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HomeMy WebLinkAbout1985-118 San Bernardino 54333-011-5 RESOLUTION NO. 85-118 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAij BERijARDINO APPROVING THE BOND PURCHASE CONTRACT AND AWARDING BONDS ASSESSMENT DISTRICT NO. 961 WHEREAS, by Resolution (the "Resolution of Issuance") adopted the same date as this Resolution, the Mayor and Common Council of the City of San Bernardino (the "City") authorized the issuance of the City's "Improvement Bonds, Assessment District No. 961, Series 1985, City of San Bernardino, California" in the aggregate principal amount of $13,400,000 (the "Bonds") for the purpose of paying the cost of the construction, installation and acquisition of certain improvements described in Resolution No. 84-551, adopted on December 17, 1984, for Assessment District No. 961; and WHEREAS, there has been presented to the Mayor and Common Council a form of bond Purchase Contract (the "Contract") whereby Miller", Schroeder Municipals, Inc. (the "Underwriter"), has offered to purchase all of the Bonds. 1 26-CI-JWB-402.l5 3-18-85 (mk) . San Bernardino 54333-011-5 NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: Section 1. Purchase Contract. That the Contract presented to the Mayor and Common Council, a copy of which is attached hereto as Exhibit A and incorporated herein, be and is hereby approved, and that the Mayor is hereby autho- rized to execute the Contract on behalf of the City. Section 2. Award Of Bonds. That the Bonds are hereby awarded to the Underwriter at the purchase price and upon the other terms and conditions specified in the Con- tract. Section 3. Delivery Authorized. That the City Treasurer is hereby directed to deliver the Bonds to the Underwriter upon receipt of payment therefor (which includes accrued interest to date of delivery). Section 4. Authority To Consummate Transaction. The Mayor, the City Treasurer, the City Clerk, the Director of Public Works/City Engineer and other proper officers, 2 26-Cl-JWB-402.15 3-8-85 (mk) San Bernardino 54333-011-5 employees and agents of the City, or any of them, are hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things as they deem necessary or proper for consummating the sale and delivery of the Bonds to the Underwriter, as contemplated by this Resolution and the Resolution of Issuance. Section 5. General Ratification. That all ac- tions and proceedings heretofore taken in connection with or in any way relating to the authorization, issuance, sale and/or delivery of the Bonds are hereby ratified and con- firmed. 3 26-Cl-JWB-402.15 3-8-85 (mk) . San Bernardino 54333-011-5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at an adjourned regular meeting thereof, held on the 19th day of March, 1985, by the following vote: AYES: Councilmen: Castaneda. Reilly, Marks, Quiel. Frazier, Strickler NAYS: Council Member Hernandez ABSENT: None ~~ ./ City erk The foregoing Resolution is hereby approved this ~ day of March, 1985. of APPROVED AS TO FORM: ~trf.~~ 4 26-Cl-JWB-402.l5 3-18-85 (mk) CITY OF SAN BERNARDINO, CALIFORNIA IMPROVEMENT BONDS ASSESSMENT DISTRICT NO. 961 SERIES 1985 PURCHASE CONTRACT March 19, 1985 Honorable Mayor and Common Council City of San Bernardino San Bernardino, California Miller & Schroeder Municipals, Ini::. (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 specified by the Manager (the Manager and such other underwriters being herein collectively called the "Underwriters"), offers to enter into this Purchase Contract wi th 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 the date set forth above, 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 Underwr i ters, 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 Bonds, Assessment bistrict No. 961, Series 1985 (the "Bonds"), in the aggregate principal amount of $13,400,000, dated as of March 1, 1985, bearing interest from said date (payable on March 1 and September 1 in each year commencing on September 1, 1985) at the rates per annum and maturing on the dates and in the amounts set forth in Exhibit "A" here- to. The purchase price for the Bonds shall be ninety-four percent (94%) of the principal amount thereof. If the Closing Date (hereinafter defined) is other than the date of the Bonds, the Underwri ters shall also pay to the Ci ty at the Closing an amount equal to the interest which has accrued on the Bonds from the date thereof through the e;XHIBIT "1\" Closing Date. The Bonds shall be substantially in the form described in, shall be issued and secured under the provi- sions of, and shall be payable and subject to redemption as provided in Resolution No. adopted by the Mayor and Com- mon Council of the City Oil March 19, 1985 (the "Resolu- tion"), the Improvement Bond Act of 1915, constituting Division 10 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. 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 the amount of at least $1,663,620 (which amount is equal to the amount of maximum annual debt service on the Bonds) shall be established from the proceeds of the sale of the Bonds, and all investment earnings on moneys on deposit in said reserve fund shall be credited to and deposited in said reserve fund to the maximum extent possible without thereby causing the Bonds to become arbitrage bonds within the meaning of section 103 (c) of the Internal Revenue Code. There shall also be deposited in the redemption fund established by the Resolution from the proceeds of the sale of the Bonds an amount of capitalized interest equal to the interest payable on the Bonds on September 1, 1985 and on March 1 and September 1, 1986, and said amount and all investment earnings thereon shall be used to the extent needed to pay the interest due on the Bonds on said dates. (b) The City expects to approve a preliminary official statement relating to the Bonds which shall consist of the preliminary official statement dated March 18, 1985 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 Ci ty 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 other documents, certificates and statements furnished by the City to the Underwriters in connection with the trans- actions contemplated by this Purchase Contract. -2- (c) Except as the City and the Manager may other- wise agree, the City will deliver to the Manager at the offices of Kindel & Anderson, Los Angeles, California, or at such other location as may be designated by the Manager and the City, the documents hereinafter mentioned and the Bonds, in temporary form, duly executed by the City in the manner provided for in the Resolution, the Act, and the Ordinances at 11: 00 a .m. local time, on March 27, 1985 (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 I S account with First Interstate Bank of California (such delivery and pay- ment being herein referred to as the "Closing"). The Bonds, which may be in temporary form, 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. The City agrees to provide Bonds in definitive form in substitution for the Bonds issued in temporary form as soon as possible, but not later than three weeks fol- lowing the Closing Date. 2. Representations, Warranties and Aqreements 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 under the Constitution and laws of the State of California and has, and at the Closing Date will have, full legal right, power and autho- rity (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriters as provided herein, and (iii) 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. (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 Official Statement and any other applicable agreements; (ii) authorized, executed and delivered an -3- agreement which has also been executed and delivered by all owners of land within Assessment District No. 961 (the "Assessment District") which provides for the City forming the Assessment District, levying an assessment on the land therein, and selling bonds in the amount of and secured by said assessment and in an amount sufficient to finance the acquisition from such owners of certain public improvements to be designed and constructed by such owners and the design and construction of other such improvements which the City has agreed to cause to be designed and constructed, all of which improvements are described in said. agreement (the "Acquisition Agreement"), and (iii) 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 Resolution, this Purchase Contract, the Acquisi tion Agreement, and any other applicable agreements will constitute valid, legal and binding obligations 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 principles, 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 Acquisi- tion Agreement, the contract or contracts for the acquisi- tion and construction of the public improvements which will be financed with the proceeds from the sale of the Bonds, 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 regula- tion of the State of California, the United States of America, or of any department, division, agency or instru- mentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instru- -4- ment to which the City is a 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 affect, the performance by the City of its obligations under this Purchase Contract and under the Resolution, the Bonds, the Acquisition Agreement, and any other applicable agree- ments have been obtained and are in full force and effect. (f) The City expects that following the Closing it will promptly cause to be prepared and approve the plans and specifications for the improvements to be constructed by the City and which will be financed through the Assessment Dis- trict and with the proceeds of the Bonds and thereafter to promptly advertise for and receive bids for the construction thereof, and award contracts for such construction to the respective lowest responsible bidders, all in accordance with the provisions of the Municipal Improvement Act of 1913, the Ordinances and other laws applicable thereto. (g) The Bonds, the Resolution, the Acquisition Agreement and other applicable agreements conform as to form and tenor to the descriptions thereof contained in the Offi- cial 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. (h) The special assessments constituting the security for the Bonds have been duly and lawfully levied under and pursuant to the Municipal Improvement Act of 1913, constituting Division 12 of the Streets and Highways Code of the State of California, and the Ordinances, and such assessments constitute valid and legally binding liens on the properties on which they have been levied. (i) There are no outstanding assessment liens against any of the properties within the Assessment District which are senior to the assessment liens referred to in paragraph (h) above. (j) 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 -5- light of the circumstances under which they were made, not misleading. (k) During the period 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. (1) The Resolution creates a valid pledge of and lien upon the unpaid assessments 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 provi- sions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth therein. (m) 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 Acquisition Agreement, or the collection or application of assessments 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, the Acquisition Agreement and any other applicable agreements, this Purchase Contract, 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 Acquisition Agreement, and any other applicable agreements, this Purchase Contract or any action of the City contem- plated by any of said documents, or which in any way seeks to enjoin or restrain the City from approving the develop- ment 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. -6- (n) 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 which are different than and supplementary to and which modify the provisions of and the procedures pres- cribed by the Improvement Bond Act of 1915 and the Municipal Improvement Act of 1913. (0) All persons who have an ownership interest in or who are beneficiaries of deeds of trust encumbering land within the Assessment District have signed and as of the Closing Date will have signed a petition requesting the for- mation of the assessment district and the sale of bonds for the financing of the acquisition and construction of the public improvements, and specifically waiving compliance by the City with the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931, constituting Division 4 of the Streets and Highways Code of the State of California. (p) 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. (q) 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. (r) The City will apply the proceeds of the Bonds in accordance with the Resolution and all other applicable documents and as described in the Official Statement. 3. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters 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 -7- 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 hereunder at or prior to the Closing Date and to the fol- lowing additional conditions: (a) At the Closing Date, the Resolution, the Acquisi tion 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 Kindel & Anderson, 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 1984-1985 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 assessment levied thereon remaining unpaid on the Closing Date shall not be less than 2: I and the Ci ty will give reasonable notice to the Manager prior to its approval of any reapportionment of any assessment so as to provide the Manager with an opportunity to advise the City whether and to what extent such reapportionment would result in a reduction in the security for the Bonds provided by the unpaid assessment; (e) At the Closing Date, the City will have duly complied with the California Environmental Quality Act, insofar as said act applies to the formation of the Assess- ment District, the issuance of the Bonds, and the acquisi- tion and construction by the City of the public improvements described in the Acquisition Agreement, by the approval and adoption of a Negative Declaration and the filing of a Notice of Determination with the County Clerk of the County of San Bernardino, as authorized by said act, and the limi- -8- tation period for the commencement of a court action or pro- ceeding challenging the City's compliance with said act will have expired; (f) At the Closing Date, Park Centre Properties and Rancho Consultants Realty Fund IV, owners of property within the Assessment District, shall have entered into an agreement with the Federal Savings and Loan Insurance Corporation ("FSLIC"), as receiver for San Marino Savings and Loan Association, the beneficiary of the deed of trust encumbering the part of said property owned by Park Centre Properties and recorded in the Official Records of the County of San Bernardino on June 17, 1983 as Instrument No. 83-133632, providing for the disbursement by the City of the acquisition price for the improvements to be acquired by the City pursuant to the Acquisition Agreement as follows: (i) an amount to Rancho Consultants Realty Fund IV based on the percentage which the acreage of the land which it owns within the Assessment District is of the total acreage of all land within the Assessment District, and (ii) the balance to FSLIC as a payment on the balance of principal on the note of Park Centre Properties to San Marino Savings and Loan Association which is secured by said deed of trust, and whereby Park Centre Properties and Rancho Consultants Realty Fund IV assign to FSLIC the amount of said balance and their right to receive same; (g) At the Closing Date, the note referred to in paragraph (f) above of Park Centre Properties to San Marino Savings & Loan Association shall be current as to the pay- ment of principal and interest, the payment which was to have been made thereon by January 31, 1985 to extend the due date thereof to July 31, 1985 shall have been made, and said note shall have been so extended, and Park Centre Properties shall not be in default in its performance under said note in any respect: (h) At the Closing Date, Park Centre Properties shall have made arrangements satisfactory to the Manager to secure its payment of the amount to be paid on July 31, 1985, pursuant to subparagraph c of paragraph 4 of the Loan Modification Agreement which it entered into with FSLIC as conservator for San Marino Savings and Loan Association on November 5, 1984, to reduce the principal balance of the note referred to in paragraph (g) above to $13,000,000 and the amount of the loan extension fee required by said subparagraph of said agreement to be paid to extend the term of said note to January 31, 1986. (i) Between the date hereof and the Closing Date, the market price or marketability of the Bonds shall not -9- 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: (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 Amer ica 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 California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), the validity or enforceability of the assessments or the ability of the City to acquire and construct the improvements contemplated by the Resolu- tion, the Acquisition Agreement and the Official State- ment; 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; (j) 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 op~nlon, dated the Closing Date and addressed to the Ci ty, of Kindel & Anderson, 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 -11- 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 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 Kindel & Anderson, 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, enforceable in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by the application of equitable principles 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 when issued will not be "indus- trial development bonds" as defined in Section 103(b) of the Internal Revenue Code or the regulations adopted thereunder; (4) 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 "Introductory Statement", "The Bonds", "Secur- ity for the Bonds", "Special Risk Factors", "The Assess- ment Distr ict", "Miscellaneous - Approval of Legali ty" and "Miscellaneous - Tax Exemption," insofar as such statements purport to summarize certain provisions of the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, the Ordinances, the Bonds, the Resolu- tion, and other applicable laws and agreements, present a fair and accurate summary of such provisions, and such summaries do not contain any untrue sta1;:ements of a material fact required to be stated in the Official Statement or necessary to make the statements made therein, in the light of the circumstances under which they are made, not misleading in any material respect; (5) the Resolution, the Acquisition Agreement and the Bonds constitute legal, valid and binding agreements of the City enforceable in accordance with their terms except as such enforceability may be limited by bank- ruptcy, insolvency and other laws affecting the enforce- ment of creditors' rights in general and the application of equitable principles if equitable remedies are sought; (6) the City has duly and validly adopted a charter pursuant to the applicable provisions of the -12- 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 City may adopt and enact ordinances such as the Ordi- nances 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 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 (7) the Reso- lution creates a valid pledge of and lien upon the proceeds of the Bonds, the unpaid assessments 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, sub- ject 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) A reasoned opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of Kindel & Anderson, Bond Counsel for the City in a form satisfactory to the Manager and Counsel for the Underwriters, to the effect that: (1) notwith- standing the provisions of the agreement between the City and Park Centre Properties, at the time the sole owner of land within the Assessment District, entered into on July 11, 1983 pursuant to the Subdivision Map Act of the State of California and the San Bernardino Municipal Code (the "Subdivision Agreement") and the performance bond or bonds posted by said owner to secure construction and dedication to the City by said owner of certain improvements, including all streets and public utility facilities, within and for a subdivision which lies within the Assessment District, legal title to the improvements to be acquired by the City pursuant to the Acquisition Agreement and with the proceeds of the Bonds is vested, as of the Closing Date, in the owners of the land in the Assessment District who are signatory to the Acquisition Agreement; (2) the Acquisition Agreement is supported by adequate legal consideration on the part of both the City and the owners and is binding on both, notwithstanding any provision of the Subdivision Agree- ment or any such performance bond or bonds, or any statute or ordinance relating to the construction and dedication of public improvements within and for a sub- division of land within the City; (3) the provisions of the Acquisition Agreement supersede the provisions of -13- the Subdivision Agreement; (4) the City has legal authority to acquire the improvements from the owners of land within the Assessment District; and (5) ti tle to said improvements will not pass to the City until they are accepted by the Ci ty, the Ci ty pays the owners of land within the Assessment District the acquisition price therefor, and such owners deliver to the City duly authorized and executed documents of conveyance and transfer, transferring ownership and legal title to the improvements to the City; (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 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; (vE) 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) the representations 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- -14- formed or satisfied under this Purchase Contract, the Resolution, the Acquisition Agreement and the Official Statement, at and prior to the Closing Date; (viii) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of the City Attorney, to the effect that (1) 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 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, this Purchase Contract, the Acquisition Agreement 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, this Purchase Contract, the Acquisition Agreement or any other applicable agreement, or any action on the part of the City contemplated by any of said documents, or 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 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 authority to issue the Bonds and to perform all of its obligations under this Pur- chase Contract, the Bonds, the Acquisition 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 Cali- fornia 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 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 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; (4) the City has duly and validly adopted and enacted the -15- 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, the Official Statement, and the Acquisition Agreement; (6) he either participated in or reviewed the procedure with respect to the adoption of the Resolution and the Ordinances, and all meetings of the Mayor and Common Council of the City involving the consideration, adoption and approval of the Resolution and Ordinances were conducted in conformity with the requirements of the Ralph M. Brown Act (Section 54950 et seq. of the Government Code of the State of Californla) and other applicable provisions of law; (7) based on facts sup- plied 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 issuance of the Bonds or the City's per- formance of the Acquisition Agreement, 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 otherwise) in such a way as to impair or prevent the development of said land; (ix) A transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds; (x) The final appraisal report of Boznanski & Company, 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; (xi) 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 Preliminary Official Statement under the heading "Land -16- Ownership" 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 arrange- ments, if any, contained in the section of the Official Statement entitled "The Assessment District" and in particular under the caption "Land Ownership" 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 necessary 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; (xii) 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 "Land Ownership" to the effect (1) that said owner is a validly organized corporation, partnership, joint ven- ture, or sole proprietorship, as the case may be, autho- rized 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 State- ment under the caption "Land Ownership" 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; and (3) that the execution by said owners of the petition requesting formation of the Assessment District and waiYing compliance by the City with the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931, Division 4 of the Streets and Highways Code of the State of California, the Acqui- -17- si tion Agreement, the document entitled "Request That Improvements be Eliminated, Waiver of Rights and Request and Consent to Issuance of Bonds for Assessment District No. 961", and the agreement between the owners of land within the Assessment District and FSLIC with respect to the disbursement of the acquisition price provided for in the Acquisition Agreement has been duly authorized, and each such agreement or document is valid and binding insofar as it relates to said owner; (xiii) The final market absorption study of Empire Economics and Joseph T. Janczyk, Ph.D., setting forth conclusions identical to those stated in the Offi- cial Statement and a certificate of said Joseph T. Janczyk, dated the C~osing 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 cir- cumstances under which they were made, not misleading; (xiv) The certificates of the Engineer of Work and the owners of land within the Assessment District called for by paragraph 2 of the Acquisition Agreement as to the actual cost of constructing the public improvements to be acquired with the proceeds of the Bonds, which shall be accompanied by copies of the executed contracts for doing such work and other documents relied upon by said engineer in making such certificate or certificates; (xv) A certificate signed by a duly autho- rized officer or representative of FSLIC dated as of the Closing Date and addressed to the Manager on behalf of the Underwriters to the effect that all payments of principal and interest on the note of Park Centre Properties to San Marino Savings and Loan Association which is referred to in paragraph (f) of this section 3 are current, the payment to have been made on January 31, 1985 to extend the due date of said note to July 31, 1985 has been made and the due date of said note has been extended to July 31, 1985, and Park Centre Properties is not in default in any respect in its performance under said note; (xvi) addressed to the and the Ci ty of (1) at the time An opinion, dated the Closing Date and Manager on behalf of the Underwriters, counsel to FSLIC to the effect that: of the execution of the documents and -18- agreement hereinafter mentioned, FSLIC was, pursuant to applicable law, acting as conservator or receiver for San Marino Savings and Loan Association: (2) as such conservator or receiver FSLIC was and is authorized to sign said documents and agreement on behalf of said association: and (3) the execution by FSLIC, as such conservator, of the petition requesting the formation of the Assessment District and the issuance of the Bonds, and the execution by FSLIC, as such receiver, of the document entitled "Request That Improvements be Eliminated, Waiver of Rights and Request and Consent to Issuance of Bonds for Assessment District No. 961", and the agreement between FSLIC, Park Centre Properties and Rancho Consultants Realty Fund IV with respect to the disbursement of the acquisition price provided for in the Acquisition Agreement has been duly authorized and accomplished pursuant to applicable law relating to FSLIC as such a conservator or receiver, and that said documents and agreement are valid and binding insofar as they relate to FSLIC and said association: (xvii) The agreement among Park Centre Properties, Rancho Consultants Realty Fund IV and FSLIC providing for the disbursement by the City of the acqui- sition price for the improvements to be acquired by the City pursuant to the Acquisition Agreement referred to in paragraph (f) of this section 3: and (xviii) Documentation, satisfactory to the Manager, of the fact that Park Centre Properties has secured payment of the amounts referred to in para- graph (h) of this Section 3; (xvix) Such additional legal opinions, 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 opinions, 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. -19- 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- 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 Redevelopment Agency of the City of San Bernardino, 300 North "D" street, San Bernardino, California 92418, Attention: Ellen Bonneville; and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Miller & Schroeder Munici- pals, Inc., 505 Lomas Santa Fe Drive, Suite 200, Solana Beach, California 92075, Attention: Michael F. Whipple. -20- . 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 Underwr iters 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 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, The Underwriters By: MILLER & SCHROEDER MUNICIPALS, INC. By: Title: Accepted: CITY OF SAN BERNARDINO By: Mayor RTAOOll -21- - EXHIBIT "A" TO PURCHASE CONTRACT City of San Bernardino, California Improvement Bonds Assessment District No. 961 Due Principal Interest September 1 Amount Rate 1987 $ 230,000 8.50% 1988 250,000 9.00 1989 275,000 9.50 1990 300,000 9.75 1991 330,000 10.00 1992 360,000 10.10 1993 400,000 10.20 1994 440,000 10.30 1995 485,000 10.40 1996 535,000 10.50 1997 590,000 10.60 1998 655,000 10.70 1999 720,000 10.80 2000 800,000 10.90 2001 890,000 11. 00 2002 985,000 11. 00 2003 1,095,000 11. 00 2004 1,215,000 11. 00 2005 1,350,000 11. 00 2006 1,495,000 11. 00 $13,400,000 RTA0011