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Resolution No. 4898RESOLUTION NO. 4898 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS ISSUING LIMITED OBLIGATION IMPROVEMENT BONDS UNDER THE IMPROVEMENT BOND ACT OF 1915 FOR CYPRESS BUSINESS AND PROFESSIONAL CENTER ASSESSMENT DISTRICT WHEREAS, this Council has heretofore initiated assessment proceedings pursuant to its Resolution No. 4867 under the Municipal Improvement Act of 1913, (Division 12 of the Streets and Highways Code (the "Code ")) and has confirmed an assessment in the total amount of $1,734,150.40; and WHEREAS, the assessment proceedings provide for the issuance of bonds pursuant to the Improvement Bond Act of 1915 (Division 10 of the Code) (the "1915 Act "); and WHEREAS, the Council in its concurrent Resolution No. 4899 awarded the sale of its limited obligation bonds to Westhoff, Cone & Holmstedt (the "Underwriter ") at the interest rates to be established in the Bond Purchase Contract with said firm; and WHEREAS, this Council desires, pursuant to Section 8650.1 of the Code, to establish the denomination of the bonds and the amount to mature each year which will be other and different than that provided in Section 8650 of the Code. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1 That the above recitals are all true and correct. SECTION 2. Bonds in the aggregate principal amount of $2,290,000 shall be issued as hereinafter provided upon the security of unpaid assessments levied in accordance with the Municipal Improvement Act of 1913 and under and pursuant to the proceedings thereunder duly had and taken. The bonds herein provided to be issued shall be known as "City of Cypress, Limited Obligation Improvement Bonds, Cypress Business and Professional Center Assessment District" (the "Bonds ") and shall be dated their date of delivery. The Bonds shall be issued only in fully registered form in denominations of $5,000 or any integral multiple thereof, except that one Bond may include the amount by which the total issue exceeds the maximum integral multiple of $5,000 contained therein, if any. The Bonds shall be issued as serial and term bonds with annual maturities beginning on September 2, 2003 and every succeeding 12 months thereafter until September 2, 2007. Bonds shall mature in the amounts and bear interest at the rates of interest to be set forth in the Bond Purchase Contract concurrently submitted to and approved by this Council. SECTION 3 The Bonds shall be issued pursuant to the provisions of the Improvement Bond Act of 1915, and shall be substantially in the form as authorized pursuant to the terms and provisions of said Act, except as such form may vary from the terms and conditions set forth in this resolution. SECTION 4. Each Bond shall be of a single maturity and interest rate as set forth in the aforesaid Bond Purchase Contract, said interest rate not to exceed 12% per annum. Each Bond shall bear interest from the March 2 and September 2 ( "Interest Payment Date ") next preceding the date on which it is authenticated and registered, unless (i) said Bond is authenticated and registered as of an interest payment date, in which event it shall bear interest from such date, or (ii) said Bond is authenticated and registered prior to the fifteenth day immediately preceding the first interest payment date, in which case it shall bear interest from their date of initial delivery, or (iii) said Bond is authenticated and registered prior to an interest payment date and after the close of business on the fifteenth day of the month immediately preceding such interest payment date, in which event it shall bear interest from such interest payment date, until payment of its principal sum has been discharged. Interest shall be payable commencing on September 2, 1998, and semi- annually thereafter on September 2 and March 2 of each year to maturity and shall be based on a 360 day year with twelve thirty-day months. 3.s1 SECTION 5. The principal, redemption premiums and interest on the Bonds shall be payable in lawful money of the United States of America at the principal corporate trust office of First Trust of California, National Association (the "Fiscal Agent Registrar ", "Paying Agent" and "Transfer Agent "). Interest on said Bonds shall be paid by check mailed by first class mail to the registered owner thereof at his address as it appears on the books of registration, as of the 15th day immediately preceding said interest payment date. SECTION 6. Any Bond may be redeemed in whole or in part in integral multiples of $5,000 on any Interest Payment Date, at the option of the City upon 30 days' notice to the Bondowner from moneys on deposit with the Fiscal Agent, at the following prices, expressed as a percentage of the principal amount of Bonds called for redemption, together with accrued interest to the date of redemption: 103% if redeemed on or before September 2, 2004 102% if redeemed on March 2 or September 2, 2005 101% if redeemed on March 2 or September 2, 2006 100% if redeemed on March 2 or September 2, 2007 and thereafter Any Bond shall be subject to redemption in whole, or in part, in integral multiples of $5,000 on any Interest Payment Date from proceeds of refunding bonds pursuant to Division 11.5 of the Act (if any such refunding bonds are sold), from prepayments of assessments deposited in the Prepayment Account of the Redemption Fund, from excess proceeds in the Assessment Fund or from surplus moneys in the Improvement Fund, upon 30 days' notice to the Bondowner and payment of the principal amount thereof and interest accrued thereon to the date of redemption, at the redemption prices shown above. The Bonds maturing on September 2, 2022 are subject to mandatory redemption, in part by lot, from sinking fund payments set forth in the Bond Purchase Contract on September 2, 2008 and on September 2 in each year thereafter to and including September 2, 2022 at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some, but not all, of the Bonds maturing September 2, 2022 have been optionally redeemed pursuant to the above - described optional redemption provisions, the total amount of sinking fund payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Bonds maturing September 2, 2022 optionally redeemed by reducing each such future sinking fund payment on a pro -rata basis (as nearly as practicable) in integral multiples of $5,000. No interest will accrue on a Bond beyond the Interest Payment Date on which said Bond is called for redemption provided that the amount necessary for the redemption has been deposited with the Fiscal Agent. Notice of redemption must be given to the applicable Bondowners by registered or certified mail (postage prepaid) or by personal service at least 30 days prior to the redemption date, if less than all of the outstanding Bonds are to be redeemed. The determination as to which Bond or Bonds are to be called will be made by the Fiscal Agent on behalf of the City Treasurer, in accordance with Streets & Highways Code Section 8768 of the 1915 Act. SECTION 7. Any fully registered Bond may, in accordance with its terms, be transferred upon the books of registration required to be kept pursuant to the provisions of Section 9 by the owner in whose name it is registered, or by his duly authorized attorney or legal representative, upon surrender of such fully registered Bond for registration of such transfer, accompanied by delivery of a written instrument of transfer in a form acceptable to the Transfer Agent and by the owner of said Bonds, duly executed. The Transfer Agent shall require the payment by the bondowner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. No transfer of fully registered Bonds shall be required to be made during the fifteen (15) days next preceding the selection of Bonds for redemption nor, in the case of Bonds selected for redemption, after such Bonds have been selected for redemption. - 2 - 3o SECTION 8. Fully registered Bonds may be exchanged at the office of the designated Transfer Agent/Registrar, for a like aggregate principal amount of Bonds of the same interest rate and maturity, subject to the terms and conditions provided in its system of registration for registered debt obligations, upon surrender and cancellation of the Bond. Upon such transfer and exchange, 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. SECTION 9. There shall be kept by the Registrar sufficient books for the registration and transfer of the Bonds and, upon presentation for such purpose, the Registrar shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said register, Bonds as hereinbefore provided. SECTION 10. The Bonds shall be executed by manual or facsimile signature by the City Treasurer and attested by the City Clerk and the City seal shall be imprinted on the Bonds. The Bonds shall then be delivered to the Transfer Agent and Registrar, for authentication and registration. In case an officer who shall have signed or attested to any of the Bonds by manual or facsimile signature or otherwise shall cease to be such officer before the authentication, delivery and issuance of the Bonds, such Bonds nevertheless may be authenticated, delivered and issued, and upon such authentication, delivery and issue, shall be as binding as though those who signed and attested the same had remained in office. SECTION 11. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form below, manually executed by the Transfer Agent and Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this resolution, and such certificate of the Transfer Agent and Registrar shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder, and are entitled to the benefits of this resolution. FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION This bond has been authenticated and registered on as Registrar and Transfer Agent By: SECTION 12. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal and redemption premium, if any, of any such Bond, and any payment of interest on any such Bond, shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including the redemption premium, if any, and interest thereon, to the extent of the sum or sums so paid. SECTION 13. In case any Bond secured hereby shall become mutilated or be destroyed, stolen or lost, the Registrar shall cause to be executed and authenticated a new Bond of like date and tenor in exchange and substitution for and upon the cancellation of such mutilated Bond or in lieu of and in substitution for such Bond destroyed, stolen or lost, upon the owner's paying the reasonable expenses and charges in connection therewith, and, in the case of a Bond destroyed, stolen or lost, his filing with the Registrar of evidence satisfactory to it and to the City Treasurer that such Bond was destroyed, stolen or lost, and of his ownership thereof, and furnishing the Registrar and City with indemnity satisfactory to them. SECTION 14. All Bonds paid, either at or before maturity, shall be cancelled upon the payment or redemption of such Bonds, and shall be delivered to the Transfer Agent and Registrar when such payment or redemption is made. All Bonds cancelled under any of the provisions of this resolution shall be destroyed as provided by law by the Transfer Agent and Registrar, who shall execute a certificate in duplicate describing the Bonds so destroyed, and shall retain said executed certificate in its permanent files for the issue. SECTION 15. Pursuant to and the provisions of Part 16 (commencing with Section 8880) of Division 10 of the Code from the proceeds received from the sale of the bonds, an amount equal to eight percent (8 %) of the Bonds shall be deposited by the City Treasurer in a special reserve fund (the "Reserve Fund ") which the City hereby covenants and agrees to establish and maintain. The Reserve Fund shall be designated and identified as the "Cypress Business and Professional Center Assessment District Reserve Fund." The Reserve Fund shall constitute a trust fund for the benefit of the owners of the Bonds and shall be maintained, used, transferred, reimbursed and liquidated as follows: (a) Whenever there are insufficient funds in the Redemption Fund to pay the next maturing installment of the principal of or interest on the Bonds, an amount necessary to pay such deficiency shall be advanced by the Fiscal Agent from the Reserve Fund to the Redemption Fund. The amounts so advanced shall be reimbursed from the proceeds of collection of delinquent assessments on the redemption or sale of the parcels for which payment of delinquent installments of assessments and interest thereon has been made from the Reserve Fund. (b) In the event unpaid assessments are paid in advance, the assessments thus paid shall be reduced by an amount equal to the ratio of the original amount of the assessment being prepaid to the total amount originally assessed in the proceedings represented by Bonds multiplied by the amount contained in the Reserve Fund (but in no event less than such proportionate share of the original eight percent (8 %) of the Bonds), and the amount thus determined shall be transferred by the Fiscal Agent solely at the written direction of the City Treasurer from the Reserve Fund to the Redemption Fund. (c) If on each February 15 and August 15, of each year, commencing August 15, 1998, the amount of any income realized from the investment of the money in the Reserve Fund plus the remaining principal amount thereof exceeds eight percent (8 %) of the original principal amount of the Bonds, less any amounts transferred pursuant to (b) above (the "Reserve Requirement "), such excess shall be transferred by the Fiscal Agent to the Redemption Fund and applied to the payment of the Bonds. (d) If, on June 30 of the fiscal year next preceding the fiscal year in which the last unpaid assessment installment becomes due and payable, the balance in the Reserve Fund is sufficient to retire all or a portion of the last maturing series of outstanding Bonds, whether by advance retirement or otherwise, collection of all or a portion of the principal and interest on the assessments shall be discontinued and at the written direction of the City the Reserve Fund shall be liquidated in retirement of the Bonds. SECTION 16. The net proceeds from the sale of the Bonds, less the amounts specified herein for deposit in the Reserve Fund, shall be placed in a fund created pursuant to Sections 10424 and 10602 of the Code, which shall be held by the Fiscal Agent and called the "Cypress Business and Professional Center Assessment District Improvement Fund ", and the moneys in said fund shall be used only for the purposes authorized in the assessment proceedings and shall be invested and disbursed by the Fiscal Agent, in accordance with the written request of the City Treasurer, Director of Finance, Director of Public Works City Engineer, or City Manager. SECTION 17. Principal of and interest on the Bonds shall be paid out of the Redemption Fund created pursuant to Section 8671 of the Code, to be held and maintained by the Fiscal Agent and called the "Cypress Business and Professional Center Assessment District Redemption Fund." Accrued interest paid by the purchaser of the Bonds, if any, shall be deposited by the Fiscal Agent in said fund. The Finance Director or City Treasurer shall deposit with the Fiscal Agent, as received, all installments and prepayments of the assessments with respect to the principal, redemption premiums and interest of the Bonds and the Fiscal Agent shall hold all such 3G moneys in said fund and use the same for the payment of principal, interest and redemption premiums, if any, on the Bonds. SECTION 18. The City Treasurer is hereby instructed to cause Bonds, as set forth above, to be printed, and to proceed to cause said Bonds to be authenticated and delivered to an authorized representative of the purchaser, upon payment of the purchase price as set forth in the contract of purchase for the Bonds. SECTION 19. In order to maintain the exemption from federal income taxation of interest on the Bonds, the City covenants to comply with all applicable requirements of the Internal Revenue Code of 1986, as amended, and all regulations, rulings and decisions in connection therewith. SECTION 20. Except as otherwise provided herein, all moneys held by the Fiscal Agent in any of the funds or accounts established pursuant to this resolution shall be invested as directed in writing by the Finance Director or City Treasurer and all investment earnings shall be credited to the fund or account so invested. If the Fiscal Agent does not receive such written direction, it shall invest such moneys in units of a taxable government money - market fund. The Fiscal Agent shall have no liability or responsibility for any loss resulting from any investment made in accordance with the provisions of this section or for determining that any directed investment is a permitted investment. SECTION 21. First Trust of California, National Association is hereby designated Fiscal Agent, Transfer Agent, Paying Agent and Registrar with respect to these proceedings and the Bonds to be issued. The City shall from time to time, subject to any agreement between the City and the Fiscal Agent then in force, pay to the Fiscal Agent compensation for its services, reimburse the Fiscal Agent for all its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants, counsel and engineers or other experts employed by it in the exercise and performance of its powers and duties hereunder, and indemnify and save the Fiscal Agent harmless against liabilities not arising from its own negligence or willful misconduct which it may incur in the exercise and performance of its powers and duties hereunder, which indemnity shall survive discharge of the Bonds. SECTION 22. If, after completion of the improvements to be constructed from the proceeds of the Bonds to be issued hereby, it is determined by the Finance Director there is a surplus in the Improvement Fund established hereby and held by the Fiscal Agent, the Fiscal Agent, upon the written direction of the Finance Director, shall transfer such moneys into the Redemption Fund established pursuant to Section 17 hereof and use such moneys for payment of principal of and interest on the Bonds. The amount of such transfer shall be applied by the City Treasurer as a credit against the installments of assessments to be collected, in accordance with the provisions of Sections 10427 and 10427.2, inclusive, of the Code. SECTION 23. Pursuant to Streets and Highways Code Section 8769, this Council hereby determines that the City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund; provided, however, this determination shall not prevent the City from, in its sole discretion, advancing funds for such purpose as otherwise provided in the Improvement Bond Act of 1915. SECTION 24. The City Council hereby approves the Preliminary Official Statement and authorizes distribution thereof. The City Manager, the Finance Director, or Director of Public Works /City Engineer is hereby authorized and directed to execute a Final Official Statement consistent therewith. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Bondholder or Beneficial Owner 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 obligations under this Section. For purposes of this Section, "Beneficial Owner" means any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any 363 Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. SECTION 25. In the event an initiative petition is submitted to the City which purports to reduce or repeal the assessments levied pursuant to the proceedings taken hereunder by the City Council, the City Council hereby covenants, to the extent permitted by law, to commence and pursue all available judicial remedies in order to preserve and protect the assessments and any installments thereof and the lien securing said assessments. SECTION 26. The terms and conditions of this resolution relating to the terms and conditions of the bonds and other non - substantive terms and provisions of this Resolution, as determined by Bond Counsel, may be amended and modified prior to closing of delivery of the Bonds by a written amendment executed by the City Manager, Finance Director, or Director of Public Works /City Engineer and countersigned by Bond Counsel. PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 26th day of January, 1998. ATTEST: CITY CLERK OF THE CITY OF CYPRESS STATE OF CALIFORNIA COUNTY OF ORANGE ) SS MAYOR 1 F TH1 CITY OF CYPRESS I, LILLIAN M. HAINA, City Clerk of the City of Cypress DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the 26th day of January, 1998, by the following roll call vote: AYES: 5 COUNCIL MEMBERS: Bowman, Carroll, Keenan, Piercy and Jones NOES: 0 COUNCIL MEMBERS None ABSENT: 0 COUNCIL MEMBERS: None CITY CLERK OF THE CITY OF CYPRESS