Except as set forth above, the City and the Fiscal Agent may treat as and deem DTC to be the absolute Owner of each Bond, for which DTC is acting as Depository for the purpose of payment of the principal of and premium and interest on such Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bonds, for the purpose of registering transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent on behalf of the City shall pay all principal of and premium and interest on the Bonds only to or upon the order of the Owners as shown on the Bond register, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and premium and interest on the Bonds to the extent of the sums or sums so paid.
No person other than an Owner, as shown on the Bond register, shall receive a physical Bond. Upon delivery by DTC to the City and the Fiscal Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section 2.06 hereof, references to “Cede & Co.” in this Section 2.10 shall refer to such new nominee of DTC.
21 DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and to the Fiscal Agent during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or that continuation of the system of book-entry transfer through DTC is not in the best interest of the Beneficial Owners, and the City shall mail notice of such termination to the Fiscal Agent.
Upon termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing to undertake such functions upon reasonable or customary terms, or if the City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certified Bonds, the Bonds shall no longer be restricted to being registered in the Bond register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names the Owners shall designate at that time, in accordance with Section 2.06.
To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.06, the Bonds will be delivered to such Beneficial Owners. 22 ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of 2023 Bonds. At any time after the execution of this Agreement, the City may issue the 2023 Bonds for the CFD with respect to Improvement Area No. 2 in the aggregate principal amount set forth in Section 2.01 and deliver the 2023 Bonds to the Fiscal Agent for authent ication and delivery to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to execute and deliver any and all documents and instruments necessary to cause the issuance of the 2023 Bonds in accordance with the pr ovisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the 2023 Bonds and to do and cause to be done any and all acts and things necessary or c onvenient for the timely delivery of the 2023 Bonds to the Original Purchaser. The Fiscal Agent is hereby authorized and directed to authenticate the 2023 Bonds and deliver them to the Original Purchaser, upon receipt of the purchase price for the 2023 Bonds.
Section 3.02. Pledge of Special Tax Revenues. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Special Tax Revenues and all moneys deposited in the Bond Fund (including the Special Tax Prepayments Account), and, until disbursed as provided herein, in the Special Tax Fund. The Special Tax Revenues and all moneys deposited into such funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided herein and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose under Section
9.03. The 2023 Bonds and all 2023 Related Parity Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all moneys deposited in the 2023 Reserve Fund . The moneys in the 2023 Reserve Fund (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the 2023 Bonds and all 2023 Related Parity Bonds as provided herein and in the Act until all of the 2023 Bonds and all 2023 Related Parity Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose u nder Section 9.03.
Amounts in the Improvement Fund (and the accounts therein), the Administrative Expense Fund and the Costs of Issuance Fund are not pledged to the repayment of the Bonds. The Project is not pledged to the repayment of the Bonds, nor are the proceeds of any condemnation or insurance award received by the City with respect to the Project.
Section 3.03. Limited Obligation. All obligations of the City under this Agreement and the Bonds shall not be general obligations of the City, but shall be limited obligations, payable solely from the Special Tax Revenues and the funds pledged therefor hereunder. Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth herein) or of the State of California or any political subdivision thereof is pledged to the payment of the Bonds.
Section 3.04. No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the redemption of Bonds 23 under Section 2.03, or the defeasance of the Bonds and discharge of this Agreement under Section 9.03.
Section 3.05. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion of the acquisition of the Project or upon the performance by any person of his obligation with respect to the Project.
Section 3.06. Parity Bonds. In addition to the 2023 Bonds, the City may issue Refunding Bonds as Parity Bonds in such principal amount as shall be determined by the City, under a Supplemental Agreement entered into by the City and the Fiscal Agent. Any such Parity Bonds shall constitute Bonds hereunder and shall be secured by a lien on the Special Tax Revenues and funds pledged for the payment of the Bonds hereunder on a parity with all other Bonds Outstanding hereunder. The City may issue such Parity Bonds subject to the following specific conditions precedent:
(A) Compliance. Following issuance of the Parity Bonds, the City shall be in compliance with all covenants set forth in this Agreement and all Supplemental Agreements, and issuance of the Parity Bonds shall not cause the City to exceed the bonded indebtedness limit of Improvement Area No. 2.
(B) Same Payment Dates . The Supplemental Agreement providing for the issuance of such Parity Bonds shall provide that interest thereon shall be payable on the Interest Payment Dates, and principal thereof shall be payable on September 1 (provided that there shall be no requirement that any Parity Bonds pay interest on a current basis).
(C) Debt Service Reserve Fund. The Supplemental Agreement providing for issuance of the Parity Bonds shall provide for either of the following:
(i) a deposit to the 2023 Reserve Fund in an amount necessary such that the amount deposited therein shall equal the 2023 Reserve Requirement following issuance of the Parity Bonds or
(ii) a deposit to a reserve account for the Parity Bonds (and such other series of Parity Bonds identified by the City) so that the amount therein shall equal the Parity Reserve Requirement following the issuance of the Parity Bonds , as long as such Supplemental Agreement expressly declares that the Owners of such Parity Bonds will have no interest in or claim to the 2023 Reserve Fund and that the Owners of the Bonds covered by the 2023 Reserve Fund will have no interest in or claim to such other reserve account.
(D) Certificates. The City shall deliver to the Fiscal Agent an Officer's Certificate certifying that the conditions precedent to the issuance of such Parity Bonds set forth in subsections (A), (B) and (C) of this Section 3.06 have been satisfied.
Nothing in this Section 3.06 shall prohibit the City from issuing any other bonds or otherwise incurring debt secured by a pledge of the Special Tax Revenues subordinate to the pledge thereof under Section 3.02 of this Agreement.
24 ARTICLE IV
PROCEEDS, FUNDS AND ACCOUNTS
Section 4.01. Application of 2023 Bond Proceeds. The Proceeds of the 2023 Bonds received from the Original Purchaser in the amount of $____________ (which is equal to the initial principal amount of the 2023 Bonds, plus an original issue premium of $__________, less an underwriter’s discount in the amount of $_________) shall be paid to the Fiscal Agent, which shall deposit the Proceeds on the Closing Date as follows:
(i) $ __________ into the Costs of Issuance Fund;
(ii) $ __________ into the 2023 Reserve Fund equaling the initial 2023 Reserve Requirement;
(iii) $ ____________ into the Bond Proceeds Account of the Improvement Fund; and
(iv) $ __________ into the Administrative Expense Fund
The Fiscal Agent may, in its discretion, establish a temporary fund or account to facilitate the foregoing deposits.
Section 4.02. Costs of Issuance Fund.
(A) Establishment of Costs of Issuance Fund. The Costs of Issuance Fund is hereby established as a separate fund to be held by the Fiscal Agent, to the credit of which a deposit shall be made as required by Section 4.01.
Moneys in the Costs of Issuance Fund shall be held by the Fiscal Agent for the benefit of the City and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance.
(B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in a requisition substantially in the form of Exhibit C hereto, executed by the Finance Director, containing respective amounts to be paid to the designated payees and delivered to the Fiscal Agent. Each such requisition shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts.
(C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited by the Fiscal Agent under Section 6.01. Interest earnings and profits resulting from such investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund.
(D) Closing of Fund. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 90 days from the Closing Date and then the Fiscal Agent shall transfer any moneys remaining therein, including any investment 25 earnings thereon, to the Bond Proceeds Account of the Improvement Fund and used for the purposes thereof.
Section 4.03. 2023 Reserve Fund.
(A) Establishment of Fund. The 2023 Reserve Fund is hereby established as a separate fund to be held by the Fiscal Agent to the credit of which a deposit shall be made as required by Section 4.01, which deposit, as of the Closing Date, is equal to the initial 2023 Reserve Requirement with respect to the 2023 Bonds, and deposits shall be made as provided in Sections 3.06(C) and
4.05(A) and (B). Moneys in the 2023 Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the 2023 Bonds and any 2023 Related Parity Bonds as a reserve for the payment of the principal of, and interest and any premium on, the 2023 Bonds and any 2023 Related Parity Bonds and shall be subject to a lien in favor of the Owners of the 2023 Bonds and any 2023 Related Parity Bonds.
(B) Use of 2023 Reserve Fund. Except as otherwise provided in this Section, all amounts deposited in the 2023 Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the 2023 Bonds and any 2023 Related Parity Bonds or, in accordance with the provisions of this Section, for the purpose of redeeming 2023 Bonds and any 2023 Related Parity Bonds from the Bond Fund. Whenever a transfer is made from the 2023 Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund for payment of the principal of, and interest and any premium on, the 2023 Bonds and any 2023 Related Parity Bonds, the Fiscal Agent shall provide written notice thereof to the Finance Director, specifying the amount withdrawn.
(C) Transfer of Excess of 2023 Reserve Requirement. Whenever, on or before any Interest Payment Date, or on any other date at the request of the Finance Director, the amount in the 2023 Reserve Fund exceeds the 2023 Reserve Requirement, the Fiscal Agent shall transfer an amount equal to the excess from the 2023 Reserve Fund to the Bond Fund, to be used to pay interest on the 2023 Bonds and any 2023 Related Parity Bonds on the next Interest Payment Date.
(D) Transfer for Rebate Purposes. Amounts in the 2023 Reserve Fund shall be withdrawn for purposes of making payment to the federal government to comply with Section 5.11, upon receipt by the Fiscal Agent of an Officer's Certificate specifying the amount to be withdrawn and to the effect that such amount is needed for rebate purposes; provided, however, that no amounts in the 2023 Reserve Fund shall be used for rebate unless the amount in the 2023 Reserve Fund following such withdrawal equals the 2023 Reserve Requirement.
(E) Transfer When Balance Exceeds Outstanding Bonds.
Whenever the balance in the 2023 Reserve Fund exceeds the amount required to redeem or pay the Outstanding 2023 Bonds and all Outstanding 2023 Related Parity Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon the written 26 request of the Finance Director, transfer any cash or Permitted Investments in the 2023 Reserve Fund to the Bond Fund to be applied, on the redemption date to the payment and redemption, in accordance with Section 4.04 or 2.03 and the provisions of the Supplemental Agreement related to the 2023 Related Parity Bonds, as applicable, of all of the Outstanding 2023 Bonds and Outstanding 2023 Related Parity Bonds. In the event that the amount so transferred from the 2023 Reserve Fund to the Bond Fund exceeds the amount required to pay and redeem the Outstanding 2023 Bonds and Outstanding 2023 Related Parity Bonds, the balance in the 2023 Reserve Fund shall be transferred to the Finance Director to be used by the City for any lawful purpose.
Notwithstanding the provisions of the first paragraph of this Section
4.03(E), no amounts shall be transferred from the 2023 Reserve Fund under this Section 4.03(E) until after: (i) the calculation of any amounts due t o the federal government under Section 5.11 and withdrawal of any such amount under Section
4.03(D) for purposes of making such payment to the federal government; and (ii) payment of any fees and expenses due to the Fiscal Agent.
(F) Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and 2023 Bonds or any 2023 Related Parity Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.03(A)(iii) or a Supplemental Agreement related to any 2023 Related Parity Bon ds, any resulting reduction in the 2023 Reserve Requirement shall be transferred on the Business Day prior to the redemption date by the Fiscal Agent to the Bond Fund to be applied to the redemption of the 2023 Bonds pursuant to Section 2.03(A)(iii) or a S upplemental Agreement related to any 2023 Related Parity Bonds. The Finance Director shall deliver to the Fiscal Agent an Officer’s Certificate specifying any amount to be so transferred, and the Fiscal Agent may rely on any such Officer’s Certificate.
(G) Investment. Moneys in the 2023 Reserve Fund shall be invested by the Fiscal Agent under Section 6.01.
(H) Qualified Reserve Account Credit Instrument s. The City shall have the right at any time to direct the Fiscal Agent to release funds from the 2023 Reserve Fund, in whole or in part, by tendering to the Fiscal Agent: (i) a Qualified Reserve Account Credit Instrument, and (ii) an opinion of Bond Counsel stating that neither the release of such funds nor the acceptance of such Qualified Reserve Account Credit Instrument will cause interest on the 2023 Bonds or any 2023 Related Parity Bonds the interest on which is excluded from gross income of the owners thereof for federal income tax purposes to become includable in gross income for purposes of federal income taxation. Upon tender of such items to the Fiscal Agent, and upon delivery by the City to the Fiscal Agent of a written calculation of the amount permitted to be released from the 2023 Reserve Fund (upon which calculation the Fiscal Agent may conclusively rely), the Fiscal Agent shall transfer such funds from the 2023 Reserve Fund to the Bond Proceeds Account of the Improvement Fund to be used for the purposes thereof. The Fiscal Agent shall comply with all documentation relating to a Qualified Reserve Account Credit Instrument as shall be required to maintain such Qualified Reserve Account Credit Instrument in full force and effect and as shall be required to receive payments thereunder in the event and to the extent required to make any payment 27 when and as required under this Section. Upon the scheduled expiration of any Qualified Reserve Account Credit Instrument, the City shall either (i) replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit Instrument, or (ii) deposit or cause to be deposited with the Fiscal Agent an amount of funds equal to the 2023 Reserve Requirement, to be derived from the first available Special Tax Revenues. If the 2023 Reserve Requirement is being maintained partially in cash and partially with a Qualified Reserve Account Credit Instrument, the cash shall be first used to meet any deficiency which may exist from time to time in the Bond Fund with respect to the 2023 Bonds and any Related Parity Bonds. If the 2023 Reserve Requirement is being maintained with two or more Qualified Reserve Account Credit Instruments, any draw to meet a deficiency which may exist from time to time in the Bond Fund with respect to the 2023 Bonds and any 2023 Related Parity Bonds shall be pro-rata with respect to each such instrument.
In the event that a Qualified Reserve Account Credit Instrument is available to be drawn upon for only one or more particular series of Bonds, a separate subaccount in the 2023 Reserve Fund may be established for such series, and the calculation of the 2023 Reserve Requirement with respect to any Bonds shall exclude the debt service on such issue of Bonds.
The City will have no obligation to replace a Qualified Reserve Account Credit Instrument or to fund the 2023 Reserve Fund with cash if, at any time that the 2023 Bonds are Outstanding, the Qualified Reserve Account Credit Instrument (or its provider) is downgraded or the provider becomes insolvent, if there is an unscheduled termination of the Qualified Reserve Account or if for any reason insufficient amounts are available to be drawn upon under the Qualified Reserve Account Credit Instrument ; provided, however, that the City shall reimburse the provider, in accordance with the terms of the Qualified Reserve Account Credit Instrument, for any draws made thereon.
The City and the Fiscal Agent shall comply with the terms of the Qualified Reserve Account Credit Inst rument as shall be required to receive payments thereunder in the event and to the extent required under this Section.
Section 4.04. Bond Fund.
(A) Establishment of Bond Fund . The Bond Fund is hereby established as a separate fund to be held by the Fiscal Agent to the credit of which deposits shall be made as required by Section 4.01, Section 4.07 and Section 4.03 and as otherwise set forth in this Agreement. Moneys in the Bond Fund shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, and shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below.
There is also hereby created in the Bond Fund a separate account to be held by the Fiscal Agent, designated the “Special Tax Prepayments Account,” to the credit of which deposits shall be made as provided in clause (iii) of the second paragraph of Section 4.05(A).
28 (B) Disbursements. At least 10 Business Days before each Interest Payment Date, the Fiscal Agent shall notify the Finance Director in writing as to the principal and premium, if any, and interest due on the Bonds on the next Interest Payment Date (whether as a result of scheduled principal of and interest on the Bonds, optional redemption of the Bonds or a mandatory sinking fund redemption). On each Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bonds the principal of, and interest and any premium, due and payable on such Interest Payment Date on the Bonds.
At least 5 Business Days prior to each Interest Payment Date, the Fiscal Agent shall determine if the amounts then on deposit in the Bond Fund are sufficient to pay the Debt Service due on the Bonds on the next Interest Payment Date. In the event that amounts in the Bond Fund are insufficient for such purpose, the Fiscal Agent promptly shall notify the Finance Director by telephone (and confirm in writing) of the amount of the insufficiency.
In the event that amounts in the Bond Fund are insufficient for the purpose set forth in the preceding paragraph with respect to any Interest Payment Date, the Fiscal Agent shall do the following:
(i) Withdraw from the 2023 Reserve Fund, in accordance with the provisions of Section 4.03, to the extent of any funds or Permitted Investments therein, amounts to cover the amount of such Bond Fund insufficiency related to the 2023 Bonds and any 2023 Related Parity Bonds.
Amounts so withdrawn from the 2023 Reserve Fund shall be deposited in the Bond Fund.
(ii) Withdraw from the reserve funds, if any, established under a Supplemental Agreement related to Parity Bonds that are not 2023 Related Parity Bonds, to the extent of any funds or Permitted Investments therein, amounts to cover the amount of such Bond Fund insufficiency related to such Parity Bonds. Amounts so withdrawn from any such reserve fund shall be deposited in the Bond Fund.
If, after the foregoing transfers, there are insufficient funds in the Bond Fund to make the payments provided for in the second sentence of the first paragraph of this Section 4.04(B), the Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bonds other than by reason of sinking payments, if any, and then to payment of principal due on the Bonds by reason of sinking payments. The available funds in the Bond Fund shall be allocated among the series of Outstanding Bonds based on the principal amount of the Outstanding Bonds without regard to the availability of moneys from the 2023 Reserve Fund or another debt service reserve account.
(C) Disbursements from the Special Tax Prepayments Account .
Moneys in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent to the Bond Fund on the next date for which notice of redemption of Bonds can timely be given under Section 2.03(A)(iii), and notice to the Fiscal Agent can timely be given under Sec tion 2.03(B), and shall be used (together with any 29 amounts transferred pursuant to Section 4.03(F)) to redeem Bonds on the redemption date selected in accordance with Section 2.03.
(D) Investment. Moneys in the Bond Fund and the Special Tax Prepayments Account shall be invested under Section 6.01. Interest earnings and profits resulting from such investment shall be retained in the Bond Fund.
(E) Deficiency. If at any time it appears to the Fiscal Agent that there is a danger of deficiency in the Bond Fund and that the Fiscal Agent may be unable to pay Debt Service on the Bonds in a timely manner, the Fiscal Agent shall report to the Finance Director such fact. The City covenants to increase the levy of the Special Taxes in the next Fiscal Year (subject to the maximum amount authorized by the Resolution of Formation) in accordance with the procedures set forth in the Act for the purpose of curing Bond Fund deficiencies.
(F) Excess. Any excess moneys remaining in the Bond Fund following the payment of Debt Service on the Bonds on any September 1, shall be transferred to the Special Tax Fund.
Section 4.05. Special Tax Fund.
(A) Establishment of Special Tax Fund. The Special Tax Fund is hereby established as a separate fund to be held by the Fiscal Agent, to the credit of which the Fiscal Agent shall deposit amounts received from or on behalf of the City consist ing of Special Tax Revenues and amounts transferred from the Administrative Expense Fund and the Bond Fund. The City shall promptly remit any Special Tax Revenues received by it to the Fiscal Agent for deposit by the Fiscal Agent to the Special Tax Fund.
Notwithstanding the foregoing,
(i) Special Tax Revenues in an amount not to exceed the amount included in the Special Tax levy for such Fiscal Year for Administrative Expenses shall be separately identified by the Finance Director and shall be deposited by the Fiscal Agent in the Administrative Expense Fund;
(ii) any Special Tax Revenues constituting the collection of delinquencies in payment of Special Taxes shall be separately identified by the Finance Director and shall be disposed of by the Fiscal Agent first, for transfer to the Bond Fund to pay any past due Debt Service on the Bonds; second, without preference or priority, for transfer to the 2023 Reserve Fund to the extent needed to increase the amount then on deposit in the 2023 Reserve Fund u p to the then 2023 Reserve Requirement and for transfer to the reserve account for any Parity Bonds that are not 2023 Related Parity Bonds to the extent needed to increase the amount then on deposit therein to the required level; and third, to be held in the Special Tax Fund for use as described in Section 4.05(B) below; and
(iii) any proceeds of Special Tax Prepayments shall be separately identified by the Finance Director and shall be deposited by the Fiscal Agent as follows (as directed in writing by the Finance Director): (a) that 30 portion of any Special Tax Prepayment constituting a prepayment of construction costs (which otherwise could have been included in the proceeds of Parity Bonds) shall be deposited by the Fiscal Agent to the Bond Proceeds Account of the Improvement Fund and (b) the remaining Special Tax Prepayment shall be deposited by the Fiscal Agent in the Special Tax Prepayments Account established pursuant to Section
4.04(A).
(B) Disbursements. At least 7 Business Days prior to each Interest Payment Date, the Fiscal Agent shall withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority:
(i) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Improvement Fund, the 2023 Reserve Fund, any reserve account for Parity Bonds that are not 2023 Related Parity Bonds , any capit alized interest account for Parity Bonds, and the Special Tax Prepayments Account to the Bond Fund such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on such Interest Payment Date and any past due principal or interest on the Bonds not theretofore paid from a transfer described in subparagraph (ii) of the second paragraph of Section 4.05(A),
(ii) without preference or priority (a) to the 2023 Reserve Fund an amount, taking into account amounts then on deposit in the 2023 Reserve Fund, such that the amount in the 2023 Reserve Fund is equal to the 2023 Reserve Requirement, and (b) to the reserve account for any Parity Bonds that are not 2023 Related Parity Bonds, taking into account amounts then on deposit in the such reserve account, such that the amount in such reserve account is equal to the amount required to be on deposit therein (and in the event that amounts in the Special Tax Fund are not sufficient for the purposes of this paragraph, such amounts shall be applied to the 2023 Reserve Fund and any other reserve accounts ratably based on the then Outstanding principal amount of the Bonds), and
(iii) (A) on each October 1, beginning on October 1, 2024, and continuing through the Remainder Taxes Period, all of the moneys remaining in the Special Tax Fund shall be transferred to the Remainder Taxes Account and (B) on each subsequent October 1 after the end of the Remainder Taxes Period, all or a portion of the moneys remaining in the Special Tax Fund shall be transferred to the Remainder Taxes Account as directed by the Finance Director.
Within 15 days after the end of each Bond Year after the Remainder Taxes Account is closed pursuant to Section 4.07, and after the foregoing transfers have been made, the Fiscal Agent shall transfer all amounts remaining on deposit in the Special Tax Fund for any lawful purpose, as directed by the City in an Officer’s Certificate.
(C) Investment. Moneys in the Special Tax Fund shall be invested and deposited by the Fiscal Agent under Section 6.01. Interest earnings and profits 31 resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof.
Section 4.06. Administrative Expense Fund.
(A) Establishment of Administrative Expense Fund. The
Administrative Expense Fund is hereby established as a separate fund to be held by the Fiscal Agent, to the credit of which deposits shall be made as required by Section 4.01 and Section 4.05( A). Moneys in the Administrative Expense Fund shall be held by the Fiscal Agent for the benefit of the City, and shall be disbursed as provided below.
(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Fiscal Agent and paid to the City or its order upon receipt by the Fiscal Agent of an Officer’s Certificate, in substantially the form of Exhibit D hereto, stating the amount to be withdrawn, that such amount is to be used to pay an Administrative Expense or a Cost of Issuance and the nature of such Administrative Expense or such Cost of Issuance.
Annually, on the last day of each Fiscal Year, the Fiscal Agent shall withdraw from the Administrative Expense Fund and transfer to the Special Tax Fund any amount in excess of that which is needed to pay any Administrative Expenses incurred but not yet paid, and which are not otherwise encumbered, as identified by the Finance Director in an Officer's Certificate.
Proceeds of the 2023 Bonds deposited into the Administrative Expense Fund shall be spent before any other moneys in the Administrative Expense Fund.
(C) Investment. Moneys in the Administrative Expense Fund shall be invested by the Fiscal Agent under Section 6.01. Interest earnings and profits resulting from such investment shall be retained by the Fiscal Agent in the Administrative Expense Fund to be used for the purposes of such fund.
Section 4.07. Improvement Fund.
(A) Establishment of Improvement Fund. The Improvement Fund is hereby established as a separate fund to be held by the Fiscal Agent and to the credit of which fund deposits shall be made as required by Sections 4.01, 4.02(D) and 4.05(A). The Remainder Taxes Account and the Bond Proceeds Account are hereby established as separate accounts within the Improvement Fund to be held by the Fiscal Agent.
Moneys in the Improvement Fund shall be disbursed, except as otherwise provided in subsections (B) and (D) of this Section, for the payment or reimbursement of costs of the Project.
(B) Procedure for Disbursement . Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer's Certificate substantially in the form of Exhibit B attached hereto which shall:
32 (i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made (which shall be for payment of a Project cost or to reimburse expenditures of the City or any other party for Project costs previously paid), and the person to which the disbursement is to be paid; and
(ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officers Certificate previously filed requesting disbursement.
Each such requisition shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts.
Disbursements for the payment or reimbursement of costs of the Project shall be made from the Bond Proceeds Account and the Remainder Taxes Account in the following order:
First: payments or reimbursements shall be made from the Bond Proceeds Account so long as there are moneys available therein and such costs can be paid from Bond proceeds without violating the covenants set forth in Sections 5.09-5.14 and
Second: payments or reimbursements shall be made from the Remainder Taxes Account (1) even if Bond proceeds remain in the Bond Proceeds Account, if such payment or reimbursement would violate the covenants set forth in Sections
5.09-5.14 and (2) when no Bond proceeds remain in the Bond Proceeds Account.
At the direction of the Finance Director, and so long as such amounts have not been previously approved for payment of a Project cost, the Fiscal Agent shall transfer amounts from the Remainder Taxes Account to the Bond Fund to pay Debt Service on the Bonds, the Administrative Expense Fund to pay Administrative Expenses, the 2023 Reserve Fund to increase the amount therein to the 2023 Reserve Requirement, and the reserve account for Parity Bonds that are not 2023 Related Parity Bonds that is held by the Fiscal Agent to increase the amount therein to the Parity Reserve Requirement.
Notwithstanding the foregoing, and except as provided in the final paragraph of this Section 4.07(B), the Set -Aside Amount may be disbursed from the Bond Proceeds Account upon receipt of an Officer’s Certificate that includes a representation that either:
(1) (a) the Phase 1B City Park has been constructed by the Developer, (b) the Phase 1B City Park has been inspected by the City, and (c) the City has determined that the Phase 1B City Park has been constructed in accordance with approved plans and specifications and all applicable City standards (other than any items identified by the City that need to be addressed before the Phase 1B City Park can be deemed complete by the City, and which the City and the Developer estimate to cost no more than $100,000 in the aggregate), or
(2) the City has determined that each parcel of Taxable Property (as defined in the Rate and Method) in Improvement Area No. 2 has a Value that is at least three (3) times the sum of: (a) the allocable principal amount of the Bonds then Outstanding, plus (b) the 33 aggregate principal amount of any fixed assessment liens on the parcel, plus ( c) the allocable principal amount of any and all Other District Bonds that are payable at least in part from special taxes levied on such parcel.
Upon satisfaction of the condition set forth in clauses (1) or (2) of the preceding paragraph, the City may apply the Set- Aside Amount (including any accrued interest earnings thereon, if any) on deposit in the Bond Proceeds Account for (i) the costs of Facilities described in the Certificate Regarding Use of Proceeds for the 2023 Bonds or (ii) such other costs of Facilities with respect to which the City has received an opinion of Bond Counsel to the effect that such application of the Set-Aside Amount (including any accrued interest earnings thereon, if any) for such other costs of Facilities, in and of itself, will not adversely impact the exclusion of interest on the 2023 Bonds from gross income of the Owners of the 2023 Bonds for federal income tax purposes, and for which the City has determined such application is consistent with the requirements of the Acquisition Agreement.
For purposes of clause (2) of t he second preceding paragraph, “Value” means the market value, as of the date of the appraisal described below and/or the date of the most recent County real property tax roll, as applicable, and, with respect to Undeveloped Property (as defined in the Rate and Method) only, not delinquent in the payment of any Special Taxes then due and owing, including with respect to such parcels the value of the then existing improvements and any facilities to be constructed or acquired with any amounts then on deposit in the Improvement Fund, as determined with respect to any parcel by reference to (i) an appraisal performed within ninety (90) days of the date of the Officer’s Certificate or (ii) in the alternative, the assessed value of the parcel and improvements thereon described in clause (i) as shown on the then current County real property tax roll available to the Finance Director. It is expressly acknowledged that, in determining the Value, the City may rely on an appraisal to determine the value of some or all of the parcels and/or the most recent County real property tax roll as to the value of some or all of the parcels. Neither the City nor the Finance Director shall be liable to the Owners or any other person or entity in respect of any appraisal provided for purposes of this definition or by reason of any exercise of discretion made by any Appraiser pursuant to this definition.
If
the condition set forth in clauses (1) or (2) of the third preceding paragraph have not been satisfied by June 1, 2026, then on such date (or as soon thereafter as possible) the City shall direct the Fiscal Agent to transfer the Set-Aside Amount (including any accrued interest earnings thereon, if any) on deposit in the Bond Proceeds Account to the Bond Fund and the Fiscal Agent shall use such proceeds to redeem 2023 Bonds on the first optional redemption date or to pay scheduled debt service on the 2023 Bonds, as directed by the City. This mandatory transfer applies only to the Set -Aside Amount (and accrued interest) and only if the conditions set forth in clauses (1) or (2) of the third preceding paragraph have not been satisfied.
(C) Investment. Moneys in the Improvement Fund shall be invested in accordance with Section 6.01. Interest earnings and profits from such investment shall be retained in the Improvement Fund to be used for the purpose of such fund.
(D) Closing of Fund. When the City believes that the Project has been completed, it shall provide a written notice to the Developer that the City believes the Project has been completed and that the Improvement Fund, Bond Proceeds 34 Account and Remainder Taxes Account should be closed. The Developer shall have 30 days after receipt of such notice to dispute the City’s finding or to concur that the Project is complete. If the Developer concurs that the Project is complete, or fails to respond to the notice by the end of the 30-day period, the City may file an Officer’s Certificate directing the Fiscal Agent to close the Improvement Fund, Bond Proceeds Account and Remainder Taxes Account.
Upon the filing of an Officer’s Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, Bond Proceeds Account and Rema inder Taxes Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund, Bond Proceeds Account and Remainder Taxes Account to the Bond Fund for application to Debt Service payments due on the next succeeding Interest Payment Date and the Improvement Fund, Bond Proceeds Account and Remainder Taxes Account shall be closed. Moneys transferred from the Improvement Fund to the Bond Fund shall be used to pay Debt Service on the Bonds in the manner specified by the City in an Officer’s Certificate.
35 ARTICLE V
COVENANTS
Section 5.01. Collection of Special Tax Revenues. The City shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes.
(A) Processing. On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide the Finance Director with a notice stating (i) the amount then on deposit in the Bond Fund, the 2023 Reserve Fund and any reserve account for Parity Bonds that are not 2023 Related Parity Bonds that is held by the Fiscal Agent, and (ii) if the amount in the 2023 Reserve Fund is less than the 2023 Reserve Requirement or the amount in such other reserve account held by the Fiscal Agent is less than the Parity Reserve Requirement, informing the City that replenishment of the 2023 Reserve Fund or reserve account is necessary. The receipt of or failure to receive such notice by the Finance Director shall in no way affect the obligations of the Finance Director under the following two paragraphs and the Fiscal Agent shall not be liable for failure to provide such notices to the Finance Director. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits or combinations during the preceding and then current year.
(B) Levy. The Finance Director shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each August 1 that the Bonds are outstanding, or otherwise such that the computation of the levy is complete before the final date on which Auditor will accept the transmission of the Special Tax amounts for the parcels within Improvement Area No. 2 for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll.
(C) Computation. The Finance Director shall fix and levy the amount of Special Taxes within Improvement Area No. 2 required to pay the following amounts, taking into account the balances in the applicable funds established under this Agreement: (i) the principal of and interest on any outstanding Bonds of the CFD with respect to Improvement Area No. 2 becoming due and payable during the ensuing calendar year, (ii) any necessary replenishment or expenditure of the 2023 Reserve Fund and any other reserve account for Parity Bonds that are not 2023 Related Parity Bonds to the extent such replenishment has not been included in the computation of the Special Taxes in a previous Fiscal Year, (iii) the Administrative Expenses, including amounts necessary to discharge any rebate obligation, during such year, (iv) an amount to cure delinquencies in the payment of principal or interest on Bonds that occurred in the previous Fiscal Year, and (v) any Project costs to be paid from Special Taxes to the extent that paying for such costs does not increase the Special Taxes levied on Undeveloped Property (as defined in the Rate and Method). During the Remainder Taxes Period, the Finance 36 Director shall fix and levy the Special Taxes at the Maximum Special Tax rate on Developed Property before considering any Capitalized Interest (as those terms are defined in the Rate and Method). The Special Taxes so levied shall not exceed the authorized amounts as provided in the proceedings under the Resolution of Formation.
(D) Collection. Except as set forth in the Ordinance, Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property.
Section 5.02. Covenant to Foreclose. Under the Act, the City hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced as hereinafter provided, and thereafter diligently prosecute to judgment (unless such delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as provided in the following two paragraphs. The Finance Director shall notify the City Attorney of any such delinquency of which the Finance Director is aware, and the City Attorney shall commence, or cause to be commenced, such proceedings.
On or about June 30 of each Fiscal Year, the Finance Director shall compare the amount of Special Taxes theretofore levied in Impro vement Area No. 2 to the amount of Special Tax Revenues theretofore received by the City, and:
(A) Individual Delinquencies. If the Finance Director determines that any single parcel subject to the Special Tax in Improvement Area No. 2 is delinquent in the payment of four installments of Special Taxes, then the Finance Director shall send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the City within 90 days of such determination.
Notwithstanding the foregoing, the Finance Director may defer any such actions with respect to a delinquent parcel if (1) Improvement Area No. 2 is then participating in the Alternative Method of Distribution of Tax Levies and Collections described in Revenue & Taxation Code Section 4701 et seq., or an equivalent procedure, (2) the amount in the 2023 Reserve Fund is at least equal to the 2023 Reserve Requirement and (3) the amount in the reserve account for any Parity Bonds that are not 2023 Related Parity Bonds is at least equal to the Parity Reserve Requirement.
(B) Aggregate Delinquencies. If the Finance Director determines that (i) the total amount of delinquent Special Tax for the prior Fiscal Year for the entire Improvement Area No. 2 (including the total of delinquencies under subsection (A) above), exceeds 5% of the total Special Tax due and payable for the prior Fiscal Year, determined by reference to the latest available secured property tax roll of the County, the Finance Director shall notify or cause to be notified property owners who are then delinquent in the payment of Special Taxes (and demand immediate payment of the delinquency) within 45 days of such determination, and shall commence foreclosure proceedings within 90 days of such determination 37 against each parcel of land in Improvement Area No. 2 with a Special Tax delinquency.
The Finance Director and the City Attorney, as applicable, are hereby authorized to employ counsel to conduct any such foreclosure proceedings. The fees and expenses of any such counsel (including a charge for City staff time) in conducting foreclosure proceedings shall be an Administrative Expense hereunder.
Section 5.03. Punctual Payment. The City will punctually pay or cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.
Section 5.04. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City , such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 5.05. Against Encumbrances. The City will not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, or their Owners, except as permitted by this Agreement.
Section 5.06. Books and Records.
(A) City. The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions relating to the Special Tax Revenues. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Fiscal Agent (who shall have no duty to inspect) and the Owners of not less than 10% of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
(B) Fiscal Agent . The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it relating to the expenditure of amounts disbursed from the funds, and, if any, accounts in such funds held by the Fiscal Agent hereunder.
Such books of record and accounts shall at all times during business hours be subject to the inspection of the City and the Owners of not less than 10% of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing upon reasonable prior notice.
38 Section 5.07. Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.
Section 5.08. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Agreement.
Section 5.09. Private Activity Bond Limitations. The City shall assure that the proceeds of the 2023 Bonds are not so used as to cause the 2023 Bonds to satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the Code.
Section 5.10. Federal Guarantee Prohibition . The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2023 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code.
Section 5.11. Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the 2023 Bonds. The Finance Director shall take note of any investment of monies hereunder in excess of the yield on the 2023 Bonds, and shall take such actions as are necessary to ensure compliance with this Section 5.11, such as increasing the portion of the Special Tax l evy for Administrative Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section. If necessary to satisfy its obligations under this Section 5.11, the City may use:
(A) Amounts in the 2023 Reserve Fund if the amount on deposit in the 2023 Reserve Fund, following the proposed transfer, is at least equal to the 2023 Reserve Requirement, and amounts in any other reserve account for Parity Bonds that are not 2023 Related Parity Bonds to the extent permitted by the Supplemental Agreement;
(B) Amounts on deposit in the Administrative Expense Fund; and
(C) Any other funds available to the City, including amounts advanced by the City, in its sole discretion, to be repaid as soon as practicable from amounts described in the preceding clauses (A) and (B).
Section 5.12. No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the 2023 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2023 Bonds would have caused the 2023 Bonds to be “arbitrage bonds” within the meaning of section 148 of the Tax Code.
Section 5.13. Yield of the 2023 Bonds. In determining the yield of the 2023 Bonds to comply with Sections 5.11 and 5.12, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing 39 Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the 2023 Bonds, without regard to whether or not prepayments are received or 2023 Bonds redeemed.
Section 5.14. Maintenance of Tax- Exemption; Record Retention; Compliance with Tax Certificates. The City shall take all actions necessary to assure the exclusion of interest on the 2023 Bonds from the gross income of the Owners of the 2023 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the 2023 Bonds.
The City will retain its records of all accounting and monitoring it carries out with respect to the 2023 Bonds for at least 3 years after the 2023 Bonds mature or are redeemed (whichever is earlier); however, if the 2023 Bonds are redeemed and refunded, the City will retain its records of accounting and monitoring at least 3 years after the earlier of the maturity or redemption of the obligations that refunded the 2023 Bonds.
The City will comply with the provisions of the Certificate as to Arbitrage and the Certificate Regarding Use of Proceeds with respect to the 2023 Bonds. The covenants of this paragraph will survive payment in full or defeasance of the 2023 Bonds.
Section 5.15. 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.
Notwithstanding any other provision of this Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default for the purposes of this Agreement. However, any Owner or Beneficial Owner of the 2023 Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.
One or more owners of the real property in Improvement Area No. 2 as of the Closing Date may also have executed a continuing disclosure agreement for the benefit of the Bondowners and Beneficial Owners of the 2023 Bonds. Any Participating Underwriter or Bondowner or Beneficial Owner may take such actions as may be necessary and appropriate directly against any such landowner to compel performance by it of its obligations thereunder, including seeking mandate or specific performance by court order; however the City shall have no obligation whatsoever to enforce any obligations under any such agreement.
Section 5.16. Limits on Special Tax Waivers and Bond Tenders. The City covenants not to exercise its rights under the Act to waive delinquency and redemption penalties related to the Special Taxes or to declare a Special Tax penalties amnesty program if to do so would materially and adversely affect the interests of the Owners of the Bonds and further covenants not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds and any Parity Bonds remaining Outstanding following such tender.
Section 5.17. City Bid at Foreclosure Sale. The City will not bid at a foreclosure sale of property in respect of delinquent Special Taxes, unless it expressly agrees to take the property subject to the lien for Special Taxes imposed by the City and that the Special Taxes levied on the property are payable while the City owns the property.
Section 5.18. Amendment of Rate and Method.
40 (A) General. The City shall not initiate proceedings under the Act to modify the Rate and Method if such modification would adversely affect the security for the Bonds. If an initiative is adopted that purports to modify the Rate and Method in a manner that would adversely affect the security for the Bonds, the City shall, to the extent permitted by law, commence and pursue reasonable legal actions to prevent the modification of the Rate and Method in a manner that would adversely affect the security for the Bonds.
(B) Exception. Notwithstanding clause (A) of this section, the City may initiate proceedings to reduce the maximum Special Tax rates under the Rate and Method, if, in connection therewith: (i) the City receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in Improvement Area No. 2 as of the July 1 preceding the reduction, the maximum amount of the Special Tax which may be levied on then-existing Taxable Property (as such term is defined in the Rate and Method) in each Bond Year for any Bonds and Parity Bonds Outstanding will equal at least the sum of the estimated Administrative Expenses and 110% of the Debt Service in each Bond Year on all Bonds and Parity Bonds to remain Outstanding after the reduction is approved; (ii) the reduction does not adversely affect the financing of the Project and (iii) the City is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. For purposes of estimating Administrative Expenses for the foregoing calculation, the Independent Financial Consultants will compute the Administrative Expenses for the current Fiscal Year and escalate such amounts by 2% in each subsequent Fiscal Year.
Section 5.19. Determination of Required Coverage. The City hereby determines that Required Coverage (as that term is defined in the Rate and Method) for each Fiscal Year is 110% of (A) the total Annual Debt Service of the then Outstanding Bonds for the Bond Year that commences in such Fiscal Year and (B) estimated Administrative Expenses for such Fiscal Year.
41 ARTICLE VI
INVESTMENTS; LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds.
(A) General. Moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, which in any event by their terms mature prior to the date on which such moneys are required to be paid out hereunder, as directed pursuant to an Officer’s Certificate filed with the Fiscal Agent at least two Business Days in advance of the making of such investments. In the absence of any such Officer’s Certificate, the Fiscal Agent shall hold such funds uninvested. The Finance Director shall make note of any investment of funds hereunder in excess of the yield on the Bonds so that appropriate actions can be taken to assure compliance with Section 5.11. Interest earnings on moneys invested in each fund or account created or established by this Agreement shall be credited to such fund or account, unless otherwise required by this Agreement.
(B) Moneys in Funds. Moneys in any fund or account created or established by this Agreement and held by the Finance Director shall be invested by the Finance Director in any Permitted Investment or in any other lawful investment for City funds, which in any event by its terms matures prior to the date on which such moneys are required to be paid out hereunder.
Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts.
Whenever in this Agreement any moneys are required to be transferred by the City to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments.
(C) Actions of Officials . The Fiscal Agent and its affiliates or the Finance Director may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. Neither the Fiscal Agent nor the Finance Director shall incur any liability for losses arising from any investments made pursuant to this Section. The Fiscal Agent shall not be required to determine the legality of any investments.
(D) Valuation of Investments. Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Tax Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Agreement or the Tax Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Tax Code and (unless valuation is undertaken at least annually) investments in the subaccounts within the 2023 Reserve Fund and any other reserve account held by the Fiscal Agent shall be valued at their present value (within the meaning of section 148 of the Tax Code).
The Fiscal Agent shall not be liable for verification of the application of such sections of the Tax Code or for any determination of Fair Market Value or present value and may conclusively rely upon an Officer’s Certificate as to such valuations.
(E) Commingled Money . Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of 42 particular funds or accounts of amounts received or held by the Fiscal Agent or the Finance Director hereunder, provided that the Fiscal Agent or the Finance Director, as applicable, shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement.
(F) Confirmations Waiver. The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the City periodic cash transaction statements which shall include detail for all investment transactions made by the Fiscal Agent hereunder.
(G) Sale of Investments . The Fiscal Agent or the Finance Director, as applicable, shall sell at Fair Market Value, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and neither the Fiscal Agent nor the Finance Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith.
Section 6.02. Liability of City.
(A) General. The City shall not incur any responsibility or liability in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder.
(B) Reliance. In the absence of bad faith, the City, including the Finance Director, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City by the Fiscal Agent or an Independent Financial Consultant and conforming to the requirements of this Agreement. The City, including the Finance Director, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be the City Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.
(C) No General Liability . No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
43 (D) Owner of Bonds . The City shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed.
Section 6.03. Employment of Agents by City . In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities.
44 ARTICLE VII
THE FISCAL AGENT
Section 7.01. The Fiscal Agent.
(A) Appointment. The Fiscal Agent is hereby appointed as the fiscal, authentication, paying and transfer agent hereunder for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied duties, covenants or obligations shall be read into this Agreement against the Fiscal Agent.
(B) Merger. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section 7.01 shall be the successor to such Fisc al Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The Fiscal Agent shall give the Finance Director written notice of any such succession hereunder.
(C) Removal. Upon 30 days written notice, the City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank, national banking association or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. If such bank, national banking association or trust company publishes a report of condition at least annually, pur suant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
(D) Resignation. The Fiscal Agent may at any time resign by giving written notice to the City by certified mail return receipt requested, and by giving to the O wners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.
(E) No Successor . If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.01 within 45 days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.
(F) Court Order . If, by reason of the judgment of any court, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Finance Director of the City in trust for the benefit of the Owners. The City covenants for the direct benefit of the Owners that its 45 Finance Director in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds.
Section 7.02. Liability of Fiscal Agent.
(A) General. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct.
The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. All indemnifications and releases from liability granted to the Fiscal Agent hereunder shall extend to the directors, officers and employees of the Fiscal Agent.
The Fiscal Agent shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (“unavailable delay”) in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fi res, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Fiscal Agent.
(B) Reliance. The Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, documents, written instructions or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement; but in the case of any such certificates, documents, written instructions or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, facsimile transmission, electronic mail, or other paper or document which it shall reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.
(C) No Duty to Inquire. The Fiscal Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the City or the CFD herein or of any of the documents executed by the City or the CFD in connection with the Bonds, or as to the existence of a default or event of default thereunder.
46 (D) Errors in Judgment. The Fiscal Agent shall not be liable for any error of judgment made in good faith by a responsible officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.
(E) No Expenditures. No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.
(F) No Action. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners under this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity satisfactory to the Fiscal Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(G) Owner of Bonds. The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.
Section 7.03. Information; Books and Accounts. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including but not limited to monthly statements reporting funds held and transactions by the Fiscal Agent, including the value of any investments held by the Fiscal Agent. The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Bond Fund, the Special Tax Fund, the 2023 Reserve Fund, any other reserve account held by the Fiscal Agent, the Improvement Fund and the Cost of Issuance Fund. Such books of record and accounts shall, upon reasonable notice, during business hours be subject to the inspection of the City and the Owners of not less than 10% of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, facsimile transmission, electronic mail, written instructions, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be the City Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in accordance therewith.
The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed.
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by an Officer’s Certificate of the City , and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its 47 discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
The Fiscal Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Fiscal Agent, or another method or system specified by the Fiscal Agent as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Fiscal Agent an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Fiscal Agent Instructions using Electronic Means and the Fiscal Agent in its discretion elects to act upon such Instructions, the Fiscal Agent’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Fiscal Agent cannot determine the identity of the actual sender of such Instructions and that the Fiscal Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Fiscal Agent have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Fiscal Agent and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Fiscal Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Fiscal Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Fiscal Agent, including without limitation the risk of the Fiscal Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated wit h the various methods of transmitting Instructions to the Fiscal Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Fiscal Agent immediately upon learning of any compromise or unauthorized use of the security procedures.
The Fiscal Agent shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
The Fiscal Agent may execute any of the duties or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys or agents, and shall be entitled to rely on advice of counsel concerning all matters of its duty hereunder.
The permissive right of the Fiscal Agent to do things enumerated in this Agreement shall not be construed as a duty and it shall not be answerable for such actions other than as a result of its negligence or willful misconduct.
Section 7.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, 48 including those of its attorneys (including the allocated costs of in- house attorneys), agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents harml ess against any liabilities, costs, claims or expenses, including fees and expenses of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement, and payment of the Bonds and discharge of this Agreement, but any monetary obligation of the City arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. 49 ARTICLE VIII
MODIFICATION OR AMENDMENT
Section 8.01. Amendments Permitted.
(A) With Consent. This Agreement and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.04. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or reduce the percentage of Bonds required for the amendment hereof.
(B) Without Consent. This Agreement and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City herein, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City;
(ii) to make modifications not adversely affecting any Outstanding Bonds in any material respect;
(iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners of the Bonds;
(iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exclusion from gross income for federal income tax purposes of interest on the Bonds;
(v) in connection with the issuance of any Parity Bonds under and pursuant to Section 3.06; and
(vi) to amend the provisions related to the use of Remainder Taxes.
(C) Fiscal Agent’s Consent. Any amendment of this Agreement may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Fiscal Agent shall be furnished an opinion of counsel that any such Supplemental Agreement entered into by the 50 City and the Fiscal Agent complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on such opinion and shall be absolutely protected in so relying.
Section 8.02. Owners’ Meetings. The City may at any time call a meeting of the Owners.
In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said meeting.
Section 8.03. Procedure for Amendment with Written Consent of Owners. The City and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01(A), to take effect when and as provided in this Section
8.03. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent, at the expense of the City, to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section 8.03 provided.
Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section 8.03 provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section 8.03 provided for has been mailed.
After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section 8.03 for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section 8.03 (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the City and the Owners of all Bonds at the expiration of 60 days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such 60-day period.
Section 8.04. Disqualified Bonds . Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. Upon request of the Fiscal Agent, the City shall specify in a certificate to the 51 Fiscal Agent those Bonds disqualified pursuant to this Section and the Fiscal Agent may conclusively rely on such certificate.
Section 8.05. Effect of Supplemental Agreement . From and after the time any Supplemental Agreement becomes effective under this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the City , the Fiscal Agent and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.
Section 8.06. Endorsement or Replacem ent of Bonds Issued After Amendments .
The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such Owners’ action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.
Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. 52 ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties . Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.
Section 9.02. Successor and Predecessor . Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 9.03. Discharge of Agreement . The City may pay and discharge the entire indebtedness on all or a portion of the Bonds Outstanding in any one or more of the following ways:
(A) by paying or causing to be paid the principal of, and interest and any premium on, all such Bonds Outstanding, as and when the same become due and payable;
(B) by depositing with the Fiscal Agent at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in the Bond Fund, the 2023 Reserve Fund and any other reserve account held by the Fiscal Agent hereof, is fully sufficient to pay all such Bonds Outstanding, including all principal, interest and redemption premiums; or
(C) by irrevocably depositing with the Fiscal Agent, in trust, cash and/or Federal Securities in such amount as the City shall determine, as confirmed by an independent certified public accountant, will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in the Bond Fund, the 2023 Reserve Fund and any other reserve account held by the Fiscal Agent (to the extent invested in Federal Securities), be fully sufficient to pay and discharge the indebtedness on all such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates.
If the City shall have taken any of the actions specified in (A), (B) or (C) above, and if such Bonds are to be redeemed prior to the maturity thereof and notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any such Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in this Agreement and all other obligations of the City under this Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent.
53 Notwithstanding the foregoing, the following obligations and pledges of the City shall continue in any event: (i) the obligation of the City to pay or c ause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon, (ii) the obligation of the City to pay amounts owing to the Fiscal Agent pursuant to Section 7.05, and (iii) the obligation of the City to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on such Bonds from gross income for federal income tax purposes.
Upon compliance by the City with the foregoing with respect to all such Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal Agent but shall be retained by the City to be used for any purpose permitted under the Act and the Resolution of Formation and the Annexation Resolution.
Section 9.04. Execution of Documents and Proof of Ownership by Owners . Any request, declaration, consent or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration, consent or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent under Section 2.07.
Any request, declaration, consent or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith.
Section 9.05. Waiver of Personal Liability . No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of or interest or any premium on the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.
54 Section 9.06. Notices to and Demands on City and Fiscal Agent . Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by facsimile transmission receipt of which has been confirmed or by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows:
City of Tracy
333 Civic Center Plaza
Tracy, CA 95376
Fax: (209) 835-1113
Attention: Finance Director
Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by facsimile transmission receipt of which has been confirmed or by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows:
U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, CA 94111
Attn: Global Corporate Trust Services
Section 9.07. Partial Invalidity . If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement.
Section 9.08. Unclaimed Moneys . Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal A gent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of the principal of, and interest and any premium on, such Bonds. Any right of any Owner to look to the City for such payment shall survive only so long as required under applicable law.
Section 9.09. Applicable Law . This Agreement shall be governed by and enforced in accordance with the laws of the State applicable to contracts made and performed in the State.
Section 9.10. Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Regularity. Bonds issued under this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.
55 Section 9.12. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds, or the date fixed for redemption of any Bonds, or the date any action is to be taken under this Agreement, is other than a Business Day, the payment of interest or principal (and premium, if any) or the action shall be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period from and after such date.
Section 9.13. State Reporting Requirements. In addition to Section 5.15, the following requirements shall apply to the Bonds:
(A) Annual Reporting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the date of the 2023 Bonds, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Finance Director shall cause the information required by California Government Code Section 53359.5(b) to be supplied to CDIAC. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC.
(B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds due to insufficiency of funds on deposit in the Bond Fund, or if funds are withdrawn from the 2023 Reserve Fund to pay principal and interest on the Bonds so as to reduce the amount in the 2023 Reserve Fund to less than the 2023 Reserve Requirement, or if funds are withdrawn from such other reserve account held by the Fiscal Agent to pay principal and interest on Parity Bonds that are not the 2023 Bonds or 2023 Related Parity Bonds so as to reduce the amount in such reserve account to less than the Parity Reserve Requirement, the Fiscal Agent shall notify the Finance Director of such failure or withdrawal in writing. The Finance Director shall notify CDIAC and the Original Purchasers of such failure or withdrawal within 10 days of such failure or withdrawal.
(C) Special Tax Reporting. The Finance Director shall file a report with the City no later than January 1, 2024, and at least once a year thereafter, which annual report shall contain:
(i) the amount of Special Taxes collected and expended with respect to the CFD, (ii) the amount of Bond proceeds collected and expended with respect to the CFD, and (iii) the status of the Project. It is acknowledged that the Special Tax Fund and the Special Tax Prepayments Account are the accounts into which Special Taxes collected on the City will be deposited for purposes of Section 50075.1(c) of the California Government Code, and the funds and accounts listed in Section 4.01 are the funds and accounts into which Bond proceeds will be deposited for purposes of Section 53410(c) of the California Government Code, and the annual report described in the preceding sentence is intended to satisfy the requirements of Sections 50075.1(d), 50075.3(d) and 53411 of the California Government Code.
(D) Compliance with Section 53343.2. The City shall comply with the provisions of California Government Code Section 53343.2, which require the City, within seven months after the last day of each fiscal year of the CFD, to display prominently on its Internet Web site all of the following information:
(a) A copy of an annual report for that fiscal year if requested pursuant to Section 53343.1.
(b) A copy of the report provided to the California Debt and Investment Advisory Commission pursuant to Section 53359.5.
56 (c) A copy of the report provided to the Controller’s office pursuant to Section 12463.2.
(E) Amendment. The reporting requirements of this Section 9.13 shall be amended from time to time, without action by the City or the Fiscal Agent (i) with respect to subparagraphs (A) and (B) above, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act, (ii) with respect to subparagraph (C) above, to reflect any amendments to Section 50075.1, 50075.3, 53410 or 53411 of the California Government Code and (iii) with respect to subparagraph (D) above, to reflect any amendments to Section 53343.2. Notwithstanding the foregoing, any such amendment shall not, in itself, affect the City ’s obligations under the Continuing Disclosure Certificate. The City shall notify the Fiscal Agent in writing of any such amendments which affect the reporting obligations of the Fiscal Agent under this Agreement.
(E) No Liability. None of the City and its officers, agents and employees, the Finance Director or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 9.13.
The Finance Director shall provide copies of any such reports to any Bondowner upon the written request of a Bondowner and payment by the person requesting the information of the cost of the City to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director. The term “Bondowner” for purposes of this Section 9.13 shall include any Beneficial Owner of the Bonds as described in Section 2.10.
Section 9.14. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
* * * * * * * * * *
57 IN WITNESS WHEREOF, the City and the Fiscal Agent have caused this Agreement to be executed as of the date first written above.
CITY OF TRACY,
for and on behalf of
CITY OF TRACY COMMUNITY FACILITIES
DISTRICT NO. 2016-1 (TRACY HILLS)
By:
Finance Director
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
Exhibit A
EXHIBIT A
FORM OF 2023 BOND
No. __ ***$______***
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN JOAQUIN
IMPROVEMENT AREA NO. 2 OF THE
CITY OF TRACY
Community Facilities District No. 2016-1
(Tracy Hills)
Special Tax Bond, Series 2023
INTEREST RATE MATURITY DATE DATED DATE CUSIP
____% September 1, ______ ______, 2023 ___________
REGISTERED OWNER:
PRINCIPAL AMOUNT: *********DOLLARS
The City of Tracy (the “City”) for and on behalf of the "City of Tracy Community Facilities District No. 2016-1 (Tracy Hills)" (the “CFD”) with respect to its “Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills)" (“Improvement Area No. 2”), for value received, hereby promises to pay solely from the Special Tax Revenues (as defined in the hereinafter defined Agreement) to be collected in Improvement Area No. 2 or amounts in certain funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Dated Date set forth above, or from the m ost recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for (unless this Bond is authenticated on or before an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to February 15, 2024, in which event it shall bear interest from the Dated Date identified above, payable semiannually on each March 1 and September 1, commencing March 1, 2024 (each an “Interest Payment Date”), at the interest rate set forth above, until the principal amount hereof is paid or made available for payment provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment.
Principal of and interest on the Bonds (including the final interest payment upon maturity or earlier redemption), is payable on the applicable Interest Payment Date by check of the Fiscal Agent (defined below) mailed by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer Exhibit A
made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent or such other place designated by the Fiscal Agent.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $__________ approved by resolution of the City Council of the City adopted on _________, 2023 (together, the “Resolution”), under the Mello-Roos Community Facilities Act of 1982, as amended, sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of funding certain facilities for the City, and is one of the series of bonds designated “Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023” (the “Bonds”). The issuance of the Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of October 1, 2023 (the “Agreement”), between the City and U.S. Bank Trust Company, National Association (the “Fiscal Agent”) and this reference incorporates the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Agreement is authorized under, this Bond is issued under and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Act, the Resolution and the Agreement, the principal of and interest on this Bond are payable solely from the annual special tax authorized under the Act to be collected within Improvement Area No. 2 (the “Special Tax”) and certain funds held under the Agreement.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent tha t provision for payment has been made by the City, as may be permitted by law. The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth in the Agreement) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.
Optional Redemption. The B
onds maturing on or after September 1, 20__ are subject to optional redemption as directed by the City, from sources of funds other than prepayments of Special Taxes, prior to their stated maturity on any date on or after September 1, 20__, as a whole or in part, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest thereon to the date fixed for redemption:
Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ 103%
September 1, 20__ through August 31, 20__ 102
September 1, 20__ through August 31, 20__ 101
September 1, 20__ and any date thereafter 100
Mandatory Sinking Fund Redemption. The Term Bond maturing on September 1, 20__, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Exhibit A
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
20__ $
20__
20__ (maturity)
The Term Bond maturing on September 1, 20__, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interes t to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
20__ $
20__
20__
20__
20__ (maturity)
The Term Bond maturing on September 1, 20__ , is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
20__ $
20__
20__
20__
20__ (maturity)
The Term Bond maturing on September 1, 20__ , is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Exhibit A
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
20__ $
20__
20__
20__
20__ (maturity)
The Term Bond maturing on September 1, 20__ , is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
20__ $
20__
20__
20__
20__ (maturity)
Provided, however, if some but not all of the Term Bonds of a given maturity have been redeemed as a result of an optional redemption or a redemption from Special Tax Prepayments, the total amount of all future Sinking Fund Payments relating to such maturi ty shall be reduced by the aggregate principal amount of Term Bonds of such maturity so redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the City, notice of which determination shall be given by the City to the Fiscal Agent.
Redemption From Special Tax Prepayments . Spec
ial Tax Prepayments and any
corresponding transfers from the 2023 Reserve Fund shall be used to redeem Bonds on the next Interest Payment Date for which notice of redemption can timely be given under the Fiscal Agent Agreement, among series and maturities so as to maintain substantially the same Debt Service profile for the Bonds as in effect prior to such redemption and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:
Redemption Dates
Redemption
Price
Any Interest Payment Date on or before March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100
Exhibit A
Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement.
This Bond shall be registered in the name of the owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner’s order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption.
The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a default under the Agreement or any other document.
This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED by the City that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Fiscal Agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Exhibit A
IN WITNESS WHEREOF, City of Tracy has caused this Bond to be to be signed by the facsimile signature of its Mayor and countersigned by the facsimile signature of the City Clerk.
City Clerk Mayor
[FORM OF FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the Agreement which has been authenticated on , 2023.
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Signatory
Exhibit A
FORM OF ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint , attorney, to transfer the same on the registration books of the Fiscal Agent, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor.
NOTICE: Signature guarantee shall be made
by a guarantor institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee program
acceptable to the Fiscal Agent
Exhibit B
EXHIBIT B
IMPROVEMENT AREA NO. 2 OF THE
CITY OF TRACY
Community Facilities District No. 2016-1
(Tracy Hills)
Special Tax Bonds, Series 2023
OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT FROM IMPROVEMENT FUND
REQUISITION NO. _____
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting Finance Director of the City of Tracy, a general law city duly organized and existing under the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same;
(ii) I am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of October 1, 2023 (the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”);
(iii) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Bond Proceeds Account established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of a Project cost (as Project is defined in the Fiscal Agent Agreement) as described on attached Schedule A;
(iv) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Remainder Taxes Account established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of a Project cost (as Project is defined in the Fiscal Agent Agreement) as described on attached Schedule A;
(v) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to transfer $_____ from the Remainder Taxes Account established under the Fiscal Agent Agreement to [the Bond Fund] [the Administrative Expense Fund] [the 2023 Reserve Fund][other reserve account];
(vi) the disbursements described on the attached Schedule A are properly chargeable to the Improvement Fund; and
Exhibit B
(vii) [for any disbursement of the Set-Aside Amount (select one as applicable)]:
(1) (a) the Phase 1B City Park has been constructed by the Developer, (b) the Phase 1B City Park has been inspected by the City, and (c) the City has determined that the Phase 1B City Park has been constructed in accordance with approved plans and specifications and all applicable City standards (other than any items identified by the City that need to be addressed before the Phase 1B City Park can be deemed complete by the City, and which the City and the Developer estimate to cost no more than $100,000 in the aggregate), or
(2) the City has determined that each parcel of Taxable Property (as defined in the Rate and Method) in Improvement Area No. 2 has a Value that is at least three (3) times the sum of: (a) the allocable principal amount of the Bonds then Outstanding, plus (b) the aggregate principal amount of any fixed assessment liens on the parcel, plus ( c) the allocable principal amount of any and all Other District Bonds that are payable at least in part from special taxes levied on such parcel; or
(3) the City has determined that the authority to spend the Set -Aside Amount on Facilities has not been satisfied before June 1, 2026, and $______ (which does not exceed the Set-Aside Amount (plus accrued interest earnings thereon)) shall be transferred to the Bond Fund [to redeem the 2023 Bonds on the first optional redemption date] [to pay scheduled debt service on the 2023 Bonds]; and]
(vii/viii) no portion of the amount herein requested to be disbursed was set forth in any Officers Certificate previously filed requesting disbursement.
Capitalized terms used herein but not defined herein have the meanings ascribed to them in the Fiscal Agent Agreement.
Dated:
CITY OF TRACY
By:
Finance Director
Exhibit B
SCHEDULE A
Payee Name and
Address
Purpose of
Obligation [*]
Amount
Account from which
Amounts should be
paid
[* For any disbursement of the Set-Aside Amount (plus accrued interest) in the Bond Proceeds Account pursuant to clause ( 1) or ( 2) of paragraph *vi i)] The requested amount represents the costs of Facilities described in the Certificate Regarding Use of Proceeds for the 2023 Bonds or such other costs of Facilities with respect to which the City has received an opinion of Bond Counsel to the effect that such application of the Set-Aside Amount (plus accrued interest), in and of itself, will not adversely impact the exclusion of interest on the 2023 Bonds from gross income of the Owners of the 2023 Bonds for federal income tax purposes.]
Exhibit C
EXHIBIT C
IMPROVEMENT AREA NO. 2 OF THE
CITY OF TRACY
Community Facilities District No. 2016-1 (Tracy Hills)
Special Tax Bonds, Series 2023
OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT
FROM COSTS OF ISSUANCE FUND
REQUISITION NO. _____
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting Finance Director of the City of Tracy, a general law city duly organized and existing under the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same;
(ii) I am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of October 1, 2023 (the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”);
(iii) under Section 4.02(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Costs of Issuance Fund established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of Costs of Issuance (as that term is defined in the Fiscal Agent Agreement) as described on attached Schedule A; and
(iv) the disbursements described on the attached Schedule A constitute Costs of Issuance, and are properly chargeable to the Costs of Issuance Fund.
Dated:
CITY OF TRACY
By:
Finance Director
Exhibit C
SCHEDULE A
Payee Name and Address Purpose of Obligation Amount
Exhibit D
EXHIBIT D
IMPROVEMENT AREA NO. 2 OF THE
CITY OF TRACY
Community Facilities District No. 2016-1 (Tracy Hills)
Special Tax Bonds, Series 2023
OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT
FROM ADMINISTRATIVE EXPENSE FUND
REQUISITION NO. _____
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting Finance Director of the City of Tracy, a general law city duly organized and existing under the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same;
(ii) I am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of October 1, 2023 (the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”);
(iii) under Section 4.06(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Administrative Expense Fund established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of an Administrative Expense or Costs of Issuance (as those terms are defined in the Fiscal Agent Agreement) as described on attached Schedule A;
(iv) the disbursements described on the attached Schedule A constitute Administrative Expenses or Costs of Issuance, and are properly chargeable to the Administrative Expense Fund; and
(v) any proceeds of the 2023 Bonds in the Administrative Expense Fund shall be disbursed before any other moneys in the Administrative Expense Fund.
Dated:
CITY OF TRACY
By:
Finance Director
Exhibit D
SCHEDULE A
Payee Name and Address Purpose of Obligation Amount
Attachment C
Stradling Yocca Carlson & Rauth
Draft of September 29, 2023
4867-4301-8368v3/024667-0137
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
BOND PURCHASE AGREEMENT
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Ladies and Gentlemen:
Piper Sandler & Co., as underwriter (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with the City of Tracy (the “City ”), which upon acceptance will be binding upon the Underwriter and the City. This offer is made subject to the City’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 8:00 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Fiscal Agent Agreement (the “Fiscal Agent Agreement”), dated as of _____ 1, 2023, by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”).
1. Purchase, Sale and Delivery of the Bonds.
A. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the City and the City hereby agrees to sell to the Underwriter all (but not less than all) of the $__________ aggregate principal amount of the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “Bonds”), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $__________ (being 100% of the aggregate principal amount thereof [plus/less] [net] original issue [premium/discount] of $__________ and less an Underwriter’s discount of $__________).
The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Special Tax Revenues, as provided in the Fiscal Agent Agreement, the Preliminary Official Statement (as hereinafter defined), and the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the Government Code of the State of California (the “Act”). The issuance of the Bonds has been duly authorized by the City pursuant to Resolution No. _____, adopted on _____, 2023 (the “Approving Resolution”).
2 4867-4301-8368v3/024667-0137
The net proceeds of the Bonds will be used, as indicated in the Fiscal Agent Agreement, to (i) finance the acquisition and construction of certain capital improvements necessary for the development of the property in the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (the “Community Facilities District”), (ii) fund a debt service reserve fund for the 2023 Bonds, (iii) [pay a portion of the interest on the Bonds coming due on March 1, 2024 and September 1, 2024], and (iv) pay the costs of issuing the Bonds.
Prior to the acceptance of this Purchase Agreement by the City, the City shall have caused to be delivered to the Underwriter (i) a Letter of Representations duly executed by Tracy Phase IB, LLC, a Delaware limited liability company (“Tracy Phase IB, LLC”) in substantially the form set forth in Exhibit C hereto, with only such changes thereto as shall have been accepted by the Underwriter, (ii) a Letter of Representations duly executed by Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”) in substantially the form set forth in Exhibit D hereto, with only such changes thereto as shall have been accepted by the Underwriter , and (iii) a Letter of Representations duly executed by AG Essential Housing CA 1, L.P, a Delaware limited partnership (the “ Landbank”) in substantially the form set forth in Exhibit E hereto, with only such changes thereto as shall have been accepted by the Underwriter.
B. The City acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations and agreements made by the City herein, and the City shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notify the Underwriter if it becomes aware that any representation or agreement made by the City herein is incorrect in any material respect.
The City acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s -length commercial transaction betw een the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); and (iv) the City has consulted its own legal, financial and other advisors to the extent that the City has deemed appropriate.
C. Pursuant to the authorization of the City, the Underwriter has distributed copies of the Preliminary Official Statement dated _____, 2023, relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein called the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and the preparation and distribution of the final Official Statement (together with any supplements thereto, the “Official Statement”) consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Jones Hall, A Professional Law Corporation, the City’s Bond Counsel (“ Bond Counsel”) and Disclosure Counsel (“Disclosure Counsel”) and the Underwriter. T he City agrees to execute the Official Statement and to provide a copy thereof to the Underwriter as set forth in Section 5.E.1. hereof. The City hereby authorizes and requires the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto. The City further authorizes the 3 4867-4301-8368v3/024667-0137
Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Fiscal Agent Agreement, this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.
D. To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “ Rule”), the City will undertake pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix G (the “Continuing Disclosure Certificate ”), to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.
E. Except as the Underwriter and the City may otherwise agree, the City will deliver to the Underwriter, at the offices of Bond Counsel in San Francisco, California, or at such other location as may be mutually agreed upon by the Underwriter and the City, the documents hereinafter mentioned; and the City will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”) in New York, New York, the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the City and authenticated by the Fiscal Agent in the manner provided for in the Fiscal Agent Agreement and the Act at 8:00 a.m. California time, on _____, 2023 (the “Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment being herein referred to as the “ Closing”). The Bonds shall be in fully registered book-entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC.
2. Public Offering and Establishment of Issue Price.
A. The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial offering prices.
B. The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by CSG Advisors Incorporated (the “ Municipal Advisor”) and any notice or report to be provided to the City may be provided to the Municipal Advisor.
C. Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the Bonds (the “ 10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public 4 4867-4301-8368v3/024667-0137
each maturity of the Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not th e Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.
D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.
Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”).
So long as the hold-the -offering-price rule r emains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
1. the close of the fifth (5th) business day after the sale date; or
2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.
E. The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to: (1) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public; and (2) comply with the hold -the-offering- price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the rel ated pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker- dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds. 5 4867-4301-8368v3/024667-0137
F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
1. “public” means any person other than an underwriter or a related party;
2. “underwriter” means: (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public; and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public);
3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to: (A ) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another); (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another); or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and
4. “sale date” means the date of execution of this Purchase Agreement by all parties.
3. Representations and Covenants of the City. The City represents and covenants to the Underwriter that:
A. The City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California, and has duly authorized the formation of the Community Facilities District and Improvement Area No. 2 therein (“ Improvement Area No. 2”) pursuant to resolutions and an ordinance duly adopted by the City Council (collectively, the “Community Facilities District Formation Resolution ” and, together with the Approving Resolution, the “ City Resolutions ”), Unanimous Approvals of the owners of property within Improvement Area No. 2 at the time Improvement Area No. 2 was annexed in to the Community Facilities District (the “ Unanimous Approvals”) and the Act. The City Council, as the legislative body of the City and the Community Fa cilities District, (i) has duly adopted the City Resolutions, (ii) has duly adopted Ordinance No. 1260 of the City on September 4, 2018, levying special taxes within the Community Facilities District (the “Ordinance”), and (iii) has caused to be recorded in the real property records of San Joaquin County a notice of special tax lien for Improvement Area No. 2 (the “ Notice of Special Tax Lien ”) (the Community Facilities District Formation Resolution, the Unanimous Approvals, the Ordinance, the Rate and Method, and the Notice of Special Tax Lien are collectively referred to herein as the “ Formation Documents”). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amend ed, except to the extent set forth therein. The Community Facilities District is duly organized and validly existing as a Community Facilities District under the laws of the State of California. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under the Fiscal Agent Agreement and this Purchase Agreement, and to 6 4867-4301-8368v3/024667-0137
carry out all transactions contemplated by each of such agreements; (ii) to issue, se ll and deliver its Bonds to the Underwriter; (iii) to enter into the Continuing Disclosure Certificate; and (iv) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, this Purchase Agreement, the Bonds and the Official Statement.
This Purchase Agreement, the Fiscal Agent Agreement, the Bonds and the Continuing Disclosure Certificate are collectively referred to herein as the “City Documents.” B. The City has complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the City Documents, and any immaterial noncompliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the City Documents.
C. Except as described in the Preli minary Official Statement, the City is not, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the execution and delivery and the performance of its obligations under the City Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the City pursuant to the City Documents, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the City of its obligations under the City Documents or the performance of the conditions precedent to be performed by the City pursuant to the City Documents.
D. Except as may be required under the “blue sky” or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations under the City Documents, have been or will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.
E. The City Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement.
F. The Bonds are payable from the Special Tax Revenues generated by the levy of special taxes in Improvement Area No. 2 (the “Special Taxes”), as set forth in the Fiscal Agent Agreement. The levy of the Special Taxes has been duly and validly authorized pursuant to the Act and, subject to the maximum rate of Special Taxes in the Rate and Method and the application of the Special Tax Revenues as set forth in the Fiscal Agent Agreement, the levy of the Special Taxes within Improvement Area No. 2 will be fixed and levied in an amount which, together with other available 7 4867-4301-8368v3/024667-0137
funds, is required for the payment of the principal of, and interest on, the 2018 Bonds, the 2019 Bonds and the Bonds when due and payable, all as provided in the Fiscal Agent Agreement. The City has covenanted in the Fiscal Agent Agreement to cause the Special Taxes to be levied and collected at the same time and in the same manner as ordinary ad valorem property taxes.
G. The Fiscal Agent Agreement creates a valid pledge of, first lien upon and security interest in, the Special Tax Revenues, and in the moneys in the Special Tax Fund established pursuant to the Fiscal Agent Agreement, on the terms and conditions set forth in the Fiscal Agent Agreement.
H. Except as disclosed in the Preliminary Official Statement, there are, to the best of the City’s knowledge, no entities with outstanding assessment liens against any of the properties within Improvement Area No. 2 or which are senior to or on a parity with the Special Taxes referred to in paragraph (G) hereof.
I. The information contained in the Preliminary Official Statement and in the Official Statement ( other than statements therein pertaining to DTC and its book-entry system and under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT” as to which no view is expressed) does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (J) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.
J. Up to and including 25 days after the End of the Underwriting Period, the City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or cons ent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be a written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” K. At the time of acceptance hereof there is and as of the Closing there will be no action pending (notice of which has been served on the City) or to the best knowledge of the City threatened, in which any such action: (i) i n any way questions the existence of the Community Facilities District or the titles of the officers of the City to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Tax Revenues or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the City Documents or the consummation of the transactions on the part of the City contemplated thereby; (iii) contests the exemption of interest on the Bonds from federal or State income taxation or contests the powers of the City or the Community 8 4867-4301-8368v3/024667-0137
Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official State ment or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and as of the time of acceptance hereof there is and, as of the Closing Date, there will be no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.
L. Any certificate signed on behalf of the City by any officer or employee of the City authorized to do so shall be deemed a representation by the City to the Underwriter as to the statements made therein.
M. At or prior to the Closing, the City will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix G to the Official Statement. Except as disclosed in the Preliminary Official Statement, the City has not failed to comply in all respects with any previous undertakings with regard to the Rule to provide annual reports or notices of material events in the last five years.
N. The City will apply the proceeds of its Bonds in accordance with the Fiscal Agent Agreement.
O. Between the date of the Purchase Agreement and the date of Closing, the City will not offer or issue any bonds, notes or other obligations for borrowed money payable or secured by Special Taxes, except as previously disclosed to the Underwriter.
The execution and delivery of this Purchase Agreement by the City shall constitute a representation to the Underwriter that the representations contained in this Section 3 are true as of the date hereof.
4. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations on the part of the City contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and, to the following additional conditions:
A. At the Closing Date, the City Resolutions, the Formation Documents, and the City Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate.
B. At the Closing Date, except as was described in the Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, 9 4867-4301-8368v3/024667-0137
the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the execution and delivery and the performance by the City of its obligations under the City Documents, the City Resolutions and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the City of its obligations under the City Documents or the City Resolutions.
C. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, true and correct in all material respects and does not, as of the Closing Date or as of the date of any supplement or amendment thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
D. Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth on the inside cover page of the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof;
2. Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement are not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect; 10 4867-4301-8368v3/024667-0137
3. A general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by Federal, State of New York or State of California officials authorized to do so;
4. The introduction, proposal or enactment of any amendment to the Federal or California Constitutions or any action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), or the validity or enforceability of Special Taxes as contemplated by the Official Statement;
5. Any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or in the Official Statement, or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a mat erial fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
6. Any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall impose as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter;
7. There shall have occurred any material outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it impracticable, in the judgment of the Underwriter, following consultation with the City, to sell the Bonds;
8. The filing or threat of an Action described Section 3.K hereof; or
9. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City.
E. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:
1. The Official Statement, executed on behalf of the City by its Finance Director or other authorized officer;
2. The City Documents, duly executed and delivered by all parties thereto;
3. The City Resolutions, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the City Resolutions are true, correct and complete copies of the City Resolutions duly adopted by the City Council;
4. The Formation Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Formation Documents are true, correct and complete copies of the Formation Documents duly adopted by the City Council; 11 4867-4301-8368v3/024667-0137
5. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Bond Counsel, in substantially the form included as Appendix F to the Official Statement;
6. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that: (i) the Purchase Agreement has been duly authorized, executed and delivered by the City, and, assuming that the Purchase Agreement constitutes the valid and binding obligation of the Underwriter, constitutes the legally valid and binding obligations of the City enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditors’ rights or remedies and general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “THE 2023 BONDS,” “SECURITY FOR THE BONDS,” “TAX MATTERS” and Appendices E and F thereof (except that no opinion or belief is expressed as to any financial or statistical data contained therein), insofar as it purports to summarize certain provisions of the Act, the Bonds, the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds, presents a fair and accurate summary of such provisions.
7. A letter of Disclosure Counsel addressed to the Underwriter, to the effect that, no facts have come to attention of Disclosure Counsel that have caused such counsel to believe that the Preliminary Official Statement, as of its date, or the Official Statement, as of its date and as of the Closing Date (except for the following items, which are expressly excluded from the scope of this sentence: any financial, statistical and demographic data or forecast s, numbers, charts, estimates, projections, assumptions or expressions of opinion, the appraisal, and information regarding DTC and its book- entry only system, that is contained or incorporated by reference in the Official Statement and the appendices to the Official Statement) as of its date or the Closing Date contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
8. A certificate dated the Closing Date and signed by an authorized representative of the City or an authorized designee, on behalf of the City to the effect that: (i) the representations made by the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, provided that any references as to the Preliminary Official Statement shall be deemed to be to the Official Statement; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be satisfied under the City Documents prior to the Closing Date;
12 4867-4301-8368v3/024667-0137
9. An opinion of the City Attorney of the City, dated the date of Closing and addressed to the Underwriter and the City, to the effect that:
(i) The City is a municipal corporation, corporate and
politic, duly organized and existing under the Constitution and laws of the State of California; (ii) The City Resolutions and the Formation Documents
have been duly adopted at a meeting of the City Council, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the City Resolutions and the Formation Documents are in full force and effect and have not been modified, amended, rescinded or repealed since the date of their adoption; (iii) The City Documents and the Official Statement have been duly authorized, executed and delivered by the City and the City Documents constitute the legal, valid and binding obligations of the City enforceable against the City in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (iv) To the best knowledge of such counsel, the execution and delivery of the City Documents and the Official Statement and compliance with the provisions thereof under the circumstances contemplated thereby: (a) do not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound; and (b) do not and will not in any material respect or constitute on the part of the City a violation, breach of or default under any court order or consent decree to which the City is subject;
(v) Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City) or, to such counsel’s knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of its members and officers to their respective offices; or (b) affect the validity of the City Documents, the City Resolutions or the Formation Documents, or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the City Documents, the City Resolutions or the Formation Documents, or contest the authority of the City to enter into or perform its obligations under any of the City Documents, the City Resolutions or the Formation Documents, or under which a determination adverse to t he City would have a material adverse effect upon the financial condition or the revenues of the City or the Community Facilities District, questions the right of the City to use Special Tax Revenues for the repayment of the Bonds or affects in any manner the right or ability of the City to collect or pledge the Special Taxes levied within Improvement Area No. 2 for the repayment of the Bonds;
10. A transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds, including certified copies of the Fiscal Agent Agreement and all resolutions of the City relating thereto;
11. A certificate dated the Closing Date from Goodwin Consulting Group, Inc. addressed to the City and the Underwriter to the effect that: (i) the Special Taxes (after payment of estimated Administrative Expenses) if collected in the maximum amounts permitted pursuant to the 13 4867-4301-8368v3/024667-0137
Rate and Method as of the Closing Date would generate at least 110% of the annual debt service payable on the Bonds in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Official Statement provided by Goodwin Consulting Group, Inc. concerning the Special Taxes and the Rate and Method and all information supplied by it for use in the Official Statement as of the date of the Official Statement and as of the Closing Date did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
12. Certified copies of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution of the Fiscal Agent Agreement and the authentication of the Bonds;
13. A certificate of the Fiscal Agent, addressed to the Underwriter and the City dated the Closing Date, to the effect that: (i) the Fiscal Agent is authorized to carry out corporate trust powers, and have full power and authority to perform its duties under the Fiscal Agent Agreement; (ii) the Fiscal Agent is duly authorized to execute and deliver the Fiscal Agent Agreement, to accept the obligations created by the Fiscal Agent Agreement and to authenticate the Bonds pursuant to the terms of the Fiscal Agent Agreement; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Fiscal Agent of the other transactions contemplated to be performed by the Fiscal Agent in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Fiscal Agent Agreement; and (iv) to the best of its knowledge, compliance with the terms of the Fiscal Agent Agreement will not conflict with, or result in a violation or breach of, or cons titute a default under, any loan agreement, trust agreement, bond, note, resolution or any other agreement or instrument to which the Fiscal Agent is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Fiscal Agent or any of its activities or properties;
14. An opinion of counsel to the Fiscal Agent, dated the Closing Date, addressed to the Underwriter and the City to the effect that the Fiscal Agent is a national banking association duly organized and validly existing under the laws of the United States having full power and being qualified to enter into, accept and agree to the provisions of the Fiscal Agent Agreement, and that the Fiscal Agent Agreement h as been duly authorized, executed and delivered by the Fiscal Agent and, assuming due execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought;
15. A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;
16. An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriter (“ Underwriter’s Counsel”), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter; 14 4867-4301-8368v3/024667-0137
17. A closing certificate of Tracy Phase I B, LLC dated the Closing Date, substantially in the form attached as Exhibit F hereto;
18. A letter from counsel to Tracy Phase IB, LLC, in form and substance acceptable to the Underwriter, dated the Closing Date and addressed to the Underwriter, regarding negative assurance with respect to the Preliminary Official Statement and Official Statement;
19. A closing certificate of Lennar Homes dated the Closing Date, substantially in the form attached as Exhibit G hereto;
20. A continuing disclosure certificate executed an d delivered by Lennar Homes, dated as of the Closing Date in the form attached as Appendix H to the Official Statement (the “Lennar Homes Continuing Disclosure Certificate”);
21. A letter or letters from counsel to Lennar Homes, in form and substance acceptable to the Underwriter, dated the Closing Date and addressed to the Underwriter, regarding:
(i) negative assurance with respect to the information in the Preliminary Official Statement and Official Statement relating to Lennar Homes and the property being developed by Lennar Homes under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT —Acquisition Agreement,” “— Development Plan for Improvement Area No. 2,” “ —Lennar Homes,” “—Landbank Arrangement,” “—Status of Development,” and “ —Home Construction Financing Plan,” and “CONTINUING DISCLOSURE—Lennar Homes Continuing Disclosure”; and (ii) the validity and enforceability of the Lennar Homes Continuing Disclosure Certificate;
22. A closi ng certificate of the Landbank dated the Closing Date, substantially in the form attached as Exhibit H hereto;
23. A Certificate of the Appraiser, substantially in the form attached hereto as Exhibit I;
24. A Certificate of the Market Absorption Consultant, substantially in the form attached hereto as Exhibit J;
25. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations of the City contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Fiscal Agent Agreement and the Official Statement.
If the City shall be unable to satisfy the conditions to the obligations of the Underw riter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the City nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the City set forth in Section 6 hereof shall continue in full force and effect.
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5. Conditions to the Obligations of the City. The obligations of the City shall be subject to the satisfaction of the conditions contained in Section 4 of this Purchase Agreement.
6. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the City shall pay only from the proceeds of the Bonds or any other legally available funds of the City or the Community Facilities District, but only as the City and such other party providing such services may agree, all expenses and costs of the City incident to the performance of its obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, initial fees of the Fiscal Agent, including fees and disbursements of their counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors employed by the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation and lodging of those employees. The Underwriter shall pay all out -of-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees of its counsel.
7. Notices. Any notice of other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City of Tracy, 333 Civic Center Plaza, Tracy, California 95376, Attention: Assistant City Manager; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Piper Sandler & Co, 3626 Fair Oaks Boulevard, Suite 100, Sacramento, CA 95864, Attention: Dennis McGuire.
8. Parties In Interest . This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof.
9. Survival of Representations . The representations of the City under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.
10. Execution in Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
11. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.
12. No Prior Agreements . This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the City.
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13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.
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14. Effective Date. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.
Very truly yours,
PIPER SANDLER & CO.
By:
Its: Authorized Officer
Time of Execution: ____________
CITY O
F TRACY
By:
Karin Schnaider, Assistant City
Manager
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EXHIBIT A
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
Schedule of Bond Maturities, Principal Amounts, Interest Rates, Yields and Initial Offering Prices
Maturity
Date
(September 1)
Principal
Amount
Interest
Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the Price
Offering Rule
Used
T Term Bonds.
C Priced to the optional redemption date of September 1, 20__ at __.
CC Priced to the optional redemption date of September 1, 20__ at __.
Optional Redemption. The Bonds maturing on or after September 1, 20__, are subject to optional redemption as directed by the City, from sources of funds other than prepayments of Special Taxes, prior to their stated maturity on any date on or after September 1, 20__, as a whole or in part, at the redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed) set forth below, together with accrued interest thereon to the date fixed for redemption:
Redemption Dates
Redemption
Price
Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”), will also be subject to mandatory redemption in part by lot, from Sinking Fund Payments made by the City from the Bond Fund, at a redemption price equal to the principal amount
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thereof to be redeemed, without premium, in the aggregate respective principal amounts, as set forth in the table below; provided, however, if some but not all of the 20__ Term Bonds of a given maturity have been redeemed through optional redemption or mandatory prepayment redemption as described above and below, the total amount of all future Sinking Fund Payments relating to such maturity will be reduced by the aggregate principal amount of 20__ Term Bonds of such maturity so redeemed, to be allocated among such Sinking Fund Payments as directed by the City.
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
(maturity)
Redemption from Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the 2023 Reserve Fund will be used to redeem Bonds on the next Interest Payment Date for which notice of redemption can timely be given under the Fiscal Agent Agreement, among maturities so as to maintain substantially the same debt service profile for the Bonds as in effect prior to such redemption and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:
Redemption Dates Redemption Price
Any Interest Payment Date on or before March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100
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EXHIBIT B
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Piper Sandler & Co. (the “PSC”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Ma
turity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) PSC offer ed the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule I (the “ Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule II.
(b) As set forth in the Bond Purchase Agreement, dated _____, 2023, by and between PSC and the Issuer, PSC has agreed in writing that: (i) for each Maturity of the Hold-the -Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule I hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule I hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after _____, 2023 (the Sale Date), or (ii) the date on which the Underwriter has sold at least 10% of such Hold-the- Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
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(d) Issuer means the City of Tracy.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _____, 2023. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents PSC’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respec t to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, a Professional Law Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
PIPER SANDLER & CO.
By:
Name:
Dated: _______, 2023
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES
(Attached)
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SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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EXHIBIT C
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
LETTER OF REPRESENTATIONS OF TRACY PHASE IB, LLC
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “ Purchase Agreement”). This Letter of Representations of Tracy Phase IB, LLC (the “ Letter of Representations ”) is delivered pursuant to the Purchase Agreement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Tracy Phase IB, LLC, a Delaware limited liability company (the “Developer ”), and the undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer is a limited liability company validly existing and in good standi ng as a limited liability company under the laws of the State of Delaware and is duly registered to transact intrastate business in the State of California as a foreign limited liability company and is in good standing in the State of California and has all requisite limited liability company right, power and authority: (i) to execute and deliver this Letter of Representations; and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement.
2. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry, or investigation at law or in equity, before or by any court, regulatory agency, public board, or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Developer or any such Affiliate which is reasonably likely to materially and adversely affect the Developer’s or its Affiliates’
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ability to develop the remainder of the Tracy Hills Project as described in the Preliminary Official Statement.
3. As of the date thereof, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Developer, its Affiliates, and the remainder of the Tracy Hills Project as set forth under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT—The Master Developer and Subsidiaries,” and “—The Tracy Hills Project” (but excluding any information cited as coming from a source other than the Developer ) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulat ory agency, public board, or body, that in any way seeks to challenge or overturn the formation of the City of Tracy Community Facilities District No. 2016 -1 (Tracy Hills) (the “ Community Facilities District ”) or Improvement Area No. 2, to challenge the adoption of the ordinance(s) of the City levying Special Taxes within Improvement Area No. 2, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer in any way from bringing any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body including, without limitation, (a) an action or suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or the proceeds of the Bonds, or (c) the enforcement of the obligations of the City or the Community Facilities District under the Fiscal Agent Agreement or any agreements between the Developer and the City or the Community Facilities District or under which the Developer is a party or beneficiary.
5. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, and the remainder of the Tracy Hills Project shall occur of which the Developer has actual knowledge which would cause the information under the captions of the Preliminary Official Statement that are described in Paragraph 3 (and subject to the limitations and exclusions contained in Paragraph 3) hereof to contain an untrue statement of a material fact or to omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City and the Underwriter.
If in the reasonable opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance that is reasonably satisfactory to counsel to the City and to the Underwriter.
6. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be
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allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
7. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached to the Purchase Agreement as Exhibit F.
8. As used in this Letter of Representations, the term “ Actual Knowledge of the Undersigned” means the actual (as opposed to constructive) knowledge that the undersigned currently has or has obtained through (i) interviews with such current officers and responsible employees of the Developer as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations including the chief financial officer of the Developer or, if the Developer does not have a chief financial officer, the person who performs the functions usually associated with such officer (unless the undersigned is the chief financial officer or such person), and (ii) reviews of documents reasonably available to the undersigned and which the undersigned reasonably deemed necessary for the undersi gned to execute this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations. The undersigned has not contacted any individuals who are no longer employed by, or associated with, the Developer.
9. As used in this Letter of Representations, the term “Affiliate” of the Developer means any person directly (or indirectly through one or more intermediaries) that exercises managerial control over the Developer or that is under managerial control of the Developer, and about whom information could be material to potential investors in their investment decision regarding the Bonds, but excludes Lennar Homes of California, LLC and its affiliates.
10. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have met with counsel to the Developer for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of Developer and he or she will have no personal liability arising from or relating to this Letter of Representations.
TRACY PHASE IB, LLC,
a Delaware limited liability company
By:
Authorized Representative
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EXHIBIT D
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC _____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “ Purchase Agreement”). This Letter of Representations of Lennar Homes of California, LLC (the “ Letter of Representations”) is delivered pursuant to the Purchase Agreement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Lennar Homes of California, LLC, a California limited liability company (“ Lennar Homes”), and the undersigned, on behalf of Lennar Homes, further certifies as follows:
1. Lennar Homes is a limited liability company validly existing and in good standing as a limited liability company under the laws of the State of California and has all requisite right, power and authority: (i) to execute and deliver this Letter of Representations; and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement, including but not limited to Lennar Homes’ obligations under the Master Acquisition Agreement dated July 19, 2016 and assigned to Lennar Homes with respect to Improvement Area No. 2 only on May 24, 2023.
2. As set forth in the Preliminary Official Statement, Lennar Homes owns or has under option certain property within Improvement Area No. 2 (“Improvement Area No. 2”) of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (herein the “ Property”). The undersigned, on behalf of Lennar Homes, makes the representations herein with respect to all such Property.
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3. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned (defined below), (a) Lennar Homes and its Affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond, or note (collectively, the “Material Agreements”) to which Lennar Homes and its Affiliates are a party or otherwise subject, which breach or def ault could reasonably be expected to materially and adversely affect Lennar Homes’ ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Taxes on the Property (to the extent the responsibility of Lennar Homes) prior to delinquency, and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.
4. To the Actual Knowledge of the Undersigned, neither Lennar Homes nor any of its Affiliates, is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect Lennar Homes’ ability complete the development of the Property as described in the Prelimina ry Official Statement or to pay the Special Taxes on the Property (to the extent the responsibility of Lennar Homes) prior to delinquency.
5. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board, or body is pending against Lennar Homes (with proper service of process to Lennar Homes having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against Lennar Homes or any such Affiliate which if successful, is reasonably likely to materially and adversely affect Lennar Homes’ ability to complete the development of the Property as described in the Preliminary Official Statement or to pay the Special Taxes on the Property (to the extent the responsibility of Lennar Homes) prior to delinquency.
6. As of the date thereof, information set forth in the Preliminary Official Statement under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT —Acquisition Agreement,” “—Development Plan for Improvement Area No. 2,” “ —Lennar Homes,” “ —Landbank Arrangement,” “—Status of Development,” and “ —Home Construction Financing Plan,” and “CONTINUING DISCLOSURE —Lennar Homes Continuing Disclosure” but solely as such information pertains to Lennar Homes, its Affiliates (defined below), the Property, Lennar Homes’ development of the Property and Lennar Homes’ contractual arrangements with respect thereto contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
7. Lennar Homes covenants that, while the Bonds or any refunding obligations related thereto are outstanding, Lennar Homes and its Affiliates which it controls will not bring any action, suit, proceeding, inqui ry, or investigation at law or in equity, before any court, regulatory agency, public board, or body, that in any way seeks to challenge or overturn the formation of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (the “ Community Facilities District”) or Improvement Area No. 2, to challenge the adoption of the ordinance(s) of the City levying Special Taxes within Improvement Area No. 2, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent Lennar Homes in any way from bringing any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory
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agency, public board, or body including, without limitation, (a) an action or suit contending that the Special Taxes have not been levied in a ccordance with the methodologies contained in the Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or the proceeds of the Bonds, or (c) the enforcement of the obligations of the City or the Community Facilities District under the Fiscal Agent Agreement or any agreements between Lennar Homes and the City or the Community Facilities District or under which Lennar Homes is a party or beneficiary.
8. To the Actual Knowledge of the Undersigned, in the last five years, neither Lennar Homes nor any Affiliate has been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by Lennar Homes or any Affiliate within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against Lennar Homes or any such Affiliate.
9. To the Actual Knowledge of the Undersigned, Lennar Homes is able to pay its bills as they become due and no legal proceedings are pending against Lennar Homes (with proper service of process to Lennar Homes having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which Lennar Homes may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
10. To the Actual Knowledge of the Undersigned, Affiliates of Lennar Homes are able to pay their bills as they become due and no legal proceedings are pending against any Affiliates of Lennar Homes (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of Lennar Homes may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debts or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
11. If between the date hereof and the Closing Date any event relating to or affecting Lennar Homes, its Affiliates (defined below), the Property, Lennar Homes’ development of the Property and Lennar Homes’ contractual arrangements with respect thereto shall occur of which the undersigned has actual knowledge and which the undersigned believes would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 6 hereof (and subject to the limitations and exclusions contained in Paragraph 6), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect , the undersigned shall notify the City and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, Lennar Homes shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the City and to the Underwriter.
12. Lennar Homes agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached to the Purchase Agreement as Exhibit G.
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13. As used in this Letter of Representations, the term “ Actual Knowledge of the Undersigned” means the actual (as opposed to constructive) knowledge that the undersigned currently has or has obtained through (i) interviews with such current officers and responsible employees of Lennar Homes as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations including the chief financial officer of Lennar Homes or, if Lennar Homes does not have a chief financial officer, the person who performs the functions usually associated with such officer (unless the undersigned is the chief financial officer or such person), and (ii) reviews of documents reasonably available to the undersigned and which the undersigned reasonably deemed necessary for the undersigned to execute this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of Lennar Homes’ current business and operations. The undersigned has not contacted any individuals who are no longer employed by, or associated with, Lennar Homes.
14. As used in this Letter of Representations, the term “Affiliate” of Lennar Homes means any person directly (or indirectly through one or more intermediaries) under managerial control of Lennar Homes, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including, without limitation, information relevant to the proposed development of the Property, or to Lennar Homes’ ability to pay the Special Taxes on the Property (to the extent the responsibility of Lennar Homes) prior to delinquency). For purposes of this Letter of Representations, The Tracy Hills Project Owner, LLC, and its direct and indirect subsidiaries including Tracy Phase IB, LLC, shall not be considered an “Affiliate” of Lennar Homes. In addition, AG Essential Housing CA 1, L.P., a Delaware limited partnership (“ AG Essential”), the land bank under an option agreement with Lennar Homes, is not an Affiliate of Lennar Homes.
15. On behalf of Lennar Homes, I have reviewed the contents of this Letter of Representations and have met with counsel to Lennar Homes for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of Lennar Homes and he or she will have no personal liability arising from or relating to this Letter of Representations.
LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company
By:
Name: _____________________________________
Title: ______________________________________
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EXHIBIT E
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
LETTER OF REPRESENTATIONS OF AG ESSENTIAL HOUSING CA 1, L.P. _____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facili ties District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “ Purchase Agreement”). This Letter of Representations of AG Essential Housing CA 1 L.P. (the “ Letter of Representations”) is delivered pursuant to the Purchase Agreement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of AG Essential Housing CA 1, L.P., a Delaware limited partnership (the “Landbank”), and the undersigned, on behalf of the Landbank, further certifies as follows:
1. The Landbank is a limited partnership validly existing and in good standing as a limited partnership under the laws of the State of Delaware and is duly registered to transact business in the State of California as a foreign limited partnership and is in good standing in the State of California and has all requisite right, power and authority: (i) to execute and deliver this Letter of Representations; and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, the Landbank owns certain property within Improvement Area No. 2 (“ Improvement Area No. 2 ”) of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (herein the “Property”). The undersigned, on behalf of the Landbank, makes the representations herein with respect to all such Property owned by Landbank.
3. As of the date thereof, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Landbank and ownership of the Property by
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Landbank as set forth under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT— Landbank Arrangement” is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4. The Landbank covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Landbank will not bring any action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body, that in any way seeks to challenge or overturn the formation of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (the “Community Facilities District”) or Improvement Area No. 2 therein, to challenge the adoption of the ordinances of the City levying Special Taxes within Improvement Area No. 2, to invalidate the Community Facilities District or Improvement Area No. 2 therein or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed und er Section 3115.5 of the Streets and Highways Code based on recordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Landbank in any way from bringing any other action, suit, proceeding, inquiry, or investigation at law or in equity, before any court, regulatory agency, public board, or body including, without limitation, (a) an action or suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in Improveme nt Area No. 2’s Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or the proceeds of the Bonds, or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Resolutions and Ordinance, the Indenture, or any other agreements among the Landbank, the City, and/or the Community Facilities District or to which the Landbank is a party or beneficiary.
5. T o the actual knowledge of the undersigned, there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body pending against the Landbank (with proper service of process to the Landbank having been accomplished) or to the actual knowledge of the undersigned is threatened in writing against the Landbank which is reasonably likely to materially and adversely affect the Landbank’s ability to sell the Property as described in the Preliminary Official Statement.
6. To the actual knowledge of the undersigned, the Landbank is able to pay its bills as they become due and no legal proceedings are pending against the Landbank (with proper service of process having been accomplished) or, to the actual knowledge of the undersigned, threatened in writing in which the Landbank may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
7. If between the date hereof and the Closing Date any event relating to or affecting the Landbank and ownership of the Property by Landbank shall occur of which the undersigned has actual knowledge and which the undersigned believes would cause the information under the section of the Preliminary Official Statement indicated in Paragraph 3 hereof (and subject to the limitations and exclusions contained in Paragraph 3), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect, the undersigned shall notify the City and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement,
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the Landbank shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the City and to the Underwriter.
8. The Landbank agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached to the Purchase Agreement as Exhibit H.
9. To the undersigned’s actual knowledge, in the last five years, the Landbank has not been delinquent to any material extent in the payment of any ad valorem property tax, special assessment, or special tax on property owned by the Landbank within the boundaries of a community facilities district or an assessment district within California that (a) would have caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against the Landbank.
The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Landbank and he or she will have no personal liability arising from or relating to this Letter of Representations.
AG ESSENTIAL HOUSING CA 1, L.P.,
a Delaware limited partnership
By:
Authorized Representative
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EXHIBIT F
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
CLOSING CERTIFICATE OF TRACY PHASE IB, LLC
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement, dated _____, 2023 (the “ Purchase Agreement”), entered into in connection therewith. This Closing Certificate of Tracy Phase IB, LLC (the “Closing Certificate”) is delivered by Tracy Phase IB, LLC , a Delaware limited liability company (the “ Developer”) pursuant to the Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Letter of Representations of Tracy Phase IB, LLC, dated _____, 2023 (the “Letter of Representations”) or the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer has received the final Official Statement relating to the Bonds. Each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the final Official Statement.
2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 3 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 3 of the Letter of Representations) relating to the Developer, its Affiliates, and the remainder of the Tracy Hills Projectwhich should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.
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3. For the period through 25 days after the “End of the Underwriter Period” as defined in the Purchase Agreement to mean the Closing Date unless otherwise notified in writing by the Underwriter, if any event relating to or affecting the Developer, its Affiliates, and the remainder of the Tracy Hills Project shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the statements and information in the Official Statement described in Paragraph 3 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 3 of the Letter of Representations)in order to make the Offici al Statement not misleading in any material respect in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necess ary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading in any material respect.
4. The undersigned has executed this Closing Certificate solely in his or her capacity as an officer of Developer and he or she will have no personal liability arising from or relating to this Closing Certificate.
TRACY PHASE IB, LLC,
a Delaware limited liability company
By:
Authorized Representative
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EXHIBIT G
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
CLOSING CERTIFICATE OF LENNAR HOMES OF CALIFORNIA, LLC
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement, dated _____, 2023 (the “ Purchase Agreement”), entered into in connection therewith. This Closing Certificate of Lennar Homes of California, LLC is delivered by Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”) pursuant to the Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Letter of Representations of Lennar Homes of California, LLC, dated ________, 2023 (the “Letter of Representations”) or the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Lennar Homes, and the undersigned, on behalf of Lennar Homes, further certifies as follows:
1. Lennar Homes has received the final Official Statement relating to the Bonds. Each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the final Official Statement.
2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 6 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 6 of the Letter of Representations) relating to Lennar Homes, its Affiliates, the Property, Lennar Homes’ development of the Property and Lennar Homes’ contractual arrangements with respect thereto which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.
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3. For the period through 25 days after the “End of the Underwriter Period” as defined in the Purchase Agreement to mean the Closing Date unless otherwise notified in writing by the Underwriter, if any event relating to or affecting Lennar Homes, its Affiliates, the Property, Lennar Homes’ development of the Property and Lennar Homes’ contractual arrangements with respect thereto shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the statements and information in the Official Statement described in Paragraph 6 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 6 of the Letter of Representations) in order to make the Official Statement not misleading in any material respect in the light of the circumstances under which they were made, Lennar Homes shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect.
4. The undersigned has executed this Closing Certificate solely in his or her capacity as an officer of Lennar Homes and he or she will have no personal liability arising from or relating to this Closing Certificate.
LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company
By:
Nam
e: _____________________________________
Titl
e: ______________________________________
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EXHI
BIT H
$_______
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
CLO
SING CERTIFICATE OF AG ESSENTIAL HOUSING CA 1, L.P.
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
Ladies and Gentlemen:
Reference is made to the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “ Bonds”) and to the Bond Purchase Agreement, dated _____, 2023 (the “ Purchase Agreement”), entered into in connection therewith. This Closing Certificate of AG Essential Housing CA 1, L.P. (the “ Closing Certificate”) is delivered by AG Essential Housing CA 1, L.P, a Delaware limited partnership (the “ Landbank”) pursuant to the Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Letter of Representations of AG Essential Housing CA 1, L.P., dated _______, 2023 (the “Letter of Representations”) or the Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Landbank, and the undersigned, on behalf of the Landbank, further certifies as follows:
1. The Landbank has received the final Official Statement relating to the Bonds. Each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the final Official Statement.
2. To the undersigned’s actual knowledge, and other than as disclosed in the Preliminary Official Statement, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 3 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 3 of the Letter of Representations) relating to the Landbank and ownership of the Property by the Landbank which should be disclosed in the Official G-2
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Stat
ement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.
3. For the period through 25 days after the “End of the Underwriter Period” as defined in the Purchase Agreement, if any event relating to or affecting the Landbank or the ownership of the Property by the Landbank shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the statements and information in the Official Statement described in Paragraph 3 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 3 of the Letter of Representations) in order to make the Official Statement not misleading in any material respect in the light of the circumstances under which they were made, the Landbank shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect.
4. The undersigned has executed this Certificate solely in his or her capacity as an authorized officer or representative of the Landbank and he or she will have no personal liability arising from or relating to this Certificate.
AG ESSENTIAL HOUSING CA 1, L.P.,
a Delaware limited partnership
By:
Authorized Representative
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EXHIBIT I
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
CERTIFICATE OF APPRAISER
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
The undersigned hereby states and certifies:
1. That he is an authorized principal of Integra Realty Resources (the “Appraiser”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.
2. That the Appraiser has prepared an appraisal report, dated _____, 2023 (the “Appraisal Report”), on behalf of the City of Tracy (the “ City”) in connection with the Preliminary Official Statement, dated _____, 2023 (the “ Preliminary Official Statement”) and the Official Statement dated _____, 2023 (“Official Statement”), for the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “Bonds”).
3. That the Appraiser hereby consents to the reproduction and use of the Appraisal Report appended to the Preliminary Official Statement and the Official Statement. The Appraiser also consents to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement.
4. In the opinion of the Appraiser the assumptions made in the Appraisal Report are reasonable. Since the date of value of the Appraisal Report, the Appraiser is not aware of any facts that would cause its opinion of value of the taxable property in the Improvement Are a No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) (the “ Improvement Area”) to be lower than the value in the Appraisal.
5. Each of the parcels appraised by the Appraiser is encompassed within the Improvement Area as set forth in the boundary map of the Improvement Area.
6. That, as of the date of the Official Statement and as of the date hereof, the Appraisal Report appended to the Official Statement, to the best of my knowledge and belief, and subject to all of the Assumptions and Limiting Conditions set forth in the Appraisal Report, does not contain any I-2
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untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under w hich they were made, not misleading, and no events or occurrences have been ascertained by us or have come to our attention that would substantially change the estimated values stated in the Appraisal Report. However, we have not performed any procedures since the date of the Appraisal Report to obtain knowledge of such events or occurrences nor are we obligated to do so in the future.
7. The City and the Underwriter, Piper Sandler & Co., are entitled to rely on the Certificate.
INTEGRA REALTY RESOURCES
By:
Authorized Representative
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EXHIBIT J
$__________
IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
SPECIAL TAX BONDS, SERIES 2023
CERTIFICATE OF MARKET ABSORPTION CONSULTANT
_____, 2023
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
The undersigned hereby states and certifies:
1. That he is an authorized principal of Empire Economics, Inc. (the “ Market Absorption Consultant”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.
2. That the Market Absorption Consultant has prepared an Market report, dated _____, 2023 (the “ Market Report ”), on behalf of the City of Tracy (the “City”) in connection with the Preliminary Official Statement, _____, 2023 (the “Preliminary Official Statement”) and the Official Statement dated _____, 2023 (“Official Statement”), for the Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) Special Tax Bonds, Series 2023 (the “Bonds”).
3. That the Market Absorption Consultant hereby consents to the reproduction and use of the Market Report appended to the Preliminary Official Statement and the Official Statement. The Market Absorption Consultant also consents to the references to the Market Absorption Consultant and the Market Report made in the Preliminary Official Statement and the Official Statement.
4. In the opinion of the Market Absorption Consultant the assumptions made in the Market Report are reasonable. Since the date of the Market Report, the Market Absorption Consultant is not aware of any facts that would cause its opinion as to the timing of home sales in Improvement Area No. 2 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills) to be different than the Market Report.
5. That, as of the date of the Official Statement and as of the date hereof, the Market Report appended to the Official Statement, to the best of my knowledge and belief, and subject t o all of the limiting conditions and major assumptions set forth in the Market Report, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the J-2
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statements contained therein, in the light of th e circumstances under which they were made, not misleading, and no events or occurrences have been ascertained by us or have come to our attention that would substantially change the estimated timing of home sales stated in the Market Report.
However, we have not performed any procedures since the date of the Market Report to obtain knowledge of such events or occurrences nor are we obligated to do so in the future.
6. The City and the Underwriter, Piper Sandler & Co., are entitled to rely on the Certificate.
EMPIRE ECONOMICS
By: ______________________________________
Authorized Representative
APPROVED AS TO FORM AND LEGALITY
___________________________
CITY ATTORNEY’S OFFICE
TRACY CIT
Y COUNCIL
RESOL
UTION NO. ____
AUTHORIZING THE ISSUANCE AND SALE OF SPECIAL TAX BONDS FOR THE
PURPOSE OF FINANCING AUTHORIZED FACILITIES, AND APPROVING AND
AUTHORIZING RELATED DOCUMENTS AND ACTIONS FOR CITY OF TRACY COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS) WITH RESPECT TO IMPROVEMENT AREA NO. 2 OF THE CITY OF TRACY COMMUNITY FACILITIES DISTRICT NO. 2016-1 (TRACY HILLS)
WHEREAS, the Council previously conducted proceedings under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code (the “Act”), to establish (i) “City of Tracy Community Facilities District No. 2016-1 (Tracy Hills)” (the “CFD”), (ii) an initial improvement area in the CFD designated “Improvement Area No. 1 of the City of Tracy Community Facilities District No. 2016-1 (Tracy Hills)" (“Improvement Area No. 1”), and (iii) a future annexation area of the CFD (the “Future Annexation Area”); and WHEREA
S, pursuant to Resolution No. 2016- 157, adopted by the Council on July 19, 2016 ( the “Resolution of Formation”), the Council provided for, among other things, (i) the financing of certain public facilities (the “Facilities”) by the CFD, (ii) the annexation of parcels in the Future Annexation Area to the CFD pursuant to a unanimous approval (a “Unanimous Approval”) of the owner or owners of such parcels and (iii) in any such Unanimous Approval, the designation as a new improvement area (each, a “Future Improvement Area”) of any territory annexing to the CFD and the identification and approval of the maximum amount of bonded indebtedness and other debt and the rate and method of apportionment of special tax for such Future Improvement Area; and
WHEREA
S, pursuant to Resolution No. 2016- 158, adopted by the Council on July 19, 2016, the Council declared the necessity to issue and sells bonds and incur other debt to finance the Facilities, including an amount not to exceed $215,000,000 in those portions of the CFD that are not in Improvement Area No. 1, with such amount to be allocated to Future Improvement Areas as described in the Resolution of Formation; and
WHEREA
S, subsequently, the Council undertook change proceedings, including a landowner vote, which culminated in the adoption by the City Council on August 21, 2018, of
Resolution ________
WHEREAS, there has also been submitted to the Council a form of preliminary Official Statement in connection with the marketing of the Bonds, and the Council, with the aid of its staff, has reviewed the preliminary Official Statement (the “Preliminary Official Statement”); and WHEREAS, i n accordance with Government Code Section 5852. 1, t he Council has obtained and di
sclosed the information set forth in Appendix A hereto; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds and the levy of the special taxes as contemplated by this resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act; now, therefore, be it RESOLVED: That the City Council of the City of Tracy hereby finds that the foregoing recitals are all true and correct; and be it further
RESOLVED: Pursuant to the Act , this Resolution and the Fiscal Agent Agreement, the Bonds are hereby authorized to be issued in the principal amount not to exceed Thirty-Eight million dollars ($38,000,000); and be it further
RESOLVED: The Bonds may be issued in one or more series, and the Bonds may be issued as federally taxable bonds or federally tax-exempt bonds, as determined by an Authorized Officer (as defined below); and be it further
RESOLVED: The Bonds shall be dated, bear interest at the rates, mature on the dates, be issued in the form, be subject to redemption, and otherwise be issued on the terms and conditions, all as set forth in the Fiscal Agent Agreement and in accordance with this Resolution; provided, however, that the true interest cost shall not exceed seven percent (7.0%); and be it further
RESOLVED: The Fiscal Agent, an Authorized Officer (as defined below) and other responsible officers of the City are hereby authorized and directed to take such actions as are required to cause the delivery of the Bonds upon receipt of the purchase price thereof; and be it further
RESOLVED: The City Council hereby finds that the issuance of the Bonds is in compliance with the Act, the Fiscal Agent Agreement and the City’s “Amended Local Goals and Policies for Community Facilities Districts (CFDs)” adopted by the Council on February 4, 2014, by Resolution No. 2014-019 (“Goals and Policies ”), except that the provision requiring property owners to provide continuing disclosure as long as they own property that is responsible for at least 10% of the special taxes in Improvement Area No. 2 is hereby waived so that the threshold can be established for the Bonds at a level acceptable to the Underwriter (as defined below) ; and be it further
RESOLVED: The City Council hereby finds that the appraisal described in the Preliminary Official Statement has been prepared consistent with the Goals and Policies; and be it further Resolution ________
RESOLVED: The City Council hereby finds that the current draft of the appraisal described in the draft Preliminary Official Statement
(the “Appraisal”) concludes that the taxable
property in Improvement Area No. 2 has a market value (subject to the various assumptions and conditions set forth
in the appraisal) that would be at least three times the maximum authorized principal amount of the Bonds approved above and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within Improvement Area No. 2 or a special assessment levied on property within the Improvement Area No. 2; and be it further
RESOLVED: To
the extent permitted by law, the Mayor and City Manager or such other official of the City as may be designated by the City Manager (each, an “Authorized Officer”) , acting alone, is hereby authorized and directed to execute and deliver the documents approved herein in substantially the form on file with the City Clerk, together with such additions or changes as are approved by such Authorized Officer, including such additions or changes as are necessary or advisable to permit the timely issuance, sale and delivery of the Bonds, and the City Clerk is hereby authorized and directed to attest thereto; the approval of such additions or changes shall be conclusively evidenced by the execution and delivery by an Authorized Officer of the documents herein specified; and be it further
RESOLVED: The Council hereby approves the Fiscal Agent Agreement, in substantially the form on file with the City Clerk. The terms and provisions of the Fiscal Agent Agreement, as executed, are incorporated herein by this reference as if fully set forth herein; and be it further RESOLVED: The Council hereby approves the Preliminary Official Statement prepared in connection with the Bonds in substantially the form on file with the Clerk of the Council, together with any changes therein or additions thereto deemed advisable by an Authorized Officer; and be it further
RESOLVED: The Council hereby approves and authorizes the distribution by the underwriter of the Bonds of the Preliminary Official Statement to prospective purchasers of the Bonds, and authorizes and directs an Authorized Officer on behalf of the City to deem the Preliminary Official Statement “final” pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”) prior to its distribution to prospective purchasers of the Bonds; and be it further RESOLVED: The execution of the final Official Statement, which shall include Bond pricing information, such other changes and additions thereto deemed advisable by an Authorized Officer, and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Official Statement by the City; and be it further
RESOLVED: The Council hereby approves the form of the Continuing Disclosure Certificate with respect to the Bonds in substantially the form thereof attached to the Official Statement on file with the City Clerk; and be it further RESOLVED: The Bond Purchase Agreement, between the City, for and on behalf of the CFD with respect to Improvement Area No. 2, and Piper Sandler & Co. (the “Underwriter”), in substantially the form on file with the City Clerk and made a part hereof as though set forth in full herein, is hereby approved by the Council; and be it further Resolution ________
RESOLVED: An Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement in such form, together with such changes, insertions and omissions that are approv ed by an Authorized Officer and that are in accordance with the provisions of
this Resolution, such execution to be conclusive evidence of such approval; subject to the requirement that the Underwriter’s discount on the purchase of the Bonds may not exceed 1.25
% of the par amount of the Bonds and the interest rate may not exceed the rate specified above; and be it further
RESOLVED: In addition, and pursuant to Section 53345.8 of the Act, the Council hereby finds and determines that an Authorized Officer may not execute and deliver the Bond Purchase Agreement unless the Authorized Officer concludes that the taxable property in Improve ment Area No. 2 has a market value based on the Appraisal (subject to the various assumptions and conditions set forth therein) at least three times the principal amount of the Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within Improvement Area No. 2 or a special assessment levied on property within the Improvement Area No. 2; and be it further RESOLVED: The City Council hereby approves the negotiated sale of the Bonds to the Underwriter pursuant to such Bond Purchase Agreement; the negotiated sale may be on a forward basis, as determined by an Authorized Officer; and be it further RESOLVED: The City Council hereby finds that sale of the Bonds to the Underwriter at a negotiated sale pursuant to the Bond Purchase Agreement will result in a lower overall cost than would be achieved by selling the Bonds at a public sale utilizing competitive bidding; and be it further
RESOLVED: The City Council hereby approves, confirms and ratifies all actions heretofore taken by the officers and agents of the City with respect to the establishment of the CFD and the designation of Improvement Area No. 2, the annexation of the Annexation Property to the CFD as Improvement Area No. 2, the approval of the Improvement Area No. 2 Rate and Method, the approval of bonded indebtedness and other debt for the CFD with respect to Improvement Area No. 2, and the sale and issuance of the Bonds; and be it further RESOLVED: The City Council hereby authorizes and directs the appropriate officers of the City to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with this resolution, including but not limited to any actions required in connection with issuance of ratings or a municipal bond insurance policy with respect to the Bonds, and any certificate, agreement, and other document described in the documents herein approved; and be it further RESOLVED: The City Council hereby authorizes a designee of an Authorized Officer to take any actions authorized by the City Council to be taken by an Authorized Officer, and such action by the designee of an Authorized Officer shall have the same force and effect as if taken by the Authorized Officer; and be it further
Resolution ________
RESOLVED: This resolution
shall take effect from and after its adoption. The provisions of any pre
vious resolutions in any way inconsistent with the provisions hereof in and for the issuance of the Bonds as herein described are hereby repealed. * * * * * * * *
The foregoing Resolution 2023-__ was adopted by the Tracy City Council on October 17, 2023, by the following vote:
AYES: COUNCIL
MEMBERS:
NOES:
ABSENT:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
ABSTENTIO
N: COUNCIL MEMBERS:
______________
NANCY D. YOUNG
Mayor of the City of Tracy, California
ATTEST: ______________
ADRIANNE RICHARDSON
City Clerk and Clerk of the Council of the
City of Tracy, California
Resolution ________
APPEN
DIX A
Government Code Section 5852.1 Disclosure
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates are based on market conditions as of September 27, 2023, and have been provided to the City by CSG Advisors Incorporated, the City’s Municipal Advisor in consultation with Piper Sandler & Co., Underwriter of the Bonds.
Principal Amount. The Municipal Advisor has informed the City that, based on the CFD financing plan and current market conditions, its good faith estim ate of the aggregate principal amount of the Bonds to be sold is $35,110,000 (the “Estimated Pr incipal Amount”), which excludes approximately $542,000 of net original issue discount estimated to be generated from current market pricing, and therefore results in $34,568,000 of net proceeds of the Bonds. Net original issue discount is generated when, on a net aggregate basis for a single issuance, the prices paid for the bonds are lower t han the face values of such bonds.
True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith esti mate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 5.73%.
Finance
Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs
associated with the Bonds), is $874,000. Such fees and charges include fees for bond and disclosure counsel, municipal advisor, appraiser, market absorption consultant, special tax consultant, fiscal agent, city attorney and staff time related to bond issuance, set-aside for Fiscal Year 2023-24 CFD administrative expenses, printing, and underwriting.
Amount of Proceeds to be Received. The Municipal Advisor has informed the C ity that, assuming that the Estimated Principal Amount of the Bonds is sold plus net premium, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received on behalf of the CFD and Improvement Area No. 2 for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $30,445,000.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments that the Improvement Area No. 2 property owners will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described Resolution ________
above,
not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $77,444,000.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estim ates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the CFD financing plan, delays in the financing, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
Oct ober 17, 2023
Agenda Item 3.C
RECOMM
ENDATION
Staf
f recommends that the City Council adopt a Resolution: 1) rescinding Resolution 2022-184 that approved the Regular Meeting Calendar of the Tracy City Council for 2023 (Calendar); and 2) approving an amended Regular Meeting Calendar of the Tracy City Council for 2023.
EXECUT
IVE SUMMARY
While
Section 2.04.020 of the Tracy Municipal Code establishes the meeting dates and times for City Council meetings, it is best practice to adopt an annual meeting calendar for agenda management and planning purposes. In addition, State law requires that certain legislative actions only occur at regularly scheduled meetings, so having an adopted calendar of regular City Council meetings establishes, with certainty, which meetings are regular scheduled meetings of the City Council. This item requests approval of an amended calendar, reflecting the cancellation of the November 21, 2023 Regular Meeting.
BACK
GROUND AND LEGISLATIVE HISTORY
Purs
uant to Tracy Municipal Code 2.04.020, regular meetings of the City Council are held at 7:00 p.m. on the first and third Tuesday of each month of the calendar year, in the Council Chambers located at City Hall. Adopting a meeting calendar allows for proper agenda planning and can provide for recess periods, holidays, or election days and also provides certainty of establishing “regularly scheduled meetings” for City Council to consider certain legislative actions which, under State law, may only be heard at such designated meetings.
Histo
rically, the City Council has cancelled certain meetings given conflicts with State and local events of importance, such as general elections and National Night Out (an annual event that occurs on the first Tuesday in August), and during holiday periods to appropriately manage staffing and quorum issues. On December 6, 2022, the City Council adopted Resolution 2022-184, which adopted the 2023 calendar of regular Tracy City Council meetings.
At the
October 3, 2023, Council meeting Council Member Bedolla, seconded by Mayor Pro Tem Davis, requested discussion regarding the cancellation of the November 21, 2023, regular Council meeting due to observance of Thanksgiving Holiday on November 23, 2023.
Speci
al meetings and workshops also may be scheduled. Such meetings and workshops may be called by the City Manager, Mayor or by a majority of Council Members as needed, in accordance with the Council Meeting Protocols and Rules of Procedure.
ANALYSI
S
The pr
oposed schedule of meetings includes consideration of the cancellation of the November 21, 2023 regular Council meeting due to observance of the Thanksgiving Holiday. This will allow for staff, Council Members and the public to appropriately plan during the Thanksgiving Agenda Item 3.C
October 17, 2023
peak travel week. Should a matter rise to a level of urgency requiring a meeting to be held during the planned recess,
a special meeting may be called pursuant to the City Council’s Local Rules of Council Procedures.
FISCAL
IMPACT
This is a routine operational item, and no significant fiscal impact exists. However, any meetings canc
elled could save funds related to the broadcasting of meetings.
STRATEGIC PLAN
This
agenda item is a routine operational item and does not relate to the Council’s four strategic priorities.
ACTION REQUESTED OF THE CITY COUNCIL
Staff recommends that the City Council adopt a Resolution: 1) rescinding Resolution 2022-184 that approved
the Regular Meeting Calendar of the Tracy City Council for 2023 (Calendar); and 2) approving an amended Regular Meeting
Calendar of the Tracy City Council for 2023.
Prepared by: Adrianne Richardson, City Clerk
Reviewed by: Bijal Patel, City Attorney
Karin Schnaider,
Assistant City Manager
Approved by: Midori
Lichtwardt, Interim City Manager
Attachments:
Attachment A: Resolution 2022-184
APPROVED AS TO FORM AND LEGALITY
4, w
CI TORNE ' S OFFICE
TRACY CITY COUNCIL
RESOLUTION NO. 2022- 184
ADOPTING THE REGULAR MEETING CALENDAR OF THE TRACY CITY COUNCIL FOR CALENDAR YEAR 2023
WHEREAS, In accordance with Tracy Municipal Code 2.04.020, regular meetings of the City Council shall be held at 7:00 p.m. on the first and third Tuesday of each month in Council Chambers; and
WHEREAS, It is best practice to adopt an annual calendar of regular meetings for agenda management and planning purposes; and
WHEREAS, In addition, State law requires that certain legislative actions only occur at regularly scheduled meetings; and
WHEREAS, Special meetings and workshops may be called by the City Manager, Mayor or a majority of Council Members as needed, in accordance with the Council' s Meeting Protocols and Rules of Procedure; and
WHEREAS, This year' s proposed schedule of meetings includes consideration of a summer and winter legislative break is being proposed; and WHEREAS, Many cities "go dark" or recess for purposes of a summer or winter break; and
WHEREAS, Staff is recommending that the City Council adopt the following as the City Council' s regular meeting calendar for calendar year 2023:
TRACY CITY COUNCIL
2023 REGULAR MEETING CALENDAR
Date Type Date Type
January 3 — Cancel
Recess)
Regular Meeting ( Winter July 4 Cancel Regular Meeting
Federal Holiday).
January 17 Regular July 5 Regular Meeting
February 7 Regular July 18 Cancel Regular Meeting
Summer Recess
February 21 Regular August 1 — Cancel Regular Meeting
National Night Out
March 7 Regular August 15 Regular
March 21 Regular September 5 Re ular
April 4 Regular September 19 Regular
April 18 Re ular October 3 Regular
May 2 Regular October 17 Regular
May 16 Regular November 7 Regular
June 6 Regular November 21 Regular
June 20 Regular December 5 Regular
December 19 - Cancel Regular Meeting
Winter Recess
ATTACHMENT A
Resolution 2022- 184
NOW, THEREFORE, BE IT:
RESOLVED: The City Councilof the City of Tracy herebyfinds and determinesthat the foregoingrecitals are true and correctand are hereby incorporatedherein as findings and determinations of the City; and be it further
RESOLVED: That the City Councilof the City of Tracy herebyapprovesthe proposed calendarof meetingsset forth in this Resolutionas the RegularMeetingCalendarof the Tracy City Council for Calendar Year 2023; and be it further
RESOLVED: That nothing in this Resolution prevents the City Council from scheduling a special meeting or cancelling a regularly scheduled meeting, otherwise in accordance with local and State law.
The foregoing Resolution2022-184was adopted by the TracyCity Councilon December 6, 2022 by the following vote:
AYES: COUNCIL MEMBERS: ARRIOLA, BEDOLLA, DAVIS, VARGAS, YOUNG NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
ABSTENTION: COUNCIL MEMBERS: NONE
NANOD. YouaO
Mayor of the City of Tracy, California
ATTEST: 1 c-
ADRIANNE RICHARDSON
City Clerk and Clerk of the Council of the
City of Tracy, California
APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE
TRACY CITY COUNCIL
RESOLUTION NO. _______________
1) RESCINDING RESOLUTION 2022-184 THAT APPROVED THE REGULAR MEETING CALENDAR OF THE TRACY CITY COUNCIL FOR 2023 (CALENDAR); AND 2)
APPROVING AN AMENDED REGULAR MEETING CALENDAR OF THE TRACY CITY COUNCIL FOR 2023
WHEREAS, In accordance with Tracy Municipal Code 2.04.020, regular meetings of the City Council shall be held at 7:00 p.m. on the first and third Tuesday of each month in Council Chambers; and
WHEREAS, It is best practice to adopt an annual calendar of regular meetings for agenda management and planning purposes; and
WHEREAS, In addition, State law requires that certain legislative actions only occur at regularly scheduled meetings; and
WHEREAS, Special meetings and workshops may be called by the City Manager, Mayor or a majority of Council Members as needed, in accordance with the Council’s Meeting Protocols and Rules of Procedure; and
WHEREAS, On December 6, 2022, the City Council adopted Resolution 2022-184 approving the 2023 calendar of regular Tracy City Council meetings; and
WHEREAS, Staff is recommending that the City Council adopt an amended 2023 calendar of regular Tracy City Council meetings to reflect the cancellation of the November 21, 2023 regular Council meeting to allow for staff, City Council members and members of the public to plan during the Thanksgiving peak travel week; with the following as the City Council’s regular meeting calendar for calendar year 2023 (Amended Calendar):
TRACY CITY COUNCIL
2023 REGULAR MEETING CALENDAR
Date Type Date Type
January 3 – Cancel Regular Meeting (Winter
Recess)
July 4 Cancel Regular Meeting
(Federal Holiday).
January 17 Regular July 5 Regular Meeting
February 7 Regular July 18 Cancel Regular Meeting
(Summer Recess)
February 21 Regular August 1 – Cancel Regular Meeting
(National Night Out)
March 7 Regular August 15 Regular
March 21 Regular September 5 Regular
April 4 Regular September 19 Regular
April 18 Regular October 3 Regular
May 2 Regular October 17 Regular
May 16 Regular November 7 Regular
June 6 Regular November 21 Cancel Regular Meeting
(Thanksgiving Week)
Resolution 2023-
June 20 Regular December 5 Regular
December 19 - Cancel Regular Meeting
(Winter Recess)
NOW, THEREFORE, BE IT:
RESOLVED: The City Council of the City of Tracy hereby finds and determines that the foregoing recitals are true and correct and are hereby incorporated herein as findings and determinations of the City; and be it further
RESOLVED: That the City Council of the City of Tracy hereby rescinds Resolution 2022- 184 that approved the Regular Meeting Calendar of the Tracy City Council for 2023; and be it further
RESOLVED: That the City Council hereby approves the Amended Regular Meeting Calendar of the Tracy City Council for 2023, as set forth in this Resolution, reflecting the cancellation of the November 21, 2023 Regular Meeting; and be it further
RESOLVED: That nothing in this Resolution prevents the City Council from scheduling a special meeting or cancelling a regularly scheduled meeting, otherwise in accordance with local and State law.
* * * * * * * * * * * * * *
The foregoing Resolution 2023-_____ was adopted by the Tracy City Council on October 17, 2023 by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTENTION: COUNCIL MEMBERS:
___________________________________________
NANCY D. YOUNG
Mayor of the City of Tracy, California
ATTEST:
ADRIANNE RICHARDSON
City Clerk and Clerk of the Council of the
City of Tracy, California