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HomeMy WebLinkAbout1982-358•2,008-2 8/10/82 RESOLUTION NO. 82-358 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE ISSUANCE OF A CER- TAIN OBLIGATION; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN AGREEMENTS (DOANE PRODUCTS COMPANY) WHEREAS, the City of San Bernardino, California (the "City"), is a municipal corporation, duly organized and existing under the Constitution of the State of California and the City Charter of the City; and WHEREAS, the City has adopted its Ordinance No. 3815 entitled "Ordinance of the City of San Bernardino Relating to the Financing of Projects for the Encouraging of Increased Employment Within the City," and certain amend- ments thereto (collectively referred to with such amendments as the "Ordinance"); and WHEREAS, the Ordinance is intended to provide a means for the financing of the development of industry and commerce and to thereby broaden the employment opportunities for residents of the City and its tax and revenue base; and WHEREAS, Doane Products Company, a Missouri corporation (the "Company"), has submitted an Application for the financing of certain capital improvements and improvements to land as authorized by the Ordinance and on July 15, 1982, the Mayor and Common Council of the City adopted Resolution No. 82-299 approving the same and making the necessary determinations entitled: "Resolution of the Mayor and Common Council of the City of San Bernardino Finding that an Application for Industrial Development Bond Financing Has Been Submitted Pursuant to the Provisions of Ordinance No. 3815 of the City for a Certain Project, Finding that Said Application Complies with the Provisions and Requirements of Said Ordinance No. 3815; Approving Said Application and the Project to Which it Refers; Directing the Preparation of a Project Agreement, a Resolution of Issuance and such other Legal Documents as May Be Necessary to -1- Carry Out Said Project and Provide for the Issuance of Industrial Development Revenue Bonds Therefor; and Making Certain Other Findings and Determinations in Connection Therewith"; and WHEREAS, pursuant to and in accordance with the provisions of the Ordinance, the Company shall develop a project consisting of a 50,000 square foot manufacturing facility and warehouse for the production of dry pet food to be located in the State College Industrial Park at the western end of Lexington Way, on the south side facing Lexington Way, San Bernardino, California (the "Project"), the same to be financed pursuant to a certain Project Agreement between the City, the Company, Allied Bank of Texas and First National Bank and Trust Company of Joplin (collectively the "Purchasers") and the Trustee, to be dated as of the date of closing for the financing contemplated hereunder; and WHEREAS, the Company has represented to the City that private financing for the acquisition of the Project is not reasonably available and a major inducement in acquiring the Project is the source of financing provided under the Ordinance; and WHEREAS, the City has previously adopted its Rules and Regulations in connection with financings to be undertaken pursuant to the Ordinance. NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AS FOLLOWS: A RTTrT.R T GRANTING CLAUSES, DEFINITIONS, LEGAL AUTHORIZATION AND FINDINGS 1.01 Granting Clauses. The City, in consideration of the promises and the purchase and acceptance of the City Notes by the purchaser or purchasers thereof, and for which good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of and interest on the City Notes according to its tenor and effect and the performance - 2 - and observance by the City of all of the covenants expressed or implied herein and in the City Notes, does hereby assign to the Purchasers and to its successors and assigns the following: FIRST, the amounts required by this Resolution and the Project Agreement to be deposited from time to time with the Trustee, and all other amounts, from time to time held by the City for the benefit of the holders of the City Notes pursuant to this Resolution together, in each case, with the proceeds of any investments and reinvestments made with such amounts and moneys and the proceeds thereof; and SECOND, all of the City's right, title and interest in and to the Project Agreement (except for the rights of the City to receive payments, if any, under the Project Agreement, the Company Note and the Deed of Trust as hereinafter defined), together with all powers, privileges, options and other benefits of the City contained in the Project Agreement, and said Company Note and Deed of Trust, which are not specifically described in the First Granting Clause above; provided, however, that nothing in this clause shall impair, diminish or otherwise affect the City's obligations under the Project Agreement, said Company Note and Deed of Trust, or, except as otherwise provided in this Resolution, impose any such obligations on the Trustee; and THIRD, any and all property of every kind or description which may from time to time hereafter be sold, transferred, conveyed, assigned, hypothe- cated, endorsed, deposited, pledged, mortgaged, granted or delivered to, or deposited as additional security by the City or anyone on its behalf or with its written consent, or which pursuant to any of the provisions hereof or of the Project Agreement, or of said Company Note and Deed of Trust, may come into the possession or control of the City or of a receiver lawfully appointed, as such additional security; and the purchaser or purchasers of the City Notes are hereby authorized to receive any and all such property as and for additional security for the payment of the City Notes, and to hold and apply all such property subject to the terms hereof. - 3 - 1.02 Definitions. The terms used herein, unless the context hereof shall require otherwise, shall have the same meanings as used in the Project Agreement as attached hereto as Exhibit "B" and incorporated herein by reference: "Bond Counsel" means the Law Offices of Timothy J. Sabo, San Bernardino, California, and any opinion of Bond Counsel shall be a written opinion signed by such Bond Counsel. Said Bond Counsel is hereby approved and employed by the City and shall serve as bond counsel to the City pursuant to the Ordinance for the financing to be undertaken hereunder for the total fee of $10,000.00, inclusive of all costs and other expenses as may be incurred by Bond Counsel. "City Note or Notes" means the industrial revenue note or notes to be issued by the City pursuant to the Ordinance and this Resolution of Issuance and designated as the "City of San Bernardino Industrial Development Revenue Note of 1982, Doane Products Company Project" as attached hereto as Exhibit "A" and incorporated herein by reference not to exceed in the aggregate the total principal amount as herein authorized. "Company" means Doane Products Company, a Missouri corporation. "Project Agreement" means the agreement or agreements substantially in the form presented to the City, to be executed by the City, the Company, the Purchasers and the Trustee providing for the issuance of the City Notes and the loan of the proceeds to the Company through the Purchasers and the Trustee, including any amendments or supplements thereto made in accordance with its provisions. "Resolution of Issuance" means this Resolution of the City, together with any supplement or amendment thereto. All references in this instrument to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and subdivisions of this Resolution of Issuance as originally executed. The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Resolution of Issuance as a whole, not to any particular Article, Section or subdivision. -4- 1.03 Legal Authorization. An industrial development revenue note of the City is hereby authorized to be issued under and subject to the terms of this Resolution of Issuance for the object and purpose of providing the funds for the permanent financing for the Project. The City Notes are designated as the "City of San Bernardino Industrial Development Revenue Note of 1982, Doane Products Company Project". The City Notes issued hereunder shall be sold and delivered to the Purchasers concurrently with the Company Note. 1.04 Findings. The City has heretofore determined, and does hereby determine, as follows: (a) the City is authorized by the Ordinance to enter into the Project Agreement for the purpose of making a construction loan to the Company through the Bank and such other lender for financing the development of the Project, all under and pursuant to provisions of the Ordinance; (b) the financing that is to be provided to the Company by the City through the Bank and such other lender, in connection with the Project, will further the purposes and goals of the Ordinance; (c) by this Resolution of Issuance, the City approves the Project and authorizes the execution of the City Notes, the Project Agreement and the Assignment of Leases, Rents and Profits, which documents set forth the terms and conditions of the financing of the Project; (d) the Project costs proposed to be financed hereby include only those costs paid or incurred by the Company with respect to the acquisition and construction of the Project after the date of the City having declared its present intent to provide tax-exempt financing for the Project, except that costs paid or incurred by the Company, with respect to the Project before such date may be included to the extent that such inclusion will not result in less than substantially all of the proceeds of the City Notes being used for the acquisition, construction, reconstruction or improvement of land or property of a character subject to the allowance for depreciation within the meaning of Section 103(b)(6) of the Internal Revenue Code of 1954, as amended; - 5 - (e) the amount necessary to finance the Project costs and the acquisition thereof requires the issuance of the City Notes in the total principal amount of Four Million Five Hundred Thousand Dollars ($4,500,000). 1.05 Tax -Exempt Financing. The financing for the acquisition and construction of improvements is intended to consist of the City Notes to be issued by the City pursuant to this Resolution of Issuance to provide financing for the acquisition and construction of the Project, said financing designated to be outstanding for a period of time as provided in the Project Agreement. A R TT(`T.R TT NOTE 2.01 Authorized Amount and Form of City Notes. The City Notes issued pursuant to this Resolution of Issuance shall be in substantially the form set forth in Exhibit "A" attached hereto and incorporated herein by this reference, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution of Issuance, and in accordance with the further provisions hereof; and the total principal amount of the City Notes for financing the Project pursuant to the Project Agreement, that may be outstanding hereunder to one (1) or more purchasers thereof, whether in the form of one (1) or more City Notes to the Purchaser and/or such other purchasers thereof, is expressly limited to an amount equal to $4,500,000; provided further that the City shall lend the proceeds of the City Notes to the Company through the Trustee pursuant to the requirements of the Project Agreement. 2.02 Terms of the City Notes. The City Notes shall be payable at the times and in the manner and shall bear interest at the rate as set forth in the City Notes, and shall be subject to such other terms and conditions as are set forth therein. 2.03 Execution. The City Note or Notes shall be executed on behalf of the City by the manual or facsimile signature of its Mayor and attested by the manual signature of its City Clerk and shall have the seal of the City affixed thereon. In case any officer whose signature shall appear on the City Note or Notes shall cease to be such officer before the delivery of the City Note or Notes, -6- such signature shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. 2.04 Delivery of City Notes. Before delivery of the City Notes there shall. be delivered to the Purchasers (except to the extent waived by the Purchasers) the following: (a) an executed copy of each of the following documents: (1) the Project Agreement; (2) the Company Note; (3) the Deed of Trust; and (4) any other security documents (as may be required pursuant to the terms of the Project Agreement); (b) an Opinion of Counsel for the Company in scope and substance satisfactory to Bond Counsel, and to the extent required by Bond Counsel, as to the authority of the Company to enter into the transaction and other related matters; (c) the opinion of Bond Counsel as to the validity and tax- exempt status of the City Notes in a form satisfactory to the Purchasers; (d) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (c) above. ARTT( T. -R. HT PREPAYMENT OF CITY NOTES 3.01 Prepayment. The City Notes may be prepaid in whole or in part prior to the maturity thereof all in accordance with the terms of the Loan and as further set forth in the Project Agreement. aro 3.02 Termination of Interest. Upon deposit of any prepayment with the 'Purchasers, to the extent permitted by the Project Agreement and the giving of any notice required by law, the principal amounts prepaid shall, after such date, cease to bear interest. ARTM.T,F. TV GENERAL COVENANTS 4.01 Payment of Principal and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and interest on the City Notes at the place, on the dates, from the source and in the manner provided herein and in the City Notes. The principal and interest are payable solely from and secured by the proceeds, income and repayment of the loan to the Company under the Project Agreement and the Deed of Trust, which proceeds, income and repayments are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the City Notes and the Project Agreement, and the City's interest and rights in said loan are hereby assigned to the Trustee for the benefit of the Purchasers, and nothing in the City Notes or in this Resolution of Issuance shall be considered as assigning, pledging or otherwise encumbering any other funds or assets of the City. 4.02 Performance of and Authority for Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, Stipulations and provisions contained in this Resolution of Issuance, in the City Notes and in all proceedings of the City pertaining thereto; that it is duly authorized under the Constitution and laws of the State of California, including particularly and without limitation the Ordinance, to issue the City Notes authorized hereby, to pledge the revenues and assign the loan under the Project Agreement in the manner and to the extent set forth in this Resolution of Issuance and the City Notes; that all action on its part for the issuance of the City Notes and for the execution and delivery thereof has been duly and effectively taken; and that the City Notes in the hands of the Purchasers is and will be a valid and enforceable obligation of the City according to the terms thereof. 4.03 Enforcement and Performance of Covenants. The City agrees to enforce all covenants and obligations of the Company under the Project Agree - '.m ment, and to perform all covenants and other provisions pertaining to the City contained in the Project Agreement. 4.04 Nature of Security. The City Notes and interest thereon are payable solely from the proceeds, income and repayment of the loan under the Project Agreement. The City Notes and interest thereon shall not be deemed to constitute a debt or liability of the City or the State of California for which is pledged the faith and credit of the City or the State of California and shall not give rise to any pecuniary liability of the City, or any of its officers, agents or employees. No holder of the City Notes shall ever have the right to compel any exercise of the taxing power of the City to pay the City Notes or the interest thereon, or to enforce payment thereof against any property of the City. The City Notes and interest thereon does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions contained in the City Notes and the Project Agreement shall be subject at all times to the availability of proceeds, income, repayments, or other funds furnished for such purpose in accordance with the Project Agreement, sufficient to pay all costs of such performance or the enforcement thereof. The City Notes shall be a special obligation of the City, and the City shall., under no circumstances, be obligated to pay City Notes or Project costs (other than Administrative Expenses), except from Revenues and other funds received under the Project Agreement for such purposes, nor to pay Administrative Expenses except from funds received under the Project Agreement for such purposes, or from funds which are made available as otherwise authorized by law. The City Notes shall contain a statement of its special obligation nature. 4.05 Compliance With Arbitrage Restrictions. (a) The City hereby covenants that it will make no use of the proceeds of the City Notes at any time during the term thereof which will cause the City Notes to be an "arbitrage bond" as that term is defined in Section 103(c) of the Internal Revenue Code of 1954, as amended, and any applicable regulations promulgated thereunder; and -9- (b) The Secretary of the Redevelopment Agency of the City of San Bernardino, or such deputy or assistant who may act in place thereof, is authorized and instructed to set forth in brief summary terms in a certificate the facts, circumstances and estimates upon which the City's expectation that the City Notes will not be used in a manner that would cause the City Notes to be arbitrage bonds is based. The certification of the such person shall be delivered to the Purchasers together with the City Notes. ARTICLE V MISCELLANEOUS 5.01 Conflict. All resolutions or parts of resolutions or other proceed- ings of the City in conflict herewith shall be and the same are repealed insofar as such conflict exists. 5.02 Successors to the Mayor and Common Council. All of the covenants, stipulations, promises, agreements and obligations contained in this Resolution of Issuance and in any resolution supplemental thereto by or on behalf of or for the benefit of the City shall bind or inure to the benefit of the successors of the City, from time to time, and to any officer, board, corporation, commission, authority, agency or instrumentality to whom or to which any power or duty affecting such covenants, stipulations, promises, agreements and obligations shall be transferred by or in accordance with law. 5.03 Severability. In case any one or more of the provisions of this Resolution of Issuance or of the City Notes shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution of Issuance or of the City Notes, but this Resolution of Issuance and the City Notes shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. 5.04 Authentication of Transcript. The City Clerk is directed to furnish to Bond Counsel certified copies of this Resolution of Issuance and all documents referred to herein and other resolutions, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the City Notes. All such certified copies, certificates and affidavits, including any -10- heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 5.05 Authorization to Execute Agreements. The forms of the proposed City Notes, the Project Agreement and the Deed of Trust are hereby approved in substantially the form heretofore presented to the City; and the Mayor of the City is authorized to execute by manual or facsimile signature, and the City Clerk to attest and the seal of the City to be affixed thereon, the Project Agreement in the name of and on behalf of the City and such other documents as Bond Counsel shall consider appropriate in connection with the issuance of the City Notes and such other documents, agreements and instruments as are necessary in the opinion of Bond. Counsel to be executed on behalf of the City by the appropriate official or staff' person of the City to consummate the transaction contemplated hereunder. In the event of the absence or disability of the Mayor or the City Clerk or such other officer or employee of the City so authorized to act, such officers of the City as, in the opinion of Bond Counsel for the City as appointed hereunder, may act in their behalf, shall without further act or authorization of the City do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. 5.06 Effective Date. This Resolution of Issuance shall take effect upon adoption. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a _reasul ar meeting thereof, held on the 16th day of August 1982, by the following vote, to -wit: - 11 - AYES: Councilmen Castaneda.Reilly, Hernandez, Quiel, Strickler NAYS: None ABSENT: Council Member Hobbs The foregoing resolutic Auqust , 1982. Approved as to form: GiUy Att ey City Clerk -12- 2,008-1 8/10/82 Exhibit "A" UNITED STATES OF AMERICA COUNTY OF SAN BERNARDINO STATE OF CALIFORNIA CITY OF SAN BERNARDINO CITY OF SAN BERNARDINO INDUSTRIAL DEVELOPMENT REVENUE NOTE OF 1982 DOANE PRODUCTS COMPANY PROJECT $4,500,000 THE CITY OF SAN BERNARDINO, CALIFORNIA (the "City"), a municipal corporation, duly organized and existing under the Constitution of the State of California and the City Charter of said City, for value received, hereby promises to pay from the source of funds hereinafter described, to the order of (the "Purchaser") at its designated principal office, or such other place as the Purchaser may designate in writing, the principal sum of Dollars ($ ), or so much thereof as may have been advanced to or for the benefit of the City and remains unpaid from time to time, with interest on the unpaid principal amount calculated daily at a variable rate equal to sixty-five percent (65%) of the Prime Rate as defined in the Project Agreement, provided, however, that such rate shall never be less than eight and three quarters percent (8-3/4%); or upon the occurrence of a "Determination of Taxability", as defined in the Project Agreement, then at such other rate and as otherwise payable as provided therein, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms therein set forth. ONE. (a) Interest shall accrue from and after the date of each and every advance or disbursement made under the Project Agreement and interest shall be payable monthly on the first day of each month, with the first interest -1- payment to be made on October 1, 1982. This City Note shall mature in one hundred eighty (180) equal installments of $25,000 each commencing 1, 19_, and ending v 1, 19_. It is the intent of the City, the Purchasers and the Company that payments on the Company Note as defined in the Project Agreement shall be in an amount sufficient to fully pay all payments of principal and interest on the City Notes of the City together with any fees of the City or any servicer of the Loan. Payment on the Company Note shall be deemed to constitute payment on the City Notes without further delivery by the City. (b) The outstanding principal balance and all accrued interest hereon shall be due and payable on September 1, 1987, or September 1, 1992, at the option of the Purchasers, as further provided in the Project Agreement. (c) If the interest on this City Note should become subject to federal income taxation pursuant to a "Determination of Taxability" as that term is defined in the Project Agreement, this City Note shall be redeemed prior to maturity in whole on the date and in the amount equal to that provided in the Project Agreement. (d) Interest shall be computed on a daily basis. (e) If any payment due under this City Note and, con- sequently under the Company Note, is not made on or prior to the day the date such payment is due the Company has agreed to pay a late charge in the amount of two percent (2%) of the payment so due and unpaid, in addition to said payment; but nothing in this paragraph is to be construed as any obligation on the part of the holder of this City Note to accept payment of any installment or of less than the total unpaid principal balance after its due date. (f) In the event of default in payment of this indebtedness in full upon maturity, the interest rate thereafter shall be increased to the then current Prime Rate plus two percent (2%) of the unpaid balance. TWO. This Note is issued by the City to make a construction and permanent loan to the Company for the development of a 50,000 square foot - 2 - manufacturing facility and warehouse for the production of dry pet food pursuant to the Project Agreement dated as of , 19_, between Doane Products Company, a Missouri corporation (the "Company"), the City, the Pur- chasers and the Trustee, in the principal amount of $4,500,000. THREE. This Note is secured by an assignment of the loan under the Project Agreement, a Deed of Trust and the Guaranty, all dated _ , 19_, between the Company and the Purchasers (collectively sometimes referred to as the "Security Documents") and the proceeds, income and repayments of said loan are further pledged by the City to satisfy the City's obligations herein. The disbursement of the proceeds of this Note is subject to the terms and conditions of the Project Agreement. FOUR. This Note may be prepaid either in whole or in part without penalty as further provided in the Project Agreement. No prepayment shall reduce the amount or postpone the due dates of the monthly payments due under Paragraph One hereof, which shall continue to be due and payable in full until the entire principal balance and accrued interest due on this Note have been paid. This City Note shall be prepaid in whole, at the option of the holders of at least sixty-six and two-thirds percent (66-2/3%) of this aggregate principal amount of the City Notes Outstanding on September 1, 1987, or September 1, 1992, at a price equal to the aggregate principal amount of this City Note Outstanding plus interest thereon to the redemption date, without premium, as provided in the Project Agreement. FIVE. This Note may be assigned by the Purchasers or any holder of the Note from time to time, by endorsement hereon or by other instrument in writing; provided, that notice of any such assignment is given in writing to the City and the Company. SIX. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution of Issuance, the Project Agreement, the Deed of Trust, the Guaranty and any instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. Upon the occurrence of any Event of Default, as set forth in the Project Agreement, holders of at least sixty-six and two-thirds -3- percent (66-2/3%) of the aggregate principal amount of the City Notes Outstanding may declare the principal and all accrued interest on this Note to be immediately due and payable without notice. SEVEN. This Note and interest hereon are payable solely from the proceeds, income and repayments of the loan under the Project Agreement. This Note and the interest hereon shall not be deemed to constitute a debt or liability of the City or the State of California for which is pledged the faith and credit of the City or the State of California and shall not give rise to a pecuniary liability on the part of the City, or any of its officers, agents or employees. No holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest hereon, or to enforce payment thereof against any property of the City. This Note and the interest hereon does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City. The agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Project Agreement, sufficient to pay all costs of such performance or the enforcement thereof. EIGHT. It is agreed that time is of the essence with regard to this Note. In the event of failure by the City to pay when due any monthly installment of interest, or if an Event of Default shall occur, as set forth in the Project Agreement, then the Purchasers shall have the right and option to declare the principal balance and accrued interest hereon, immediately due and payable. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. NINE. (a) The remedies of the Purchasers, as provided herein and in the Project Agreement, are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Purchasers, and may be exercised as often as an occasion therefor shall. occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. W, W (b) The Purchasers shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Purchasers, and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. TEN. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly this Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except in accordance with applicable registration requirements of said laws or an applicable exemption from such registration requirements. ELEVEN. This Note is issued pursuant to and in full compliance with the Constitution and laws of the State of California, particularly Ordinance No. 3815, as amended, of the City, and pursuant to a resolution adopted by the Mayor and Common Council of the City which authorizes the execution and delivery of the Project Agreement and the Resolution of Issuance which has been approved by such Mayor and Common Council of the City. This City Note is a limited obligation of the City and is payable solely from the payment of principal and interest under the Project Agreement and the Resolution of Issuance which has been approved by such Mayor and Common Council of the City and shall be payable via the Company Note. This City Note shall never constitute an indebtedness of the City within the meaning of any California constitutional provision or statutory limitation, and shall not constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the principal of or interest on this City Note, nor is the City in any manner obligated to make any appropriation for payment. Payments under the Project Agreement and the Company Note sufficient for the prompt payment when due of the principal and interest on this City Note are to be paid to the Purchasers and are deemed to be payments on this City Note. All capitalized terms used herein shall have the meanings attributed to them in the Project Agreement. IT IS HEREBY CERTIFIED, RECITED and DECLARED that all acts, conditions and things required by the Constitution of the State of California, the Ordinance, the statutes of the State of California, the Resolution of Issuance and the Project Agreement to exist, to have happened and to have been performed precedent to and in the issuance of this Note, exist, have happened and have been performed duly in time, form and manner as required by law. IN WITNESS WHEREOF, the City of San Bernardino has caused this Note to be duly executed in its name and by the facsimile signature of its Mayor and its corporate seal to be affixed hereon and attested by the manual signature of its City Clerk, and has caused the Note to be dated as of p , 1982. ATTEST: Ci y Clerk of the City of San Bernardino, California THE CITY OF SAN BERNAR CALIFORNIA ffay6r o�the guy of 0' San Ber ardinbb California -6-