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HomeMy WebLinkAbout1993-10-14 - Resolution No. 93-25RESOLUTION NO. 93-25 RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA WATER DISTRICT PROVIDING FOR THE ISSUANCE AND SALE OF 1993 GENERAL OBLIGATION REFUNDING BONDS OF SAID DISTRICT FOR IMPROVEMENT DISTRICT NO. I THEREOF IN THE AMOUNT OF $6,170,000 9 0 TABLE OF CONTENTS SECTION PAGE Section 1. Definitions 3 Section 2. Authoritv for the Issuance of the Bonds 7 Section 3. Desienation. Maturitv Schedule and Interest Provisions 8 Section 4. Place of Pavment 10 Section 5. Form of Bond. TemDorarv Bonds 10 Section 6. Execution and Authentication of the Bonds 11 Section 7. Transfer and Exchange of the Bonds 12 Section 8. Registration Book 12 Section 9. Bonds Mutilated. Lost. Destroved or Stolen 13 Section 10. Book Entrv 14 Section 11. Redemption 16 Section 12. Use of Bond Proceeds 16 Section 13. Securitv for the Bonds 16 Section 14. Investment Earnings 18 Section 15. Paving Agent 18 Section 16. Tax Covenants 19 Section 17. Rebate Fund 20 Section 18. Defeasance 22 Section 19. Unclaimed Monevs 23 Section 20. Amendments to this Resolution 23 Section 21. Proceedings Constitute Contract 24 PUBL:6439_3 1141 B2608.3 PAGE Section 22. Award of the Bond to the Underwriter, 24 Section 23. Authorization of Personnel 25 EXHIBIT A FORM OF BOND PUBL:6439_31141 B2608.3 ii 0 WHEREAS, pursuant to the County Water District Law, Division 12 (commencing at Section 30000) of the Water Code of the State of California, as amended, and pursuant to Resolution No. 78-27 adopted by the Board of Directors (the "Board") of the Yorba Linda Water District (the "District") on May 4, 1978, a special election was duly and regularly held in Improvement District No. 1 (the "Improvement District") of the District on June 13, 1978, at which election there was submitted to the qualified voters of the Improvement District the following proposition: PROPOSITION: Shall the Yorba Linda Water District incur a bonded indebtedness for Improvement District No. 1 thereof in the sum of $27,320,000 for the purpose of the acquisition and construction of works and facilities useful or necessary to convey, supply, store or make use of water including all land, easements, rights of way and other property necessary therefor and including all engineering, inspection, legal and fiscal agent's fees, costs of the bond election and of the issuance of bonds, and bond interest estimated to accrue during the construction period and for a period not to exceed twelve months after the completion of construction and all costs and estimated costs incidental to or connected with such acquisition, construction or financing of said facilities? and WHEREAS, the District has issued $2,345,000 of said authorized bonds designated "Bonds of Yorba Linda Water District Improvement District No. 1, 1978 Water Bonds, Series A (the "Series A Bonds") and $6,615,000 of said authorized bonds designated "Bonds of Yorba Linda Water District Improvement District No. 1, 1978 Water Bonds, Series B (the "Series B Bonds"); and WHEREAS, this Board of Directors (the "Board") finds and determines that prudent management of the fiscal affairs of the District requires that it issue refunding bonds to refund the outstanding Series A Bonds maturing on and after March 1, 1994 and to refund the outstanding Series B Bonds maturing on and after May 1, 1994; and PUBL:6439_31141 B2608.3 WHEREAS, pursuant to Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing at Sections 53550 and 53580, respectively) of the Government Code of the State of California (herein "Articles 9 and 11 the District has the authority to issue refunding bonds without an election; and WHEREAS, it is proper and the necessity therefor appears that refunding bonds in the amount of $6,170,000 be issued for the purpose hereinabove stated, and in the form and manner hereinafter provided; and WHEREAS, pursuant to an agreement dated April 29, 1982, by and among the District, the City of Yorba Linda and certain developers, the District agreed not to issue additional bonds in Improvement District No. 1 without calling a public hearing on the question; and WHEREAS, it is unclear under said agreement that the refunding of the Series A Bonds and the Series B Bonds constitutes additional bonds, nevertheless, the District has given notice, as provided in said agreement, of a hearing on the issuance of the refunding bonds; and WHEREAS, said hearing has been held and the District is fully advised of all matters relating to the issuance of the refunding bonds and has determined that there were no protests against the issuance of the refunding bonds; and WHEREAS, according to law, the District has published a Notice Inviting Bids in The Bond Buyer, for the receipt of bids on the refunding bonds; and WHEREAS, Griffin, Kubik, Stephens & Thompson has offered to purchase the refunding bonds at the lowest net interest cost to the District on the terms and conditions set forth in the Notice Inviting Bids. NOW, THEREFORE, the Board of Directors of Yorba Linda Water District DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: PUBU6439_31 141 B2608.3 2 9 0 Section 1. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Auditor. The term "Auditor" means the Auditor of the District. Authorized Officer of the District. The term "Authorized Officer of the District" means the General Manager of the District or another official designated by the Board of Directors of the District to act on behalf of the District under or with respect to this Resolution and all other agreements related hereto. Bond Counsel. The term "Bond Counsel" means an attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. Bond Year. The term "Bond Year" means, the period beginning on the Delivery Date and ending on any date during the one-year period beginning on the Delivery Date, selected by the District in the Tax Certificate, and each successive twelve month (or shorter) period thereafter until there are no longer any bonds outstanding. Bonds. The term "bonds" means the Yorba Linda Water District Improvement District No. 1 1993 General Obligation Refunding Bonds. Business Dav. The term "Business Day" means a day which is not a Saturday or Sunday or a day on which banking institutions are authorized or required by law to be closed in the State of New York or the State of California for commercial banking purposes. PUBL:6439_31 141 B2608.3 3 9 0 Code. The term "Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, notices, announcements, and other releases of the United States Department of the Treasury or Internal Revenue Service interpreting and construing it. Costs of Issuance. The term "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the District and related to the authorization, execution and delivery of the bonds and the refunding escrow including, but not limited to, municipal bond insurance, costs of preparation and reproduction of documents, costs of rating agencies and costs to provide information required by rating agencies, filing fees, initial fees and charges of the Paying Agent, fees and charges of the District, legal fees and charges, fees and expenses of consultants and professionals, fees and expenses of the financial advisor, fees and charges for preparation, execution and safekeeping of the bonds and any other charge, cost or fee in connection with the original sale, execution and delivery of the bonds. County. The term "County" means the County of Orange, State of California. Defeasance Securities. The term "Defeasance Securities" means and includes, if and to the extent the same are permitted by law, only such securities as are described in clauses (i), (ii) and (iii) below which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof, or as to which an irrevocable notice of redemption of such securities on a specified redemption date has been given and such securities are not otherwise subject to redemption prior to such specified date other than at the option of the holder thereof, as follows: (i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any of the Federal agencies to the extent unconditionally guaranteed by the United States of America, including obligations issued pursuant to paragraph 2113(d)(3) of the Federal Home Loan Bank Act, as amended by paragraph PUBL:6439_3114 I B2608.3 4 9 0 511(a) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, or any successor provisions to paragraph 21(B) of the Federal Home Loan Bank, as so amended; (ii) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (a) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (i) hereof, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (ii), as appropriate, and (c) as to which the principal of and interest on the bonds and obligations of the character described in clause (i) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (ii) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (ii), as appropriate; and (iii) certificates that evidence ownership of the right to payments of principal or interest on obligations described in clause (i), provided that such obligations shall be held in trust by a bank or trust company or a national banking association. PUBL:6439_3 1141 B2608.3 5 • i Deliverv Date. The term "Delivery Date" means, with respect to the bonds, the date on which such bonds were initially issued and delivered to the purchaser thereof. Information Services. The term "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's Investors Service "Municipal and Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; Standard and Poor's Corporation "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the District may designate. Interest Pavment Date. The term "Interest Payment Date" means May 1 and November 1 of each year commencing May 1, 1994. Outstandine. The term "outstanding" when used as of any particular time with reference to the bonds means all bonds theretofore issued by the District except: (1) Bonds theretofore cancelled by the Paying Agent or surrendered to the Paying Agent for cancellation; (2) Bonds for the payment or redemption of which moneys or securities in the necessary amount (as provided in Section 19 hereof) shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such bonds, provided that, if such bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Resolution; and (3) Bonds in lieu of, or in substitution for which, other bonds shall have been issued by the District. PUBL:6439_31141B2608.3 6 • • Owner. The term "owner" or "bondowner" or "owner of bonds" or any similar term, when used with respect to the bonds, means any person who shall be the registered owner of any outstanding bond. Rebate Regulations. The term "Rebate Regulations" means any final and temporary or proposed Treasury Regulations promulgated under Section 148(f) of the Code. Record Date. The term "Record Date" means, with respect to any Interest Payment Date for the bonds, the fifteenth (15th) day of the calendar month preceding such Interest Payment Date, whether or not such Record Date is a Business Day. Resolution. The term "Resolution" means this resolution authorizing the issuance of the bonds and any amendments hereof. Request of the District. The term "Request of the District" means a certificate of the District executed by an Authorized Officer of the District. Securities Depositories. The term "Securities Depositories" means: The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, facsimile (216) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, facsimile (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, facsimile (215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses as such depositories may specify and/or such other securities depositories as the District may designate. Tax Certificate. The term "Tax Certificate" means that certain Tax Certificate executed on the Delivery Date by the District with respect to the bonds. Section 2. Authority for the Issuance of the Bonds. This Board of Directors hereby authorizes the issuance of $6,170,000 general obligation refunding bonds of Yorba Linda Water PUBl.:6439_3114 B2608.3 7 District for Improvement District No. 1 for the purpose of refunding the outstanding Series A Bonds and Series B Bonds. Said refunding bonds are issued pursuant to the County Water District Law and Articles 9 and 11 of Chapter 3 of Part 1 of Divison 2 of Title 5 of the Government Code of the State of California. This Board of Directors finds and determines that the total net interest cost to maturity on the refunding bonds plus the principal amount of the refunding bonds does not exceed the total net interest cost to maturity on the outstanding Series A Bonds and Series B Bonds, respectively, plus the principal amount, respectively, of the outstanding Series A Bonds and Series B Bonds to be refunded. For the foregoing calculation, the amount of principal and interest on the refunding bonds was prorated to the respective Series A Bonds and Series B Bonds. Based on said finding this Board determines that as provided in Section 53552 of the Government Code, the refunding bonds may be issued without submitting the question of the issuance of the refunding bonds to a vote of the qualified electors within Improvement District No. 1. Section 3. Desienation. Maturitv Schedule and Interest Provisions. Said refunding bonds shall be designated "Yorba Linda Water District Improvement District No. 1, 1993 General Obligation Refunding Bonds". The bonds shall be dated October 15, 1993. The bonds shall be issued in the form of fully registered bonds in the denomination of $5,000 each or any whole multiple thereof and shall mature on May 1 in the amounts for each of the years as follows: PUBL:6439_31141 B2608.3 8 • Years Principal Interest Inclusive Amount Rate 1994 $330,000 3.625% 1995 485,000 3.625% 1996 500,000 3.625% 1997 520,000 3.625% 1998 540,000 3.625% 1999 565,000 3.700% 2000 590,000 3.700% 2001 615,000 3.700% 2002 640,000 3.700% 2003 675,000 3.700% 2004 710,000 3.700% The bonds shall be initially registered in the name of "Cede & Co.", as nominee of The Depository Trust Company, New York, New York, and shall be evidenced by one bond for each of the maturities in the principal amounts set forth above, and The Depository Trust Company, New York, New York, is hereby appointed depository for the bonds, and registered ownership may not thereafter be transferred except as set forth in Section 10. The interest and principal and prepayment premiums, if any, evidenced and represented by the bonds shall be payable in lawful money of the United States of America. The bonds shall bear interest at rates hereinbefore set forth, from October 15, 1993, payable on May 1, 1994 and thereafter semiannually on each November 1 and May 1. Each bond shall bear interest until its principal sum has been paid; provided, however, that if funds have been deposited with the Paying Agent for the payment of the principal amount of such bonds in full accordance with the terms of this Resolution, such bond shall then cease to bear interest. Interest on bonds shall be paid by the Paying Agent by check mailed on the Interest Payment Date to the registered owner as his/her name and address appear on the register kept by the Paying Agent at the close of business on the Regular Record Date (the fifteenth day of the PUBL:6439_31141B2608.3 9 0 0 month preceding the Interest Payment Date). Each bond shall bear interest from the Interest Payment Date next preceding the date of authentication (unless (i) the date of authentication is prior to April 16, 1994 in which event from October 15, 1993 (ii) the date of authentication is after a Regular Record Date and before the following Interest Payment Date, and if the District shall not default in the payment of interest due on such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date or (iii) it is authenticated as of an Interest Payment Date, in which event it shall bear interest from such date) or provided for in accordance with this Resolution. Section 4. Place of Pavment. The bonds and any premiums upon the redemption thereof prior to maturity shall be payable in lawful money of the United States of America and shall be payable at the principal corporate office of Bank of America National Trust and Savings Association, the Paying Agent, in Los Angeles, California. Section 5. Form of Bond. Temoorarv Bonds. The bonds shall be substantially in the form annexed hereto as Exhibit "A". Such form is hereby approved and adopted as the form of the bonds and of the registration and assignment provisions pertaining to them, with necessary or appropriate variations, omissions, and insertions, as permitted or required by this Resolution. Any bonds issued pursuant to this Resolution may be initially issued in temporary form exchangeable for definitive bonds when the same are ready for delivery. The temporary bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the District, shall be without coupons and may contain references to any of the provisions of this Resolution as may be appropriate. Every temporary bond shall be executed by the District and be issued by the Paying Agent upon the same conditions and in substantially the same form and manner as the definitive fully registered bonds. If the District issues temporary bonds, it will execute and furnish definitive bonds without delay, and, thereupon, the temporary PUBL:6439 31 141 B2608.3 10 0 0 bonds shall be surrendered for cancellation at the principal corporate office of the Paying Agent in Los Angeles, California, or at such other place in California as the District may approve. The Paying Agent shall deliver in exchange for the surrendered temporary bonds an equal aggregate principal amount of definitive bonds of authorized denominations of this same issue. Until exchanged, the temporary bonds shall be entitled to the same benefits under this Resolution as definitive bonds of this same issue, except no accrued interest shall be paid on the temporary bonds until the exchange has been accomplished. Section 6. Execution and Authentication of the Bonds. The bonds shall be signed on behalf of the District by its President by manual or facsimile signature and by its Secretary by manual or facsimile signature, and the seal of the District shall be impressed, imprinted or reproduced thereon. The foregoing officers are hereby authorized and directed to sign the bonds in accordance with this Section. If any District member or officer whose facsimile signature appears on the bonds ceases to be a member or officer before delivery of the bonds, his/her signature is as effective as if he or she had remained in office. The Paying Agent shall authenticate the bonds on registration and/or exchange to effectuate the registration and exchange provisions set forth in Sections 5 and 7 hereof, and only those bonds that have endorsed on them a certificate of authentication, substantially in the form set forth in the form of bond, duly executed by the Paying Agent, shall be entitled to any rights, benefits or security under this Resolution. No bonds shall be valid or obligatory for any purpose unless and until the certificate of authentication has been duly executed by the Paying Agent. The certificate of the Paying Agent upon any bond shall be conclusive and the only evidence required that the bond has been duly authenticated and delivered under this Resolution. The Paying Agent's certificate of authentication on any bond shall be deemed to have been duly executed if signed by an authorized officer of the Paying Agent, but it shall not be necessary that PUBL:6439_31 141 B2608.3 I 1 0 0 the same officer sign the certificate of authentication on all of the bonds that may be issued hereunder. Section 7. Transfer and Exchange of the Bonds. Except as provided in Section 9 hereof, any bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 8, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. Whenever any bond or bonds shall be surrendered for transfer, the Paying Agent shall authenticate and deliver a new bond or bonds of the same series and maturity, for the like aggregate principal amount of bond or bonds surrendered. The bonds may be exchanged at the principal corporate office of the Paying Agent in Los Angeles, California for a like aggregate principal amount of bonds of other authorized denominations of the same series and maturity. Except as provided in Section 10 hereof, the person, firm or corporation requesting the transfer or exchange shall pay any costs or charges in connection with the transfer or exchange as are established by the Paying Agent, in addition to paying any tax or governmental charge that may be imposed in connection with the transfer or exchange. Section 8. Reeistration Book. The Paying Agent will keep at its principal corporate office in Los Angeles, California, or at such other place in California as the District may approve, sufficient books for the registration and transfer of the bonds. The books shall at all times be open to inspection by the District; and, upon presentation for such purpose, the Paying Agent shall under such reasonable regulations as it may prescribe, register or transfer, or cause to be registered or transferred, on the register, the bonds as hereinbefore provided. PUBL:6439_31 141 B2608.3 12 0 Section 9. Bonds Mutilated. Lost. Destroved or Stolen. Except as provided in Section 10, if any bond shall become mutilated, the Paying Agent shall authenticate and deliver a new bond of like tenor, maturity and principal amount in exchange and substitution for the bond so mutilated, but only upon surrender to the Paying Agent of the bond so mutilated. Every mutilated bond so surrendered to the Paying Agent shall be cancelled by it. If any bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Paying Agent, and, if such evidence is satisfactory to the Paying Agent and indemnity satisfactory to the Paying Agent shall be given indemnifying the Paying Agent and the District, the Paying Agent, at the expense of the bondowner, shall authenticate and deliver a new bond of like tenor and maturity, and numbered as the Paying Agent shall determine, in lieu of and in substitution for the bond so lost, destroyed or stolen. The Paying Agent may require payment of a sum not exceeding the actual cost of preparing each new bond executed under this Section 9 and of the expenses which may be incurred by the Paying Agent under this Section 9. Any bond executed under the provisions of this Section 9 in lieu of any bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Resolution with all other bonds secured by this Resolution. The Paying Agent shall not be required to treat both the original bond and any replacement bond as being outstanding for the purpose of determining the principal amount of bonds which may be executed hereunder or for the purpose of determining any percentage of bonds outstanding hereunder, but both the original and replacement bond shall be treated as one and the same. Notwithstanding any other provision of this Section 9, in lieu of delivering a new bond for a bond which has been mutilated, lost, destroyed or stolen and which has matured, the Paying Agent may make payment of such bond upon receipt of indemnity satisfactory to the Paying Agent. PUBL:6439_3 141 B26083 13 • Section 10. Book Entrv. (a) The Bonds shall be initially registered as provided in Section 3 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 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 a substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) To any substitute depository 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 District 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 District to remove The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) hereof, upon receipt of the outstanding Bonds by the Paying Agent, together with a Request of the District to the Paying Agent, a new bond for each maturity shall be executed by the District and delivered by the District and in the aggregate principal amount of the Bonds then PUBL:6439_31 141 B2608.3 14 • 0 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 Request of the District. (c) In the case of any transfer pursuant to clause (iii) of subsection (a) hereof, upon receipt of the Outstanding Bonds by the Paying Agent, together with a Request of the District to the Paying Agent, new Bonds shall be executed by the District and delivered by the Paying Agent 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 a Request of the District; provided, the Paying Agent shall not be required to deliver such new Bonds within a period less than sixty (60) days from the date of receipt of such a Request of the District. After any transfer pursuant to this subsection, the Bonds shall be transferred pursuant to Section 3. (d) The District and the Paying Agent shall be entitled to treat the person in whose name any bond is registered as the owner thereof for all purposes of the Resolution and any applicable laws, notwithstanding any notice to the contrary received by the Paying Agent or the District; and the District and the Paying Agent shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with any beneficial owners of the Bonds, and neither the District nor the Paying Agent will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other parry, including The Depository Trust Company or its successor (or substitute depository or its successor), except for the owner of any Bonds. (e) So long as the outstanding Bonds are registered in the name of Cede & Co. or its registered assigns, the District and the Paying Agent shall cooperate with Cede & Co., as sole registered owner, or its registered assigns in effecting 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. All payments PusL:6439_3114I B2608.3 15 • 0 shall be made in accordance with the terms of the DTC Letter of Representations among the District, the Paying Agent and the Depository Trust Company. Section 11. Redemption. The bonds are not subject to call and redemption prior to maturity. Section 12. Use of Bond Proceeds. The proceeds of the sale of the bonds shall be deposited to the following funds: (1) Any premium and accrued interest shall be deposited into the Interest and Sinking Fund, hereinafter established, (2) $4,498,950.00 shall be deposited with the Paying Agent for redemption of the Series B Bonds on November 1, 1993, (3) $1,487,162.50 shall be deposited in an escrow fund with the Paying Agent, (as Escrow Bank) for the redemption of the Series A Bonds on March 1, 1994, (4) the balance of the proceeds shall be deposited in a fund hereby established by the Auditor of the District and designated "Yorba Linda Water District Improvement District No. 1 1993 General Obligation Refunding Bonds Cost of Issuance Fund" (the "Costs of Issuance Fund"). The moneys in said Cost of Issuance Fund shall be applied to the payment of the Costs of Issuance. Any money remaining in the Costs of Issuance Fund after all Costs of Issuance have been paid shall be transferred to the Interest and Sinking Fund. Section 13. Securitv for the Bonds. If the revenues of the Improvement District are, or in the judgment of the Board are likely to be, inadequate to pay the interest on or principal of the bonds as the same become due, or any other expenses or claims against the Improvement District, the Board shall either: (a) annually, at least fifteen days before the first day of the month in which the Board of Supervisors of Orange County, California, is required by law to levy the amount of taxes required for county purposes, furnish to said Board of Supervisors, and to the Auditor of said County, respectively, in writing, (i) an estimate of the minimum amount of money required by PUBL:6439_3114 B2608.3 16 the District from the Improvement District for the payment of the principal of or interest on the bonds as the same become due, (ii) a description of the Improvement District, which is the improvement district benefited by incurring the indebtedness evidenced by the bonds, and (iii) an estimate of the minimum amount of money required by the Improvement District to meet all charges, claims, expenditures and expenses other than a bonded debt; in which event, as required by law, said Board of Supervisors shall annually until the bonds are paid (or moneys for the payment of both the principal and interest thereof as the same respectively become due are otherwise provided from revenues of the Improvement District are then on deposit in the Interest and Sinking Fund), levy upon all the property within the Improvement District a tax sufficient to pay the annual interest on the bonds and also such part of the principal thereof as shall become due before the time for fixing the next general county tax levy; or (b) (i) elect to fix its own rates of taxation by resolution, pursuant to Section 31702.1 of the Water Code of the State of California, (ii) on or before September 1 of each year fix the rates of taxation, based upon the written statement transmitted by the Auditor of said County to the Board in such year showing the total value of all taxable property in the Improvement District to be used by said County for taxation for such year, which rates of taxation shall be required for the payment of the principal of or interest on the bonds as the same become due before the time for fixing the next general county tax levy and for each other purpose of the Improvement District for such year, making due allowance for delinquency as fixed by law or by the Board, and (iii) immediately certify said rates to said Auditor; which acts, as provided by law, shall be a valid assessment of the property and a valid levy of the taxes so fixed; or (c) provide for the assessment of all taxable property within the Improvement District and the levy and collection of taxes thereon to pay the principal of and interest on the bonds as the same become due, in any other manner provided by law. PUBL:6439_3114 B2608.3 17 0 • As currently provided by law, the Board of Supervisors of said County shall annually cause to be collected a tax sufficient to pay the annual interest on the bonds and also such part of the principal thereof as shall become due before the time for fixing the next general county tax levy, such tax to be known as "Yorba Linda Water District Improvement District No. 1 Bond Tax". Taxes for the payment of the interest on or principal of the bonds shall be levied upon all the taxable property within the Improvement District and all such taxes shall be collected at the same time and in the same manner and form as county taxes are collected, and when collected shall be paid to the District, for deposit into a fund which is hereby established and designated "Yorba Linda Water District Improvement District No. 1 1993 Refunding Bonds Interest and Sinking Fund" (the "Interest and Sinking Fund"). The moneys in the Interest and Sinking Fund shall be used (and transferred to the Paying Agent for the bonds as required) for the sole purpose of paying the principal of and interest on the bonds. All such taxes for the payment of the bonds or the interest thereon shall be a lien on all the taxable property in the territory comprising the Improvement District and said taxes shall be of the same force and effect as other liens for taxes and their collection shall be enforced by the same means as provided for the enforcement of liens for state and county taxes. Section 14. Investment Earnines. Any earnings received from any moneys placed in any fund herein established shall inure to the benefit of and shall become a part of such fund. Any losses so incurred shall be treated in like manner. Any Rebatable Arbitrage shall be transferred to the Rebate Fund as provided in Section 17 hereof. Section 15. Paving Agent. Bank of America National Trust and Savings Association is hereby appointed Paying Agent for the bonds. The District may at any time and for any reason, remove the Paying Agent and any successor thereto, but any such successor shall be a bank or trust company, having a combined PUBL:6439_31 141 B2608.3 18 • • capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and shall be subject to supervision or examination by a federal or state banking authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 15 the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus set forth in its most recent report of condition so published. Any removal of the Paying Agent shall become effective upon acceptance of appointment by the successor Paying Agent occurs. The Paying Agent or any successor may at any time resign by giving written notice to the District and by giving mailed notice to the owners of its intention to resign and of the proposed date of resignation, which shall be a date not less than 45 days after mailing of such notice, unless an earlier resignation date and the appointment of a successor Paying Agent. Upon receiving such notice of resignation, the District shall promptly appoint a successor Paying Agent by an instrument in writing; provided, however, that in the event the District fails to appoint a successor Paying Agent within 30 days following receipt of such written notice of resignation, the resigning Paying Agent may petition the appropriate court having jurisdiction to appoint a successor paying agent. Any resignation of the Paying Agent shall become effective upon acceptance of appointment by the successor Paying Agent. Any successor Paying Agent approved by the District or any court shall satisfy the qualifications set forth in this Section 15. Section 16. Tax Covenants. Notwithstanding any other provision of this Resolution, absent an opinion of Bond Counsel that the exclusion from gross income of the interest on the bonds will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from PUBL:6439_31 14 1132608.3 19 • • gross income and specifically covenants, without limiting the generality of the foregoing, as follows: (a) Private Activitv. The District will not take or omit to take any action or make any use of the proceeds of the bonds or of any other monies or property which would cause the bonds to be an "industrial development bond" within the meaning of Section 103(b) of the Internal Revenue Code of 1954, as amended (the "Prior Code"), or private loan bonds within the meaning of Section 103(o) of the Prior Code; (b) Arbitrage. The District will make no use of the proceeds of the bonds or of any other amounts or property, regardless of the source, or take or omit to take any action which would cause the bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code; (c) Federal Guarantee. The District will make no use of the proceeds of the bonds or take or omit to take any action that would cause the bonds to be "federally guaranteed" within the meaning of Section 103(h) of the Prior Code; (d) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; and (e) Miscellaneous. The District will take no action inconsistent with its expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein. Section 17. Rebate Fund. (a) Establishment of Rebate Fund. With respect to the issuance of the bonds, the Auditor shall establish a special fund with respect to the bonds designated as the "Rebate Fund" (the "Rebate Fund"), and the District shall comply with the requirements of this Section 17. All money at any time deposited in the Rebate Fund shall be held by the Auditor in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be PUBL:6439_31 141 B2608.3 20 • • governed by this Section 17 and the Tax Certificate, unless the District obtains an opinion of Bond Counsel that the exclusion from gross income of the interest on the bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied. (i) Annual Computation. Within 55 days of the end of each Bond Year, the District shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f) of the Code and Section 1.148-3 of the Rebate Regulations, for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the "Rebatable Arbitrage"). The District shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Annual Transfer. Within 55 days of the end of each Bond Year, an amount shall be deposited in the Rebate Fund by the Auditor from any legally available funds if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with Subsection (a)(i). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, the Auditor shall withdraw the excess from the Rebate Fund and then credit the excess to the Interest and Sinking Fund. (iii) Pavment to the Treasury. The Auditor shall pay to the United States Treasury, out of amounts in the Rebate Fund, (X) Not later than 60 days after the end of (A) the fifth Bond Year, and (B) each fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and PUBl.:6439_3 141 B2608.3 21 • • (Y) Not later than 60 days after the payment of all bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code. In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (a)(iii) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after the repayment of the bonds and the payments described in Subsection (a)(iii), may be withdrawn by the District and utilized in any manner by the District. (c) Survival of Defeasance. Notwithstanding anything in this Section 17 to the contrary, the obligation to comply with the requirements of this Section 17 shall survive the defeasance of the obligation represented by the bonds. Section 18. Defeasance. When the District has deposited with the Paying Agent or an escrow bank the amount in money or Defeasance Securities, which together with interest earnings thereon, will be sufficient to fully pay the principal of and interest on the outstanding bonds, then and in that case the obligations created by this Resolution shall thereupon cease, terminate and become void except for the right of the owners of the bonds and the obligations of the Paying PUBL:6439_31 141 B2608.3 22 • 0 Agent to (i) apply such moneys and Defeasance Securities to the payment of the bonds as herein set forth, which moneys and Defeasance Securities shall continue to be held by the Paying Agent or the escrow bank in trust for the benefit of the owners and shall be applied by the Paying Agent to the payment, when due, of the principal of, the interest on and the premium, if any, represented by the bonds, and (ii) return to the District any unclaimed moneys as provided in Section 19 hereof. Section 19. Unclaimed Monevs. Anything contained herein to the contrary notwithstanding, any moneys held by the Paying Agent in trust for the payment and discharge of the interest or principal represented by any of the bonds which remain unclaimed for two (2) years (or one day prior to the escheat period established by the laws of the State of California if said period is less than two (2) years) after the date of deposit of such moneys if deposited with the Paying Agent after the date when the interest and principal represented by such bonds have become payable, shall be repaid by the Paying Agent to the District as its absolute property free from trust, and the Paying Agent shall thereupon be released and discharged with respect thereto and the owners shall look only to the District for the payment of the interest and principal represented by such bonds; provided, however, that before being required to make any such payment to the District, the Paying Agent shall, at the written request and expense of the District, first mail a notice to the owners of the bonds so payable that such moneys remain unclaimed and that after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such moneys then unclaimed will be returned to the District. Section 20. Amendments to this Resolution. This Resolution may be amended but no such amendment shall become effective as to the owners of bonds then outstanding unless and until approved in writing by the owners of a majority in aggregate principal amount of bonds PUBL:6439_31 141$2608.3 23 • • then outstanding. Notwithstanding the foregoing this Resolution and the rights and obligations provided thereby may also be modified or amended at any time, without the consent of the owners of the bonds, but only (1) for the purpose of curing any ambiguity or omission relating thereto, or of curing, correcting or supplementing any defective provision contained in such Resolution, (2) in regard to questions arising under such Resolution which the District may deem necessary or desirable and not inconsistent with this Resolution and which shall not materially adversely affect the interests of the owners of the bonds, or (3) for any other reason, provided such modification or amendment does not materially adversely affect the interests of the owners of the bonds. Section 21. Proceedines Constitute Contract. The provisions of this Resolution, and of any other resolution supplementing or amending this Resolution, shall constitute a contract between the District and the owners of the bonds. The provisions of any amendment shall be enforceable by any owner for the equal benefit and protection of all owners similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. This contract is made under and is to be construed in accordance with the laws of the State of California. Section 22. Award of the Bond to the Underwriter. The bid of Griffin, Kubik, Stephens & Thompson for $6,170,000 principal amount of the bonds is hereby accepted and the Auditor is hereby authorized and directed to deliver the bonds to said purchaser thereof upon payment to said Auditor of the purchase price of $6,077,450.00 (par less a discount of $92,550.00), together with accrued interest at the following rates: PUBL:6439_31 141 B2608.3 24 • • Bond Maturing Interest Rate (Inclusive) Per Annum 1994 3.625% 1995 3.625% 1996 3.625% 1997 3.625% 1998 3.625% 1999 3.700% 2000 3.700% 2001 3.700% 2002 3.700% 2003 3.700% 2004 3.700% All bids except the bid of Griffin, Kubik, Stephens & Thompson are hereby rejected, and the Secretary of the district is hereby directed to return to the unsuccessful bidders their several checks accompanying their respective bids. Section 23. Authorization of Personnel. The General Manager of the District and each and every officer of the District is authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary and advisable in order to consummate the delivery of the bonds and otherwise effectuate the purposes of this Resolution. PUBL:6439_3 1141 B2608.3 25 • 0 PASSED AND ADOPTED this 14th day of October, 1993 by the following vote: AYES: DIRECTORS: Fox, Scanlin, Armstrong, Korn and Beverage NOES: DIRECTORS: None ABSENT: DIRECTORS: None ABSTAIN: DIRECTORS: None r President of the Board'of Directors of Yorba Linda Water District (SEAL) ATTEST: Secretary of the Board of Directors of Yorba Linda Water District PUBL:6439_31141B2608.3 26 • • EXHIBIT A UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE 1993 GENERAL OBLIGATION REFUNDING BONDS YORBA LINDA WATER DISTRICT IMPROVEMENT DISTRICT NO. 1 Registered No. Interest Rate Maturitv Date Issue Date CUSIP October 15, 1993 Registered Owner: Principal Amount: YORBA LINDA WATER DISTRICT, a public corporation, situated in the County of Orange, State of California, (herein called the "District"), duly organized and existing under and by virtue of the County Water District Law (Division 12 of the Water Code of the State of California), hereby acknowledges its indebtedness and promises to pay to the registered owner named above or registered assigns, herein sometimes referred to as "registered owner" (subject to the right of prior redemption hereinafter mentioned), the principal sum stated above on the maturity date stated above, and to pay such registered owner by check mailed thereto, at his/her address as it appears on the register kept by the Paying Agent at the close of business on the fifteenth day of the month preceding the interest payment date (the "Regular Record Date"), interest on such principal sum at the rate of per annum, stated above from the interest payment date next preceding the date of authentication (unless (i) the date of authentication is prior to April 16, 1994 in which event from October 15, 1993 (ii) the date of authentication is after a Regular Record Date and before the following interest payment date, and if the District shall not default in the payment of interest due on such interest payment date, in which event it shall bear interest from such interest payment date or (iii) it is authenticated as of an interest payment date, in which event it shall bear interest from such date) until the principal hereof shall have been paid or provided for in accordance with the Resolution hereinafter referred to, at the rate or rates PUBL:6439_31 141 B2608.3 27 0 0 above indicated, payable May 1, 1994 and thereafter semiannually on November 1 and May 1 in each year. Both principal and interest and any premium upon the redemption prior to the maturity of all or part hereof are payable in lawful money of the United States of America, and (except for interest which is payable by check as stated above) are payable at the principal corporate office of Bank of America National Trust and Savings Association, Paying Agent for the District, in Los Angeles, California. The principal of this bond and the interest hereon may be paid from revenues of said Improvement District No. 1 as permitted or required by law. Taxes levied for the payment of the principal of this bond and the interest hereon shall be levied exclusively upon the taxable property in Improvement District No. 1 of Yorba Linda Water District and neither Yorba Linda Water District nor any officer thereof is holden for the payment hereof. The bonds are not callable before maturity. This bond is issued in fully registered form and is non-negotiable. It may be exchanged for a like aggregate principal amount of bonds of other authorized denominations of the same series and maturity, all as more fully set forth in the Resolution of Issuance, Resolution No. 93-25 (the "Resolution"). This bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at the principal corporate office of the Paying Agent in Los Angeles, California, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, upon surrender and cancellation of this bond. Upon such transfer a new registered bond of authorized denomination or denominations for the same aggregate principal amount of the same series and maturity will be issued to the transferee in exchange therefor. The District and the Paying Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the District and the Paying Agent shall not be affected by any notice to the contrary. This bond shall not be entitled to any benefit under the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Paying Agent. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of California. PUBL:6439_3 1141132608.3 28 0 0 IN WITNESS WHEREOF, YORBA LINDA WATER DISTRICT has caused this bond to be signed by the President of said District and of the Board of Directors thereof and countersigned by the Secretary of said District and of said Board of Directors, by their manual, printed, lithographed or engraved facsimile signatures, and sealed with the official seal of said District. President of Yorba Linda Water District and of the Board of Directors thereof (SEAL) COUNTERSIGNED: Secretary of said District and of said Board APPROVED BY: District Counsel PUBL:6439_31141B2608.3 29 • • FORM OF CERTIFICATE OF AUTHENTICATION This is one of the bonds described in the with in-mentioned Resolution. Dated: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Paying Agent By: Authorized Officer FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the with in-mentioned bond, and hereby irrevocably constitutes and appoints , to transfer the same on the registration books of the Paying Agent with full power of substitution in the premises. Dated: Bond: 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. Signature Guaranteed: Bond: Signature(s) must be guaranteed by a commercial bank or trust company or a member of the New York Stock Exchange PUBL:6439 31141 B2608.3 30 0 0 SECRETARY'S CERTIFICATE I, William J. Robertson, Secretary of Yorba Linda Water District, hereby certify that the foregoing is a full, tue and correct copy of a resolution duly adopted at a special meeting of the board of Directors of said District duly and regularly held at the regular meeting place thereof on October 14, 1993, of which meeting all of the members of said board had due notice and at which a majority thereof was present; and that at said meeting said resolution was adopted by the following vote: AYES: Fox, Scanlin, Armstrong, Korn, Beverage NOES: None ABSTAIN: None ABSENT: None I further certify that I have carefully compared the same with the original resolution on file and of record in my office; that the foregoing is a full, true and correct copy of said original resolution adopted at said meeting; and that he foregoing has not been amended, modified or rescinded since the date of its adoption, and is now in full force and effect. In WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said District on October 14, 1993. S tary of the Yorba Linda Water District and of the Board of Directors thereof (SEAL) PUBL:6439_31141B2608.3 31