Loading...
HomeMy WebLinkAbout1986-507 SBE077-22/2053S/de 11/24/86 RESOLUTION NO. 86-507 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, ACCEPTING A BOND PURCHASE AGREEMENT AND PROVIDING FOR THE ESTABLISHMENT OF A REDEMPTION FUND FOR THE PAYMENT OF THE BONDS TO BE PURCHASED PURSUANT TO SAID AGREEMENT WHEREAS, the Mayor and Common Council of the City of San Bernardino, Ca lifornia (the "Mayor and Common Counci 1") , have heretofore instituted and conducted proceedings under the terms and provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds, being Streets and Highways Code of the State of California, Section 9500, et~. (the "1984 Act"), for the refunding of the $13,400,000 City of San Bernardino, Improvement Bonds, Assessment District No. 961, Series 1985 (Park Centre) (the "1985 Bonds"), together with a levy of a reassessment on the property included within Assessment District No. 961 (the "Assessment District"); and WHEREAS, the Mayor and Common Council have approved Resolution No. 86-421, adopted on October 23, 1986 (the "Resolution of Intention"), pursuant to which the City determined and declared I that it is in the public interest, convenience and necessity to initiate proceedings pursuant to the 1984 Act for the refunding of the 1985 Bonds together wi th the levy of a reassessment on the property included within the Assessment District for the purpose of paying the debt service on the refunding bonds and refinancing the - 1 - c., indebtedness of the 1985 Bonds by the issuance of such refunding bonds (the "Bonds") pursuant to the 1984 Act; and WHEREAS, the Mayor and Common Council have now received, in proper form, a Bond Purchase Agreement for .the purchase of the Bonds to be issued pursuant to the 1984 Act and under said proceedings, and said Bond Purchase Agreement is determined to be in the best interests of owners of land included within the Assessment District and should be formally accepted by this Mayor and Common Council. NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. That the above recitals are all true and correct. Section 2. That the Bond Purchase Agreement sUbstantially in the form as attached hereto as Exhibit "A" and incorporated herein by reference, together with such changes, modifications and amendments as may be approved by the City Treasurer and the City Attorney upon the recommendation of Bond Counsel, received from Miller & Schroeder Financial, Inc. (the "Underwri ter"), for the purchase of the Bonds representing unpaid reassessments in the Assessment District is hereby accepted and approved. - 2 - Section 3. That the sale of the Bonds is subject to all the terms and conditions as set forth in the Bond Purchase Agreement as approved pursuant to Section 2 hereof. Section 4. That the Mayor, the, City Treasurer, the City Clerk or any other authorized officer of the City is hereby authorized and directed to execute and deliver the Bond Purchase Agreement which shall set forth the terms and provisions of the sale of the Bonds by the City to the Underwriter as such terms have been ascertained by the Underwriter based upon the most favorable market conditions available in the municipal bond market and when delivered shall be considered to be approved by the City pursuant to this Resolution. Section 5. That the City Treasurer be, and hereby is, di rected to have the Bonds printed, executed and delivered to the purchaser thereof upon receipt of the amount of moneys due pursuant to the bid of the purchaser and upon the performance of all the conditions as set forth in the Bond Purchase Agreement. Section 6. That the interest rate or rates on the Bonds and the applicable discount of the Underwriter be, and the same hereby are fixed at the rate or rates and the discount amount as set forth in the accepted Bond Purchase Agreement. - 3 - Section 7. That the City Treasurer is hereby authorized and directed to keep, or to cause First Interstate Bank of California, as Fiscal Agent for the City, to establish and maintain, a redemption fund designated by the name of the proceedings, into which the City Treasurer or the Fiscal Agent, as appropriate, shall deposit all sums received for the collection of the reassessments and the interest thereon, together with all penalties, if applicable, thereon and from which shall be disbursed such funds required for the payment of the principal of, premium, if any, and interest on the Bonds as the same become due. Under no circumstances shall the Bonds or interest thereon be paid out of any other fund except as provided by law. Section 8. of San Bernardino, Assessment District "Redemption Fund"). That said fund shall be known as the California, Improvement Refunding No. 961, Series 1986, Redemption Fund" "City Bonds, (the Section 9. That the City Treasurer or the Fiscal Agent, as appropriate, shall transfer moneys as necessary from the Reserve Fund established under the resolution providing for the issuance of the Bonds for deposit to the Redemption Fund in the manner and form as authorized by law. Section 10. modifications and The Ci ty amendments to hereby approves the resolution such changes, authorizing the - 4 - issuance of the Bonds entitled "Resolution of the Mayor and Common Council of the City of San Bernardino, California, Authorizing the Issuance of an Aggregate Principal Amount of $12,450,000 of Refunding Bonds of Said City to Refund Previously Issued $13,400,000 City of San Bernardino, Improvement Bonds, Assessment District No. 961, Series 1985 (Park Centre)" (the "Resolution of Issuance") as may be approved by the City Treasurer and the City Attorney upon the recommendation of Bond Counsel. All terms not otherwise specified in the Resolution of Issuance shall be those terms and provisions as may be set forth in the Bond Purchase Agreement as shall be submitted in final form by the Underwriter prior to the time of the issuance and delivery of the Bonds and as shall be set forth in those certain amendments to the Resolution of Issuance approved by this Resolution. The Mayor and City Clerk are hereby authorized and directed to execute the final form of the Resolution of Issuance which shall set forth the final terms and provisions of the sale of the Bonds when the final terms have been ascertained by the Underwriter based upon the most favorable market conditions then available in the municipal bond market, together with such amendments, modifications and changes as may be required by the Fiscal Agent, the Escrow Bank and the Underwriter and as such amendments, modifications and changes may be approved by the City Treasurer and the City Attorney upon the recommendation of Bond Counsel. - 5 - Section II. adoption. This Resolution shall take effect upon I HEREBY adopted by the San Bernardino at held on the Rt-h the following vote, CERTIFY that the foregoing Mayor and Common Counci 1 a n rlnjnnrn,:3n rp..gnlPlr day of rlA"AmhAT to wit: resolution of the meeting was duly Ci ty of thereof. 1986 , by AYES: Council Members R!=:.t-r:=Il'irl Rp; 11y. Qn;pl. ~+r;(""klpr NAYS: ('"tinn,...;' MpmhPT Frrl7.;PT ABSENT: ('"rlnn,...; 1 Mp.mhiPrc:. H,prnrlnnp7 . M.:=iIrkc:: ~~(~ CieY Clerk day of The foregoing resolution is hereby approved this nprop,mhp.r I 1986. '1t-~ Approved as to form: ~~ /Jt. ity Attorney - 6 - , ~ ?:/ ;y oS CITY OF SAN BERNARDINO, CALIFORNIA IMPROVEMENT REFUNDING BONDS ASSESSMENT DISTRICT NO. 961 SERIES 1986 PURCHASE CONTRACT December 8, 1986 Honorable Mayor and Common Council City of San Bernardino San Bernardino, California Miller & Schroeder Financial, Inc. (the "Manager"), acting not as a fiduciary or agent for you, but on behalf of itself and on behalf of such other underwriters as may from time to time be spec i f ied by the Manage r (the Manage rand such other underwriters being herein collectively called the "Underwriters"), offers to enter into this Purchase Contract with the City of San Bernardino, California (the "City"), which upon acceptance will be binding upon the City and upon the Underwriters. This offer is made subject to the City's acceptance by the execution of this Purchase Contract and its delivery to the Manager at or before 11:59 p.m., local time, on December 24, 1986, and, if not so accepted, will be subject to withdrawal by the Manager upon notice delivered to the City at any time prior to the acceptance hereof by the City. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Underwriters, jointly and severally, hereby agree to purchase from the City, and the City hereby agrees to sell to the Underwriters, all (but not less than all) of the City of San Bernardino, California, Improvement Refunding Bonds, Assessment District No. 961, Series 1986 (the "Bonds"), in the aggregate principal amount of $12,450,000, dated as of December 15, 1986, bearing interest from said date (payable on March 2 and September 2 in each year commencing on September 2, 1987) at the rates per annum and maturing on the dates and in the amounts set forth in Exhibit "A" hereto. The purchase price for the Bonds shall be ninety-seven percent (97%) of the principal amount thereof. If the Closing Date (hereinafter defined) is other than the date of the Bonds, the Underwriters shall also pay to the City at the Closing an amount equal to the interest which has accrued on the Bonds from the date thereof through the Closing Date. The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemp- tion as provided in Resolution No. 86-505 adopted by the Mayor and Common Council of the City on December 8, 1986 (the "Resolution"), the Refunding Act of 1984 for 1915 Improvement Act Bonds, constituting Division 11. 5 of the Streets and Highways Code of the State of California (the "Act"), and Ordinance No. 3902 of the City, as amended by Ordinance No. MC-426 and Ordinance No. MC-444 of the City (the "Ordinances") (it being expressly understood that Ordinance No. 3902 may also have been amended by other ordinances of the City). The Bonds shall be serial bonds issued in fully registered form. A reserve fund in an amount equal to ten (10) percent of the proceeds of the sale of the Bonds shall be established from the proceeds of the sale of the Bonds. (The aforementioned assessment distr ict is hereinafter referred to as the "Assessment District.") (b) The proceeds of the Bonds and the other funds hereinafter mentioned to be deposited in the Escrow Fund (hereinafter mentioned) as hereinafter provided, together with any interest or other gain to be derived from the investment thereof, shall be utilized solely for the purpose of refunding the outstanding improvement bonds of the City designated "$13,400,000 City of San Bernardino Improvement Bonds, Assessment District No. 1961, Series 1985 (Park Centre)" issued pursuant to Resolution No. 85-116 adopted by the Mayor and Common Council of the City on March 19, 1985 (the "Original Bonds") and for no other purpose, and the maturity of the Original Bonds shall be advanced to, and such bonds shall be called and redeemed on March 1, 1987. (c) The City expects to approve a preliminary official statement relating to the Bonds which shall consist of the preliminary official statement dated December 17, 1986 and such changes thereto as shall be agreed upon by the City through an officer or employee of the City authorized to make such an agreement, its Bond Counsel and the Manager (the "Preliminary Official Statement"); and the City also expects to approve, through an officer or employee of the City authorized to give such approval, a final Official Statement relating to the Bonds (the "Official Statement") which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of the Manager and the City, from time to time prior to the Closing Date. The City hereby authorizes the Underwriters to use and distribute in connection with the offer and sale of the Bonds: the Preliminary Official Statement, the Offi- cial Statement, the Resolution, the Ordinances, this Pur- chase Contract and all information contained herein, and all -2- other documents, certificates and statements furnished by the City to the Underwriters in connection with the trans- actions contemplated by this Purchase Contract. (d) Except as the City and the Manager may other- wise agree, the City will deliver to the Manager at the offices of Sabo & Deitsch, a Professional Corporation, Woodland Hills, California, or at such other location as may be designated by the Manager and the Ci ty, the documents hereinafter mentioned and the Bonds, in definitive or temporary form, duly executed by the City and authenticated by the Fiscal Agent named and appointed in the Resolution in the manner provided for in the Resolution, the Act, and the Ordinances at 11:00 a.m. local time, on December 30, 1986 (the "Closing Date"), and the Manager will accept such delivery and pay the purchase price of the Bonds and accrued interest on the Bonds, if any, as set forth in paragraph (a) of this section by wire transfer of Los Angeles Clearing House Funds or other immediately available funds to City's account with First Interstate Bank of California (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Manager not later than 24 hours prior to the Closing Date for purposes of inspection and packaging. The Bonds shall be in fully registered form and shall be registered in accordance with instructions to be supplied to the City by the Manager. If the Bonds are issued in temporary form, the City agrees to provide Bond~ in definitive form in substitution for the Bonds issued in temporary form as soon as possible, but not later than three weeks following the Closing Date. 2. Representations, Warranties and Agreements of the City. The City represents and warrants to and agrees with the Underwriters that: (a) The City is duly organized and validly existing as a municipal corporation and a charter city under the Constitution and laws of the State of California and has, and at the Closing Date will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriters as provided herein, and (iE) to carry out, give effect to and consummate the transactions contemplated by this Purchase Contract, the Resolution, the Official Statement and any agreements referred to therein. (b) The City has complied, and will at the Closing Date be in compliance, in all respects with the Resolution, the Act, the Ordinances, and all other applicable laws and agreements. -3- (c) The City has, or prior to the Closing Date will have, duly and validly: ( i) adopted and enacted the Resolution and the Ordinances, and approved and authorized the execution and delivery of the Bonds, this Purchase Con- tract, the Escrow Agreement (hereinafter mentioned), the Official Statement and any other applicable agreements, and (ii) authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by each of said documents, and at the Closing Date the Bonds, the Resolu- tion, this Purchase Contract and any other applicable agreements will constitute valid, legal and binding obliga- tions of the City and (assuming due authorization, execution and delivery by such other parties thereto, where necessary) of the other parties thereto, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights in general and to the application of equitable prin- ciples, if equitable remedies are sought. (d) The City is not, and at the Closing Date will not be, in breach of or default under any law or administra- tive rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or any appli- cable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound; and the adoption and enactment of the Resolution and the Ordinances, and the execution and delivery of the Bonds, this Purchase Contract, the Escrow Agreement, any other applicable agreements and the other instruments contemplated by any of such documents to which the City is a party, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is party or is otherwise subject or bound. (e) All approvals, consents, authorizations, elec- tions and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely -4- affect, the performance by the City of its obligations under this Purchase Contract and under the Resolution, the Bonds, and any other applicable agreements have been obtained and are in full force and effect. (f) The Bonds, the Resolution, the Escrow Agree- ment, and other applicable agreements conform as to form and tenor to the descriptions thereof contained in the Official Statement; and the Bonds, when delivered to and paid for by the Underwriters on the Closing Date as provided herein, will be validly issued and outstanding and entitled to all the benefits and security of the Resolution. (g) The special reassessments constituting the security for the Bonds have been duly and lawfully levied under and pursuant to the Act and the Ordinances, such reassessments constitute valid and legally binding liens on the properties on which they have been levied. (h) There are no outstanding assessment liens against any of the properties within the Assessment District which are senior to the reassessment liens referred to in paragraph (g) above except the liens of the assessments for the Original Bonds which have been superseded and supplanted by those reassessments, and the installments of the assess- ments for the Original Bonds which are due on December 10, 1986 and April 10, 1987, the liens for which will continue until such installments are paid in full. (i) The Official Statement will be, as of the Closing Date, true, correct and complete in all material respects; and the Official Statement will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Dur ing the per iod commencing on the date of this Purchase Contract and ending on the date 90 days fol- lowing the Closing Date, if any event shall occur as a result of which it may be necessary to supplement the Offi- cial Statement in order to make the statements therein, in light of the circumstances existing at such time, not mis- leading, the City will forthwith notify the Manager of any such event of which it has knowledge and, if in the opinion of the Manager such event requires an amendment or supple- ment to the Official Statement, the City will at its expense amend or supplement the Official Statement in a form and manner jointly approved by the City and the Manager. -5- (k) The Resolution creates a valid pledge of and lien upon the unpaid reassessments in the Assessment District and the interest thereon and the moneys in all funds and accounts established pursuant to the Resolution, including the investments thereof, subject in all cases to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth therein. (1) No action, suit, proceeding, inquiry or inves- tigation, at law or in equity, before or by any court, regu- latory agency, or public board or body is pending, or to the knowledge of the City threatened, which in any way affects the existence of the City or the titles of its officers to their respective offices or seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Resolution, or the collection or application of reassessments pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contests or affects the validity or enforceability of the Bonds, the Resolution, and any other applicable agreements, this Purchase Contract, or any action of the City contemplated by any of said documents, or in any way contests the complete- ness or accuracy of the Official Statement or the powers of the City or its authority with respect to the Bonds, the Resolution, and any other applicable agreements, this Purchase Contract or any action of the City contemplated by any of said documents, or which in any way seeks to enjoin or restrain the City from approving the development of any of the property within the Assessment District, or which would adversely affect the exemption of interest paid on the Bonds from federal income taxation or California personal income taxation. (m) As of the Closing Date, the City shall have entered into an escrow agreement (the "Escrow Agreement") with First Interstate Bank of California, as Escrow Bank (the "Escrow Bank") in a form satisfactory to the Underwriters providing (i) for the deposit of (a) the proceeds of the sale of the Bonds, less the amount thereof to be deposited in the Reserve Fund for the Bonds, (b) the balance of the moneys on deposit in the Improvement Fund with respect to the Original Bonds, less $601,610.28, (c) the balance of the moneys on deposit in the Reserve Fund for the Original Bonds, and (d) the installments on the assessments for the Original Bonds payable and collected on December 10, 1986, in trust with said bank into the Escrow Fund pursuant to the Resolution and the Escrow Agreement, (ii) for the advancement of the maturity of, and the redemp- tion and payment on March 1, 1987 of the principal of and -6- interest and redemption premiums on the Original Bonds with said proceeds and such other amounts, and any interest or other gain to be derived from the investment thereof, and (Hi) for the investment of such proceeds, and such other amounts in Federal Securities as defined in Section 9600 (c) of the California Streets and Highways Code. (n) On the closing date the City shall have given or caused to have been given by registered mail the notice required by Section 8751 of the California Streets and Highways Code to the registered owner of each Original Bond of the advancement of the maturity of his bond to March 1, 1987, and containing the information specified in Section 8752 of said Code, and shall have complied in all respects with the requirements of said Sections 8751 and 8752. (0) On the Closing Date the City will deposit or cause to be deposited into the Escrow Fund pursuant to the Escrow Agreement and the Resolution (i) the proceeds of the sale of the Bonds, less the amount to be deposited in the Reserve Fund for the Bonds, (ii) the balance of the moneys on deposit in the Improvement Fund with respect to the Original Bonds, less $601,610.28, and (iii) the balance of the moneys on deposit in the Reserve Fund for the Original Bonds, and when they are received, shall deposit into the Escrow Fund the installments of the assessments for the Original Bonds payable and collected on December 10, 1986, and shall. use and apply such proceeds and other amounts solely as provided in the Escrow Agreement and the Resolution, and for no other purpose. (p) The City has adopted a charter pursuant to the applicable provisions of the Constitution of the State of California which as of the Closing Date will be in full force and effect, and in the exercise of its home rule powers under its charter the City may adopt and enact ordi- nances such as the Ordinances containing provisions and establishing procedures for the formation of assessment districts, the assessment of land in such districts and the sale of bonds for the acquisition and construction of and financing the acquisition and construction of public improvements, and the levying of reassessments and the issuance of bonds secured thereby to refund such bonds which are different than and supplementary to and which modify the provisions of and the procedures prescribed by the Improve- ment Bond Act of 1915 (Division 10 of the Streets and High- ways Code of the State of California), the Municipal Improvement Act of 1913 (Division 12 of said Code) and the Act. -7- (q) The City has covenanted in the Resolution that if parcels of property within the Assessment District are sold at foreclosure sale for delinquent installments of reassessments and if there is no other purchaser at the sale, it will purchase the parcels by bidding in the amount of its foreclosure judgment; provided, however, that such covenant further provides that the City shall not be obli- gated to use available funds (including any surplus funds), other than the Reserve Fund established by the Resolution, to purchase delinquent parcels or pay the delinquent installment or installments and future installments on the reassessments on such delinquent parcels. (r) The City will take such action as is required to comply with the provisions of Section 148 of the Internal Revenue Code of 1986 to maintain the exemption from federal income taxation of the interest on the Bonds, and will not take any action which would be contrary to the provisions of said Section 148 or which would jeopardize the exemption from federal income taxation of the interest on the Bonds. (s) The City will furnish such information, exe- cute such instruments and take such other action in cooper- ation with the Manager as the Manager may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Manager may designate. (t) Any certificate signed by any official of the City authorized to do so shall be deemed a representation and warranty by the City to the Underwriters as to the statements made therein. (u) The City will apply the proceeds of the Bonds in accordance with the Resolution, the Escrow Agreement and all other applicable documents and as descr ibed in the Official Statement. 3. Conditions to the Obli<l.ations of the Underwriters. The obligations of the Underwr1ters to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Manager, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other offi- cials of the City, as well as of the other individuals referred to herein, made in any certificates or other docu- ments furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed -8- hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Resolution, the Escrow Agreement and any other applicable agreements shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Manager, and there shall have been taken in connection therewith and with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Contract, all such actions as, in the opinion of Sabo & Deitsch, a professional corporation, Bond Counsel for the City, shall be necessary and appropriate; (b) At the Closing Date, the Official Statement shall be in form and substance satisfactory to the Manager; (c) At the Closing Date, no taxes on any of the properties within the Assessment District shall be delin- quent, except as specifically approved by the Manager; and the first half of the property taxes and assessments for fiscal year 1986-1987 for all parcels within the Assessment District shall have been paid or provision for such payment shall have been made to the satisfaction of the Manager; (d) The ratio of the appraised value of each of the parcels within the Assessment District to the amount of the final reassessment levied thereon remaining unpaid on the Closing Date shall not be less than as shown in the Preliminary Official Statement, and the City will give reasonable notice to the Manager prior to its approval of any reapportionment of any reassessment so as to provide the Manager with an opportunity to advise the City whether and to what extent such reapportionment would result in a reduc- tion in the security for the Bonds provided by the unpaid reassessment; (e) At the Closing Date the statutory period for the commencement of court actions or proceedings challenging the proceedings for the levy of the reassessments, the reassessments as levied and the issuance of the Bonds shall have expired, or the right to commence any such action or proceeding shall have been waived in writing by all owners of property within the Assessment District. (f) Between the date hereof and the Closing Date, the market price or marketability of the Bonds shall not have been materially adversely affected, in the judgment of the Manager (evidenced by a written notice to the City ter- minating the obligation of the Underwriters to accept deli- very of and pay for the Bonds), by reason of any of the fol- lowing: -9- (i) legislation introduced in or enacted by the Congress or recommended to the Congress by the Pres- ident of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation has been referred for considera- tion, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon interest which would be received by any holders of the Bonds; (ii) legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdic- tion, or an order, ruling, regulations (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrange- ments, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Resolution is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, as contemplated by this Purchase Contract or by the Official Statement or otherwise is or would be in violation of the Federal securities laws then in effect; (iii) a general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by federal, State of New York or State of California officials authorized to do so, or a war or other national calamity; -10- (iv) rating of any rating agency; the withdrawal or downgrading of any securities of the City by a national (v) any amendment to the federal or Cali- fornia Constitution or action by any federal or Cali- fornia court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), or the validity or enforceability of the reassessments; or (vi) any event occurring, or information becoming known which, in the judgment of the Manager, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any un- true statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the cir- cumstances under which they were made, not misleading; (g) At or prior to the Closing Date, the Manager shall have received two counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Manager: (i) The Official Statement, executed on behalf of the City by its Mayor; (ii) The Resolution and the Ordinances, together with certificates of the City Clerk, dated as of the Closing Date, to the effect that the Resolution and each ordinance is a true, correct and complete copy of one duly adopted by the City and that it has not been amended, modified or rescinded (except as may have been agreed to by the Manager) and is in full force and effect as of the Closing Date; (iii) An unqualified oplnlon, dated the Closing Date and addressed to the City, of Sabo & Deitsch, a Professional Corporation, Bond Counsel for the City, to the effect that the Bonds are the valid, legal, binding obligations of the City and that the interest thereon is exempt from federal income taxes and from personal income taxes of the State of California, together with an unqualified opinion of such counsel, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, to the effect that such opinion addressed to the City may be relied upon by the -11- Underwriters to the same extent as if such opinion was addressed to it; (iv) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of Sabo & Deitsch, a Professional Corporation, Bond Counsel for the City, to the effect that (1) this Purchase Contract has been duly authorized, executed and delivered by the City, and, assuming due authorization, execution and delivery by the Manager, constitutes a legal, valid and binding agreement of the City, enforce- able in accordance with its terms, subject to bank- ruptcy, insolvency and other laws affecting the enforce- ment of creditors' rights in general and except as such enforceability may be limited by the application of equi table pr inciples if equitable remedies are sought; (2) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended; (3) the Bonds and the Resolution conform as to form and tenor to the descriptions thereof contained in the Official Statement, and the statements contained in the Official Statement on the cover and under the captions "Intro- ductory Statement", "The Bonds", "Security for the Bonds", "Special Risk Factors", "Reassessment and Bond Redemption Proceedings", "The Assessment District", "Miscellaneous Approval of Legality" and "Miscel-. laneous - Tax Exemption," insofar as such statements purport to summarize certain provisions of the Act, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, the Ordinances, the Bonds, the Resolution, the Escrow Agreement and other applicable laws and agreements, present a fair and accurate summary of such provisions, and such summaries do not contain any untrue statements of a material fact required to be stated in the Official Statement or necessary to make the state- ments made therein, in the light of the circumstances under which they are made, not misleading in any material respect; (4) the Resolution, the Escrow Agree- ment and the Bonds constitute legal, valid and binding agreements of the Ci tyenforceable in accordance with their terms except as such enforceability may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights in general and the application of equitable principles if equitable remedies are sought; (5) the City has duly and validly adopted a charter pursuant to the applicable provisions of the Constitution of the State of California which as of the Closing Date is in full force and effect, and in the exercise of its home rule powers under its charter -12- the City may adopt and enact ordinances such as the Ordinances containing provisions and establishing procedures for the formation of assessment districts, the assessment of land in such districts and the sale of bonds for the acquisition and construction of and financing the acquisition and construction of public improvements, and the levying of reassessments and the issuance of bonds secured thereby for the refunding of such bonds pursuant to the Act which are different than and supplementary to and which modify the provisions of and procedures prescribed by the Improvement Bond Act of 1915 and the Municipal Improvement Act of 1913 and the Act; and (6) the Resolution creates a valid pledge of and lien upon the proceeds of the Bonds, the reassess- ments on the land in the Assessment District and the interest thereon and the moneys in all funds and accounts established pursuant to the Resolution, including the investments thereof, subject in all cases to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth therein; (v) An opinion of Sabo & Deitsch, a Pro- fessional Corporation, Bond Counsel to the City, dated as of the Closing Date, to the effect that the proceeds of the sale of the Bonds, and the other funds deposited in the Escrow Fund pursuant to the Escrow Agreement and the Resolution, together with any interest or other gain to be derived from the investment thereof pursuant to the Escrow Agreement, will be sufficient in amounts to discharge the lien of Resolution No. 85-116 and to provide for the payment on March 1, 1987, of the principal of and interest and redemption premiums on the Original Bonds, and that after the deposit of such proceeds and other funds in the Escrow Fund and the realization of the expected interest or other gain to be derived from the investment thereof, as provided in the Escrow Agreement, the Original Bonds shall no longer be deemed to be outstanding and unpaid. (vi) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of Best, Best & Krieger, counsel to the Underwriters, to the effect that (1) the Bonds are exempt from the regis- tration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended, and (2) based upon the information made available to them in the course of their participation in the preparation of the Official Statement as counsel to the Underwriters and without having undertaken to determine independently -13- or assuming any responsibility for the accuracy, com- pleteness or fairness of the statements contained in the Official Statement, such counsel do not believe that the Official Statement, as of its date and as of the Closing Date, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any appendices and any other financial and statistical data contained in the Official Statement); and such memoranda of said firm as to "blue sky" matters as the Manager may reasonably require; (vii) Certificates or opinions issued by an Independent Financial Consultant, as defined in the Resolution, and a certified public accountant licensed to practice in the State of California dated as of the Closing Date certifying that the proceeds of the Bonds and the other amounts deposited in the Escrow Fund pursuant to the Escrow Agreement and the Resolution are in an amount, as of the Closing Date, which together with any interest or other gain to be derived from the investment thereof in Federal Securities (as defined in the Escrow Agreement), which will be sufficient to pay on March 1, 1987, the principal of and interest and redemption premiums on the Original Bonds. (viii) A certificate, dated the Closing Date and signed by the Mayor or such other officer of the City as the Manager may select, to the effect that (1) to the best knowledge of said officer the representa- tions and warranties of the City contained in this Purchase Contract are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (2) to the best knowledge of said officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to dis- close therein in order to make the statements and infor- mation therein not misleading in any material respect; and (3) the City has complied with all the agreements and satisfied all the conditions on its part to be per- formed or satisfied under this Purchase Contract, the Resolution, and the Official Statement, at and prior to the Closing Date; (ix) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of the City Attorney, to the effect that (I) no action, -14- suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to his knowledge, threatened which in any way affects the existence of the City or the titles of its officers to their respective offices, or seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Resolution, the Ordinances, the Escrow Agreement, this Purchase Contract, or any other applicable agreements or any action of the City contemplated by any of said docu- ments, or in any way contests the completeness or accuracy of the Official Statement or the powers of the City or its authority with respect to the Bonds, the Resolution, the Ordinances, the Escrow Agreement, this Purchase Contract, or any other applicable agreement, or any action on the part of the City contemplated by any of said documents, or which challenges the exemption of interest paid on the Bonds from federal income taxation or California personal income taxation; (2) the City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California, with full legal right, power and author- ity to issue the Bonds and to perform all of its obliga- tions under this Purchase Contract, the Bonds, the Resolution, the Escrow Agreement, and all other applicable agreements; (3) the City has duly and validly adopted a charter pursuant to the applicable provisions of the Constitution of the State of California which as of the Closing Date is in full force and effect, and in the exercise of its home rule powers under its charter the Ci ty may adopt and enact ordinances such as the Ordinances containing provisions and establishing proce- dures for the formation of assessment distr icts, the assessment of land in such districts and the sale of bonds for the acquisition and construction of and financing the acquisition and construction of public improvements, and the levying of reassessments and the issuance of bonds secured thereby for the refunding of such bonds pursuant to the Act which are different than and supplementary to and which modify the provisions of and procedures prescribed by the Improvement Bond Act of 1915, the Municipal Improvement Act of 1913 and the Act; (4) the Ci ty has duly and validly adopted and enacted the Resolution and the Ordinances, and they are in full force and effect and the referendum period with respect to the Ordinances has expired; (5) the City has duly authorized, executed and delivered this Purchase Con- tract and the Official Statement; (6) he either partici- pated in or reviewed the procedure with respect to the adoption of the Resolution and the Ordinances, and all -15- meetings of the Mayor and Common Council of the City involving the consideration, adoption and approval of the Resolution and Ordinances were conducted in conform- ity with the requirements of the Ralph M. Brown Act (Section 54950 et seq. of the Government Code of the State of California) and other applicable provisions of law; (7) based on facts supplied to him by the Mayor and members of the Common Council of the City, neither the Mayor nor any member of said Common Council has any financial conflict of interest with respect to the formation of the Assessment District, the levying of the reassessments pursuant to the Act or the issuance of the Bonds, and said Mayor and the members of said Common Council have complied with all provisions of law which are applicable to such financial conflicts of interest; and (8) the zoning and subdivision ordinances applicable to the land within the Assessment District cannot be amended (whether by an initiative ordinance or other- wise) in such a way as to impair or prevent the develop- ment of said land; (x) A letter of instructions from Sabo & Deitsch, a Professional Corporation, Bond Counsel to the City, dated as of the Closing Date, as to the actions to be taken and avoided by the City in order to comply with the requirements of Section 148 of the Internal Revenue Code of 1986 to maintain the exemption from Federal income taxation of interest on the Bonds. (xi) A transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds; (xii) The final appraisal report of Bruce W. Hull and Associates, Inc., setting forth appraised values for each parcel within the Assessment District and a certificate of such appraiser dated the Closing Date confirming his consent to the reproduction of the appraisal report in the Official Statement and to the effect that, as of the date hereof and as of the Closing Date, the appraisal report set forth in the Official Statement and the statements in the Official Statement under the caption "Land Values" do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; (xiii) Letters, addressed to the Manager and dated the Closing Date, from each of the owners of land located within the Assessment District listed in the -16- .., I Preliminary Official Statement under the heading "Prop- erty Owners and Future Development" to the effect that (1) any and all information submitted by him to the Manager or the City in connection with the preparation of the Preliminary Official Statement and the Official Statement was, to the best of his knowledge, true and correct; (2) the statements relating to him, his proposed development, his property ownership, and his contractual arrangements, if any, contained in the section of the Official Statement entitled "The Assess- ment District" and in particular under the caption "Property Owners and Future Development" in that section, to the best of his knowledge, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or neces- sary to make the statements therein, in the light of the circumstances in which they were made, not misleading; (3) no proceedings are pending in which he may be adjudicated as bankrupt or discharged from any or all of his debts or obligations or granted an extension of time to pay his debts or a reorganization or readjustment of his debts; and (5) no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to his knowledge, threatened in any way seeking to restrain or to enjoin the development of his property; (xiv) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters and the City, of counsel to each of the owners of land located within the Assessment District listed in the Preliminary Official Statement under the heading "Property Owners and Future Development" to the effect (1) that said owner is a validly organized corporation, partnership, joint venture, or sole proprietorship, as the case may be, authorized to do business in the State of California; (2) that, based upon his or her review of the Official Statement and after diligent inquiry of his or her client, nothing has come to his or her attention which causes him or her to believe that any of the statements relating to such client contained in the Official Statement under the caption "Property Owners and Future Development" contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such statements, in the light of the circumstances in which they were made, not misleading; (xv) The final market absorption study of Empire Economics and Joseph Janczyk Evans, Ph.D., -17- setting forth conclusions identical to those stated in the Official Statement and a certificate of said Joseph Janczyk Evans, Ph.D., dated the Closing Date, confirming his consent and the consent of Empire Economics to the reproduction of said study and to the effect that as of the date hereof and as of the Closing Date, said study does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; (xvi) Such additional legal op1n1ons, certi- ficates (including a non-arbitrage certificate), instru- ments and other documents as the Manager may reasonably request to evidence the truth and accuracy, as of the date hereof, and as of the Closing Date, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contem- plated hereby and by the Resolution and the Official Statement. All the op1n1ons, letters, certificates, instru- ments and other documents mentioned in this section or else- where in this Purchase Contract shall be deemed to be in compliance with the terms hereof if, and only if, they are in form and substance satisfactory to the Manager. If any of the conditions to the obligations of the Underwriters contained in this section or elsewhere in this Purchase Contract shall not have been satisfied when and as required herein, all obligations of the Underwriters here- under may be terminated by the Manager at, or at any time prior to, the Closing Date by written notice to the City. 4. Expenses. (a) Whether or not the Underwriters accept delivery of and pay for the Bonds as set forth herein, they shall be under no obligation to pay, and the City shall pay or cause to be paid (out of the proceeds of the Bonds or any other legally available funds of the City) all expenses incident to the performance of the City's obligations here- under, including but not limited to the cost of printing, engraving and delivering the Bonds to the Underwriters; the cost of preparation, printing (and/or word processing and reproduction), distribution and delivery of all the agree- -18- ments and documents contemplated hereby (including but not limited to the Preliminary Official Statement and the Offi- cial Statement and drafts of any thereof) in reasonable quanti ties as requested by the Manager; the fees and dis- bursements of the paying agent, transfer agent and regis- trar, Bond Counsel, accountants, engineers, appraisers, economic consultants and any other experts or consultants retained in connection with the Bonds; and any other expenses not specifically enumerated in paragraph (b) of this section incurred in connection with the issuance of the Bonds. (b) Whether or not the Bonds are delivered to the Underwriters as set forth herein, the City shall be under no obligation to pay, and the Underwriters shall pay, all expenses paid or incurred to qualify the Bonds for sale under any "blue sky" laws; and all other expenses paid or incurred by the Underwriters in connection with their public offering and distribution of the Bonds not specifically enumerated in paragraph (a) of this section, including the fees and disbursements of their counsel. 5. Notices. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to the City of San Bernardino, 300 North "0" Street, San Bernardino, California 92418, Attention: Craig A. Graves, City Treasurer; and any notice or other communication to be given to the Under- writers under this Purchase Contract may be given by deli- vering the same in writing to Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Suite 100, Solana Beach, California 92075, Attention: Norman K. McPhail. 6. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriters (including successors or assignees of any Underwriter) and no other person, including but not limited to any owner of land within the Assessment District, shall acquire or have any right hereunder or by virtue hereof. 7. Action by Officer. Any act to be performed by the City hereunder may be performed on behalf of the City by a duly authorized officer, employee or representative of the City, and if so performed, shall be a valid and binding act of the City. The City shall with respect to any act so per- formed on behalf of the City, furnish to the Underwriters satisfactory proof of the authorization of the person per- forming the act. 8. Survival of Representations and Warranties. The representations and warranties of the City, set forth in or -19- made pursuant to this Purchase Contract, shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Pur- chase Contract and regardless of any investigations made by or on behalf of the Underwriters (or statements as to the results of such investigations) concerning such representa- tions and statements of the City and regardless of delivery of and payment for the Bonds. 9. Effective. This Purchase Contract shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. Respectfully submitted, By: The Title: Accepted: h'''',,",'.' By: -20- RTA02l2 Due September 2 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 RTA0212 EXHIBIT "A" TO PURCHASE CONTRACT City of San Bernardino, California Improvement Refunding Bonds Assessment District No. 961 Series 1986 Principal Amount $ 5,000 350,000 370,000 390,000 410,000 435,000 465,000 490,000 525,000 560,000 600,000 645,000 690,000 740,000 795,000 855,000 920,000 990,000 1,065,000 1,150,000 $12,450,000 Interest Rate 4.75% 5.00 5.50 5.75 6.00 6.25 6.40 6.60 6.80 7.00 7.10 7.20 7.30 7.40 7.50 7.60 7.65 7.70 7.75 7.75