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HomeMy WebLinkAboutRES NO 196-93RESOLUTION NO. 196-93 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAKERSFIELD PROV~D~N~ FOR THE ISSUANCE OF THE CITY OF BAKEREFIELD SE~'ER REVENUE REFUNDZNG BONUSv 8ERZES 1993v ~N THE AGGREGATE PRINCIPAL ~OUNT NOT TO EXCEED $21,265v000~ ~ND AW~%RDING B~,LE THEREOF RESOLVED BY THE CITY COUNCIL (the "Council") OF THE CITY OF BAKERSFIELD (the "City") as follows: WHEREAS, the City is a charter city existing under the laws of the State of California and organized and (the "State"); WHEREAS, the City now owns and operates a municipal sewer system (the "Enterprise"); and WHEREAS, the City of Bakersfield Public Facilities Corporation issued its 1985 Leasehold Mortgage Revenue Bonds, pursuant to Indenture of Mortgage and Deed of Trust dated January 1, 1985, in the principal amount of $14,665,000 (the "1985 Bonds"); and WHEREAS, pursuant to a Trust Agreement dated April 1, 1988, adopted by the Council on April 1, 1988, the City authorized its city of Bakersfield 1988 Certificates of Participation (Wastewater Treatment Plant 3 Project) to refund the 1985 Bonds and provide additional funds to finance the construction of additional facilities (the "1988 Certificates"); and WHEREAS, the Council has determined that it is in the public interest to issue refunding bonds for the purpose of providing the funds to prepay the outstanding 1988 Certificates; and WHEREAS, Articles 10 and 11 of Chapter 3 of Division 2 of Title 5 of the Government Code of the State (the "Refunding Law") authorizes the City to issue such refunding bonds upon resolution. NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED AND ORDERED AS FOLLOWS: (1063.6) ORIGINAL ~%RTICLE ~ AUTHORIZATION OF BONDS; DEFINITIONS Section 1.01. Authorization. The City has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines, that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the Bonds (as hereinafter defined) do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now duly empowered, pursuant to each and every requirement of law, to issue the Bonds in the manner and form provided in this Resolution. Section 1.02. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.02 shall, for all purposes of this Resolution, of any resolution supplemental hereto, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified: "A~re~ate Annual Debt Service" means, for any Bond Year, the sum of the amounts of Annual Debt Service for such Bond Year for all Bonds and Parity Obligations then Outstanding. "Annual Debt Service" means, for each Bond Year, the sum of (1) the interest payable on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (2) the principal amount of the Outstanding Bonds payable by their terms in such Bond Year. "Authority" means the Bakersfield Public Financing Authority, a public body, corporate and politic, established under the Marks-Roos Local Bond Pooling Act of 1985. The Authority shall be the original purchaser of the Bonds, using proceeds from its sale of the Pool Bonds for such purchase. The Bonds may be registered in the name of and delivered to a trustee for the Pool Bonds, on behalf of the Authority. "Bond Registration Books" means the records maintained by the City, or authorized financial institution appointed hereunder, pursuant to Section 2.07 hereof for the registration and transfer of ownership of the Bonds. "Bond Year" means any twelve-month period extending from September 15 in one calendar year to and including September 14 of the succeeding calendar year, except the first Bond Year, which shall commence on the Closing Date, and conclude September 14, 1994. -2- ORIGINAL "Bonds" means the City of Refunding Bonds, Series 1993, issued amount not to exceed $21,265,000. Bakersfield Sewer Revenue in the aggregate principal "city" means the City of Bakersfield, California. "City Manager" means the City Manager or Assistant City Manager of the City or any other duly authorized representative of the City appointed by the City to perform the functions of the City Manager. "City Clerk" means the City Clerk or Deputy City Clerk of the City or any other duly authorized representative of the City appointed by the City to perform the functions of the City Clerk. "Closin~ Date" means the date on which the Bonds are delivered to the Authority and the proceeds for such purchase are delivered to the City, which is March 23, 1994. "Costs of Issuance" means all items of expense directly or indirectly payable to the City to cover the costs of issuance, sale and delivery of the Bonds, including but not limited to printing expenses, filing and recording fees, fees, charges and disbursements of attorneys, financial advisors, consultants, and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds and any other costs, charges or fees incurred in connection with the original issuance of the Bonds. "Council" means the City Council of the City of Bakersfield. "Debt Service Fund" means the fund by that name established and held by the City pursuant to Section 3.04. "Kern County Auditor-Controller,, means the person who holds the office designated Kern County Auditor-Controller from time to time, or one of the duly appointed deputies of such person, or any person or persons performing substantially the same duties in the event said office is ever abolished or changed. "Enterprise" means the municipal sewer system, owned and operated by the City. "Event of Default" means any of the events described in Section 7.01. "Finance Director" means the Finance Director of the City or the person duly appointed by the City to perform those duties. "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month -3 - ORIGINAL period hereafter selected and designated by the City as its official fiscal year period. "Government Obligations" shall mean and include any of the following securities: State and Local Government Series issued by the United States Treasury (SLGS); United States Treasury bills, notes and bonds; and certificates, receipts or other obligations evidencing direct ownership of, or the right to receive, a specified portion of one or more interest payments or principal payments, or any combination thereof, to be made on any United States Treasury bill, note or bond ("STRIPS"). "Independent certified Public Accountant" means any accountant or firm of such accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State of California, appointed by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; and (c) is not connected with the City as an employee of the City, but who may be regularly make reports to the City. officer or retained to "Independent Financial Consultant" means any financial consultant or firm of such consultants appointed by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City, other than as a potential original purchaser of the Bonds or of any Parity Obligations; and (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City. "Interest Account" means the account by that name established and held in the Special Fund pursuant to Section 3.05(a). "Interest Payment Date" means each March 15 and September 15, commencing September 15, 1994, and continuing each year thereafter so long as any of the Bonds remain Outstanding hereunder. -4- ORIGINAL "Maximum Annual Debt Service" means, as of the date of any calculation, the largest Annual Debt Service during the current Bond Year or any Bond Year thereafter through the final Principal Payment Date. "Mayor" means the Mayor of the City or any other duly authorized representative of the City designated by resolution or by law to perform the functions of the Mayor in the event of the Mayor's absence or disqualification. "Net Revenues" mean, for any Fiscal Year, the Revenues for such Fiscal Year less all sums expended therefrom for the annual management, operation, maintenance and repair costs of the Enterprise, including all incidental costs, fees and expenses properly chargeable thereto. "1985 Bonds" mean the City of Bakersfield Public Facilities Corporation 1985 Leasehold Mortgage Revenue Bonds dated January 1, 1985. "1988 Certificates" mean the City of Bakersfield 1988 Certificates of Participation (Wastewater Treatment Plant 3 Project). "Outstandinq," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 6.03) all Bonds except: (a) Bonds theretofore canceled by the City (or the duly authorized agent of the City) or surrendered to the City (or the duly authorized agent of the City) for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 8.03; and, (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City pursuant to this Resolution or any Supplemental Resolution. "Owner" or "Bond Owner" means any person who shall be the person in whose name any Outstanding Bond shall be registered. "Parity Obliqations" mean any loans, advances or indebtedness issued or incurred by the City pursuant to Section 2.11. "Pavin~ A~ent" means the Authority or the financial institution appointed by the City to make the payment of principal and interest on the Outstanding Bonds. The City may act as its own Paying Agent. -5- "Pool Bond Revenues" means, for any single Bond Year, the aggregate amount of principal payments for and interest payments on the Bonds made by the City to the Authority or its trustee, plus all investment earnings on any monies held by the Authority or its trustee for the benefit of the Pool Bonds (excluding those monies held by the Authority or its trustee which are to be rebated to the United States government pursuant to the Tax Code). "Pool Bonds" means the Authority's Revenue Bonds, Series 1994A, issued in the aggregate principal amount of $35,660,000. "Principal Account" means the account by that name established and held by the City, or its agent appointed hereunder by the City, pursuant to Section 3.05(b). "Principal Payment Date" means September 15 in each year in which any of the Bonds mature; and with respect to any Bond means the stated maturity date. "Prior Bonds" means the 1988 Certificates. "Project Fund" means the fund by that name established and held by the City pursuant to Section 4.02. "Record Date" means the first (lst) day of the calendar month in which an Interest Payment Date occurs, whether or not such first day is a business day. "Refundin~ Law" means Articles 10 and 11 of Chapter 3 of Division 2 of Title 5 (Section 53570 et seq.) of the Government Code of the State. "Report" means a document in writing signed by an Independent Financial Consultant and including: (a) a statement that the person or firm making or giving such Report has read the pertinent provisions of this Resolution to which such Report relates; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "Resolution" means this resolution adopted by the Council on the date set forth herein, under and pursuant to the Refunding - 6 - Law, and as it may from time to time be amended or supplemented pursuant to the provisions hereof. "Revenues" mean all charges received for, and all other income and receipts derived from the operation of the Enterprise, or arising from the Enterprise, including revenues deposited in any accounts to secure or to provide for the payment of the Bonds, and interest received on any invested monies of the Enterprise. Excluded from this definition are proceeds of any charges required by State or federal regulations to be levied and collected from users and held, distributed or used for a special designated or limited purpose. "State" means the State of California. "Supplemental Resolution" means any resolution, agreement or other instrument then in full force and effect which has been duly adopted or entered into by the City; but only if and to the extent that such Supplemental Resolution is specifically authorized hereunder. "Tax Code" means the Internal Revenue Code of 1986, as amended, or any successor statutes. Any reference to a provision of the Tax Code shall be deemed to include the applicable regulations of the United States Department of the Treasury promulgated with respect to such provision. "Wastewater Treatment Fund" means the fund by that name established by the City to receive Revenues. "Written Rec~/est of the City" or "Written Certificate of the City" means a request or certificate in writing signed by the Mayor, Vice Mayor, Finance Director or City Manager of the City or by any other officer of the City duly authorized by the City for that purpose. Section 1.03. Rules of Construction. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Resolution, and the words "herein,""hereof," "hereunder" and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision hereof. Section 1.04. Equal Security. In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of -7- ORIGINAL the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. ARTICLE THE BONDS Section 2.01. Authorization and DesiGnation. Bonds in the aggregate principal amount not to exceed twenty-one million two hundred sixty-five thousand dollars ($21,265,000.00) are hereby authorized to be issued by the City under and subject to the terms of this Resolution and the Constitution and laws of the State. The Bonds shall be designated the "City of Bakersfield Sewer Revenue Refunding Bonds, Series 1993." Section 2.02. Terms of Bonds. The Bonds shall be issued in fully registered formwithout coupons in denominations of $5,000 or any integral multiple thereof. One Bond in the aggregate amount of $21,265,000 (or the aggregate par amount of the bonds) may also be issued. The Bonds shall be substantially in the form set forth in Exhibit A attached hereto. The Bonds shall mature and become payable on the Principal Payment Dates in each of the years and in the amounts as set forth in Exhibit B attached hereto and incorporated by reference. The Bonds shall be dated March 2, 1994 and shall bear interest from said date at the rates shown on Exhibit B. Interest shall be paid on each Interest Payment Date to the Owner in whose name the ownership of the Bonds is registered on the Bond Registration Books at the close of business on the immediately preceding Record Date. Interest shall be paid by check of the City or designated agent mailed by first class mail, postage prepaid, on each Interest Payment Date to the Bond Owners at their respective addresses shown on the Bond Registration Books as of the close of business on the preceding Record Date; or by wire transfer made on such Interest Payment Date to any Owner of $1,000,000 or more in aggregate principal amount of Bonds who shall have requested such transfer pursuant to written notice filed with the City or designated agent, received not later than the preceding Record Date. Section 2.03. Redemption. (a) Optional Redemption. The Bonds shall be subject to redemption in whole on any date on or after September 15, 2001, or in part on any date on or after September 15, 2001, in inverse order of maturity and by lot within a maturity, at the option of the City from any available source of funds, at (1063.6) -8- ORIGINAL a redemption price equal to one hundred percent (100%) of the principal amount to be redeemed together with the following redemption premiums (computed upon the principal amount of the Bonds to be redeemed), plus accrued interest to the redemption date: Redemption Date (both dates inclusive) Redemption Premium September 15, 2001, through September 14, 2002 September 15, 2002, through September 14, 2003 September 15, 2003, and thereafter 2% 1% 0% (1063.6) The Bonds are also subject to redemption in whole on any date or in part on any date in inverse order of maturity and by lot within a maturity, at the option of the City, without premium, from the net proceeds of insurance or eminent domain available therefor if the City does not apply such net proceeds toward the acquisition or construction of additions, betterments, extensions or improvements to the Enterprise as provided in this Resolution at the principal amount thereof and accrued interest thereon to the date fixed for redemption. (b) Notice of Redemption. The City shall mail (by first class mail) notice of any redemption to the respective owners of any Bonds designated for redemption, at least thirty (30) but not more than sixty (60) days prior to the redemption date, at their addresses appearing on the Bond Registration Books; but such mailing shall not be a condition precedent to such redemption and neither failure to mail or to receive any such notice nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price (including the amount of premium, if any) and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, or by stating that all of the Bonds of one or more Principal Payment Dates have been called for redemption, and shall require that such Bonds be surrendered at the office of the Finance Director (or at the designated office of the Paying Agent) for redemption at the said redemption price (including the amount of premium, if any), giving notice also that further interest on such Bonds will not accrue from and after the redemption date. (c) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond redeemed in part only, the City shall execute and shall deliver to the Owner thereof, at the expense -9- ORIGINAL of the City, a new Bond or Bonds, of the same series and Principal Payment Date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds to be redeemed. (d) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Resolution other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. (e) Manner of Redemption. Whenever any Bonds are to be selected for redemption, the City shall determine by lot, the Bonds or portions thereof to be redeemed. All Bonds redeemed pursuant to this Section shall be canceled upon surrender to the City. Section 2.04. Execution of Bonds. The Bonds shall be executed on behalf of the City by the Mayor and City Clerk, who hold such offices on the date of execution and delivery of this Resolution or at any time thereafter. The seal of the City shall be impressed or imprinted upon the Bonds. Either or both of the signatures and seal may be affixed by facsimile thereof, provided such facsimiles are accompanied by a certificate of authentication as provided below. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the Authority, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Authority. Any Bond may be signed and attested on behalf of the City by such persons who as of the actual date of the execution of such Bond shall be the proper officers of the City, but who on the date of such Bond may no longer be such officer of the City. Should a Bond or Bonds bear the facsimile signature of either officer of the City or a facsimile seal of the City, then such Bonds shall bear thereon a certificate of authentication in the form set forth in Exhibit A, executed and dated by the City or the Paying Agent. Bonds bearing facsimile signatures and/or seal must bear a certificate of authentication to be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such executed certificate of authentication shall be conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Resolution. Bonds bearing the original signatures of the Mayor and City Clerk and an original impression or imprint of the seal need not be authenticated. - 10 - ORIGINAL Section 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Bond Registration Books, by the Owner in whose name it is registered, in person or by a duly authorized agent of such person, upon surrender of such Bond to the City at the office of the Finance Director for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Finance Director, duly executed. Whenever any Bond or Bonds shall be surrendered for registration of transfer, the City shall execute and the Finance Director deliver a new Bond or Bonds, for like Principal Payment Date and like aggregate principal amount. Anything in this Resolution to the contrary notwithstanding, the City may refuse to transfer any Bonds under the provisions of this Section 2.05 during the period fifteen (15) days prior to the date established by the City for the selection of Bonds for redemption, or as to Bonds the notice of redemption of which has been mailed pursuant to the provisions of Section 2.03(b). Section 2.06. Exchange of Bonds. Bonds may be exchanged at the office of the Finance Director for a like aggregate principal amount of Bonds of other authorized denominations of the same Principal Payment Date. The City may charge a sum not exceeding its reasonable costs for each new Bond issued upon any exchange (except in the case of any exchange of temporary bonds for definitive Bonds) and the City shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Anything in this Resolution to the contrary notwithstanding, the City may refuse to transfer or exchange any Bonds under the provisions of this Section 2.06 from the period fifteen (15) days prior to the date established by the City for the selection of Bonds or as to which notice of redemption has been mailed pursuant to the provisions of Section 2.03(b). Section 2.07. Bond Registration Books. The Finance Director will keep or cause to be kept, at the office of the Finance Director or such other appointed agent pursuant to this Resolution, sufficient records for the registration and registration of transfer of Bonds, which shall at all times during normal business hours be open to inspection by the City; and, upon presentation for such purpose, the City shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said records, Bonds as hereinbefore provided. Section 2.08. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, - 1 1 - ORIGINAL lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the office of the Finance Director, and the City shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits pursuant to this Resolution as definitive Bonds authenticated and delivered hereunder. Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated the City, at the expense of the Owner of said Bond, shall execute, and the City shall thereupon deliver, a new Bond of like tenor and n,~mher in exchange and substitution for the Bond so mutilated, but only upon surrender to the City of the Bond so mutilated. Every mutilated Bond so surrendered to the City shall be canceled by it and delivered to, or upon the order of, the City. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and, if such evidence be satisfactory to the Finance Director and indemnity satisfactory to the Finance Director shall be given, the City, at the expense of the owner, shall execute, and the Finance Director shall thereupon deliver, a new Bond of like tenor and amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the City. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Resolution with all other Bonds issued pursuant to this Resolution. Section 2.10. Sale of Bonds. The Finance Director is hereby authorized to negotiate the sale of the Bonds with the Authority and shall enter into a purchase contract for the Bonds upon advice of counsel that such contract is consistent with the terms of the Bonds, the Resolution and the Refunding Law. The purchase contract may provide for an original issue discount of not to exceed three percent of the par amount of the Bonds. Section 2.11. Issuance of Parity Obligations. In addition to the Bonds, the City may, by Supplemental Resolution, issue or incur other loans, advances or indebtedness payable from -12- ORtGI~'~AL Revenues on a parity with the Bonds in such principal amount as shall be determined by the City. The City may issue and deliver any such Parity Obligations subject to the following specific conditions which are hereby made conditions precedent to the issuance and delivery of such Parity Obligations issued under this Section: (a) The city shall be in compliance with all covenants set forth in this Resolution, and a Written Certificate of the City to that effect shall be presented at or prior to the issuance of such Parity Obligations; provided, however, that the conditions of this subparagraph shall not apply to the issuance of any Parity Obligations issued to refund the Bonds. (b) An Independent Financial Consultant shall prepare and file a Report with the Finance Director stating that the Net Revenues for the last full Bond Year immediately preceding the month of the adoption by the Council of the resolution authorizing the issuance of the Parity Obligations, when added to the projected increase in Net Revenues of the Enterprise upon acquisition or completion of construction of the improvements to be financed by the Parity Obligations, for the first full Fiscal Year immediately following the anticipated acquisition or completion date, will produce a sum equal to at least one hundred twenty-five percent (125%) of the Maximum Annual Debt Service for such Bond Year plus the Maximum Annual Debt Service which will accrue in such first full Fiscal Year. At the option of the City and in accordance with applicable law, Revenues may be increased and such increase may be included in the calculation of the 125% requirement set forth above. (c) The City shall deliver a Written Certificate of the City to the effect that the improvements to the Enterprise to be acquired and constructed with the proceeds of such Parity Obligations are technically feasible and that the estimated cost of the acquisition and/or construction thereof is reasonable. (d) The Supplemental Resolution providing for the issuance of such Parity Obligations under this Section 2.11 shall provide that: (i) interest on said Parity Obligations shall be payable on March 15 and September 15 in each year of the term of such Parity Obligations; and, (ii) the principal of such Parity Obligations shall be payable on September 15 in any year in which principal is payable. (1063.6) -13- ARTICLE ~ SECURITY FOR BONDS; USE OF REVENUES Section 3.01. Pledge of Net Revenues and Other Funds. All Net Revenues and all monies and securities on deposit in each of the funds and accounts established under Sections 3.04 and 3.05 of this Resolution are hereby irrevocably pledged to the punctual payment of the principal of, redemption premium, if any, and interest on the Bonds. The Net Revenues and such other funds shall not be used for any other purpose while any of the Bonds remain Outstanding; provided, however, that this pledge of Net Revenues and other funds is subject to the issuance of Parity Obligations as set forth in Section 2.11. Section 3.02. Revenue-Debt CaDacitv Covenant. At all times during the life of the Bonds and/or any Parity Obligations, the City shall establish, maintain and collect charges in connection with the operation of the Enterprise, which, when combined with other Revenues received by the City, provide Net Revenues during any Fiscal Year equal to or greater than one and three-twentieths (1.15) times the AggregateAnnual Debt Service due in such Fiscal Year. Section 3.03. Net Revenues a Trust Fund. The City agrees and covenants that so long as any Bonds shall be Outstanding, all Net Revenues and all monies and securities on deposit in each of the funds and accounts established under Sections 3.04 and 3.05, when and as received, shall be received and held by the City in trust as security and payment for the Bonds, and the City shall only have such beneficial right or interest in such funds as provided in this Resolution. Section 3.04. Transfer from Water Treatment Fund: Establishment of Debt Service Fund. There is hereby created a special fund to be known as the City of Bakersfield 1993 Sewer Revenue Refunding Bonds Debt Service Fund (the "Debt Service Fund"). The City has created and currently maintains and operates the Wastewater Treatment Fund, into which is deposited all Revenues received by the City. The City shall transfer on a monthly basis from the Wastewater Treatment Fund to the Debt Service Fund all of the Net Revenues. However, the City shall only be obligated to transfer to the Debt Service Fund an amount of Net Revenues which, when added to other available amounts in the Debt Service Fund, equals the amounts required to be deposited into the Interest Account and the Principal Account in such Bond Year pursuant to Section 3.05. Section 3.05. Establishment of Interest Account and Principal Account. Within the Debt Service Fund there is hereby created an Interest Account and a Principal Account. Amounts on -14- deposit in the Debt Service Fund shall be applied by the Finance Director in the following order of priority: (a) Interest Account. On or before the 10th day of each month, beginning April 10, 1994, and so long as any of the Bonds remain Outstanding, the City shall debit the Debt Service Fund and credit the Interest Account with an amount which, when added to any amount already credited to the Interest Account, will be equal to one-sixth (1/6th) the amount of interest coming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date. No credit need be made to the Interest Account if the amount contained therein is equal to or greater than the amount of interest coming due on the next succeeding Interest Payment Date. All monies in the Interest Account shall be used and withdrawn by the City solely for the purpose of paying the interest on the Bonds as it becomes due and payable (including interest on any Bonds purchased or redeemed prior to maturity pursuant to this Resolution). (b) Principal Account. On or before the 10th day of each month, beginningApril 10, 1994, the City shall debit the Debt Service Fund and credit the Principal Account with an amount which, when added to any amount already credited to the Principal Account, will be equal to one-twelfth (1/12th) of the principal coming due and payable on the Outstanding Bonds on the next succeeding Principal Payment Date (except that for the principal coming due on September 15, 1994, the amount will be equal to one-sixth (1/6th) of the principal coming due and payable on said date). No credit need be made to the Principal Account if the amount contained therein is equal to or greater than the amount of principal coming due on the next succeeding Principal Payment Date. All monies in the Principal Account shall be used and withdrawn by the City solely for the purpose of paying the principal on the Bonds as it becomes due and payable. (c) SurPlus. In the event that for any reason whatsoever any amounts shall remain on deposit in the Debt Service Fund, the Interest Account or the Principal Account on September 16 in any Fiscal Year after making all of the transfers theretofore required to be made pursuant to the preceding clauses (a) through (b), the City may withdraw such amounts as its sole property to be used for any lawful purpose of the Enterprise. Section 3.06. Replenishment of Pool Bonds Reserve Fund. The Bonds will be purchased by the Authority from proceeds received from the sale of the Pool Bonds. The Pool Bonds are secured in part by the Pool Bonds Reserve Fund. The City does not intend nor is required to establish a reserve fund for the Bonds. Should the City fail to make an installment of principal and/or interest when - 15 - ORIGINAL due hereunder, the Authority shall instruct the Trustee to withdraw from the Pool Bonds Reserve Fund an amount up to the amount of the delinquent installment of principal and/or interest to the extent such withdrawal from the Pool Bonds Reserve Fund is necessary for the Trustee to pay the installment of principal and interest then due on the Pool Bonds. Upon receipt of notice from the Authority or the Trustee that the amount in the Pool Bonds Reserve Fund is less than the Pool Bonds Reserve Requirement due to a delinquent installment of principal and/or interest by the City for the Bonds, the City shall deposit with the Trustee, from the Debt Service Fund or from any other source of funds which may be appropriated and legally available for such purpose in the Fiscal Year in which the deposit is made, the amount specified in such notice as necessary to bring the amount in the Pool Bonds Reserve Fund up to the Pool Bonds Reserve Requirement, plus an amount, as determined by the Trustee, equal to any interest earnings lost by the Authority as a result of the withdrawal from the Pool Bonds Reserve Fund. The City shall be responsible for replenishment of the Pool Bonds Reserve Fund only to the extent that the City has depleted the Pool Bonds Reserve Fund as a result of the delinquent installment for the Bonds. The City shall not be responsible for replenishment of any Pool Bonds Reserve Fund shortfall which is due to a delinquent payment by any other local agency for which a local obligation was funded by the proceeds of the Pool Bonds. The City shall make such deposit as promptly as practicable after receipt of such notice, but in no event later than 6 months following receipt of the notice. ~%RTICLE IV USE OF PROCEEDS AND CONTROL OF FUNDS Section 4.01. Application of Proceeds from Sale of Bonds. Upon the receipt of the proceeds from the sale of the Bonds, the City shall deposit said proceeds as follows: (a) The City shall deposit in the Interest Account the amount of accrued interest and premium, if any, received upon the sale of the Bonds. (b) The City shall deposit the remainder of the proceeds into the Project Fund. Section 4.02. Project Fund. There is hereby created a fund known as the "City of Bakersfield Sewer Revenue Refunding Bonds, Series 1993, Project Fund," which the City hereby covenants and agrees to cause to be maintained and which shall be held by the Finance Director of the City. Monies in the Project Fund shall be expended as follows: -16- ORIGINAL (a) Refunding Prior Bonds. The total amount necessary to redeem the all Prior Bonds Outstanding (inclusive of monies in the Project Fund and amounts in the reserve fund for the Prior Bonds), including the payment of interest and premiums on the Prior Bonds, as determined by the Finance Director, shall be deposited in an escrow or trust with any bank or trust company as the Finance Director may select until such time as the Prior Bonds are called for redemption pursuant to their respective terms. The amounts deposited in such escrow or trust may be invested and reinvested by the Finance Director pursuant to the Tax Code and the Refunding Law until such time as the Prior Bonds are redeemed. The Prior Bonds will be redeemed at the earliest possible date allowed under their terms and all Prior Bonds outstanding at such time shall be redeemed. (b) Costs of Issuance and Incidental Expenses. The Costs of Issuance and all incidental expenses incurred in connection therewith and in connection with the redemption of the Prior Bonds shall be paid to those persons entitled thereto. Such costs and expenses, if known on the Closing Date, may be paid on behalf of the City at the time of closing directly by the Authority and such costs and expenses will be deducted from the total net proceeds received by the City for the sale of the Bonds. ~RTICLE V ADDITIONAL COVENANTS OF THE CITY Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid principal and interest when due with respect to all the Bonds, together with the premium thereon, if any, in strict conformity with the terms of the Bonds and this Resolution, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and all Supplemental Resolutions and of the Bonds. Nothing herein contained shall prevent the City from making advances of its own moneys howsoever derived to any of the uses or purposes referred to herein. Section 5.02. Extension of Bonds. The City will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for interest on any of the Bonds and will not, directly or indirectly, approve any such arrangement by purchasing or funding the Bonds or claims for interest or by in any other manner. In case the Principal Payment Date of any such Bond or claim for interest shall be extended or funded, whether or not with the consent of the City, such Bond or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Resolution, - 17 - ORIGINAL except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for which interest which shall not have been so extended or funded. Section 5.03. Aqainst Encumbrances. The City will not encumber, pledge or place any charge or lien upon any of the Net Revenues superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Resolution. Nothing herein is intended or shall be construed to impair the ability of the City to place any charge or lien upon any of the Net Revenues which is subordinate or junior to the pledge and lien established herein. Section 5.04. Manaqement and Operations of Properties. The city will manage and operate all properties owned by the City and comprising any part of the Enterprise in a sound and businesslike manner, and will keep such properties insured at all times in conformity with sound business practice. Section 5.05. Payment of Claims. The City will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the City and comprising any part of the Enterprise or upon the Net Revenues or any part thereof, or which might impair the security of the Bonds. Nothing herein contained shall require the City to make any such payment so long as the City in good faith shall contest the validity of said claims. Section 5.06. Books and Accounts: Financial Statement. The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions relating to the Enterprise and to the Revenues. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives authorized in writing. The City will cause to be prepared and filed with the Finance Director annually, within one hundred and eighty (180) days after the close of each Fiscal Year so long as any of the Bonds are Outstanding, complete financial statements with respect to such Fiscal Year showing the Revenues, all disbursements from the Revenues and the financial condition of the Enterprise, including the balances in all funds and accounts relating to the Enterprise, as of the end of such Fiscal Year, which statements shall be accompanied by a certificate or opinion in writing of an Independent Certified Public Accountant. The City will furnish a copy of such statements to any Bond Owner upon reasonable request. -18- Section 5.07. Protection of Security and Rights of Bond Owners. The City will preserve and protect the security of the Bonds and the rights of the Bond Owners. From and after the sale and delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City. Section 5.08. Payments of Taxes and Other Charges. The City will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the City or the properties then owned by the City with respect to the Enterprise, or upon the Revenues therefrom, when the same shall become due. Nothing herein contained shall require the City to make any such payment so long as the City in good faith shall contest the validity of said taxes, assessments or charges. The City will duly observe and conform with all valid requirements of any governmental authority relative to the Enterprise or any part thereof. Section 5.09. Limitation on Use of Proceeds. The City shall make no use of the proceeds of the Bonds which would cause the Bonds to be "private activity bonds" that are not "qualified private activity bonds" under and within the meaning of Section 141(d) of the Tax Code. Without limiting the generality of the foregoing, the City shall not enter into any arrangement or agree to enter into any arrangement the effect of which would be to cause more than five percent (5%) of the proceeds of the Bonds to be used directly or indirectly to make or finance loans to persons other than governmental units. Section 5.10. Registration Covenant. The City shall take no action nor suffer any action to be taken which would cause the Bonds not to be registered bonds within the meaning of Section 149 of the Tax Code or a federally guaranteed obligation within the meaning of Section 149(b) of the Tax Code. Section 5.11. Arbitra~e Covenant. The City covenants with the Owners of all Bonds at any time Outstanding that it will make no use of the proceeds of the Bonds which if made at the time of issuance of the Bonds, would have caused any of the Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Tax Code. Section 5.12. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Resolution, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Resolution. The City shall, within one hundred twenty (120) days following the close of each Fiscal Year, file with the Finance -19- OR~G~'~AL Director a Written Certificate of the City stating that no Event of Default occurred hereunder during such Fiscal Year. ARTICLE VI MODIFICATION OR AMENDMENT OF THIS RESOLUTION Section 6.01. Amendments Permitted. This Resolution and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended by the City at any time by the execution of a Supplemental Resolution, but only with and pursuant to the affirmative vote at a meeting of Bond Owners, or with the written consent without a meeting, of the Owners of no less than sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 6.03. Any such Supplemental Resolution shall become effective upon the execution and delivery thereof by the parties thereto and upon consent of the requisite number of Bond Owners pursuant to Section 6.02. No such modification or amendment shall (1) extend the Principal Payment Date of any bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal thereof, or interest thereon, or any premium payable on the redemption thereof, at the time and place and at the rate and in the currency provided therein, without the written consent of the Owner of such Bond, or (2) permit the creation by the City of any mortgage, pledge or lien upon the Revenues superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as expressly permitted by this Resolution), or reduce the percentage of Bonds required for the affirmative vote or written consent to an amendment or modification. This Resolution and the rights and obligations of the City and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Resolution, without the consent of any Owners of the Bonds, but only to the extent permitted by law and only for any one or more of the following purposes: (a) to add to the covenants and agreements of the City in this Resolution contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the City; (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Resolution, or in regard to questions arising under this Resolution, as the City may deem necessary or desirable, and which shall not adversely affect the interests of the Owners of the Bonds; and (1063.6) -20- (~063.6) (c) to provide for the issuance of any Parity Obligations, and to provide the terms and conditions under which such Parity Obligations may be issued, subject to and in accordance with the provisions of Section 2.11 hereof. Section 6.02. Bond Owners' Meetino. (a) Callino Bond Owners' Meeting. If the City desires to obtain the consent of Bond Owners as provided in Section 6.01, the City may call a meeting of Bond Owners, by resolution, for the purpose of considering the action, the consent to which is desired. (b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be mailed by the Secretary of the City, postage prepaid, to the respective Owners thereof at their respective addresses appearing on the Bond Registration Books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the City, in its discretion. The actual receipt by any Bond Owner of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by the City Clerk and approved by resolution of the Council stating that the meeting has been called and that notice thereof has been given as herein provided shall be conclusive as against all parties and it shall not be open to any Bond Owner to show that he failed to receive notice of such meeting. (c) Voting Oualifications. Any Bond Owner may, prior to any such meeting, deliver his Bond or Bonds to any agent designated by the City for that purpose, and shall thereupon be entitled to receive an appropriate receipt for the Bond or Bonds so deposited and call for the redelivery of such Bond or Bonds at any time after the meeting. The Finance Director shall prepare and deliver to the chairperson of the meeting a list of names and addresses of the registered Owners of Bonds, with a statement of the names of Bond Owners so depositing their Bonds and the maturities and serial numbers of the Bonds so held and deposited and no Bond Owner shall be entitled to vote at such meeting unless such Owner's name appears on such list or unless he shall present his Bond or Bonds at the meeting or a certificate of deposit thereof, satisfactory to the City, executed by a bank, trust company or other authorized depository. No Bond Owners shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against such Owner's name on such list, unless he shall produce the Bonds upon which such Owner -21- desires to vote, or a certificate of deposit thereof as above provided. (d) Disaualified Bonds. The City covenants that it will present at the meeting a Written Certificate stating the maturities and serial numbers of all Bonds disqualified pursuant to Section 6.03. No person shall be permitted at the meeting to vote or consent with respect to any Bond appearing upon such certificate, or any Bond which it shall be established at or prior to the meeting is disqualified pursuant to Section 6.03 and no such Bond (herein referred to as "Disqualified Bonds") shall be counted in determining whether a quorum is present at the meeting. (e) Ouorum and Procedure. A representation of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Disqualified Bonds) shall be necessary to constitute a quorum at any meeting of Bond Owners, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or less than a quorum. The City shall, by an instrument in writing, appoint a temporary chairperson of the meeting, and the meeting shall be organized by the election of a permanent chairperson and a secretary. At any meeting each Bond Owner shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The City, by its duly authorized representative, may attend any meeting of the Bond Owners, but shall not be required to do so. (f) Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the Bond Owners a statement of proposed action, consent to which is desired, and if such action shall be consented to and approved by Bond Owners holding at least sixty percent (60%) in aggregate amount of the Bonds then Outstanding (exclusive of Disqualified Bonds) the chairperson and secretary of the meeting shall so certify in writing to the City, and such certificate shall constitute complete evidence of consent of Bond Owners under the provisions of this Resolution. A certificate signed and verified by the chairperson and secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. (g) Written Consent of Bond Owners. If the City shall desire to obtain any such consent in writing, without a meeting of Bond Owners, the Council may, by resolution, (1063.6) -22- propose the action to which consent is desired. A copy of such resolution, together with a request to Bond Owners for their consent to the action proposed therein, shall be mailed by the City Clerk thereof to each Owner at the respective addresses appearing on the Bond Registration Books. The actual receipt by any Bond Owner of such resolution and request shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by said City Clerk, approved by resolution of the Council stating that said resolution and request has been published and mailed as herein provided shall be conclusive as against all parties, and it shall not be open to any Bond Owner to show that such Bond Owner failed to receive such resolution and request for consent. Each written consent shall be accompanied by proof of ownership of the Bonds for which such consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the resolution proposing the action. Any such written consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or by the subsequent Owner. To be effective, any revocation of consent must be filed before the adoption of the resolution accepting consents as hereinafter provided. After the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Disqualified Bonds) shall have consented in writing, the Council shall adopt a resolution accepting such consents and such resolution shall constitute complete evidence of the consent of Bond Owners under this Resolution. (h) Publication of Consent. Notice specifying the amendment, waiver or modification that has received the consent of Bond Owners as required by this Section shall be mailed by the City Clerk to the Owners at the respective addresses appearing in the Bond Registration Books, within sixty (60) days following the final action in the proceedings for the obtaining of such consent. Said notice is only for the information of Bond Owners and failure to mail such notice or any defect therein shall not affect the validity of the proceedings theretofore taken in the obtaining of such consent. Section 6.03. Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VI, and shall not be entitled to vote - 2 3 - upon, consent to, or take any other action provided for in this Article VI. Section 6.04. Effect of SupPlemental Resolution. From and after the time any Supplemental Resolution becomes effective pursuant to this Article VI, this Resolution shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Resolution of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Resolution shall be deemed to be part of the terms and conditions of this Resolution for any and all purposes. The City may adopt appropriate regulations to require each Bond Owner, before such Owner's consent provided for in this Article VI shall be deemed effective, to reveal if the Bonds as to which such consent is given are disqualified as provided in Section 6.03. Section 6.05. Endorsement or Replacement of Bonds Issued After Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VI shall bear a notation, by endorsement or otherwise, in form approved by the Council, as to such action. In that case, upon demand of the Owner of any bond Outstanding at such effective date and presentation of the applicable Bond for that purpose at the office of the Finance Director (or duly appointed agent hereunder) or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The city may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such Bond Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the office of the Finance Director without cost to any Bond Owner, upon surrender of such Outstanding Bonds. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Section Maturities. The Default hereunder: 7.01. Events of Default and Acceleration of following events shall constitute Events of (a) if default shall be made in the due and punctual payment of the principal of or interest or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by (1063.6) -24- ORIGINAL proceedings for redemption by declaration or otherwise, and such default shall have continued for thirty (30) days; (b) if default shall be made by the City in the observance of any of the covenants, agreements or conditions on its part in this Resolution or in the Bonds contained, and such default shall have continued for a period of ninety (90) days; or (c) if the City shall commence a voluntary action under Title 11 of the United States Code or any substitute or successor statute. If an Event of Default has occurred under subsections (a) or (c) of this Section and is continuing, the City may, and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall, declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in this Resolution or in the Bonds to the contrary notwithstanding. Immediately upon becoming aware of the occurrence of an Event of Default, the City shall give notice of such Event of Default to the Owners of the Bonds in the same manner as provided herein for notices of redemption of the Bonds, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date of acceleration specified in such notice. Section 7.02. ADDlication of Funds Upon Acceleration. All of the Net Revenues and all sums in the funds and accounts established pursuant to Sections 3.04 and 3.05 upon the date of the declaration of acceleration as provided in Section 7.01, and all sums thereafter received by the City hereunder, shall be applied in the order following upon presentation of the several Bonds, and the stamping thereon of payment if only partially paid, or upon the surrender thereof if fully paid: First, to the payment of the costs and expenses of the Bond Owners in declaring such Event of Default, if any, including reasonable compensation to their agents, attorneys and counsel; and Second, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and interest, with interest on the overdue principal and installments of interest at the rate of twelve percent (12%) per annum (to the extent that such interest on overdue installments of principal and interest shall have been collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of (10~3.~) -25- ORIG(NAL principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Section 7.03. Limitation on Bond Owners' Right to Sue. No Owner of any Bond issued hereunder shall have.the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Resolution, unless such Owner shall have previously given to the Citywritten notice of the occurrence of an Event of Default. Such notification is hereby declared, in every case, to be condition precedent to the exercise by any Owner of Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Resolution, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Resolution shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds. The right of any Owner of any bond to receive payment of the principal of (and premium, if any) and interest on such Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without thewritten consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Resolution. Section 7.04. Non-waiver. Nothing in this Article VII or in any other provision of this Resolution or in the Bonds, shall affect or impair the obligation of the City, which is absolute and unconditional, to pay from the Net Revenues and other amounts pledged hereunder, the principal of and interest on the Bonds to the respective Owners of the Bonds on the respective Principal Payment Dates, as herein provided or affect or impair the right of action, which is also absolute and unconditional, of the Owners to institute suit to enforce such payment by virtue of the contract embodies in the Bonds. A waiver of any default by any Bond Owner shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner of any of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Bond Owners by the Law or by this Article VII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners of the Bonds. -26 - ORIGINAL If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Bond Owners, the City and the Bond Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 7.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners of Bonds is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law. ~RTICLE VIII MISCELLANEOUS Section 8.01. Benefits Limited to Parties. Nothing in this Resolution, expressed or implied, is intended to give to any person other than the City, and the Owners of the Bonds, any right, remedy, claim under or by reason of this Resolution. Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners of the Bonds. Section 8.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Resolution or any Supplemental Resolution the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Resolution contained by or on behalf of the City shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 8.03. Discharge of Resolution. If the City should pay and discharge the entire indebtedness on all Bonds Outstanding in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest on all Bonds Outstanding, as and when the same become due and payable; (b) by resolution order the Finance Director to set aside or deposit with the Paying Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts established pursuant to Sections 3.04, 3.05 and 4.02, is fully sufficient to pay all Bonds Outstanding, including all principal, interest and redemption premiums, if any, or; (10~.6) --27-- OR/G~NAL (c) by resolution order the Finance Director to designate or deposit with the Paying Agent, in trust, Government Obligations in such amount as the Finance Director shall determine will, together with the interest to accrue thereon and moneys then on deposit in the funds and accounts established pursuant to Sections 3.04, 3.05 and 4.02, be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, interest and redemption premiums, if any) at or before maturity; and if such Bonds are to be redeemed prior to the maturity thereof and notice of such redemption is given pursuant to Section 2.03(b), then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Net Revenues and other funds provided for in this Resolution and all other obligations of the City under this Resolution with respect to all Bonds Outstanding shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon. Section 8.04. Execution of Documents and Proof of Ownership by Bond Owners. Any request, declaration or other instrument which this Resolution may require or permit to be executed by Bond Owners may be in one or more instruments of similar tenor, and shall be executed by Bond Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Bond Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The ownership of Bonds and the amount, principal Payment Date, number and date of ownership thereof shall be proved by the Bond Registration Books. Any request, declaration or other instrument or writing of the Owner of any bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City in good faith and in accordance therewith. Section 8.05. Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of or interest on the Bonds; but nothing herein contained shall relieve any such -- 2 8- ORIGINAL member, officer, agent or employee from the performance of any official duty provided by law. Section 8.06. Publication for Successive Weeks. Any publication to be made under the provisions of this Resolution in successive weeks may be made in each instance upon any business day of the week and need not be made on the same day of any succeeding week or in the same newspaper for any or all of the successive publications, but may be made on different days of the week and in different newspapers. Section 8.07. Destruction of Canceled Bonds. Whenever in this Resolution provision is made for the surrender to the City of any Bonds which have been paid or canceled pursuant to the provisions of this Resolution, a certificate of destruction duly executed by the Finance Director shall be deemed to be the equivalent of the surrender of such canceled Bonds, and the City shall be entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to. Section 8.08. Notices. Any notice or demand which by any provision of this Resolution is required or permitted to be given to or served on the City may be given or served by being deposited postage prepaid in a post office letter box addressed to the City as follows: Finance Director, City of Bakersfield, 1501 Truxtun Avenue, Bakersfield, California 93301. Section 8.09. Partial Inva!iditv. If any Section, paragraph, sentence, clause or phrase of this Resolution shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Resolution. The City hereby declares that it would have adopted this Resolution and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Resolution may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Paying Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Paying Agent hereunder shall be assumed by and vest in the Finance Director of the City in trust for the benefit of the Bond Owners. The City covenants for the direct benefit of the Bond Owners that its covenants for the direct benefit of the Bond Owners that its Finance Director in such case shall be vested with all of the rights and powers of the Paying Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Paying Agent hereunder, in trust for the benefit of the Bonds. Section 8.10. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the - 29 - Paying Agent in trust for the payment and discharge of the interest or premium (if any) on or principal of the Bonds which remains unclaimed for six (6) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Paying Agent at such date, or for six (6) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Finance Director (or duly appointed agent hereunder) at such date, or for six (6) years after the date of deposit of such money if deposited with the Paying Agent after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be at the Written Request of the City be repaid by the Paying Agent to the City as its absolute property free from trust, and the Paying Agent shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the City for the payment of the interest and premium (if any) on and principal of such Bonds. The provisions of this Section 8.10 shall be subject to any contrary provisions of applicable law of the State. III III III III III - 3 0- OF~G~AL I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the City Council of the City of Bakersfield at a regular meeting thereof held on the 15th day of December 1993, by the following vote: AYES: COUt~LIdE';,.~.~.,,'~ Mc4)ERidOTT, EDW~ DS, DeMOND, SUTI'H, BRUNN|,ROWL.E$,SAL-VAGGIO NOES: COUNCILMEMBERS AI~TAIN: COUNCILMEMBERS ~ ,o ~.,~. Clerk of the Council of the City of Bakersfield APPROVED~ii~ of December 1993 MAYOR of ~f~eYC~ of Bakersfield APPROVED AS TO FORM: BURKE, WILLIAMS & SORENSEN, Bond Counsel By: Richard H. Harg~ove COUNTERSIGNED: TT0 EY the City of B~kersfleld - 31 - EXHIBIT UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF KERN NO. CITY OF BAKERSFIELD SEWER REVENUE REFUNDING BONDSt $ SERIES 1993 PRINCIPAL AMOUNT BOND DATE REGISTERED OWNER: M~TURITY DATE (September 15) INTEREST MATURITY R~TE PRINCIPAL The CITY OF BAKERSFIELD, a municipal corporation organized and existing under the Constitution and laws of the State of California (the "City"), for value received hereby promises to pay (but only out of the Revenues, as hereinafter defined) to the registered owner hereof, or registered assigns, on the maturity date stated above, the principal sum shown hereon in lawful money of the United States and in like manner pay interest at the rate per annum stated above on , , and semiannually thereafter on each March 15 and September 15 (each an "Interest Payment Date") for the life of the Bond. This Bond bears interest from the Bond Date shown above. Both the principal hereof and redemption premium hereon are payable upon presentation and surrender hereof at the office of the Finance Director of the City, or its successors, as Transfer Agent, Registrar and Paying Agent (the "Agent"). Interest hereon is payable by check or draft mailed to the owner hereof at such owner's address as it appears on the registration books of the Agent, or at such address as may have been filed with the Agent for that purpose, as of the first (lst) day of the month immediately preceding each Interest Payment Date. A - 1 ORIGINAL This Bond is the one and only bond representing the City of Bakersfield Sewer Revenue Refunding Bond, Series 1993, in the aggregate principal amount of $ , issued by the City under pursuant to Articles 10 and 11 of Chapter 3 of Division 2 of Title 5 (commencing with Section 53570) of the California Government Code (the "Refunding Law"), and the resolution of the City Council entitled, "A Resolution of the City Council of the City of Bakersfield Providing for Issuance of the City of Bakersfield Sewer Revenue Refunding Bonds, Series 1993, in the Aggregate Principal Amount of Not to Exceed $21,265,000 and Awarding Sale Thereof," adopted by the City Council of the City on December 15, 1993, (the "Resolution"), for the purpose of refunding prior bonds described in the Resolution. Reference is hereby made to the Resolution, to any resolutions supplemental thereto and to the Refunding Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues and Net Revenues, as those terms are defined in the Resolution, and the rights of the registered owners of the Bonds. All the terms of the Resolution and the Refunding Law are hereby incorporated herein and constitute a contract between the City and the registered owner, as the such owner may change from time to time, and to all the provisions thereof the owner of this Bond, by his acceptance hereof, consents and agrees. Each taker and subsequent owner hereof shall have recourse to all of the provisions of the Refunding Law and the Resolution and shall be bound by all of the terms and conditions thereof. The Bonds are issued to provide funds for the advance refunding of the 1988 Certificates (as defined in the Resolution) which were issued to finance improvements to the City's municipal sewer system of the City (the "Enterprise"). The Bonds are special obligations of the City and are payable, as to the principal thereof, interest thereon and any premiums upon the redemption of any thereof, from the Net Revenues of said Enterprise (which are more particularly defined in the Resolution. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Net Revenues, and the Net Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds. Additional Bonds payable from the Net Revenues may be issued on a parity with the Bonds, but only subject to the conditions and limitations contained in the Resolution. The principal of and interest on this Bond are payable solely from the Net Revenues, and the City is not obligated to pay such principal and interest except from the Net Revenues. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Net Revenues. A - 2 ORIG~N^L The City covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe and collect rates, fees and charges in connection with the Enterprise which, when combined with other revenues of the Enterprise, provide Net Revenues during any fiscal year equal to or greater than two times the total annual debt service due on the Bonds and any parity bonds then outstanding. The Bonds are subject to redemption in whole on any date on or after September 15, 2001, or in part on any date on or after September 15, 2001, in inverse order of maturity and by lot within a maturity, at the option of the City from any available source of funds, at a redemption price equal to one hundred percent (100%) of the principal amount to be redeemed together with the following redemption premiums (computed upon the principal amount of the Bonds to be redeemed), plus accrued interest to the redemption date: Redemption Date (both dates inclusivel September 15, 2001 through September 14, 2002 September 15, 2002 through September 14, 2003 September 15, 2003 and thereafter Redemption Premium 2% 1% 0% The Bonds are also subject to redemption in whole on any date or in part on any date in inverse order of maturity and by lot within a maturity, at the option of the City, without premium, from the net proceeds of insurance or eminent domain available therefor if the City does not apply such net proceeds toward the acquisition or construction of additions, betterments, extensions or improvements to the Enterprise as provided in this Resolution at the principal amount thereof and accrued interest thereon to the date fixed for redemption. This Bond shall not be entitled to any benefit under the Refunding Act or the Resolution, or become valid or obligatory for any purpose, until and unless manually executed by the Mayor and the City Clerk of the City. /// /// /// A - 3 ORIGINAL IN WITNESS WHEREOF, the City of Bakersfield has caused this Bond to be executed and registered by the Mayor of the City and by its City Clerk and has caused its official seal to be imprinted hereon all as of , CITY OF BAKERSFIELD By: Mayor (SEAL) Attest: By: City Clerk ABBZGlqM~I~I' For value received the undersigned do(es) hereby sell, a s s i g n a n d t r a n s f e r u n t o the within-mentioned registered Bond and hereby irrevocably constitute (s) and appoint (s) , attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises. Dated: SIGNATURE GUARANTEED BY: A - 4 EXHIBIT B ~9~8 ~E~¥1~CATE$ OF REFU~DING DEBT SERVZCE DATE PRZHC~PAL COUPON ~HTEREST PERICD TOTAL FISCAL TOTAL 9/15/9~ 71~,D59.18 718~059.1~ 71~059.18 9/15/~5 810,000.00 4,70000D 1,~9,~85.00 ~,149,385.00 2,~49,385.00 9/15/96 ~5~000.00 ~.000000 1,~01,315.00 2.1&6.315.0D 2,166.315.00 9/15/97 880,000.00 5.&00000 1,259,065.00 2.139,065.D0 2,139,065.00 9/IS/98 935,000.00 5.700000 9/15/99 980,000.00 5.900000 1,158,950.00 2,138~250.00 2,138,250.00 9/15/ O 1,035.000.OO 6.100000 1,100,430.00 2,135,~0.00 9/15/ I 1,O~5,OO0.OO 6.300000 1,037,295.00 2,132,295.00 2,132,2g5.D0 9/15/ 2 I~160,000.00 6.900000 968o310.00 2,12B.310.00 2,128,310.00 9/15/ 3 1,2~O,OOO.OO 6.900000 888,270.00 2,126,270.00 2~128,270.00 9/15/ & 1,320,OOO.00 6.900000 802,710.00 2,122,710.00 2,122,710.D0 9/15/ 5 1,410,000.00 6.900000 711,630.00 2,121,6,10.00 2,121,650.00 9/15/ 6 t~500,000.00 &.900DO0 614,$40.00 2,114,340.00 2,114,340.00 9/15/ 7 t,600,000.00 7.200000 510,B40.00 2,110,~,40.00 2,11D,B&O.00 9/15/ 8 1.710,e00.00 7.200000 395,6/.0.00 2~105o640.00 2,105,640.00 9/15/ 9 1,830,000.00 7.200000 272,520,00 2,102,520.00 9/15/10 1,955,D00.00 7.200000 160,760.00 2,095,760.00 ~,0~$,760.00 20,305,000.00 1~,430,3~4.16 75,1~0.79 7B,I~0.79 1~,352,233.39 3~,657,233.~9 ACCRUED 2D,$05,000.00 Dated 3/ 2/94 t~ith Oetivery of Debt Date: 03-02-1~94 a 17:15:17 FILem~et Nt~£ Icy; BA~ER_COPa EXHIBIT B ~ ~' B- 1