HomeMy WebLinkAboutRES NO 97-98RESOLUTION NO. 9 7 "' 9 8
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BAKERSFIELD AUTHORIZING ISSUANCE OF BONDS AND
DESCRIBING THE TERMS THEREOF IN ASSESSMENT
DISTRICT NO. 96-2 (ALLEN ROAD TRUNK SEWER)
WHEREAS, on March 25, 1998, the City Council of the City of Bakersfield adopted its
resolution of intention to order acquisition of improvements in Assessment District No. 96-2 (Allen
Road Trunk Sewer), City of Bakersfield, Kern County, California, under the provisions of the
Municipal Improvement Act of 1913 (the "Act"), as amended, and proceedings taken under the Act
led, on June 10, 1998, to the levy of special assessments by the Council against parcels of land
within the assessment district, which assessments were recorded on or about June 11, 1998 in the
office of the Superintendent of Streets of the City and filed for recordation on or about June 26, 1998
with the County Recorder of Kern County; and
WHEREAS, the entitlement of property owners to pay their assessments in cash, at discount
and without interest, within the 30-day period commencing on the date the assessments were
confirmed has expired, and the Finance Director has certified and filed with the City Clerk a list of
assessments remaining unpaid; and
WHEREAS, the Council has determined, by separate resolution adopted this same date, the
amount of unpaid assessments, as certified by the Finance Director, in order to establish the final
principal amount of bonds to be issued;
NOW, THEREFORE, THE CITY COUNCIL HEREBY FINDS, DETERMINES AND
RESOLVES as follows:
SECTION 1. DEFINITIONS. Unless the context otherwise require, the terms defined in this
Section 1 shall, for all purposes of this Resolution, have the meanings herein specified and shall be
equally applicable to both the singular and plural forms of any of the terms herein defined.
"Act" means the Municipal Improvement Act of 1913, Sections 10000 and following of the
California Streets and Highways Code.
"Bank" means U.S. Bank Trust National Association, or its duly appointed and acting
successor as paying agent, registrar and transfer agent for the Bonds.
"Bond" or "Bonds" means the City of Bakersfield Limited Obligation Improvement Bonds
of Assessment District No. 96-2 (Allen Road Trunk Sewer), issued pursuant to the Bond Act and this
Resolution, in substantially the form provided in Exhibit A hereto.
"Bond Act" means the Improvement Bond Act of 1915, Sections 8500 and following of the
California Streets and Highways Code.
"Bond Counsel" means McFarlin & Anderson, Lake Forest, California, serving as Bond
Counsel to the City with respect to the Bonds.
"Bond Date" means the dated date of the Bonds, which shall be the date of delivery thereof.
"City" means the City of Bakersfield, Kern County, California.
"Closing Date" means the date of delivery of the Bonds to the Underwriter.
"Code" means the Internal Revenue Code of 1986, as amended.
"Continuing Disclosure Certificate" means the continuing disclosure certificate of the City,
dated the Closing Date, and containing the matters required to assist the Underwriter in complying
with SEC Rule 15c2-12(b)(5).
"Council" or "City Council" means the legislative body of the City of Bakersfield.
"Finance Director" means the person who is the duly appointed and acting Finance Director
of the City.
"Improvement Fund" means the fund by that name established and maintained by the Finance
Director pursuant to Section 6.1 of this Resolution.
"Interest Payment Date" means March 2 and September 2 of each year, commencing
September 2, 1998.
"Paying Agent" means the Bank.
"Redemption Fund" means the fund by that name established and maintained by the Finance
Director pursuant to Section 6.2 of this Resolution.
"Special Reserve Fund" means the fund by that name established and maintained by the
Finance Director pursuant to Section 6.3 of this Resolution.
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"Tax Certificate" means the Tax Certificate to be prepared by Bond Counsel and executed
on the Closing Date by the Finance Director, including the Reoffering Yield Certificate of the
Underwriter attached thereto.
"Underwriter" means Sutro & Co., San Francisco, California.
SECTION 2. ISSUANCE OF BONDS. The Council hereby authorizes the issuance of the
Bonds under the provisions of the Bond Act to represent unpaid assessments in the amount of the
unpaid assessments, rounded down, if necessary, to the nearest $5,000. Each Bond shall be
designated, "City of Bakersfield Limited Obligation Improvement Bond, Assessment District No.
96-2 (Allen Road Trunk Sewer)." The Bonds shall be dated their date of delivery and shall be issued
in denominations of $5,000 or integral multiples thereof. Bonds shall mature in principal amounts,
shall bear interest at the rates, and shall consist of serial bonds, term bonds, or any combination
thereof, all as set forth in the bond purchase contract to be submitted by the Underwriter and
approved by the Finance Director; provided that the term bonds, if any, shall mature on September
2, 2018, and shall be subject to scheduled mandatory redemption, without premium, in advance of
maturity, as specified by Section 8 below and by the bond purchase contract.
SECTION 3. APPOINTMENT OF PAYING AGENT, REGISTRAR AND TRANSFER
AGENT. The Council hereby appoints the Bank as paying agent, registrar and transfer agent for the
Bonds in accordance with a separate agreement to be entered into between the City of Bakersfield
and the Bank.
SECTION 4. FORM AND EXECUTION. Bonds shall be issued as fully registered bonds
substantially in the form set forth as Exhibit A to this Resolution. The Bonds shall be signed by the
Finance Director and City Clerk of the City of Bakersfield, and the seal of the City shall be affixed.
Both signatures and seal may be reproduced on the-Bonds by facsimile, but upon its registration or
reregistration each Bond shall be authenticated by the manual signature of the authorized
representative of the Bank.
The Bank shall assign to each Bond authenticated and registered by it a distinctive letter, or
number, or letter and number, and shall maintain a record thereof which shall be available to the City
for inspection.
SECTION 5. BOOK-ENTRY BONDS. The Bonds when issued shall be initially registered
in the name of "Cede, & Co.," as nominee of The Depository Trust Company, New York, New
York; and shall be initially issued as one Bond for each of the maturities of the Bonds.
The Depository Trust Company is hereby appointed depository for the Bonds and registered
ownership of the Bonds, or any portion thereof, may not thereafter be transferred except:
(i) To any successor of Cede & Co., as nominee of The Depository Trust Company,
or its nominee, or to any substitute depository designated pursuant to clause (ii) of this
section (a "substitute depository"); provided, that any successor of Cede & Co., as nominee
of The Depository Trust Company or substitute depository, shall be qualified under any
applicable laws to provide the services proposed to be provided by it;
(ii) To any substitute depository not objected to by the City, upon (1) the resignation
of The Depository Trust Company or its successor (or any substitute depository or its
successor) from its functions as depository, or (2) a determination by the City to substitute
another depository for The Depository Trust Company (or its successor) because The
Depository Trust Company or its successor (or any substitute depository or its successor) is
no longer able to carry out its functions as depository; provided, that any such substitute
depository shall be qualified under any applicable laws to provide the services proposed to
be provided by it; or
(iii) To any person as provided below, upon (1) the resignation of The Depository
Trust Company or its successor (or substitute depository or its successor) from its functions
as depository, or (2) a determination by the City to remove The Depository Trust Company
or its successor (or any substitute depository or its successor) from its functions as
depository.
In the case of any transfer pursuant to clause (i) or clause (ii) above, upon receipt of the
outstanding Bonds by the Paying Agent, together with a written Request of the City, a new Bond for
each maturity shall be executed and delivered in the aggregate principal amount of the Bonds then
outstanding, registered in the name of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such written Request of the City. In the case of any
transfer pursuant to clause (iii) above, upon receipt of the outstanding Bonds by the Paying Agent
together with a written Request of the City, new Bonds shall be executed and delivered in such
denominations numbered in the manner determined by the Paying Agent and registered in the names
of such persons as are requested in such written request of the City, subject to the limitations of this
Section 5 and the receipt of such a written Request of the City, and thereafter, the Bonds shall be
transferred pursuant to the provisions set forth in this Resolution; provided, that the Paying Agent
shall not be required to deliver such new Bonds within a period of less than sixty (60) days.
So long as the outstanding Bonds are registered in the name of Cede & Co., or its registered
assigns, the City and the Paying Agent shall cooperate with Cede & Co., as sole holder, or its
registered assigns, in erecting payment of the principal of and interest on the Bonds by arranging
for payment in such manner that funds for such payments are properly identified and are made
immediately available on the date they are due.
SECTION 6. ESTABLISHMENT OF SPECIAL FUNDS. For administering the proceeds
of the sale of bonds, the payments from property owners on account of assessments levied, and the
payment of interest and principal on the Bonds, there shall be established and maintained five funds
to be known as the Improvement Fund, the Redemption Fund, the Special Reserve Fund, the
Investment Earnings Fund and the Arbitrage Rebate Fund, respectively, for Assessment District
No. 96-2 (Allen Road Trunk Sewer).
SECTION 6.1. IMPROVEMENT FUND. The Improvement Fund shall be
established and maintained by the Finance Director. Except as provided in Sections 6.2 and 6.3,
proceeds of sale of the Bonds, together with all amounts paid by property owners on the assessments
before bond issuance, if any, and the contributions from other public funds, if any, shall be deposited
in the Improvement Fund. Disbursements from the Improvement Fund shall be made by the Finance
Director in accordance with the budget of estimated costs and expenses set forth in Exhibit B of the
Final Engineer's Report, heretofore approved by the Council on June 10, 1998, which report and
budget are subject to modification by the Council from time to time as prescribed by the Act.
Proceeds of investment of the Improvement Fund shall be deposited in the Investment
Earnings Fund, to be established, maintained and administered in accordance with the provisions of
Section 6.4 of this Resolution.
SECTION 6.2. REDEMPTION FUND. The Redemption Fund shall be established
and maintained by the Finance Director. There shall be deposited into the Redemption Fund, from
the proceeds of the sale of bonds, the amount provided for funded interest, which shall be the amount
to pay interest on the Bonds from their dated date to September 2, 1998. All payments of principal
and interest installments on the assessments, together with penalties, if any, and all amounts received
on account of payment of assessments prior to maturity shall be deposited in the Redemption Fund,
which shall be a trust fund for the benefit of the bondholders. Monies for payment of the Bonds at
maturity, or at redemption before maturity, and all interest on the Bonds shall be disbursed to the
Bank from the Redemption Fund.
Proceeds of investment of the Redemption Fund shall be retained in the Redemption
Fund, which shall at all times be administered in conformity with the limitations and requirements
specified in the Tax Certificate so as to establish and retain the status of a "Bona Fide Debt Service
Fund" for said Redemption Fund, thereby exempting the Redemption Fund from arbitrage and rebate
requirements otherwise imposed by the Code and the regulations adopted pursuant thereto.
SECTION 6.3. SPECIAL RESERVE FUND. The Special Reserve Fund shall be
established and maintained by the Finance Director. There shall be deposited into the Special
Reserve Fund the amount equal to the "Initial Reserve Requirement" from the proceeds of the sale
of bonds. The Initial Reserve Requirement shall be an amount equal to the least of(1) ten percent
(10%) of the proceeds of the Bond issue, (2) maximam annual debt service on the Bonds, or (3) one
hundred twenty-five percent (125%) of average annual debt service on the Bonds, and that amount,
less any amounts transferred to the Redemption Fund pursuant to Section 8884 of the Streets and
Highways Code, shall constitute the "Reserve Requirement" for the Bonds from time to time.
A. During the term of the Bonds, the amount in the Special Reserve Fund shall be
available for transfer into the Redemption Fund in accordance with Sections 8808 and 8883 of the
Streets and Highways Code. The amount so advanced shall be reimbursed to the Special Reserve
Fund from the proceeds of reinstatement of delinquencies or sale of the parcel or parcels for which
payment of delinquent assessment installments was made from the Special Reserve Fund.
B. If any assessment is prepaid before final maturity of the Bonds, the amount of
principal which the assessee is required to prepay shall be reduced by an amount which is in the
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same ratio to the original amount of the Special Reserve Fund as the original amount of the prepaid
assessment bears to the total amount of unpaid assessments originally securing the Bonds. This
reduction in the amount of principal prepaid shall be balanced by a transfer from the Special Reserve
Fund to the Redemption Fund in the same amount.
C. The amount maintained in the Special Reserve Fund shall never exceed the
Reserve Requirement. Proceeds of investment of the Special Reserve Fund shall be deposited in the
Investment Earnings Fund to be established, maintained and administered in accordance with the
provisions of Section 6.4 of this Resolution.
D. When the amount in the Special Reserve Fund equals or exceeds the amount
required to retire the remaining unmatured Bonds (whether by advance retirement or otherwise), the
amount of the Special Reserve Fund shall be transferred to the Redemption Fund, and the remaining
installments of principal and interest not yet due from assessed property owners shall be canceled
without payment.
SECTION 6.4. INVESTMENT EARN1NGS FUND. The Investment Earnings Fund
shall be established and maintained by the Finance Director. Proceeds of the investment of amounts
in the Improvement Fund and the Special Reserve Fund will be deposited in the Investment Earnings
Fund. As of June 30 of each year during the term of the Bonds, the Finance Director shall determine
or cause to be determined whether any portion of investment earnings must be rebated to the United
States pursuant to Section 148 of the Code and regulations adopted thereunder. The Finance
Director is authorized to retain independent attorneys, accountants and other consultants to assist in
complying with arbitrage and rebate requirements and restrictions imposed by the Code and
regulations adopted thereunder.
Any amounts required to be rebated will be transferred to the Arbitrage Rebate Fund,
and the balance will be transferred as follows:
(a) To the extent that the balance in the Special Reserve Fund is less than the
Reserve Requirement, a transfer will be made from the Investment Earnings Fund to the
Special Reserve Fund.
(b) The remaining balance in the Investment Earnings Fund, if any, will be transferred
to the Improvement Fund until the authorized improvements are completed and the
Improvement Fund is closed; thereafter the balance in the Investment Earnings Fund will be
transferred to the Redemption Fund to be used, in the discretion of the Finance Director, as
a credit upon the annual installments of assessment or for the advance retirement of Bonds.
SECTION 6.5. ARBITRAGE REBATE FUND. The Arbitrage Rebate Fund shall
be established and maintained by the Finance Director. Amounts in the Arbitrage Rebate Fund shall
be invested in the same manner as amounts in the other funds and shall be held in trust for rebate to
the United States at the times required by Section 148 of the Code and regulations adopted
thereunder.
SECTION 6.6. RETURN OF UNCLAIMED FUNDS. Other provisions of this
Resolution to the contrary notwithstanding, the Bank shall return to the City any funds held by it
hereunder not later than thirty (30) days before those funds would escheat to the State of California
under any 1 aw now or hereafter.
SECTION 7. PAYMENT ON BONDS. The principal and redemption premium, if any, on
the Bonds shall be payable at the office of the Bank in Los Angeles, California, upon presentation
and surrender of such Bonds to the Bank by the registered owners thereof on their maturity dates or
on redemption prior to maturity. Interest shall be paid by check mailed by first class mail, postage
prepaid, to the registered owner of each Bond at the owner's address appearing on the register
maintained by the Bank, as registrar, on the 15th day of the month preceding the date of payment (or,
in the case of an owner of at least $1,000,000 in principal amount of the Bonds who so requests in
writing prior to the close of business on the fifteenth day of the month immediately preceding each
Interest Payment Date, by wire transfer). Upon the payment and cancellation of any Bond, the Bond
shall be destroyed, and the Bank shall furnish the City a certificate of destruction.
SECTION 8. ADVANCE RETIREMENT OF BONDS. Any Bond or any portion thereof
in the amount of $5,000 or any integral multiple thereof outstanding, may be redeemed and paid in
advance of maturity upon the second day of March or September in any year by giving at least 30
days' notice by registered or certified mail or by personal service to the registered owner thereof at
such owner's address as it appears on the registration books of the Bank and by paying principal and
accrued interest, together with a redemption premium (calculated as a percentage of the par value
of Bonds being redeemed) as follows for the respective March 2 or September 2 redemption dates:
Redemption Dates
(March 2 or September 2)
September 2, 1998 through September 2, 2007
March 2, 2008 and September 2, 2008
March 2, 2009 and September 2, 2009
March 2, 2010 and thereafter
Redemption Premium
3.0%
2.0%
1.0%
0.0%
In addition to redemption in advance of maturity in accordance with the foregoing, the term
Bonds maturing on September 2, 2018, if any, shall be subject to partial mandatory advance
redemption, by lot, without premium, on each September 2 on and after the September 2 specified
in the bond purchase contract in accordance with the schedule set forth in said bond purchase
contract.
SECTION 9. REREGISTRATION. Any Bond may be registered to a new owner by
completing the assignment certificate on the reverse of the Bond and delivering the Bond to the
registrar, and upon payment by the person requesting such reregistration of any tax or other
governmental charge required to be paid with respect to such reregistration. Upon reregistration, any
Bond may be replaced by one or more Bonds of the same maturity and aggregate amount in
denominations of $5,000 or any integral multiple thereof.
SECTION 10. COVENANTS. In the event of a default in the payment of any Bond or any
installment of interest thereon, bondholders shall have the remedies set forth in the Bond Act. In
addition, the Council makes the following covenants, which shall constitute a contract with the
bondholders:
SECTION 10.1. FORECLOSURE OF LIENS. No later than October 1 in any year,
the City shall file an action in the Superior Court to foreclose the lien on each delinquent assessment
if (1) the sum of uncured assessment delinquencies for the preceding fiscal year exceeds five percent
(5%) of the assessment installments posted to the tax roll for that fiscal year, and (2) the amount of
the Special Reserve Fund is less than the Reserve Requirement.
SECTION 10.2. ARBITRAGE. During the term of the Bonds, the City will make
no use of bond proceeds which, if such use had been reasonably expected at the date the Bonds are
issued, could have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of
the Code and the regulations adopted thereunder, and further shall rebate to the United States any
amounts required to be rebated on account of arbitrage in accordance with the provisions of the Code
and those regulations.
SECTION 10.3. MAINTENANCE OF TAX EXEMPTION. The City will take all
reasonable actions required to maintain the status of interest on the Bonds as excludable from gross
income for federal income tax purposes and as exempt from the State of California personal income
taxes. Without limiting the generality of the foregoing, the City will adhere to the restrictions and
comply with the requirements set forth in the Tax Certificate.
SECTION 10.4. CONTINUING DISCLOSURE. The City hereby covenants and
agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure
Certificate of the City. In the event of failure of the City to comply with the Continuing Disclosure
Certificate of the City, the Underwriter and any Bondholder may take such actions as may be
necessary and appropriate, including seeking mandate or specific performance by court order, to
cause the City to comply with its obligation under Section 10.4 and under the Continuing Disclosure
Certificate of the City.
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CLERK'S CERTIFICATE
I, Pamela A. McCarthy, City Clerk of the City of Bakersfield, DO HEREBY
CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of
Bakersfield, California, at a regular meeting thereof held on the 15thday of duly ,
1998, by the following vote, to wit:
,~ES: COUNC/LMEMSER DeMOND, CARSON, SM!TH, McDERMOT[ ROWLES, SULLIVAN. SALVAGGIO
NOES: COUNCILMEMBER '7~ ~ ~
ABSTAIN: CO~ILME'~R ~ ~,
ABSENT'. COUNC#..M~MBER ~
City Clerk and Ex Officio Cl/erk of the Council
of the City of Bakersfield, Califomia
15th
Approved this __the day of July, 1998
APPROVED AS TO FORM:
MCFARLIN & ANDERSON
Bond Counsel
By '~
COUNTERSIGNED:
ACTING CITY ATTORNE~ ~f
the City of Bakersfield
11
REGISTERED
Number
EXHIBIT A
United States of America
State of California
County of Kern
REGISTERED
$
CITY OF BAKERSFIELD
LIMITED OBLIGATION IMPROVEMENT BOND
ASSESSMENT DISTRICT NO. 96-2
(ALLEN ROAD TRUNK SEWER)
INTEREST RATE MATURITY DATE BOND DATE
% September 2, ,1998
CUSIP NUMBER
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM:
DOLLARS
Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing
with Section 8500), of the Streets and Highways Code, (the "Act"), the City of Bakersfield,
County of Kern, State of California, (the "City"), will, out of the redemption fund for the
payment of the Bonds issued upon the unpaid portion of assessments made for the acquisition,
construction, work and improvements more fully described in proceedings taken pursuant to
Resolution of Intention No. 1157, adopted by the Council of the City o£Bakersfield on the 25th
day of March, 1998, pay to the registered owner stated above or registered assigns, on the
maturity date stated above, the principal sum stated above, in lawful money of the United States
of America and in like manner will pay interest from the interest payment date next preceding the
date on which this Bond is authenticated, unless this Bond is authenticated and registered as of
an interest payment date, in which event it shall bear interest from such interest payment date, or
unless this Bond is authenticated and registered prior to August 15, 1998, in which event it shall
bear interest from its date, until payment of such principal sum shall have been discharged, at the
rate per annum stated above, payable semiannually on March 2 and September 2 in each year
commencing on September 2, 1998. Both the principal hereof and redemption premium, if any,
hereon are payable at the office of U.S. Bank Trust National Association, as Paying Agent,
Registrar and Transfer Agent, in Los Angeles, California (the "Bank"), and the interest hereon is
payable by check mailed by first class mail, postage prepaid, on each interest payment date to the
owner hereof at the owner's address as it appears on the registration books of the Bank, or at
such address as may have been filed with the Bank for that purpose, as of the fifteenth day of the
month preceding each interest payment date (or in the case of an owner of at least $1,000,000 in
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principal amount of the Bonds who so requests in writing prior to the close of business on the
fifteenth day of the month immediately preceding each interest payment date, by wire transfer).
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET
FORTH IN THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN.
This Bond will continue to bear interest after maturity at the rate above stated, provided,
it is presented at maturity and payment thereof is refused upon the sole ground that there are not
sufficient moneys in said redemption fund with which to pay same. If it is not presented at
maturity, interest thereon will run until maturity.
This Bond shall not be entitled to any benefit under the Act or the Resolution Authorizing
Issuance of Bonds (the Resolution of Issuance), or become valid or obligatory for any purpose,
until the certificate of authentication and registration hereon endorsed shall have been dated and
signed by the Bank.
IN WITNESS WHEREOF, said City of Bakersfield has caused this Bond to be signed in
facsimile by the Finance Director of said City and by its City Clerk, and has caused its corporate
seal to he reproduced in facsimile hereon all as of the _~th day August, 1998
City of Bakersfield
City Clerk
Finance Director
(SEAL)
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the
within mentioned Resolution of Issuance, which has
been authenticated and registered on
U.S. BANK TRUST NATIONAL ASSOCIATION,
as paying agent, registrar and transfer agent
BY:
Authorized Signatory
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(REVERSE OF BOND)
CITY OF BAKERSFIELD
LIMITED OBLIGATION IMPROVEMENT BOND
ASSESSMENT DISTRICT NO. 96-2
(ALLEN ROAD TRUNK SEWER)
ADDITIONAL PROVISIONS OF THE BOND
Except for the term Bonds maturing in the year 2018, each Bond is one of several annual
series of Bonds of like date, tenor and effect, but differing in amounts, maturities and interest
rates, issued by the City of Bakersfield under the Act and the Resolution of Issuance, for the
purpose of providing means for paying for the acquisition and construction of improvements
described in said proceedings, and is secured by the moneys in said redemption fund and by the
unpaid portion of said assessments made for the payment of said acquisition and construction of
improvements, and, including principal and interest, is payable exclusively out of said fund.
This Bond is transferable by the registered owner hereof, in person or by the owner's
attorney duly authorized in writing, at said office of the Bank, subject to the terms and conditions
provided in the Resolution of Issuance, including the payment of certain charges, if any, upon
surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of
any authorized denomination or denominations, of the same maturity, for the same aggregate
principal amount, will be issued to the transferee in exchange therefor.
Bonds shall be registered only in the name of an individual (including joint owners), a
corporation, a partnership or a trust.
The Bank shall not be required to make such exchange or registration of transfer of Bonds
during the period commencing with the fifteenth (15th) day of the month preceding any interest
payment date and ending on said interest payment date.
The City will not obligate itself to advance available funds from the City treasury to cure
any deficiency which may occur in the bond redemption fund. A determination not to obligate
itself shall not prevent the City from, in its sole discretion, so advancing funds.
The City and the Bank may treat the registered owner hereof as the absolute owner for all
purposes, and the City and the Bank shall not be affected by any notice to the contrary.
This Bond or any portion of it in the amount of $5,000 or any integral multiple thereof,
may be redeemed and paid in advance of maturity upon the second day of March or September in
any year by giving at least 30 days' notice by registered or certified mail to the registered owner
hereof at such owner's address as it appears on the registration books of the Bank and by paying
the principal and accrued interest, together with a redemption premium (calculated as a
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percentage of the par value of the Bonds being redeemed) as follows for the respective March 2
and September 2 redemption dates:
Redemption Dates Redemption Premium
(March 2 or September 2)
September 2, 1998 through September 2, 2007 3.0%
March 2, 2008 and September 2, 2008 2.0%
March 2, 2009 and September 2, 2009 1.0%
March 2, 2010 and thereafter 0.0%
In addition to redemption in advance of maturity in accordance with the foregoing, the
term Bonds maturing on September 2, 2018, are subject to pa~ial mandatory advance
redemption, by lot, without premium, on each September 2 on and after September 2, 20._, in
accordance with the following schedule and in the following principal amounts:
Year
(September 2) Principal Amount
20_ $ (To come
20_
20_
20_
20_ (maturity)
I hereby certify that the following is a correct copy of the signed legal opinion
ANDERSON, Lake Forest, California, on file in my office.
of MCFARL1N &
City Clerk
[Form of Legal Opinion]
A-4
[Form of Assignment]
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within Bond and do(es) hereby
irrevocably constitute and appoint attorney to transfer the same
on the register of the Paying Agent, with full power of substitution in the premises.
Date:
SIGNATURE GUARANTEED:
NOTE:
The signature(s) to this Assignment must correspond with the name(s) as written
on the face of the within Bond in every particular, without alteration or
enlargement or any change whatsoever. The signature(s) must be guaranteed by
an eligible guarantor institution.
Social Security Number, Taxpayer Identification Number or other Identifying
Number o f Assignee:
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