurer of the City.
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"Enterprise" means the enterprise defined in
said Ordinance No. 2170 calling said election, as
follows:
"the entire sewer system (including all
buildings, systems, plants, works, facilities
or undertakings used for or useful in the
collection, treatment or disposal of sewage
and the reclamation of effluent therefrom) of
the City of San Bernardino as such system now
exists, together with all improvements and
extensions to said system later constructed
or acquired, including the improvements and
extensions made with funds derived from the
sale of the revenue bonds herein proposed to
be issued."
"Fiscal Agent" means the Fiscal Agent
appointed by the City pursuant to this Resolution, to
wit: Security Pacific National Bank, its successors
and assigns, and any other corporation or association
which may at any time be substituted in its place, as
provided in this Resolution.
"Fiscal Agent for the Refunded Bonds" means
the trustee appointed by the City pursuant to the
Series Resolutions, to wit: Bank of America NT&SA, its
successors and assigns, and any other corporation or
association which may at any time be substituted in its
place, as provided in this Resolution.
"Fiscal Year" means the year period beginning
on July 1st and ending on the next following June 30th.
"Gross Revenues of the Enterprise" means all
charges received for sewer service and all other income
and receipts derived from the operations of the Enter-
prise, including any sewage treatment and effluent
reclamation works, or arising from the Enterprise of
said works, and includes all revenues (as defined in
Section 54315 of the Government Code) received by the
City from the services and facilities of the Enter-
prise.
"Independent Financial Consultant," Indepen-
dent Engineer" or "Independent Certified Public Accoun-
tant" means any individual or firm engaged in the
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profession involved, appointed by the City, and who, or
each of whom, has a favorable reputation in the field
in which his opinion or certificate will be given, and:
(1) is in fact independent and not
under domination of the City; and
(2) does not have any substantial
interest, direct or indirect, with the City; and
(3) is not connected with the City as
an officer or employee of the City, but who may be
regularly retained to make reports to the City.
"Maximum Annual Debt Service" means the
largest of the sums obtained for any Fiscal Year after
the computation is made, by totaling the following
"Annual Debt Service" for each such Fiscal Year.
(1) The principal amount of all serial
Bonds and serial Parity Bonds payable in such
Fiscal Year; and
(2) The amount of Minimum Sinking Fund
Payments for term Parity Bonds to be made in such
Fiscal Year in accordance with the applicable
schedule or schedules of Minimum Sinking Fund
payments*; and
(3) The interest which would be due
during such Fiscal Year on the aggregate principal
amount of Bonds and Parity Bonds which would be
outstanding in such Fiscal Year if the Bonds and
Parity Bonds outstanding on the date of such
computation were to mature or be redeemed in
accordance with the maturity schedule or schedules
for the serial Parity Bonds and the schedule or
schedules or Minimum Sinking Fund Payments for
term Parity Bonds. At the time and for the
purpose of making such computation, the amount of
term Parity Bonds already retired in advance of
* There are no term Bonds in this issue and these
provisions regarding term Parity Bonds and Minimum
Sinking Fund Payments therefor are inserted in
case, at a future time, they may be needed.
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the above-mentioned schedule or schedules shall be
deducted pro rata from the remaining amounts
thereon,
"Mayor and Common Council" means the legisla-
tive body of the City of said City acting under and
pursuant to the City Charter,
"Necessary and Reasonable Maintenance and
Operation Costs of the Enterprise" include the neces-
sary and reasonable maintenance and operation costs of
the Enterprise (which include the reasonable expenses
of billing and collection of service charges, manage-
ment, repair and other expenses necessary to maintain
and preserve the Enterprise in good repair and working
order) .
"Net Revenues of the Enterprise" means the
amount of Gross Revenues of the Enterprise remaining
after payment therefrom of the Necessary and Reasonable
Maintenance and Operation Costs of the Enterprise.
"Opinion of Counsel" means a written opinion
of an attorney or firm of attorneys of favorable
reputation in the field of municipal bond law. Any
opinion of such counsel may be based upon, insofar as
it relates to factual matters, information which is in
the possession of the City as shown by a certificate or
opinion of, or representation by, an officer or offi-
cers of the City, unless such counsel knows, or in the
exercise of reasonable care should have known, that the
certificate or opinion or representation with respect
to the matters upon which his opinion may be based, as
aforesaid, is erroneous.
"Outstanding", as to the Bonds, means that
they are unpaid or that provision for the full payment
and discharge thereof at maturity or upon redemption
thereof prior to maturity through the setting apart in
the Bond Service Fund or in the Redemption Account or
in a special trust fund (as the case may be) of money
and/or securities, as provided in Section 3 hereof,
sufficient to insure the payment at maturity or redemp-
tion thereof prior to maturity has not been made. For
the purpose of determining whether the required consent
of Bondholders has been obtained pursuant to Section 28
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hereof, Bonds should directly or indirectly by the City
("Issuer-Owned Bonds") shall not be counted.
"Parity Bonds" means any bonds, notes,
interim certificates, debentures or other obligations
of whatever nature issued by the City, or any other
governmental or private person with whom the City may
contract, which payments to service the same, and/or
provide security therefor, shall rank on a parity with
the payments on the Bonds, all as authorized or
required by Section 22 hereof.
"Refunded Bonds" means the Outstanding
remainder of the Sewer Revenue Bonds, Election 1957,
Series 1, 2 and 3 referred to in the recitals hereof
which are to be refunded pursuant to this Resolution.
"Revenue Bond Law" means the Revenue Bond Law
of 1941 as cited in the recitals hereof.
"Series Resolutions" means the Resolutions of
the Mayor and Common Council of the City providing for
the issuance of the Sewer Revenue Bonds, Election 1957,
Series 1, 2 and 3.
"Sewer Fund" means the special fund estab-
lished pursuant to Section 143 of the Charter into
which shall be deposited the Gross Revenues of the
Enterprise as required by Section 134 of the Charter.
Section 2. Amount, Issuance, Purpose and
Nature of Bonds. That under and pursuant to said
Charter and said Revenue Bond Law of 1941, Revenue
Bonds of the City of San Bernardino in the amount of
$2,600,00 shall be issued for the purpose stated
herein. Said Revenue Bonds shall be and are special
obligations of the City of San Bernardino and shall be
and are secured by a pledge of and lien upon, and shall
be and are a charge upon, and shall be and are payable
as to the principal thereof and interest thereon and
any premiums upon the redemption of any thereof, solely
from the Net Revenues of the Enterprise, such Net
Revenues being hereby pledged, charged and assigned for
the security of the Bonds.
The proceeds of the Bonds shall be used by
the City for the purpose of calling and redeeming prior
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to maturity all of the Refunded Bonds which can be so
called and redeemed on April 1, 1983, and defeasing
such part of the Refunded Bonds which are not subject
to call and redemption on April 1, 1983 by refunding
the same so that, in accordance with the Series Resolu-
tions referred to in the recitals hereof, the lien of
said Resolutions, including, without limitation, the
pledge of Net Revenues of the Enterprise thereunder,
shall thereupon cease, terminate and become void and be
discharged and satisfied, and the Refunded Bonds and
interest increments thereon shall no longer be deemed
to be outstanding and unpaid. In connection therewith:
(a) Section 14 hereof, provides for a
portion of the proceeds of the sale of the Bonds
to be paid to the Fiscal Agent for the Refunded
Bonds in sufficient time to accomplish the call
and redemption on April 1, 1983, referred to above
and to defease the portion of such Refunded Bonds
that are not subject to such call and redemption.
Upon delivery of the Bonds hereunder, such sums
are to be deposited and to be used as provided in
this Resolution.
(b) The City and/or the Fiscal Agent, as the
case may be, shall take all action necessary to
pay, retire, and defease the Refunded Bonds as set
forth in (c) below, including, without limitation,
all actions required by this Resolution.
(c) The City hereby directs the City Trea-
surer and the Fiscal Agent for the Refunded Bonds
and the Fiscal Agent to pay when due on April 1,
1983, and to call and redeem, prior to maturity
all of the Refunded Bonds which can be so paid and
called and redeemed on April 1, 1983, and hereby
gives the Fiscal Agent notice that such redemption
shall be on April 1, 1983, at the applicable
premiums as set forth in the recitals hereof, and
to set aside enough funds to defease such portions
of the Refunded Bonds which are not subject to
call and redemption prior to maturity on April 1,
1983, all as more particularly set forth in this
Resolution.
Section 3. Equality of Bonds, Pledge of
Revenues. Pursuant to the Revenue Bond Law of 1941 and
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this Resolution, the Bonds shall be equally secured by
a pledge, charge and lien upon the Net Revenues of the
Enterprise without priority for number, date of Bonds,
date of sale, date of execution, or date of delivery,
and the payment of the interest on and principal of
such Bonds and any premiums upon the redemption of any
thereof shall be and are secured by an exclusive
pledge, charge and lien upon the Net Revenues of the
Enterprise, and all of the Net Revenues of the Enter-
prise are hereby pledged, charged and assigned for the
security of said Bonds, and such Net Revenues of the
Enterprise and any interest earned on the Net Revenues
of the Enterprise shall constitute a trust fund for the
security and payment of the interest on and principal
of said Bonds, and so long as any of the Bonds or
interest thereon are unpaid said Net Revenues of the
Enterprise and interest thereon shall not be used for
any other purpose, except as permitted by this Resolu-
tion, and shall be held in trust for the benefit of the
Bondholders and shall be applied pursuant to this
Resolution, or to this Resolution as modified pursuant
to provisions herein.
Nothing in this Resolution shall preclude:
(a) the redemption prior to maturity and payment of the
Bonds of this issue from proceeds of refunding bonds
issued under said Revenue Bond Law of 1941 as the same
now exists or as hereafter amended, or under the
Charter of said City or under any other law of the
State of California; (b) the issuance, subject to the
limitations in Section 22 hereof, of additional indebt-
edness evidenced by revenue bonds, notes, interim
certificate, debentures or other obligations of what-
ever nature, issued by the City, or any governmental or
private person with whom the City may contract, which
payments rank on a parity with the Bonds, payable out
of the Net Revenues of the Enterprise.
If the City shall payor cause to be paid, or
shall have made provision to pay upon maturity or upon
redemption prior to maturity, to the Holders of the
Bonds, the principal of, premium, if any, and interest
to become due thereon, through setting aside trust
funds or setting apart in a reserve fund or special
trust account created pursuant to this Resolution or
otherwise, or through the irrevocable segregation for
that purpose in some sinking fund or other fund or
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trust account with a fiscal agent or otherwise, funds
sufficient therefor, including, but not limited to,
interest earned to be earned on Federal Securities,
then the lien of this Resolution, including, without
limitation, the pledge of the Net Revenues of the
Enterprise, and all other rights granted hereby, shall
thereupon cease, terminate and become void and be dis-
charged and satisfied, and the principal of, premium,
if any, and interest on the Bonds shall no longer be
deemed to be outstanding and unpaid; provided, however,
that nothing in this Resolution shall require the
deposit of more than such Federal Securities as may be
sufficient, taking into account both the principal
amount of such Federal Securities and the interest to
become due thereon, to implement any refunding of the
Bonds. In such event, the Fiscal Agent shall cause an
accounting for such period or periods as shall be
requested by the City to be prepared and filed with the
City, and the Fiscal Agent, upon the request of the
City, shall release the rights of the Bondholders under
this Resolution and execute and deliver to the City all
such instruments as may be desirable to evidence such
release, discharge and satisfaction, and the Fiscal
Agent shall pay over or deliver to the City all moneys
or securities held by it pursuant to this Resolution
which are not required for the payment or redemption of
Bonds not theretofore surrendered for such payment or
redemption, and the Bonds shall no longer be considered
to be "Outstanding". As used in this paragraph,
"Federal Securities" means United States Treasury
notes, bonds, bills or certificates of indebtedness, or
obligations for which the faith and credit of the
United States are pledged for the payment of principal
and interest, including the guaranteed portions of
small business administration loans, so long as such
loans are obligations for which the faith and credit of
the United States are pledged for the payment of
principal and interest; bonds, consolidated bonds,
collateral trust debentures, consolidated debentures,
or other obligations issued by federal land banks or
federal intermediate credit banks established under the
Federal Farm Loan Act, as amended, and Farm Credit Act
of 1971, debentures and consolidated debentures issued
by the Central Bank for Cooperatives and banks for
cooperatives established under the Farm Credit Act of
1933, as amended, and the Farm Credit Act of 1971,
bonds or debentures of the Federal Home Loan Bank Board
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established under the Federal Home Loan Bank Act, bonds
of any federal home loan bank established under said
act and stocks, bonds, debentures, participations and
other obligations of or issued by the Student Loan
Marketing Association, the Government National Mortgage
Association and the Federal Home Loan Mortgage Corpora-
tion; and bonds, notes or other obligations issued by
the Federal Financing Bank, the United States Postal
Service, or issued or assumed by the International Bank
for Reconstruction and Development, the Tennessee
Valley Authority, the Inter-American Development Bank,
the Government Development Bank for Puerto Rico, or the
Asian Development Bank and any other types of Federal
Securities authorized by law to be and for refunding
purposes at the time that such refunding occurs.
Provision shall be made by the City, satis-
factory to the Fiscal Agent, for the publication, at
least twice, at an interval of not less than seven (7)
days between publications, in a financial newspaper or
journal, of a notice to the Holders of such Bonds that
such funds are so available for such payment.
Section 4. No General City Liability. The
general fund of the City of San Bernardino is not
liable for the payment of the Bonds or their interest,
nor is the credit or taxing power of the City of San
Bernardino pledged for the payment of the Bonds or
their interest or premium, if any. The Holder of the
Bonds or coupons shall not compel the exercise of the
taxing power by the City of San Bernardino or the
forfeiture of any of its property. The principal of
and interest on the Bonds and any premiums upon the
redemption of any thereof are not a debt of the City of
San Bernardino nor a legal or equitable pledge, charge,
lien, or encumbrance, upon any of its property, or upon
any of its income, receipts, or revenues, except the
Net Revenues of the Enterprise which are, under the
terms of this Resolution and said Revenue Bond Law,
pledged to the payment of said Bonds and interest.
Section 5. Description of Bonds. Said Bonds
shall be in the principal sum of $2,600,000, shall be
520 in number, numbered 1 to 520, inclusive, and shall
be of the denomination of $5,000 each. Said Bonds
shall be designated SEWER REVENUE REFUNDING BONDS,
ISSUE OF 1983, shall be dated March 15, 1983, and shall
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be payable in consecutive numerical order on March 15
in each year of maturity in the amounts for each of the
several years as follows:
Year of Year of
Maturity Principal Maturity Principal
March 15 of Amount March 15 of Amount
1984 $ 5,000 2004 $ 40,000
1985 10,000 2005 45,000
1986 5,000 2006 50,000
1987 10,000 2007 50,000
1988 5,000 2008 60,000
1989 10,000 2009 60,000
1990 10,000 2010 70,000
1991 15,000 2011 80,000
1992 10,000 2012 85,000
1993 15,000 2013 90,000
1994 15,000 2014 105,000
1995 15,000 2015 110,000
1996 20,000 2016 125,000
1997 20,000 2017 135,000
1998 20,000 2018 150,000
1999 25,000 2019 165,000
?OOO 30,000 2020 185,000
2001 30,000 2021 200,000
2002 30,000 2022 220,000
2003 35,000 2023 240,000
Section 6. Interest. Said bonds shall bear
interest at a rate or rates to be hereafter fixed by
resolution or resolutions, but not to exceed twelve
percent (12%) per annum. All interest shall be payable
semiannually on March 15 and September 15 of each year,
commencing September 15, 1983. Each Bond shall bear
interest until the principal sum thereof has been paid;
provided, however, that if funds are available for the
payment thereof in full accordance with the terms of
this Resolution, said Bond shall then cease to bear
interest. Interest coupons attached to the Bearer
Bonds shall be numbered in consecutive numerical order
from one (1) upwards in the order of their respective
maturities. Each coupon shall represent six (6)
months' interest.
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The Fully Registered Bonds shall be numbered
by the Fiscal Agent as the Fiscal Agent shall determine
and shall be dated as of the date of authentication
thereof, except that Fully Registered Bonds issued upon
exchanges and transfers of Fully Registered Bonds and
upon exchanges of Bearer Bonds for Fully Registered
Bonds shall be dated so that no gain or loss of inter-
est shall result from such exchange or transfer. Each
Fully Registered Bond shall bear interest from the
interest payment date next preceding the date thereof
unless (i) it is dated as of an interest payment date,
in which event it shall bear interest from that inter-
est payment date, or (ii) it is dated prior to the
first interest payment date, in which event it shall
bear interest from the date of the Bearer Bonds.
Interest on Fully Registered Bonds shall be paid by the
Fiscal Agent (out of the appropriate funds) by check or
draft mailed on the interest payment date to the
registered owner as his name and address appears on the
Bond Register kept by the Fiscal Agent at the close of
business on the fifteenth (15th) day preceding the
interest payment date.
Section 7. Place of Payment. The Bonds, the
interest thereon and any premiums upon the redemption
thereof prior to maturity shall be payable in lawful
money of the United States of America and (except for
interest on Fully Registered Bonds which is payable by
check or draft as stated above) shall be payable at the
corporate trust office of Security Pacific National
Bank, Fiscal Agent for the City in Los Angeles,
California, or at any Paying Agent for the City in
Chicago, Illinois or New York, New York.
Section 8. Forms of Bonds and Conversion.
The Bearer Bonds and the interest coupons appertaining
thereto shall be negotiable and shall be substantially
in the form attached hereto and by this reference
incorporated herein, marked "Exhibit A" (Bearer Bond),
and the Fully Registered Bonds shall be substantially
in the form attached hereto and by this reference
incorporated herein, marked "Exhibit B" (Fully Regis-
tered Bond). Such forms are hereby approved and
adopted as the forms of such Bonds and of the coupons,
and of the redemption, exchange, registration and
assignment provisions pertaining thereto, with
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necessary or appropriate variations, omissions and
insertions as permitted or required by this Resolution.
Any Bonds issued pursuant to this Resolution
may be initially issued in temporary form exchangeable
for definitive Bonds when the same are ready for
delivery. The temporary Bonds may be printed, litho-
graphed or typewritten, shall be of such denominations
as may be determined by the City, shall be without
coupons and may contain such reference to any of the
provisions of this Resolution as may be appropriate.
Every temporary Bond shall be executed by the City and
be issued by the Fiscal Agent upon the same conditions
and in substantially the same form and manner as the
definitive Fully Registered Bonds. If the City issues
temporary Bonds, it will execute and furnish definitive
Bonds without delay, and, thereupon, the temporary
Bonds shall be surrendered for cancellation at the
corporate trust office of the Fiscal Agent in Los
Angeles, California, or at such other place in
California as the City may approve, and the City shall
deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive Bearer Bonds
or definitive Fully Registered Bonds without coupons of
authorized denominations of this same issue. Until so
exchanged, the temporary Bonds shall be entitled to the
same benefits under this Resolution as definitive Bonds
of the same issue delivered hereunder, except that any
interest which has accrued thereon shall not be paid
until the exchange has been accomplished.
Section 9. Execution of Bonds. The Mayor of
the City and the City Treasurer of the City are hereby
authorized and directed to sign all of said Bonds by
their printed, lithographed or engraved facsimile
signatures, and the City Clerk of the City is hereby
authorized and directed to countersign said Bonds and
to cause the corporate seal of the City to be imprinted
thereon, and the City Treasurer of the City is hereby
authorized and directed to sign the interest coupons of
said Bonds by his printed, lithographed or engraved
facsimile signature.
The foregoing officers are hereby authorized
and directed to sign said Bonds and coupons in accor-
dance with this Section. If any City officer whose
manual or facsimile signature appears on said Bonds or
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coupons ceases to be such
said Bonds, his signature
remained in office.
officer before delivery of
is as effective as if he had
As to Fully Registered Bonds, the Fiscal
Agent shall authenticate the same on registration
and/or change to effectuate the registration and
exchange provisions set forth herein, and only such of
the Bonds as shall have endorsed thereon a certificate
of authentication, substantially in the form set forth
in Exhibit B, duly executed by the Fiscal Agent, shall
be entitled to any rights, benefits, or security under
this Resolution. No Fully Registered Bond shall be
valid or obligatory for any purpose unless and until
such certificate of authentication shall have been duly
executed by the Fiscal Agent, and such Certificate of
the Fiscal Agent, upon any such Fully Registered Bond
shall be conclusive and the only evidence that such
Fully Registered Bond has been duly authenticated and
delivered under this Resolution. The Fiscal Agent's
certificate of authentication on any Fully Registered
Bond shall be deemed to have been duly executed if
signed by an authorized officer of the Fiscal Agent,
but it shall not be necessary that the same officer
sign the certificate of authentication on all of the
Fully Registered Bonds that may be issued hereunder at
anyone time.
Section 10. Types of Bonds, Registration
and Exchange. Two forms of Bonds have been provided:
(1) those which shall be initially issued and which are
in negotiable form, payable to bearer with negotiable
coupons (herein sometimes referred to as "Bearer
Bonds"), and (2) those which are issued to facilitate
registration and so are issued as non-negotiable Fully
Registered Bonds payable to the registered owner
(herein sometimes referred to as "Fully Registered
Bonds"). The Bearer Bonds are not registrable by
endorsement, but may be exchanged for Fully Registered
Bonds as provided herein. A Bearer Bond or Bearer
Bonds may be registered by exchanging the same for a
Fully Registered Bond or Fully Registered Bonds, as the
case may be. A Bearer Bond or Bearer Bonds and a Fully
Registered Bond or Fully Registered Bonds may be
exchanged for a Fully Registered Bond or Fully Regis-
tered Bonds. A Fully Registered Bond may be exchanged
in whole for Bearer Bonds or in part for such Bearer
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Bonds and the balance for Fully Registered Bonds.
Transfer of ownership of a Fully Registered Bond or
Fully Registered Bonds shall be made by exchanging the
same for a new Fully Registered Bond or Fully Regis-
tered Bonds. All of such exchanges shall be made in
such manner and upon such reasonable terms and condi-
tions as may from time to time be determined and
prescribed by the City; provided, however, no such
exchange shall be made between the fifteenth (15th) day
preceding any interest payment date and such interest
payment date. Such exchanges shall be free of any
costs or charges to the person, firm or corporation
requesting such exchange, except for any tax or govern-
mental charge that may be imposed in connection with
such exchange. Each Bearer Bond issued pursuant to
this Resolution shall be of the denomination of $5,000.
Each Fully Registered Bond issued pursuant to this
Resolution shall be of a denomination which is $5,000
or a whole multiple thereof and shall be of the same
issue.
Section 11. Bond Register. The Fiscal Agent
will keep or cause to be kept at its corporate trust
office in the City of Los Angeles, California, or at
such other place in California as the City may approve,
sufficient books for the registration and transfer of
the Bonds, which shall at all time be open to inspec-
tion by the City; and, upon presentation for such
purpose, the Fiscal Agent shall, under such reasonable
regulations as it may prescribe, register or transfer,
or cause to be registered or transferred, on said
register, said Bonds as hereinbefore provided.
Section 12. Call and Redemption of Bonds
Prior to Maturity.
A. The Bonds maturing on or prior to
March 15, 1993, shall not be subject to call or redemp-
tion prior to maturity. The Outstanding Bonds maturing
on or after March 15, 1994, may be called before
maturity and redeemed, at the option of the City, in
whole from the proceeds of refunding bonds and other
available funds, or in whole or in part from any other
source of funds, on March 15, 1993, or on any interest
payment date thereafter prior to maturity. If less
than all of the Bonds Outstanding are to be so redeemed
at anyone time, the Bonds to be redeemed shall be
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redeemed in inverse order of maturity and within a
maturity by lot. Bonds so called for redemption shall
be redeemed at a redemption price for each redeemed
Bond equal to the principal amount thereof, plus
accrued interest to the redemption date and a premium
(percentage of principal amount) if redeemed on the
following dates:
Redemption Dates Premium
March 15, 1993 and September 15, 1993 2-1/2%
March 15, 1994 and September 15, 1994 2 %
March 15, 1995 and September 15, 1995 1-1/2%
March 15, 1996 and September 15, 1996 1 %
March 15, 1997 and September 15, 1997 1/2%
Bonds may be called on March 15, 1998, and on any
interest payment date thereafter, without premium.
The interest payment date on which Bonds are to be
presented for redemption is hereinafter sometimes
called the "redemption date."
B. Call and Redemption. The Mayor and
Common Council of the City may by resolution direct the
call and redemption prior to maturity of Bonds by the
Fiscal Agent in such amounts as funds are available
therefor and shall give notice to the Fiscal Agent of
such redemption at least sixty (60) days prior to the
redemption date. .
C. Notice of Redemption. Notice of redemp-
tion prior to maturity (except as provided below) shall
be given by publication at least once prior to the
redemption date in a financial newspaper or journal,
printed in the English language, of national circula-
tion and customarily published on each business day in
the City of New York, New York, such publication to be
not less than thirty (30) nor more than sixty (60) days
prior to such redemption date. In the case of refund-
ing, notice shall also be given as provided in Section
3 hereof. Notice of redemption shall also be mailed,
not less than thirty (30) nor more than sixty (60) days
prior to the redemption date, (i) to the original
purchaser(s) of the Bonds (in the case of a syndicate,
to the manager thereof) and to any other Bondholder who
files his name and address with the Fiscal Agent for
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the purpose of receiving such notice, and (ii) if any
Bond called for redemption is a Fully Registered Bond,
to the registered owner of each such Bond; but neither
failure to mail such notice nor any defect in any
notice so mailed shall affect the sufficiency of the
proceedings for the redemption of any of the Bonds.
The notice of redemption shall (a) state the redemption
date; (b) state the redemption price; (c) state the
numbers of the Bonds to be redeemed; provided, however,
that whenever any call includes all of the outstanding
Bonds, the numbers of the Bonds need not be stated; (d)
require that Bearer Bonds be surrendered with all
interest coupons maturing subsequent to the redemption
date at the place or places of redemption; (e) state,
as to any Fully Registered Bonds redeemed in part only,
the registered bond numbers and the principal portion
thereof to be redeemed; and (f) state that interest on
the principal portion of the Bonds so designated for
redemption shall cease to accrue from and after such
redemption date and that on said date there shall
become due and payable on each of such Bonds the
redemption price thereof. If, at the time of giving
notice of redemption, no Bonds are outstanding except
Fully Registered Bonds, publication of such notice
shall be deemed to have been waived if such notice
shall have been mailed by registered or certified mail
to each registered owner of such Bonds at his address
as it appears on the register or at such address as he
may have filed with the Fiscal Agent for that purpose.
The actual receipt by the Holder of any Bond
of notice of such redemption shall not be a condition
precedent to redemption, and failure to receive such
notice shall not affect the validity of the proceedings
for the redemption of such Bonds or the cessation of
interest on the redemption date. Notice of redemption
of Bonds shall be given by the Fiscal Agent for and on
behalf of the City at the expense of the City.
A certificate by the Fiscal Agent that notice
of redemption has been given as herein provided shall
be conclusive as against all parties, and no Bondholder
whose Bearer Bond or Fully Registered Bond is called
for redemption may object thereto or object to the
cessation of interest on the redemption date fixed by
any claim or showing that he failed to actually receive
such notice of call and redemption.
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The Fiscal Agent shall, on or before the date
of publication of said notice of redemption, mail a
similar notice, postage prepaid to any person, firm or
corporation that originally purchased Bonds from the
City.
As to any Fully Registered Bonds so called
for, for redemption, the Fiscal Agent shall, on or
before the date of publication of said notice of
redemption, mail a similar notice, postage prepaid, to
the respective registered owners thereof at the
addresses appearing on the Bond Register.
The actual receipt by any Bondholder of
notice of such redemption shall not be a condition
precedent to redemption, and failure to receive such
notice shall not affect the validity of the proceedings
for the redemption of such Bonds or the cessation of
interest on the redemption date. The notice or notices
required by this section shall be given by the Fiscal
Agent. A certificate by the Fiscal Agent that notice
of call and redemption has been given to original
purchasers and to holders of Fully Registered Bonds as
herein provided shall be conclusive as against all
parties, and no Bondholder whose Bond or Fully Regis-
tered Bond is called for redemption may object thereto
or object to the cessation of interest on the redemp-
tion date fixed by any claim or showing that he failed
to actually receive such notice of call and redemption.
D. Redemption Fund. Prior to the redemption
date the Fiscal Agent shall establish, maintain and
hold in trust a separate account which is hereby
created for the purpose of this Resolution to be
described or known as SEWER REVENUE REFUNDING BONDS,
ISSUE OF 1983, REDEMPTION FUND (hereinafter sometimes
referred to as "Redemption Fund"), and prior to the
redemption date there must be set aside in said Redemp-
tion Fund moneys available for the purpose and suffi-
cient to redeem, at the premiums, if any, payable as
provided in this Resolution, the Bonds designated in
such notice of redemption. Said moneys must be set
aside in said Fund solely for that purpose and shall be
applied on or after the redemption date to payment
(principal and premium, if any) of the Bonds to be
redeemed upon presentation and surrender of such Bonds,
together with (except as to Fully Registered Bonds) all
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interest coupons appertaining thereto maturing after
the redemption date, and shall be used only for that
purpose. Any interest coupon due on or prior to the
redemption date shall be paid from the Bond Service
Fund hereof upon presentation and surrender thereof.
Any interest due on or prior to the redemption date
upon Fully Registered Bonds shall be paid from said
Bond Service Fund. Each Bearer Bond presented must
have attached thereto or presented therewith all
interest coupons maturing after the redemption date.
E. Partial Redemption of Fully Registered
Bonds. Upon surrender of any Fully Registered Bond
redeemed in part only, the City shall execute and the
Fiscal Agent shall authenticate and deliver to the
registered owner thereof, at the expense of the City, a
new Bond or Bonds of authorized denominations equal in
aggregate principal amount to the unredeemed portion of
the Fully Registered Bond surrendered and of the same
interest rate or rates and same maturity or maturities,
which new Bond or Bonds may be, at the option of the
registered owner, either a Bearer Bond or Bearer Bonds
with all unmatured coupons appertaining thereto or a
Fully Registered Bond or Fully Registered Bonds, or in
part a Bearer Bond or Bearer Bonds and the balance in
Fully Registered Bond or Fully Registered Bonds. The
registered owner of any Fully Registered Bond may, in
lieu of surrendering such Bond for a new Bond, endorse
on the reverse of such Fully Registered Bond a notation
of such partial redemption, in such form as may be
satisfactory to the City and the Fiscal Agent and under
such conditions as the Fiscal Agent may approve. Such
partial redemption shall be valid upon payment of the
amount thereby required to be paid to such registered
owner, and the City and the Fiscal Agent shall be
released and discharged from all liability to the
extent of such payment irrespective of whether such
endorsement shall or shall not have been made upon the
reverse of such Fully Registered Bond by such regis-
tered owner and irrespective of any error or omission
in such endorsement.
F. Effect of Redemption. Notice of re-
demption having been duly given as aforesaid, and
moneys for payment of the principal of, premium, if
any, and interest payable upon redemption of the Bonds
being set aside as aforesaid, the Bonds, or parts
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thereof, as the case may be, so called for redemption
shall, on the redemption date, become due and payable
at the redemption price specified in such notice,
interest on the Bonds, or parts thereof, as the case
may be, so called for redemption shall cease to accrue,
the coupons for interest thereon maturing subsequent to
the redemption date shall be void, and said Bonds, or
parts thereof, as the case may be, shall cease to be
entitled to any lien, benefit or security under this
Resolution, and the Holders of said Bonds shall have no
rights in respect thereof except to receive payment of
the redemption price thereof, and, in the case of
partial redemption of Fully Registered Bonds, to also
receive a new Bond or Bonds for the unredeemed balance
as aforesaid.
All unpaid interest installments which shall
have matured on or prior to the redemption date desig-
nated in such notice shall continue to be payable to
the respective Holders thereof but without interest
thereon.
All Bonds, or parts thereof, as the case may
be, redeemed pursuant to the provisions of this Section
and the appurtenant coupons, if any, shall be cancelled
upon surrender thereof and delivered to, or upon the
order of, the City.
If after all of the Bonds have been redeemed
and cancelled or paid and cancelled there are moneys
remaining in said Redemption Fund, said moneys shall be
transferred to the Sewer Fund; provided, however, that
if said moneys are part of the proceeds of refunding
bonds said moneys shall be transferred to the fund or
account created for the payment of principal of and
interest on such refunding bonds.
Section 13. Funds and Accounts. In the City
Treasury of the City in the Sewer Fund (which Fund
exists under Section 143 of the Charter) there is
hereby continued the following account:
1. Sewer Maintenance and Operation Account
(herein sometimes called the "M & 0 Account").
There is hereby created with the Fiscal Agent
the following Funds:
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1. Sewer Revenue Refunding Bonds, Issue of
1983, Costs of Issuance Fund (herein sometimes
called the "Costs of Issuance Fund");
2. Sewer Revenue Refunding Bonds, Issue of
1983, Bond Service Fund (herein sometimes called
the "Bond Service Fund");
3. Sewer Revenue Refunding Bonds, Issue of
1983, Reserve Fund (herein sometimes called the
"Reserve Fund"); and
4. Sewer Revenue Refunding Bonds, Issue of
1983, Proceeds Fund (herein sometimes called the
"Proceeds Fund"), within which shall be estab-
lished a special account designated as the "Escrow
Account" .
So long as any of the Bonds or the interest
thereon remains outstanding and unpaid (or in law
thereof defeased), the moneys in the foregoing Funds
shall be used for no purposes other than those required
or permitted by this Resolution and the Revenue Bond
Law.
Section 14. Disposition of Bond Proceeds.
For the purpose of ensuring the application of the
proceeds received from the sale of the Bonds to the
purposes set forth in the recitals hereof, for which
said Bonds are to be issued, the proceeds of the sale
of the Bonds shall be paid to the Fiscal Agent and
shall be deposited and expended by the Fiscal Agent as
follows:
(a) Costs of Issuance Fund: Upon delivery
of the Bonds, the Fiscal Agent shall deposit an
amount of such proceeds into the Cost of Issuance
Fund as set forth in a certificate duly executed
by an authorized City representative. All Costs
of Issuance shall be paid from the Cost of Issu-
ance Fund to those persons entitled thereto or to
the appropriate City fund to be reimbursed there-
for. It is recognized that the Costs of Issuance
Fund may be overfunded initially because of the
necessity to rely upon estimates pending receipt
of the final bills, statements and invoices for
the costs. Any remaining balance in the Cost of
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Issuance Fund after all of the foregoing payments
have been made shall be transferred to the Bond
Service Fund.
(b) Bond Service Fund: Upon delivery of the
Bonds, the Fiscal Agent shall deposit from such
proceeds into the Bond Service Fund an amount
equal to the interest accrued on the Bonds from
their date to the date of their delivery, and any
premium on their sale.
(c) Reserve Fund: Upon delivery of the
Bonds, the Fiscal Agent shall deposit in an amount
equal to the Maximum Annual Debt Service.
(d) Proceeds Fund: Concurrently with the
delivery of the Bonds to the purchasers thereof,
the Fiscal Agent shall pay to the Fiscal Agent for
the Refunded Bonds for deposit in the Redemption
Funds created by the Series Resolutions the
balance of the proceeds of the sale of the Bonds.
At the same time, the Treasurer shall pay to the
Fiscal Agent for the Refunded Bonds for deposit in
the Redemption Funds created by the Series Resolu-
tions such additional amounts from funds and
accounts held pursuant to the Series Resolutions
as shall be set forth in a Certificate executed by
an appropriate City representative, based upon
computations made by the Independent Financial
Consultants, all to the end that the Outstanding
Refunded Bonds which are subject to being called
and redeemed prior to maturity on April 1, 1983
will be so called and redeemed. Any interest
earned on such deposit shall be paid to the City
for deposit into the Sewer Fund.
Concurrently with the delivery of the Bonds,
the Treasurer shall pay to the Fiscal Agent, and the
Fiscal Agent shall deposit into a special account
(herein referred to as the "Escrow Account") such sums
as shall be necessary to defease such portion of the
Refunded Bonds, which are not subject to call and
redemption prior to maturity, i.e., $25,000 Sewer
Revenue Bonds, Election 1957, Series 3, maturing on
April 1, 1984, as shown in the recitals hereof. The
moneys so deposited in said Escrow Account shall be
invested in Federal Securities, as such term is
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described in Section 3 hereof, and such moneys so
invested and the interest thereon shall be used to pay,
in lawful money of the United States of America, the
interest on such $25,000 of Refunded Bonds on October
1, 1983, and the interest on and principal thereof on
April 1, 1984. Any moneys remaining in the Escrow
Account after payment of the principal, redemption
price of and interest on such $25,000 Refunded Bonds in
full shall be paid by the Fiscal Agent to the Treasurer
for deposit in the Sewer Fund.
Section 15. Sewer Fund. The Gross Revenues
of the Enterprise shall continue to be transferred to
and placed in the Sewer Fund as required by Section 134
of the Charter, and thereafter so long as any of said
Bonds are Outstanding, the Gross Revenues of the Enter-
prise shall be paid into the Sewer Fund, and payments
from said fund shall be made only as provided by
Section 149 of the Charter, this Resolution and the
Revenue Bond Law. Notwithstanding the foregoing, at
the direction of the City Treasurer, there shall be
established in the Sewer Fund such account or accounts
as are necessary to properly account for and maintain
as separate trust funds all connection fees which have
been and may continue to be charged to private persons
and/or public agencies and are required to be used for
the payment of the costs of extensions and improvements
of or additions to the Enterprise or any parts thereof.
Such sums shall remain in such account or accounts
until expended, pursuant to Section 149 of the Charter
for the purposes for which such connection fees have
and may continue to be charged.
Section 16. Maintenance and Operation
Account. Thereafter monthly sums sufficient for the
Necessary and Reasonable Maintenance and Operation
Costs of the Enterprise (and to maintain in the M & 0
Account a reasonably required reserve and replacement
fund not to exceed three (3) months estimated Necessary
and Reasonable Maintenance and Operation Costs of the
Enterprise) shall be apportioned from the Gross Reve-
nues of the Enterprise and transferred at the direction
of the Treasurer within the Sewer Fund to the M & 0
Account, and immediately thereafter, the balance i.e.,
the Net Revenues of the Enterprise, shall be trans-
ferred to the Fiscal Agent and applied as hereinafter
provided in this Resolution.
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Section 17. Bond Service Fund. Upon deliv-
ery of the Bonds to the purchasers thereof, any accrued
interest paid by said purchasers shall be placed in the
Bond Service Fund. On the date of the Bonds and
thereafter, so long as any of the Bonds are outstand-
ing, on the first day of each calendar month, there
shall be set aside and transferred from the Net Reve-
nues of the Enterprise paid to the Fiscal Agent as
above set forth to the Bond Service Fund at least one-
sixth (1/6th) of the interest which will become due and
payable on Outstanding Bonds and any Parity Bonds
within the next ensuing six (6) months and also at
least one-twelfth (1/12th) of the principal amount of
such Bonds and any Parity Bonds which will mature and
be payable within the next ensuing twelve (12) months,
so that at least the full amount required to pay, as it
becomes due, the interest on such Bonds and any Parity
Bonds and any maturity or installment of principal of
such Bonds and any Parity Bonds shall be set aside in
the Bond Service Fund at least one month prior to the
date the installment of interest and/or principal
become due. No such transfer need be made prior to the
actual delivery of the Bonds and Parity Bonds, if any,
to the purchaser thereof; provided, however, that if
the Bonds and Parity Bonds, if any, are issued and
delivered subsequent to their date there shall be set
aside, transferred to and placed in the Bond Service
Fund on the first (1st) day of the calendar month
subsequent to the date of delivery sums at least
sufficient, together with other transfers of the same
amount made on the first (1st) day of each calendar
month thereafter, to provide in said Bond Service Fund
one month prior to the payment date of the first (1st)
installment of interest and/or principal on such Bonds
and Parity Bonds, if any, the full amount of such
interest and/or principal. Any amount required to be
set aside, transferred to and placed in the Bond
Service Fund may be prepaid in whole or in part by
being earlier set aside, transferred to and placed in
the Bond Service Fund and in that event the monthly
transfer which has been so prepaid need not be made at
the time appointed therefor. In any event, at least
one (1) month prior to the due date of any maturity or
installment of principal of and/or interest on Bonds
any any Parity Bonds, all sums required for the payment
thereof must be in such Bond Service Fund in cash. All
such sums shall be so transferred from the sums which
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the Fiscal Agent has received from the Treasurer as
transfers from the Sewer Fund as hereinbefore provided,
except for transfers to said Fund from the Reserve
Fund, as hereinafter provided in this Resolution. It
is hereby directed that such sums be so set aside
through transfers made in such amounts as may be
necessary to comply with the foregoing provisions of
this Section. Money set aside and placed in said Bond
Service Fund shall remain therein until from time to
time expended for the payment of such principal and
interest, and shall not be used for any other purpose
whatever, except that any such money so set aside and
placed in said Bond Service Fund which at any time may
be in excess of the amount which at that time is
required by the terms of this Section to be in the Bond
Service Account in cash may be temporarily invested as
hereinafter provided, provided that such investment
shall not affect the obligation of the City through the
Fiscal Agent to cause the full amount required by the
terms of this Section to be available in said Bond
Service Fund in cash at the time required by the terms
of this Section. If, at the time any Bond or interest
coupon is presented for payment, the moneys in the Bond
Service Fund are insufficient to make such payment,
money sufficient for such payment shall be transferred
from the Reserve Fund to said Bond Service Fund. Any
money remaining in said Bond Service Fund after payment
in full (including interest) of the Bonds and Parity
Bonds, if any, may be transferred to the Sewer Fund.
The Bonds and Parity Bonds, if any, and interest
coupons shall recite that they are payable from the
Sewer Fund, but said Bonds and Parity Bonds, if any,
and coupons, notwithstanding such recital, shall be
paid from the Bond Service Fund, which is derived from
the Sewer Fund.
Section 18. Reserve Fund. From the proceeds
of the sale of the Bonds there shall be immediately
placed in the Reserve Fund $260,000.00 as aforesaid,
and thereafter there shall be maintained in said
Reserve Fund an amount at least equal to the Maximum
Annual Debt Service.
Moneys in the Reserve Fund shall be used
solely for the purpose of paying the principal of and
interest on, the Bonds and any Parity Bonds in the
event that the moneys in the Bond Service Fund are
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insufficient therefor and for that purpose may be with-
drawn and transferred to the Bond Service Fund. No
payment need be made into the Reserve Fund so long as
there shall be in said Fund a sum at least equal to the
Maximum Annual Debt Service. Whenever moneys are
withdrawn from the Reserve Fund for the purposes pro-
vided in this Section, the amount in the Reserve Fund
shall be restored to the amount required in this
Section by transfers from Surplus. Any amount in the
Reserve Fund in excess of the Maximum Annual Debt
Service shall be transferred to Surplus.
Section 19. Surplus. After the monthly
transfers required or permitted by Section 16, 17 and
18 hereof have been made any remaining balance of the
amount of Net Revenues of the Enterprise derived from
the Sewer Fund and placed on deposit with the Fiscal
Agent during the preceding month shall be used for the
restoration, if necessary, of the Reserve Fund as
provided in Section 18 hereof.
After the above transfers and uses have been
made and all other covenants of the City contained
herein have been duly performed, any money derived from
the Net Revenues of the Enterprise (herein sometimes
referred to as "Surplus") shall be transferred by the
Fiscal Agent, at the direction of the City Treasurer,
and deposited into the City Treasury in such account or
accounts as may be established therefor to be used for
any of the following purposes exclusively:
(a) To make the payments required under the
Sewage Treatment Plant Sublease, dated as of
August 1, 1970, as amended as of November 1, 1973.
(b) To pay the cost of unusual or extra-
ordinary Maintenance and Operation Costs of the
Enterprise;
(c) To pay interest on any bonded debt
incurred for the improvement of the Enterprise;
(d) To pay the principal of any such debt;
(e) To pay the principal of, interest and
premiums on Bonds called prior to maturity;
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(f) To pay the principal of,
premiums on Bonds purchased in the
prices offered at or below the sum
paid in the event of redemption by
interest and
open market at
required to be
call;
(g) To pay the principal of and interest on
bonds which may hereafter be issued pursuant to
Section 22 hereof, of equal parity or subordinate
as to the lien thereof to the lien of the Bonds,
and the premium upon any of such Bonds called or
purchased prior to maturity;
(h) To pay the costs of extensions and
improvements of or additions to the Enterprise for
any other sewer purpose; and
(i) For any lawful purpose not prohibited by
the Charter.
No moneys shall be otherwise paid or trans-
ferred therefrom unless all of the requirements of this
Resolution then required to be performed have been
fully accomplished.
Section 20. Deposit and Investment of Moneys
in Funds. Subject to the provisions of Covenant 16 of
Section 21 hereof, all moneys held by the Treasurer
and/or the Fiscal Agent hereunder, except such moneys
which are at the time invested, shall be held in time
or demand deposits in any bank, trust company or other
company or association authorized to accept deposits of
public funds (including the banking department of the
Fiscal Agent) and shall be secured as required by law.
Moneys in the Sewer Fund, in the M & 0
Account thereof, may from time to time be invested by
the City Treasurer, and moneys in the other Funds held
by the Fiscal Agent may, and, upon written request of
the City, shall, be invested by the Fiscal Agent as
permitted by law, subject to the following restric-
tions:
(a) Moneys in the Sewer Fund, in the M & 0
Account thereof, shall be invested only in obli-
gations which will by their terms mature not later
than the date the City estimates the moneys
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represented by the particular investment will be
needed for withdrawal from such Fund or Account.
(b) Moneys in the Bond Service Fund shall be
invested only in obligations which will by their
terms mature on such dates as to ensure that
before each interest payment date there will be in
such Fund, from matured obligations and other
moneys already in such Fund, cash equal to the
interest, principal and redemption premiums, if
any, payable on such date, as may be recommended
from time to time by the opinion of an Independent
Financial Consultant appointed by the City.
(c) Moneys in the Reserve Fund shall be
invested only in Federal Securities, which will by
their terms mature on such dates as to insure that
before each interest payment date there will be in
such Fund from matured obligations and other
moneys already in such Fund, cash equal to the
interest and/or principal payable on such date, as
may be recommended from time to time by the
opinion of an Independent Financial Consultant
appointed by the City. For the purposes of this
provision, "Federal Securities" shall mean only
direct obligations of the United States of America
or bonds or other obligations for which the full
faith and credit of the United States is pledged
for the payment of principal and interest.
(d) Moneys in the Sewer Fund as "Surplus"
may be invested in any legally authorized invest-
ments in such manner as seems reasonably likely at
the time of investment to maximize the earnings
thereon, all at the discretion of the Treasurer.
Obligations purchased as an investment of
moneys in any of said Account and Funds shall be deemed
at all times to be a part of such Account or Funds and
the interest accruing thereon and any gain realized
from such investment shall be credited to such Account
or Funds and any loss resulting from any such author-
ized investment shall be charged to such Account or
Funds without liability to the City or the officers and
employees thereof or to the Fiscal Agent. The City or
the Fiscal Agent, as the case may be, shall sell at the
best price obtainable or present for redemption any
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obligation so purchased whenever it shall be necessary
to do so in order to provide moneys to meet any payment
or transfer from any Account or Funds as required by
this Resolution. For the purpose of determining at any
given time the balance in any such Account or Funds,
any such investment shall be valued at the face amount
thereof. Notwithstanding any other provision of this
paragraph, interest earnings on the amounts on deposit
in the Reserve Fund, to the extent not otherwise
required to maintain in the Reserve Fund the Minimum
Reserve Fund Requirement, shall be transferred and used
as Surplus.
Section 21. Covenants. So long as any of
the Bonds and any Parity Bonds are Outstanding, the
City makes the following covenants with the Bondholders
under the provisions of the City Charter and the
Revenue Bond Law of 1941 (to be performed by the City
or its proper officers, agents or employees) which
covenants are necessary, convenient and desirable to
secure the Bonds and any Parity Bonds and tend to make
them more marketable; provided, however, that said
covenants do not require the City to expend any funds
other than the Gross Revenues of the Enterprise or the
Net Revenues of the Enterprise, as the context may
require.
Covenant 1. Punctual Payment. The City
shall duly and punctually payor cause to be paid the
principal of and interest on every Bond and Parity
Bond, if any, together with the premium thereon, if any
be payable on the date, at the place and in the manner
mentioned in the Bonds and Parity Bonds, if any, and
coupons and in accordance with this Resolution, and
that the payments into the Bond Service Fund and the
Reserve Fund shall be made, all in strict conformity
with the terms of said Bonds and Parity Bonds, if any,
of this Resolution, and that it shall faithfully
observe and perform all of the conditions, covenants
and requirements of this Resolution and all resolutions
supplemental thereto and of the Bonds and Parity Bonds,
if any, and that time of such payment and performance
is of the essence of the City's contract with the
Bondholders.
Covenant 2. Discharge Claims. In order to
fully preserve and protect the priority and security of
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the Bonds and Parity Bonds, if any, the City shall pay
from the Gross Revenues of the Enterprise and discharge
all lawful claims for labor, materials and supplies
furnished for or in connection with the Enterprise
which, if unpaid, may become a lien or charge upon the
Gross Revenues of the Enterprise prior or superior to
the lien of the Bonds and Parity Bonds, if any, and
impair the security of the Bonds and Parity Bonds, if
any. The City shall also pay from the Gross Revenues
of the Enterprise all taxes and assessments or other
governmental charges lawfully levied or assessed upon
or in respect of the Enterprise or upon any part
thereof or upon any of the Gross Revenues of the
Enterprise.
Covenant 3. Accomplish Purpose. As soon as
funds are available therefor, the City shall commence
the accomplishment of the purposes for which the Bonds
and Parity Bonds, if any, are issued and shall continue
the same to completion with all practical dispatch and
in an economical manner.
Covenant 4. Operate Enterprise in Efficient
and Economical Manner. The City shall operate the
Enterprise in an efficient and economical manner and
maintain and preserve the Enterprise in good repair and
working order.
Covenant 5. Against Sale. The Enterprise
shall not be mortgaged or otherwise encumbered, sold,
leased, pledged, any charge placed thereon, or disposed
of as a whole or substantially as a whole unless such
sale or other disposition be so arranged as to provide
for a continuance of payments into the Sewer Fund
sufficient in amount to permit payment therefrom of the
principal of and interest on and premiums, if any, due
upon the redemption thereof, of the Bonds and Parity
Bonds, if any, payment of which is required to be made
out of the Net Revenues of the Enterprise, and also to
provide for such payments into the Reserve Fund as are
required under the terms of this Resolution. The Gross
Revenues of the Enterprise, the Net Revenues of the
Enterprise, or any other funds pledged or otherwise
made available to secure payment of the principal of
and interest on the Bonds and Parity Bonds, if any,
shall not be mortgaged, encumbered, sold, leased,
pledged, any charge placed thereon, or disposed of or
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used except as authorized by the terms of this Resolu-
tion. The City further covenants that it will not
enter any agreement which impairs the operation of the
Enterprise or any part of it necessary to secure
adequate Net Revenues of the Enterprise to pay the
principal and interest of the Bonds and Parity Bonds,
if any, or which otherwise would impair the rights of
the Bondholders with respect to the Net Revenues of the
Enterprise or the operation of the Enterprise. If any
substantial part of the Enterprise is sold the payment
therefor shall either be used for the acquisition
and/or construction of improvements and extensions of
the Enterprise or shall be placed in the Bond Service
Fund or the Redemption Fund and shall be used to payor
call Outstanding Bonds in the manner provided in this
Resolution.
Covenant 6. Insurance.
A. The City shall procure and maintain
insurance on the Enterprise with responsible insurers
in such amounts and against such risks (including
accident to or destruction of the Enterprise) as are
usually insurable in connection with similar enter-
prises, which such insurance shall be in an amount at
least sufficient to enable the City to retire all
Outstanding Bonds and Parity Bonds, if any.
In the event of any damage to or destruction
of the Enterprise caused by the perils covered by such
insurance, the net proceeds of such insurance shall be
applied to the repair, reconstruction or replacement of
the damaged or destroyed portion of the Enterprise.
The City shall cause such repair, reconstruction or
replacement to begin promptly after such damage or
destruction shall occur and to continue and to be
properly completed as expeditiously as possible, and
shall payout of the net proceeds of such insurance all
costs and expenses in connection with such repair,
reconstruction or replacement so that the same shall be
completed and the Enterprise shall be free and clear of
all liens and claims. If the net proceeds received by
reason of any such loss shall exceed the costs of such
repair, reconstruction or replacement, the excess shall
be deposited by the City in the Sewer Fund.
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Alternatively, if the net proceeds of such
insurance are sufficient to enable the City to retire
all Outstanding Bonds and Parity Bonds, if any, the
City may elect not to repair, reconstruct or replace
the damaged or destroyed portion of the Enterprise, and
thereupon such net proceeds shall be paid to the Fiscal
Agent and applied to redeem or purchase all Outstanding
Bonds and Parity Bonds, if any, in the manner specified
in Section 12 of this Resolution.
Without limiting the generality of the
foregoing, the City shall also comply with the follow-
ing provisions of this Covenant.
B. The City shall procure and maintain
suitable and adequate fidelity insurance or bonds on
all officers and employees of the City handling or
responsible for any of the Gross Revenues of the Enter-
prise.
C. The City shall procure and obtain a
policy of title insurance from a recognized title
insurance company insuring the City for the full cost
of the future acquisition of any real property in fee
simple acquired comprising any portion of the Enter-
prise, excluding any improvements thereon.
D. The City shall procure and maintain
public liability insurance covering claims against the
City for bodily injury or death, or damage to property
occasioned by reason of the ownership or operation of
the Enterprise, such insurance to afford protection in
such amounts and against such risks as are usually
covered in connection with similar enterprises.
E. All policies of insurance required to be
maintained herein shall provide that an authorized City
representative and the Fiscal Agent shall be given
thirty (30) days' written notice of any intended
cancellation thereof or reduction of coverage provided
thereby.
Covenant 7. Records and Accounts. The City
shall keep proper books of record and accounts of the
Enterprise, separate from all other records and
accounts, in which complete and correct entries shall
be made of all transactions relating to the Enterprise.
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Said books shall at all reasonable times be subject to
the inspection of not less than ten percent (10%) of
the Bondholders or their representatives authorized in
writing.
The City shall cause the books and accounts
of the Enterprise to be audited annually by an Indepen-
dent Certified Public Accountant (a reasonable time
after the close of the Fiscal year so that the Summary
Statement hereinafter referred to can be published) and
shall make available for inspection by the Bondholders
at the office of the City Clerk of said City, at the
office of the City Treasurer thereof and at the office
of the Fiscal Agent, a copy of the report of such
Accountant. Without limiting the generality of the
foregoing, such annual audit shall include:
(a) Balance Sheet.
ing balances of all Funds
continued or created.
A balance sheet includ-
and Accounts herein
(b) Revenue and Payments. A statement in
detail of the cash receipts and disbursements of
the income and expenses of the Enterprise.
(c) Insurance. A statement as to the insur-
ance carried by the City relating to the Enter-
prise, including a brief description of each
policy as to its coverage and name of company
issuing it.
(d) Customers. The number of customers
classified by rate or charge for service groups.
(e) Billing. The annual billings and the
average monthly billings by service group.
(f) Rate Schedules.
charges prescribed by the
effect.
The schedules of the
rate ordinance then in
(g) Recapitulation. A recapitulation of
Funds and Accounts continued or created by this
Resolution into which are put moneys derived from
the operation of the Enterprise and from the sale
of any Bonds or Parity Bonds, if any, issued
therefor or in connection therewith, which shall
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show balances at the beginning of the period,
deposits and withdrawals made during the period
and balances at the end of the period; and also
the monthly deposit requirements for Funds and
Accounts during the next succeeding fiscal period.
(h) Comments. Comments relative to the ful-
fillment of the provisions of this Resolution.
The City shall cause to be published annual-
ly, not more than one hundred and twenty (120) days
after the close of each fiscal year a Summary Statement
showing the amount of Gross Revenues of the Enterprise
and the amount of all other funds collected which are
required to be pledged or otherwise made available as
security for payment of principal of and interest on
the Bonds and Parity Bonds, if any, the disbursements
from such Gross Revenues of the Enterprise and other
funds in reasonable detail, and a general statement of
the financial and physical condition of the Enterprise.
The City shall furnish a copy of the state-
ment to any Bondholder upon request.
In the Audits and preparing the Summary
Statement above-referred to the City and its officer,
agents, employees, counsel and auditors shall, to the
extent that such document involves any other public
entity be entitled to rely on any audited or certified
statements of such entity.
Covenant 8. No Free Service. Except to the
extent that the City is required under agreements
and/or contracts existing on the effective date of this
Resolution, no service from the Enterprise shall be
furnished or rendered to the United States of America,
the State of California, any municipal or public
corporation (other than the City) or district or public
agency or any private corporation or person free, and
that, except to the extent that the City is required
under agreements and/or contracts existing on the
effective date of this Resolution, no such service
shall be rendered to the United States of America, the
State of California, any municipal or public corpora-
tion (other than the City) or district or any private
corporation or person at rates lower than those charged
other persons for similar service; provided, however,
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that not withstanding the foregoing the City may
continue any agreement and/or contract with the United
States of America, the State of California, any munici-
pal or public corporation (other than the City) or
district or public agency on substantially the same
basis as to free service and rates as are in existence
on the effective date of this Resolution; and, provid-
ed, however, further, that notwithstanding any provi-
sion of this Covenant 8, the City shall comply with any
obligation validly imposed by law. No building or
other real property of the Enterprise shall be fur-
nished free to the City, but the City shall pay into
the Sewer Fund the reasonable rental value of any
property so used, and reasonable and proper charges for
service rendered or quarters furnished to the Enter-
prise shall be paid to the City from the Sewer Fund.
The City shall maintain and enforce valid regulations
for the payment of bills for sewer service and such
regulations shall provide that the charges for sewer
service shall be collected together with and not
separately from charges for water service rendered by
the City, and, except for sewer users not being ren-
dered water service by the City, charges for sewer
service shall be billed upon the same bill as charges
for water service and collected as one item, and the
City shall discontinue water service to any user whose
water and sewer bill has not been paid within the time
fixed by said regulations, which shall not be more than
60 days from the date the water and sewer bill became
delinquent; and, for sewer users not being rendered
water service by the City such regulations shall
provide that the City shall discontinue service to any
user whose sewer bill has not been paid within the time
fixed by said regulations, which shall not be more than
60 days from the date the sewer bill became delinquent.
Covenant 9. Rates and Charges. The City
hereby covenants that pursuant to Section 134 of the
City Charter and the Revenue Bond Law, it shall levy
and collect charges for sewer service which shall be at
least sufficient to pay the following amounts in the
order set forth:
(a) The Necessary and Reasonable Maintenance
and Operation Costs of the Enterprise;
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(b) The principal of and interest on the
Bonds and any Parity Bonds as they become due and
payable and payments required to be made into the
Reserve Fund for the Bonds;
(c) All payments required for compliance
with this Resolution;
(d) Any other payment or payments specif-
ically authorized or required by this Resolution;
and the charges shall be so fixed that, during each
Fiscal Year, after the payment of item designated (a)
of this Section the Net Revenues of the Enterprise
available for the payment of item designated (b) shall
be at least 1.25 times the amount payable under said
(b) and at least 1 times the amounts payable under said
(c) and (d) (this requirement to be considered as a
minimum and not as preventing the City from changing
any minimum amounts payable under items (c) and (d)).
Covenant 10. Compliance with Conditions
Precedent. Upon the date of issuance of the Bonds, all
conditions, acts and things required by law or by the
Resolution to exist, to have happened or to have been
performed precedent to or in the issuance of such Bonds
shall exist, have happened and have been performed, and
such Bonds shall be within every limit prescribed by
law.
Covenant 11. Eminent Domain Proceeds. If
all or any part of the Enterprise shall be taken by
eminent domain proceedings, the net proceeds realized
by the City therefrom shall be deposited by the City
with the Treasurer in a special fund in trust and
applied by the City to the cost of acquiring or con-
structing or financing improvements to the Enterprise
if: (A) the City first secures and files with the
Treasurer an Independent Engineer's Certificate showing
(i) the estimated loss in annual Net Revenues of the
Enterprise, if any, suffered, or to be suffered, by the
City by reason of such eminent domain proceedings, (ii)
a general description of the improvements to the Enter-
prise then proposed to be acquired or constructed by
the City from such net proceeds, and (iii) an estimate
of the additional Net Revenues of the Enterprise to be
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derived from such improvements; and (B) the Treasurer,
on the basis of such Independent Engineer's Certifi-
cate, determines that such additional Net Revenues of
the Enterprise will sufficiently offset the loss of Net
Revenues of the Enterprise, resulting from such eminent
domain proceedings so that the ability of the City to
meet its obligations hereunder will not be substantial-
ly impaired, which determination shall be final and
conclusive. If the foregoing conditions are met, the
City shall then promptly proceed with the acquisition
or construction or financing of such improvements
substantially in accordance with such Independent
Engineer's Certificate and payments therefor shall be
made by the Treasurer from such net proceeds and from
other moneys of the City lawfully available therefor,
and any balance of such net proceeds not required by
the City for the purposes aforesaid shall be deposited
in the Sewer Fund. If the foregoing conditions are not
met, then such net proceeds shall be paid to the Fiscal
Agent for deposit in the Redemption Fund and applica-
tion pro rata, among the various maturities, to the
redemption or purchase of the Bonds and Parity Bonds,
if any, then Outstanding in the proportion which the
principal amount of the Outstanding Bonds and Parity
Bonds, if any, bears to the aggregate principal amount
of all Bonds and Parity Bonds, if any, then Outstand-
ing. If the Fiscal Agent is unable to purchase or
redeem Bonds and Parity Bonds, if any, in amounts
sufficient to exhaust the available moneys allocable to
the Bonds and Parity Bonds, if any, the remainder of
such moneys shall be held in trust by the Fiscal Agent
and applied to the payment of the Bonds and Parity
Bonds, if any, as the same become due by their terms,
and, pending such application, such remaining moneys
may be invested by the Treasurer in the manner provided
in Section 20.
If such eminent domain proceedings have had
no effect, or at most a relatively immaterial effect,
upon the Net Revenues of the Enterprise and the secur-
ity of the Bonds and Parity Bonds, if any, and an
Independent Engineer's Certificate to such effect has
been filed with the Treasurer, the Treasurer may so
determine, which such determination by the Treasurer
shall be final and conclusive and, upon notice thereof,
the City shall forthwith deposit such net proceeds in
the Sewer Fund.
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Covenant 12. Power to Issue Bonds and Make
Pledges. The City is duly authorized pursuant to the
Charter and the Revenue Bond Law of 1941 to create and
issue the Bonds and to adopt this Resolution and to
pledge the Net Revenues of the Enterprise, Funds and
Accounts and other moneys, securities, funds and
property purported to be pledged by this Resolution in
the manner and to the extent provided in this Resolu-
tion. The Bonds and the provisions of this Resolution
are and will be valid and legally enforceable obliga-
tions of the City in accordance with their terms and
the terms of this Resolution. The City shall at all
times, to the extent permitted by law, defend, preserve
and protect the pledge of the Net Revenues of the
Enterprise, Funds and Accounts and other moneys,
securities, funds and property pledged under this
Resolution and all the rights of the Bondholders under
this Resolution against all claims and demands of all
persons whomsoever.
Covenant 13. Further Assurances. Whenever
and so often as requested so to do by the Treasurer or
the Fiscal Agent, the City will promptly execute and
delivery or cause to be executed and delivered all such
other and further instruments, documents or assurances,
and promptly do or cause to be done all such other and
further things, as may be necessary or reasonably
required in order to further and more fully vest in the
Treasurer, the Fiscal Agent and the Bondholders all
rights, interest, powers, benefits, privileges and
advantages conferred or intended to be conferred upon
them by this Resolution.
Covenant 14. Unconditional Obligation.
Except only as provided herein for alteration of the
Bonds or this Resolution, nothing in this Resolution or
in the Bonds or in the coupons contained shall affect
or impair the obligation of the City, which is absolute
and unconditional, to pay the principal of, interest
and premium, if any, on the Bonds to the respective
Holders of the Bonds and coupons at the respective
dates of maturity, or upon prior redemption, as herein
provided, or affect or impair the right of action,
which is also absolute and unconditional, of such
Holders to institute suit to enforce such payment by
virtue of the contract embodied in the Bonds and
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coupons and in the Revenue Bond Law and this Resolu-
tion.
Covenant 15. Agreement and Performance
Thereof. The performance of the duties prescribed in
this Resolution and in the Charter and Revenue Bond Law
by the City or its proper officers, agents or employ-
ees, is of the essence of the City's contract with the
Bondholders. Each taker and subsequent Holder of the
Bonds and attached or detached coupons has recourse to
all of the provisions of this Resolution and of the
Charter and Revenue Bond Law and is bound by their
terms. Each and all of the terms of this Resolution
shall be and constitute a covenant on the part of the
City to and with each and every Bondholder from the
time the Bonds are issued hereunder. The Resolution,
the Charter and Revenue Bond Law and the covenants,
agreements, provisions and conditions herein contained,
constitute a continuing agreement with the Holders of
all of the Bonds issued or to be issued hereunder and
then Outstanding, to secure the full and final payment
of the principal and redemption price of and the
interest on all Bonds which may from time to time be
executed and delivered hereunder. Whenever all of the
Bonds and all interest then accrued thereon shall have
been fully paid, discharged or defeased, the agreements
in this Resolution contained shall cease and terminate,
and the City shall be under no further obligation to
apply the Revenues as herein required, or otherwise to
do or perform any of the covenants, conditions, or
agreements contained in this Resolution.
Covenant 16. Non-Arbitrage. The City hereby
covenants that it will make no use of the proceeds of
the Bonds at any time during the term thereof which, if
such use had been reasonably expected on the date of
issue of the Bonds, would have caused the Bonds to be
arbitrage bonds within the meaning of Section 103(c) of
the Internal Revenue Code of 1954, as amended, and any
applicable regulations promulgated thereunder.
Section 22. Issuance of Parity, Refunding
and Additional Bonds.
A. Issuance of Parity Bonds. No additional
bonds shall be issued or other obligations incurred
which shall be payable from the Net Revenues of the
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Enterprise and constitute a lien thereon which shall
have priority over the Bonds and any Parity Bonds. The
City may issue additional bonds, payable from and
secured by a lien on the Revenues on a parity with the
lien of any of the then Outstanding Bonds (the "Parity
Bonds"), subject to the provisions of this Section.
1. Such Parity Bonds shall be duly author-
ized in the manner provided by law, and the Mayor and
Common Council shall adopt a resolution or resolutions
providing for the issuance of such Parity Bonds and,
specifying the maximum principal amount thereof and
describing the terms and conditions of such Parity
Bonds.
2. The City shall not, at the time of the
issuance of such Parity Bonds, be in default hereunder
unless the Parity Bonds are for funding or refunding
defaulted Bonds or otherwise curing such default.
3. The Net Revenues of the Enterprise for
the last Fiscal Year preceding the date of adoption by
the Mayor and Common Council of the Resolution pro-
viding for the issuance of such Parity Bonds, audited
as provided in Covenant 7 of Section 21 hereof, as
shown by a certificate of an Independent Certified
Public Accountant on file with the City and Fiscal
Agent; plus
(i) an allowance for increases in the
Net Revenues of the Enterprise for such fiscal
year from any additions, extensions or improve-
ments to the Enterprise to be acquired, construct-
ed or financed with the proceeds of such Parity
Bonds or with the proceeds of any Bonds previously
issued, and also for Net Revenues of the Enter-
prise from any such additions, extensions or
improvements which have been made from moneys from
any source but which, during all or any part of
such Fiscal Year, were not in service, all in an
amount equal to seventy-five percent (75%) of the
estimated additional average annual Net Revenues
of the Enterprise to be derived from such addi-
tions, extensions or improvements for the first
thirty-six (36) months in which each such addi-
tion, extension or improvement is to be in opera-
tion, all as shown by an Independent Engineer's
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Certificate on file with the City and the Fiscal
Agent;
(ii) An allowance for increases in the
Net Revenues of the Enterprise to be received as
compensation to the City for collecting and/or
transporting and/or treating and/or disposing of
sewage or other wastes under a contract or con-
tracts executed with the United States of America,
the State of California or any municipal or public
corporation or district, or any private corpora-
tion or person but which, during all or part of
such Fiscal Year or last completed twelve-month
period, were not received, all in an amount equal
to seventy-five percent (75%) of the estimated
additional average annual Net Revenues of the
Enterprise to be derived under such contract or
contracts for the first thirty-six month period of
service under the contract involved, all as shown
by an Independent Engineer's Certificate on file
with the City and the Fiscal Agent; and
(iii) an allowance for increases in the
Net Revenues of the Enterprise arising from any
increases in the charges which became effective
prior to the issuance of such Parity Bonds but
which, during all or any part of such Fiscal Year,
were not in effect, in an amount equal to seventy-
five percent (75%) of the amount by which the Net
Revenues of the Enterprise would have been
increased if such increase in charges had been in
effect during the whole of such Fiscal Year, as
shown by an Independent Engineer's Certificate on
file with the City and the Fiscal Agent;
shall equal at least 1.25 times the Maximum Annual Debt
Service on the Bonds and Parity Bonds in any future
Fiscal Year after the issuance of such Parity Bonds.
4. The resolution providing for the issu-
ance of the Parity Bonds shall provide for an increase
in the amount in the Reserve Fund so that there shall,
after issuance of the Parity Bonds and at all times
thereafter, be on deposit therein a sum equal to the
Maximum Annual Debt Service computed as to the aggre-
gate principal amount of all Bonds to be Outstanding
following the issuance of the Parity Bonds.
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B. Nothing in this Resolution shall be
deemed to limit or restrict the power of the City to
issue additional bonds payable from Surplus on a basis
which is subordinate as to the lien of any of the
Revenues to the Outstanding Bonds and Parity Bonds (in
this Resolution sometimes referred to as "Junior Lien
Bonds"), without compliance with the provisions of this
Section or of any other provisions of this Resolution.
C. The Mayor and Common Council may refund
the Bonds or Parity Bonds, if any, in any manner, which
at the time of such refunding may be permitted by law.
The refunding bonds may be on a parity of lien with all
or a portion of the refunded Bonds. Nothing herein
shall prohibit the Mayor and Common Council from
issuing such refunding bonds as Junior Lien Bonds. For
the purpose of curing a default or threatened default,
the Mayor and Common Council may issue additional bonds
and exchange such bonds for maturing or matured Bonds
or Parity Bonds, if any, or sell them and use the
proceeds thereof to pay said Bonds or Parity Bonds, if
any, provided that the new bonds shall be made to
mature after the maturity of the Bonds or Parity Bonds,
if any. Funding or refunding bonds may be issued in
such principal amount as may be authorized by law.
D. The issuance of types of debt other than
Bonds as Parity Bonds or as Junior Lien Bonds is
specifically authorized and required by this Resolu-
tion. Such other types of debt, issued as Parity Bonds
or Junior Lien Bonds, as the case may be, may include,
without limitation, debt issued by a joint powers
authority, the Redevelopment Agency of the City of San
Bernardino, or any public or private authority, agency
or person through lease with the City or otherwise or
through lease participation certificates, conditional
sale certificates or lease purchase certificates or any
other financially feasible means. It is contemplated
that substantial Federal and/or State grants have been
applied for and are anticipated to be approved. These
grants are on a matching funds basis. It is anticipat-
ed that more of such grants will be applied for and
granted in the future. The San Bernardino City Sewer
System with its sewage treatment and effluent recla-
mation works is regional in scope, serving nearby areas
that are not in the City limits. The discharge is into
the Santa Ana River watershed which makes the San
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Bernardino City Sewer System so important to the
environment of the entire area and the communities
being served by the Santa Ana River watershed. The
purpose of this subsection is to authorize and require
the City to proceed by whatever financing means proves
feasible to issue whatever types of debt that may be
appropriate to the prompt solution of this very impor-
tant waste disposal problem facing the City.
Section 23. The Fiscal Agent and the Paying
Agents.
A. Appointment of Fiscal Agent. Security
Pacific National Bank in Los Angeles, California, is
hereby appointed Fiscal Agent for the City to act as
the agent and depositary of the City for the purpose of
receiving all moneys required to be paid to the Fiscal
Agent hereunder, to allocate, use and apply the same,
to hold, receive and disburse the funds pledged or held
hereunder, and otherwise to hold all the offices and
perform all the functions and duties provided in this
Resolution to be held and performed by the Fiscal
Agent. The Fiscal Agent shall signify its acceptance
of the duties and obligations imposed upon it by this
Resolution by executing and delivering to the City a
written acceptance thereof; and by executing and
delivering such acceptance, the Fiscal Agent shall be
deemed to have accepted such duties and obligations,
but only upon the terms and conditions set forth in
this Resolution.
The City may remove the Fiscal Agent initial-
ly appointed or any successor thereto and in such case
shall forthwith appoint a successor thereto but any
successor shall be a bank or trust company doing
business and having an office in the City of Los
Angeles, having a combined capital an surplus of at
least $50,000,000. The Fiscal Agent herein appointed
or any substituted Fiscal Agent may at any time resign
as such by writing filed with the City in which event
the City shall forthwith appoint a substitute Fiscal
Agent and the resignation shall become effective upon
such appointment. In the event that the Fiscal Agent
or any successor becomes incapable of acting as such,
the Agency shall forthwith appoint a substitute Fiscal
Agent. Any bank or trust company into which the Fiscal
Agent may be merged or with which it may be
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consolidated shall become the Fiscal Agent without
action of the City. The Fiscal Agent may become the
owner of any of the Bonds authorized by this Resolution
or any of the coupons appurtenant thereto with the same
rights it would have had if it were not the Fiscal
Agent.
The Fiscal Agent shall have no duty or
obligation whatsoever to enforce the collection of or
to exercise diligence in the enforcement of the collec-
tion of funds assigned to it hereunder, or as to the
correctness of any amounts received, but its liability
shall be limited to the proper accounting for such
funds as it shall actually receive.
The recitals of fact and all promises,
covenants and agreements herein and in the Bonds shall
be taken as statements, promises, covenants and agree-
ments of the City, and the Fiscal Agent assumes no
responsibility for the correctness of the same, and
makes no representations as to the validity or suffi-
ciency of this Resolution or of the Bonds or coupons,
and shall incur no responsibility in respect thereof,
other than in connection with the duties or obligations
herein or in the Bonds assigned to or imposed upon the
Fiscal Agent. The Fiscal Agent shall not be liable in
connection with the performance of its duties here-
under, except for its own negligence or default.
The City shall, during the life of the Bonds,
provide for Paying Agents, at least one in Chicago,
Illinois, and at least one in New York, New York, at
the office of which the Bonds and coupons are payable
at the option of the Holder.
Section 24. Lost, Stolen, Destroyed or
Mutilated Bonds. In the event that any Bond or any
interest coupon pertaining thereto is lost, stolen,
destroyed or mutilated, the City will cause to be
issued a new Bond or coupon similar to the original to
replace the same in such manner and upon such reason-
able terms and conditions, including the payment of
costs and the posting of a surety bond if the City
deems such surety bond necessary, as may from time to
time be determined and prescribed by Resolution. The
City may authorize such new Bond or coupon or coupons
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to be signed and authenticated in such manner as it
determines in said resolution.
Section 25. Cancellation of Bonds. All
Bonds and coupons surrendered to the Fiscal Agent of
the City for payment upon maturity or for redemption
shall upon payment therefor be cancelled immediately
and forthwith transmitted to the Treasurer of the City.
All of the Bonds and interest coupons surrendered to
the Treasurer for redemption shall upon payment there-
for be cancelled immediately. Any Bonds purchased by
the City as authorized herein together with all unpaid
coupons pertaining thereto shall be cancelled forthwith
and shall not be reissued. All of the cancelled Bonds
and interest coupons shall remain in the custody of the
Treasurer until destroyed pursuant to due authoriza-
tion.
Section 26. Events of Default and Remedies.
A. Event of Default. One or more of the
following events (herein called "Events of Default")
shall constitute an event of default:
J. Principal. If default shall be made in
the due and punctual payment of the principal of any
Bond when and as the same shall become due and payable,
whether at maturity as therein expressed, by proceed-
ings for redemption, by declaration, or otherwise; or
2. Interest. If default shall be made in
the due and punctual payment of any installment of
interest of any Bond when as such interest installment
shall become due and payable; or
3. Covenants. If default shall be made in
the observation of any of the covenants, agreements or
conditions on its part herein or in the Bonds con-
tained, and such default shall have continued for a
period of sixty (60) days; or
4. Bankruptcy. If the City shall file a
petition or answer seeking reorganization or arrange-
ment under the Federal Bankruptcy laws or other applic-
able laws or statutes of the United States of America,
or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the
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City, seeking reorganization under the Federal Bank-
ruptcy laws or any other applicable laws or statutes of
the United States of America, or if, under the Federal
Bankruptcy laws or the provisions of any other law for
the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the
City or of the whole or any substantial part of its
property.
B. Acceleration. In each and every Event of
Default, the Fiscal Agent, or the Holders of not less
than sixty-six and two-thirds percent (66-2/3%) in
aggregate principal amount of the Bonds at the time
Outstanding shall be entitled, upon notice in writing
to the City, to declare the principal of all of the
Bonds then Outstanding hereunder and the interest
accrued thereon to be due and payable immediately, and
upon any such declaration the same shall become and
shall be immediately due and payable, anything in this
Resolution or in the Bonds contained to the contrary
notwithstanding; provided, however, that no such
acceleration shall be made in the case of a default
under subsections A 1 and 2 above, if such default has
been cured within thirty (30) days of the date thereof.
has
Net
the
C. Application of Funds.
been declared under subsection B
Revenues of the Enterprise shall
following order:
When acceleration
above, all of the
be applied by in
1. Costs and Expenses. To the payment of
the costs and expenses the Bondholders in declaring
such Event of Default, including reasonable compensa-
tion to their agents, attorneys and counsel, and to the
payment of the costs and expenses of the Fiscal Agent
in carrying out the provisions of this Section, includ-
ing reasonable compensation to its agents, attorneys
and counsel;
2. Interest on Undue Bonds. In case the
principal of the Bonds shall not have become due and
shall not then be due and payable, to the payment of
the interest in default in the order of the maturity of
the installments of such interest, with interest on the
overdue installments at the same rate, such payments to
be made ratably to the persons entitled thereto without
discrimination or preference;
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3. Principal and Interest on Due Bonds. In
case any principal of the Bonds shall have become and
shall be then due and payable, to the payment of the
whole amount then owing and unpaid upon the Bonds for
the principal and interest, with interest on the
overdue principal and installments of interest at the
same rate; and
4. Insufficient Funds. In case such moneys
shall be insufficient to pay in full the whole amount
so owing and unpaid upon the Bonds, then to the payment
of such principal and interest without preference or
priority of principal over interest, or of interest
over principal, or of any installment of interest over
any other installment of interest, ratably to the
aggregate of such principal and interest then due.
D. Procedure for Application to Bonds. No
application of funds to the Bonds shall be made except
upon presentation of the several Bonds and coupons, and
the stamping thereon of the payment, if only partially
paid, or upon the surrender thereof if fully paid.
E. Refunding Defaulted Bonds. The City may
refund any defaulted Bond as to which the maturity has
been accelerated by the issuance of a new bond maturing
after the maturity of the last Bond issued hereunder,
but otherwise on a parity as to payment of interest
with the Bonds issued hereunder, and with the consent
of the Holder thereof, exchange such Bonds for such
matured Bond, or, without his consent, issue and sell
said refunding bond and pay said defaulted Bond, and in
such event such action shall be deemed to cure such
default hereunder.
F. Proceedings Constitute Contract; Bond-
holder Remedies. The provisions of this Resolution and
of the resolutions providing for the sale of the Bonds
and awarding the Bonds and fixing the interest rate or
rates thereon shall constitute a contract between the
City and the Bondholders and the provisions thereof
shall be enforceable by any Bondholder for the equal
benefit and protection of all Bondholders similarly
situated by mandamus, accounting, mandatory injunction
or any other suit, action or proceeding at law or in
equity that is now or may hereafter be authorized under
the laws of the State of California in any court of
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competent jurisdiction. Said contract is made under
and is to be construed in accordance with the laws of
the State of California.
No remedy conferred hereby upon any Bond-
holder is intended to be exclusive of any other remedy,
but each such remedy is cumulative and in addition to
every other remedy and may be exercised without ex-
hausting and without regard to any other remedy con-
ferred by the Revenue Bond Law or any other law of the
State of California. No waiver of any default or
breach of duty or contract by any Bondholder shall
affect any subsequent default or breach of duty or
contract or shall impair any rights or remedies on said
subsequent default or breach. No delay or omission of
any Bondholder to exercise any right or power accruing
upon any default shall impair any such right or power
or shall be construed as a waiver of any such default
or acquiescence therein. Every substantive right and
every remedy conferred upon the Bondholders may be
enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to
enforce any right or exercise any remedy shall be
brought or taken, and the Bondholder shall prevail,
said Bondholder shall be entitled to receive from the
Net Revenues of the Enterprise reimbursement for
reasonable costs, expenses, outlays and attorney's fees
and should said suit, action or proceeding be aban-
doned, or be determined adversely to the Bondholders
then, and in every such case, the City and the Bond-
holders shall be restored to their former positions,
rights and remedies as if such suit, action or proceed-
ing had not been brought or taken.
After the issuance and delivery of the Bonds
this Resolution and supplementary resolutions thereto
shall be irrepealable, but shall be subject to modifi-
cation to the extent and in the manner provided in
Sections 26 and 27, inclusive, of this Resolution, but
to no greater extent and in no other manner.
Section 27. Supplemental Resolutions.
A. The City may, without the consent of the
Bondholders as provided in Section 28, adopt at any
time or from time to time Supplemental Resolutions for
anyone or more of the following purposes, and any such
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Supplemental Resolution shall become effective in
accordance with its terms upon the filing with the
Fiscal Agent of a copy thereof certified by the City
Clerk:
( 1 )
ments of
securing
To
the
the
add additional covenants and agree-
City for the purpose of further
payment of the Bonds;
(2) To prescribe further limitations and
restrictions upon the issuance of Parity Bonds and
Junior Lien Bonds and the incurring of indebted-
ness by the City;
(3) To surrender any right, power or privi-
lege reserved to or conferred upon the City by the
terms of this Resolution;
(4) To confirm as further assurance any
pledge under and the subjection to any lien, claim
or pledge created or to be created by the provi-
sions of this Resolution of the Net Revenues of
the Enterprise and Accounts and/or Funds or of any
other moneys, securities or funds;
(5) To cure any ambiguity or defect or
inconsistent provision in this Resolution or to
insert such provisions clarifying matters or
questions arising under this Resolution as are
necessary or desirable, provided that such modi-
fications do not adversely affect the rights of
the Bondholders.
B. Supplemental Resolutions Effective with
Consent of Bondholders. The provisions of this Resolu-
tion may also be modified at any time or from time to
time by a Supplemental Resolution, subject to the
consent of Bondholders in accordance with and subject
to the provisions of Section 28 hereof, such Supple-
mental Resolution to become effective upon the filing
with the Fiscal Agent of a copy thereof certified by
the City Clerk.
C. General Provisions Relating to Supple-
mental Resolutions. This Resolution shall not be
modified or amended in any respect except in accordance
with and subject to the provisions of this Section 27
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"
and Section 28. Nothing contained in this Section 27
or Section 28 shall affect or limit the right or
obligation of the City to execute and deliver to the
Fiscal Agent or any Paying Agent any instrument else-
where in this Resolution provided or permitted to be
delivered to the Fiscal Agent or any Paying Agent.
A copy of every Supplemental Resolution
adopted by the City when filed with the Fiscal Agent
shall be accompanied by an Opinion of Counsel stating
that such Supplemental Resolution has been duly and
lawfully adopted in accordance with the provisions of
this Resolution, is authorized or permitted by this
Resolution and is valid and binding upon the City and
enforceable in accordance with its terms.
The Fiscal Agent is hereby authorized to
accept delivery of a certified copy of any Supplemental
Resolution permitted or authorized pursuant to the
provisions of this Resolution and to make all further
agreements and stipulations which may be contained
herein, and, in taking such action, the Fiscal Agent
shall be fully protected in relying on Opinion of
Counsel that such Supplemental Resolution is authorized
or permitted by the provisions of this Resolution.
Section 28. Consent of Bondholders.
A. The consents of Bondholders are required
by this Section for the amendment, waiver or modifica-
tion of any provision of this Resolution not referred
to in Section 27; provided, however, further that
modification or amendment shall be made under or
pursuant to this Resolution, which shall, without the
express consent of the Bondholder affected, reduce the
amount of any Bond, reduce the interest rate or premi-
um, if any, payable thereon, extend its maturity or
terms for paying interest thereon or change the mone-
tary medium in which principal and interest or premium,
if any, is payable or reduce the percentage of consent
required for amendment or modification. Any act
relating to such amendment, waiver or modification
consented to by Bondholders holding sixty-six and
two-thirds percent (66-2/3%) in aggregate principal
amount of the Bonds, exclusive of Issuer-Owned by the
City, shall be binding upon the Holders of all of the
bonds and interest coupons, whether such coupons be
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attached to Bonds or detached therefrom, and shall not
be deemed an infringement of any of the provisions of
this Resolution or of said Revenue Bond Law, whatever
the character of such act may be, and may be done and
performed as fully and freely as if expressly permitted
by the terms of this Resolution, and after such consent
relating to such specified matters has been given, no
Bondholder or Holder of any interest coupon, whether
attached to a Bond or detached therefrom, shall have
any right or interest to object to such action or in
any manner to question the propriety thereof or to
enjoin or restrain the City or any officer thereof from
taking any action pursuant thereto.
B. Calling Bondholders' Meeting. If the
City shall desire to obtain any such consent it shall
call a meeting of Bondholders, by resolution, for the
purpose of considering the action, the consent to which
is desired.
C. Notice of Meeting. Notice specifying the
purpose, place, date and hour of such meeting shall be
published once in a financial newspaper or journal of
national circulation published in the City of New York,
New York not less than sixty (60) days and not more
than ninety (90) days prior to the date fixed for the
meeting. Such notice shall set forth the nature of the
proposed action, consent to which is desired. If any
of the Bonds shall be so registered as to be payable
otherwise than to bearer, the Fiscal Agent shall, on or
before the first publication of such notice, mail a
similar notice, postage prepaid, to the respective
registered owners thereof at their addresses appearing
on the Bond Register. The place, date and hour of
holding such meeting and the date or dates of pUblish-
ing and mailing such notice shall be determined by the
City, in its discretion.
The actual receipt by any Bondholder of
notice of any such meeting shall not be a condition
precedent to the holding of such meeting, and failure
to receive such notice shall not affect the validity of
the proceedings thereat. A certificate by the Fiscal
Agent, approved by resolution of the Mayor and Common
Council of said City, that the meeting has been called
and that notice thereof has been given as herein
provided shall be conclusive as against all parties and
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DIS310.1(et)
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it shall not be open to any Bondholder to show that he
failed to receive notice of such meeting.
D. Voting Qualifications. Any Bondholder
may, prior to any such meeting, deliver his Bond or
Bonds to the Fiscal Agent, and shall thereupon be
entitled to receive an appropriate receipt for the Bond
or Bonds so deposited, calling for the redelivery of
such Bond or Bonds at any time after the meeting. The
Fiscal Agent shall prepare and deliver to the Chairman
of the meeting a list of the names and addresses of the
registered owners of Bonds, with a statement of the
maturities and serial numbers of the Bonds held and
deposited by each of such Bondholders, and no Bond-
holder shall be entitled to vote at such meeting unless
his name appears upon such list or unless he shall
present his Bond or Bonds at the meeting or a certifi-
cate of deposit thereof, satisfactory to the Fiscal
Agent, executed by a bank or trust company. No Bond-
holder shall be permitted to vote with respect to a
larger aggregate principal amount of Bonds than is set
against his name on such list, unless he shall produce
the Bonds upon which he desires to vote, or a certifi-
cate of deposit thereof as above provided.
E. Issuer-Owned Bonds. The City shall
present at the meeting a certificate, signed and
verified by the City Treasurer, stating the maturities
and serial numbers of all Bonds owned by, or held for
account of, the City, directly or indirectly. No
person shall be permitted at the meeting to vote or
consent with respect to any Bond appearing upon such
certificate, or any Bond which it shall be established
at or prior to the meeting is owned by the City,
directly or indirectly, and no such Bond (in this
resolution referred to as "Issuer-Owned Bond") shall be
counted in determining whether a quorum is present at
the meeting.
F. Quorum and Procedure. A representation
of at least sixty-six and two-thirds percent (66-2/3%)
in aggregate principal amount of the Bonds then Outs-
tanding (exclusive of Issuer-Owned Bonds) shall be
necessary to constitute a quorum at any meeting of
Bondholders, but less than a quorum may adjourn the
meeting from time to time, and the meeting may be held
as so adjourned without further notice, whether such
55
DIS31O.1(et)
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adjournment shall have been had by a quorum or by less
than a quorum. The City shall, by an instrument in
writing, appoint a temporary chairman of the meeting,
and the meeting shall be organized by the election of a
permanent chairman and a secretary. At any meeting
each Bondholder shall be entitled to one vote for every
$5,000 principal amount of Bonds with respect to which
he shall be entitled to vote as aforesaid, and such
vote may be given in person or by proxy duly appointed
by an instrument in writing presented at the meeting.
The City, by its duly authorized representative, may
attend any meeting of the Bondholders, but shall not be
required to do so.
G. Vote Required. At any such meeting held
as aforesaid there shall be submitted for the consid-
eration and action of the Bondholders a statement of
proposed action, consent to which is desired, and if
such action shall be consented to and approved by
Bondholders holding at least sixty-six and two-thirds
percent (66-2/3%) in aggregate amount of the Bonds then
outstanding (exclusive of Issuer-Owned Bonds) the
chairman and secretary of the meeting shall so certify
in writing to the City, and such certificate shall
constitute complete evidence of consent of Bondholders
under the provisions of this Resolution. A certificate
signed and verified by the chairman and the secretary
of any such meeting, shall be conclusive evidence and
the only competent evidence of matters stated in such
certificate relating to proceedings taken at such
meeting.
Section 29. Execution of Instruments by
Bondholders and Proofs of Ownership of Bonds.
A. Evidence of Signatures of Bondholders and
Ownership of Bonds. Any request, direction, consent,
revocation of consent, or other instrument in writing
required or permitted by this Resolution to be signed
or executed by Bondholders may be in any number of
concurrent instruments of similar tenor, and may be
signed or executed by such Bondholders in person or by
their attorneys or agents appointed by an instrument in
writing for that purpose or, in the case of coupon
Bonds, by any bank, trust company or other depository
of such Bonds. Proof of the execution of any such
instrument, or of any instrument appointing any such
56
DIS310.1(et)
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. .
San Bernardino
60,009-40-16
attorney or agent, and of the hOlding and ownership of
Bonds shall be sufficient for any purpose of this
Resolution (except as otherwise herein provided), if
made in the following manner:
1. The fact and date of the execution
of any Bondholder or his attorney or agent of
any such instrument and of any instrument
appointing any such attorney or agent, may be
proved by delivery of a certificate, which
need not be acknowledged or verified, of an
office of any bank, or trust company, or of
any notary public, or other officer author-
ized to take acknowledgements. Where any
such instrument is executed by an officer of
a corporation or association or a member of a
partnership on behalf of such corporation,
association or partnership, such certificate
shall also constitute sufficient proof of his
authority; and
2. The fact of the holding of coupon
Bonds by any Bondholder and the amount and
the numbers of such Bonds and the date of his
holding the same (unless such Bonds be
registered) may be proved by a certificate
executed by an officer of any bank, or trust
company, if such certificate shall be deemed
by the Fiscal Agent to be satisfactory,
showing that at the date therein mentioned
such person had on deposit with or exhibited
to such bank, or trust company, the Bonds
described in such certificate. The Fiscal
Agent may conclusively assume that such
ownership continues until written notice of
the contrary is served upon the Fiscal Agent.
The ownership of registered Bonds shall be
proved by the bond register held by the
Fiscal Agent under the provisions of this
Resolution.
Nothing contained in this Section shall be
construed as limiting the Fiscal Agent to such proof,
it being intended that the Fiscal Agent may accept any
other evidence of the matters herein stated which may
seem sufficient. Any request or consent of the Holder
of any Bond shall bind every future Holder of the same
57
DIS310.1(et)
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Bond in respect of anything done or suffered to be done
by the City, the Fiscal Agent or any Paying Agent in
pursuance of such request or consent.
Section 30. Miscellaneous.
A. Preservation and Inspection of Docu-
ments. All documents received by the Fiscal Agent and
Treasurer or any Paying Agent under the provisions of
this Resolution shall be retained in its possession and
shall be subject at all reasonable times to the inspec-
tion of the City, the Fiscal Agent or any Paying Agent,
and, upon written request of not less than five percent
(5%) in principal amount of the Holders of the Out-
standing Bonds, Bondholders and their agents and
representatives, any of whom may make copies thereof.
B. Parties of Interest. Nothing in this
Resolution, or adopted pursuant to the provisions
hereof, expressed or implied, is intended to or shall
be construed to confer upon or to give to any person or
party other than the City, Fiscal Agent, Paying Agents
and the Holders of the Bonds and coupons pertaining
thereto any rights, remedies or claims under or by
reason of this Resolution or any covenants, condition
or stipulation thereof; and all covenants, stipula-
tions, promises and agreements in this Resolution
contained by or on behalf of the City shall be for the
sole and exclusive benefit of the City, Fiscal Agent
and Paying Agents and the Holders from time to time of
the Bonds and the coupons pertaining thereto.
C. No Recourse Under Resolution or on
Bonds. All covenants, stipulations, promises, agree-
ments and obligations of the City contained in this
Resolution shall be deemed to be the covenants, stipu-
lations, promises, agreements and obligations of the
City and not of any officer or employee of the City in
his individual capacity, and no recourse shall be had
for the payment of the principal or Redemption Price of
or interest on the Bonds or for any claim based thereon
or on this Resolution against any officer or employee
of the City or any person executing the Bonds.
D. CUSIP: CUSIP identifications numbers
will be imprinted on the Bonds, but such numbers shall
not constitute a part of the contract evidenced by the
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Bonds and no liability shall hereafter attach to the
Agency or any of the officers or agents thereof because
of or on account of said numbers. Any error or omis-
sion with respect to said numbers shall not constitute
cause for refusal by the successful bidder to accept
delivery of and pay for the Bonds.
E. Headings. Any headings preceding the
text of the several Sections hereof, and any table of
contents or marginal notes appended to copies hereof,
shall be solely for convenience or reference and shall
not constitute a part of this Resolution, nor shall
they affect its meaning, construction or effect.
F. Conflict. All resolutions or parts of
resolutions or other proceedings of the City in con-
flict herewith shall be and the same are repealed
insofar as such conflict exists.
Section 31. Future Contracts. Nothing
herein contained shall be deemed to restrict or prohib-
it the City from making contracts or creating bonded or
other indebtedness payable from the general fund of the
City or from taxes or any source other than the Net
Revenues of the Enterprise as defined herein, and the
general fund of the City shall not include the Net
Revenues of the Enterprise, and no contract or other
obligation payable from the general fund of the City
shall be payable from the Net Revenues of the Enter-
prise unless specifically authorized pursuant to
Section 22 hereof.
Section 32. Severability. If any covenant,
agreement or provision, or any portion thereof, con-
tained in this Resolution, or the application thereof
to any person or circumstance, is held to be unconsti-
tutional, invalid or unenforceable, the remainder of
this Resolution and the application of any such cove-
nant, agreement or provision, or portion thereof, to
other persons or circumstances, shall be deemed sever-
able and shall not be affected thereby, and this
Resolution and the Bonds issued pursuant hereto shall
remain valid and the Bondholders shall retain all valid
rights and benefits accorded to them under this Resolu-
tion and the Constitution and laws of the State of
California and the Charter of the City.
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Section 33. Effective Date. This Resolution
shall take effect upon adoption.
I HEREBY CERTIFY that the foregoing resolution was
duly adopted by the Mayor and Common Council of the City of
adjourned regular
meeting thereof,
San Bernardino at an
held on the 24th
day of
March
, 1983, by the
following vote, to wit:
AYES:
Council Members
Castaneda, Reilly,
Hernandez, Marks, Quiel, Strickler
NAYS: None
ABSENT: Council Member Hobbs
hmtd/ ~~
, City C erk
The foregoing resolution is hereby approved this
__s4J>~__
day of March , 1983.
o~rnardino
Approved as to form:
U4.1.. ~
-r'F"""--a
JlS$1: c~rylJrr'''N'Y
60
San Bernardil'lo
60,009-40-16
.
EXHIBIT A
[FORM OF BEARER BOND]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF SAN BERNARDINO
SEWER REVENUE REFUNDING BOND
ISSUE OF 1983
$5,000
No.
(1) THE CITY OF SAN BERNARDINO, a municipal
corporation duly organized and existing under and
pursuant to the Constitution and laws of the State of
California (hereinafter sometimes called "City"), FOR
VALUE RECEIVED, hereby promises to pay, solely from the
Sewer Fund, as hereinafter provided, to the bearer on
, 19__, upon presentation and surren-
der of this Bond, the sum of FIVE THOUSAND DOLLARS
($5,000), with interest thereon payable solely out of
said Sewer Fund, at the rate of % per annum,
interest payable semiannually on the fifteenth day of
March and September of each year commencing on
September 15, 1983, until this Bond is paid, upon
presentation and surrender of the respective interest
coupons hereto attached; provided, however, that if at
the maturity date of this Bond and or, if the same is
callable and redeemable prior to maturity and shall be
duly called for redemption, then at the date fixed for
redemption, funds are available for the payment or
redemption thereof, as provided in the Resolution
hereinafter mentioned, this Bond shall then cease to
bear interest. Both principal and interest are payable
in lawful money of the United States of America at the
corporate trust office of Security Pacific National
Bank, or at any fiscal agent for the City in Los
Angeles, California, or, at the option of the holder
hereof, at the office of any paying agent for the City
in Chicago, Illinois, or New York, New York.
(2) This Bond and the interest hereon and
any premium upon the redemption hereof are not a debt
of the City of San Bernardino, nor a legal or equitable
pledge, charge, lien or encumbrance upon any of its
property or upon any of its income, receipts or
61
DIS310.1(et)
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,
revenues except the revenues of the municipal sewer
system pledged to its payment, and the principal and
interest of this Bond and any premium upon the redemp-
tion hereof are payable solely from the revenues
pledged to its payment, to wit, net revenues from the
sewer system of the City, and said City is not obligat-
ed to pay such principal, interest and premium except
from said net revenues. The Sewer Fund is established
under and pursuant to the Charter of the City and the
Revenue Bond Law of 1941, and under the provisions of
the Resolution authorizing the issuance of this Bond
the gross revenues received from the services and
facilities or arising from the entire sewer system of
the City are required to be deposited in the City
Treasury to the credit of said Sewer Fund and used only
for the purposes authorized by said Resolution, includ-
ing the payment of the Necessary and Reasonable Mainte-
nance and Operation Costs of the sewer system and the
payment of principal and interest of the issue of bonds
of which this is one.
(3) This is one of a duly authorized issue
of Bonds of the City in the aggregate principal amount
of $ , designated "Sewer Revenue Refunding
Bonds, Issue of 1983," hereinafter called "the Bonds,"
all of which have been issued pursuant to the Charter
of the City and the Revenue Bond Law of 1941 (being
Chapter 6, Part I, Division 2, Title 5 of the Govern-
ment Code of the State of California) for the purpose
of refunding these outstanding series of bonds of said
City entitled "Sewer Revenue Bonds, Election 1957,
Series 1, 2 and 3" and the creation of said issue and
the terms and conditions of the Bonds are provided for
by the resolution of the Mayor and Common Council of
said City authorizing the Bonds adopted
19__, designated Resolution No. , and this
reference incorporates said Resolution and said Chapter
6 herein, and by acceptance hereof the holder of this
Bond and the coupons hereto attached assents to said
terms and conditions. Said Resolution is adopted
under, and this Bond and the interest coupons hereto
attached are issued under and are to be construed in
accordance with the laws of the State of California.
(4) By the terms of said Revenue Bond Law
and by covenant expressed in said Resolution, the City
is obligated to levy and collect charges for service
62
DIS310.1(et)
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from the sewer system of the City such as to provide
revenues sufficient to pay the Necessary and Reasonable
Maintenance and Operation Costs of the sewer system and
the principal of and interest on the bonds as they
become due and payable in addition to all other pay-
ments required for compliance with said Resolution, are
prohibited from issuing bonds having any priority with
respect to payment from the sewer system revenues, and
are subject to conditions with respect to any sale of
said sewer system. In the manner provided in the
Resolution, any or all of the obligations referred to
in this paragraph and certain other obligations men-
tioned in said Resolution may be waived with the
consent of the holders of sixty-six and two-thirds
percent (66-2/3%) in aggregate principal amount of the
outstanding bonds, exclusive of issuer-owned bonds,
unless the modification or amendment is for the purpose
of curing ambiguities, defects, etc., in which case no
Bondholder's consent is required.
(S) Unless this Bond matures on or prior to
, 19__, it is callable and redeemable
prior to maturity as follows: [insert provision from
Resolution].
(6) This Bond and the coupons hereto attach-
ed are negotiable instruments and shall be negotiable
by delivery. This Bond may be registered as to princi-
pal only or as to both principal and interest, in
accordance with the provisions for registration
endorsed hereon.
(7) It is hereby certified and recited that
any and all acts, conditions and things required to
exist, happen and to be performed precedent to and in
the incurring of the indebtedness evidenced by this
Bond and in the issuance of this Bond exist, have
happened, and have been performed in due time, form and
manner as required by the Constitution, the Charter of
the City and the laws of the State of California, and
that this Bond, together with all other indebtedness of
the City pertaining to the aforesaid sewer system, is
within every debt and other limit prescribed by the
Constitution, the Charter of the City and the laws of
the State of California.
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IN WITNESS WHEREOF, said City of San Bernar-
dino has caused this Bond to be signed by the Mayor and
the City Treasurer of said City by their facsimile
signatures, countersigned by the City Clerk of said
City by her manual signature, and the corporate seal of
said City to be imprinted hereon, and the interest
coupons hereto attached to be signed by the City
Treasurer by his facsimile signature, and has caused
this Bond to be dated the fifteenth day of March, 1983.
Mayor of the City of San
Bernardino, California
City Treasurer of the
City of San Bernardino,
California
COUNTERSIGNED:
City Clerk of the City
of San Bernardino, California
(SEAL)
64
DIS310.1(et)
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"
"
San Bernardil;1o
60,009-40-16
(COUPON BOND)
Coupon No.
On the first day of 19
, THE CITY OF SAN
BERNARDINO, CALIFORNIA, will pay to
the bearer, at the corporate trust
office of Security Pacific National
Bank, Fiscal Agent for the City, in
Los Angeles, California, or, at the
option of the holder hereof, at the
office of any paying agents of the
City in Chicago, Illinois, or New
York, New York, out of the Sewer
Fund of said City and not out of
any other fund or moneys of the
City, the sum of $
in lawful money of the United States
of America, being the interest then
due on SEWER REVENUE REFUNDING BOND,
ISSUE OF 1983, No.
dated March 15, 1983, subject to the
provisions on the reverse hereof.
City Treasurer of the City of
San Bernardino, California
On the reverse side of the coupon there shall be
printed substantially the following:
(REVERSE OF COUPON)
If the bond to which this coupon is attached
is redeemable and is duly called for redemption on a
date prior to the maturity date of this coupon, this
coupon will be void.
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DIS310.1(et)
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"
"
San Bernardi~o
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EXHIBIT B
[FORM OF FULLY REGISTERED BOND]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF SAN BERNARDINO
SEWER REVENUE REFUNDING BOND
ISSUE OF 1983
Fully Registered Bond
No. R
$5,000
(1) THE CITY OF SAN BERNARDINO, a municipal
corporation duly organized and existing under and
pursuant to the Constitution and laws of the State of
California (hereinafter sometimes called "City"), FOR
VALUE RECEIVED, hereby promises to pay, solely from the
Sewer Fund, as hereinafter provided, to
, or registered assigns (herein sometimes
referred to as "registered owner"), subject to the
right of prior redemption hereinafter mentioned the
principal sum of
Dollars ($ being Bonds maturing as follows:
Maturity Date
Amount
Interest Rate
and to pay such registered owner on the interest
payment date by check or draft mailed to him as his
name and address appear on the register kept by the
Fiscal Agent at the close of business on the fifteenth
(15th) day preceding the interest payment, interest on
such principal sum from the interest payment date next
preceding the date hereof (unless (i) the date hereof
is an interest payment date, in which event from the
interest payment date, or (ii) the date hereof is prior
to September 15, 1983, in which event from March 15,
1983) until the principal hereof shall have been paid
or provided for in accordance with the Resolution
hereinafter referred to, at the rate of % per
annum, interest payable semiannually on March 15 and
September 15 in each year commencing on September 15,
1983. Both principal and interest and any premium upon
the redemption prior to maturity of all or part thereof
66
DIS310.l(et)
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.'
.,
.
. .
. ,
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60,009-40-16'
are payable in lawful money of the United States of
America; and (except for interest which is payable by
check or draft as stated above) are payable at the
corporate trust office of Security Pacific National
Bank, Fiscal Agent for the Agency, in Los Angeles,
California, or, at the option of the Holder hereof, at
the office of any Paying Agent of the Agency in New
York, New York or Chicago, Illinois.
[Insert Paragraphs 2, 3, 4 and 5 from the
Form of Bear Bond]
(2) This Bond is issued in fully registered
form (herein sometimes referred to as "Fully Registered
Bond") and is non-negotiable. This Bond may be
exchanged for a like aggregate principal amount of
Bearer Bonds of the same issue, bearing all unmatured
coupons, or for a like aggregate principal amount of
Fully Registered Bonds of other authorized denomina-
tions, or in part for Bearer Bonds and the balance for
Fully Registered Bonds of the same issue, and Bearer
Bonds bearing all unmatured coupons may be exchanged
for a like aggregate principal amount of Fully Regis-
tered Bonds of authorized denominations of the same
issue, all as more fully set forth in the Resolution.
This Bond is transferable by the registered owner
hereof, in person or by his attorney duly authorized in
writing, at the corporate trust office of the Fiscal
Agent in the City of Los Angeles, California, but only
in the manner subject to the limitations and upon
payment of the charges provided in the Resolution, upon
surrender and cancellation of this Bond. Upon such
transfer a new Fully Registered Bond of authorized
denomination or denominations for the same aggregate
principal amount of the same issue will be issued to
the transferee in exchange therefor. No exchange or
transfer shall be made between the fifteenth (15th) day
preceding any interest payment date and such interest
payment date.
(3) The City, the Fiscal Agent and any
Paying Agent may treat the registered owner hereof as
the absolute owner hereof for all purposes, and the
Agency, the Fiscal Agent and any Paying Agent shall not
be affected by any notice to the contrary.
67
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.
.
.
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(4) This Bond shall not be entitled to any
benefit under the Resolution, or become valid or
obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been signed
by the Fiscal Agent.
[Insert Paragraph 7 from Form of Bearer Bond]
IN WITNESS WHEREOF, said City of San Bernar-
dino has caused this Bond to be signed by the Mayor and
the City Treasurer of said City by their facsimile
signatures, countersigned by the City Clerk of said
City by her manual signature, and the corporate seal of
said City to be imprinted hereon all as of the
day of
COUNTERSIGNED:
City Clerk of the City
of San Bernardino, California
(SEAL)
Mayor of the City of San
Bernardino, California
City Treasurer of the
City of San Bernardino,
California
68
DIS310.1(et)
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"
.
.
.
.
San Bernardino
60,009-40-16
[FORM OF CERTIFICATE OF AUTHENTICATION
OF FULLY REGISTERED BONDS]
This is one of the Fully Registered Bonds
described in the within-mentioned Resolution.
, Fiscal Agent
By
Authorized Officer
[FORM OF ENDORSEMENT ON FULLY
REGISTERED BONDS]
This Fully Registered Bond (issued in fully
registered form without coupons) is issued in lieu of
or in exchange for Bearer Bond(s) of this issue of the
denomination of $5,000, each not contemporaneously
outstanding, aggregating the face amount hereof; and
Bearer Bonds of this same issue and of the denomination
of $5,000 will be issued in exchange for this Bond in
the manner, with the effect and under the terms and
conditions stated on the face of the Bond and in the
Resolution referred to therein.
69
DIS310.1(et)
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....
A'-
.
..
.
.
San Bernardillo
60,009-40-16
[FORM OF ASSIGNMENT OF FULLY
REGISTERED BONDS]
For value received
hereby sells, assigns and transfers unto
the within-
mentioned Bond and hereby irrevocably constitutes and
appoints
, attorney, to transfer the same on the books
of the Fiscal Agent with fully power of substitution in
the premises.
Date:
NOTE:
The signature to this assignment must
correspond with the name as written on the
face of the within Bond in every particular,
without alteration or enlargement or any
change whatsoever.
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