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RES-2007-007CITY OF ANAHEIM RESOLUTION NO. 2007- 007 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM, CALIFORNIA (I) APPROVING THE ISSUANCE OF NOT TO EXCEED $225,000,000 AGGREGATE PRINCIPAL AMOUNT OF REVENUE BONDS OF THE ANAHEIM PUBLIC FINANCING AUTHORITY; (II) APPROVING THE FORMS AND AUTHORIZING THE EXECUTION OF AN INSTALLMENT PURCHASE AGREEMENT, AN INDENTURE OF TRUST, ESCROW AGREEMENTS, A CONTINUING DISCLOSURE AGREEMENT, A PURCHASE CONTRACT AND OTHER RELATED DOCUMENTS; (III) APPROVING THE DELIVERY OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT; AND (IV) APPROVING CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Anaheim (the "City and the Anaheim Redevelopment Agency have heretofore entered into a Joint Exercise of Powers Agreement (the "Joint Exercise of Powers Agreement establishing the Anaheim Public Financing Authority (the "Authority and WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Bond Law and the Joint Exercise of Powers Agreement, the Authority is authorized to borrow money for the purpose of assisting the City in the financing and refinancing of costs related to public capital improvements of the City; and WHEREAS, it has been proposed that the Authority assist the City in the financing and refinancing of certain public capital improvements to the City's electric distribution system (the "Distribution System Assets and WHEREAS, it has been proposed that the Authority sell the Distribution System Assets to the City and the City purchase such Distribution System Assets from the Authority pursuant to an Installment Purchase Agreement (the "Installment Purchase Agreement by and between the City and the Authority, the proposed form of which has been presented to this City Council, pursuant to which the City will agree to make certain installment purchase payments (the "2007 A Purchase Payments in connection therewith; and WHEREAS, the Authority and the City have determined that it would be in the best interests of the Authority, the City and the citizens of the City to authorize, pursuant to an Indenture of Trust (the "Indenture by and among the Authority, the City and Union Bank of California, N.A., as trustee (the "Trustee the proposed form of which has been presented to this City Council, the issuance of the Authority's Revenue Bonds, Series 2007 -A (City of Anaheim Electric System Distribution Facilities) (the "2007 -A Bonds in an aggregate principal amount of not to exceed $225,000,000, under the provisions of the Bond Law, payable from certain revenues including the 2007 -A Purchase Payments, for the purpose of raising funds necessary to provide such financial assistance to the City; and WHEREAS, it has been proposed that a portion of the proceeds received from the sale of the 2007 -A Bonds and certain other moneys be deposited in an escrow fund created pursuant to an Escrow Agreement (the "FARECa1 Escrow Agreement among the Financing Authority for Resource Efficiency of California "FARECa1 the City and The Bank of New York Trust Company, N.A., as escrow agent, the proposed form of which has been presented to this City Council, to provide for the defeasance of certain FARECaI Certificates of Participation originally executed and delivered in 1997 to finance a portion of the Distribution System Assets; WHEREAS, it has been proposed that a portion of the proceeds received from the sale of the 2007 -A Bonds and certain other moneys be deposited in an escrow fund created pursuant to an Escrow Agreement (the "1998 Escrow Agreement," and together with the FARECa1 Escrow Agreement, the "Escrow Agreements among the Authority, the City and The Bank of New York Trust Company, N.A., as escrow agent, the proposed form of which has been presented to this City Council, to provide for the defeasance of certain Authority Revenue Bonds originally issued in 1998 to finance a portion of the Distribution System Assets; and WHEREAS, it has been proposed that the City and the Authority enter into a Purchase Contract (the "Purchase Contract with Citigroup Global Markets Inc., as senior manager, and such other securities firms as may be selected by an Authorized Officer (defined below) as underwriters (collectively, the "Underwriters the proposed form of which has been presented to this City Council, providing for the purchase by negotiated sale of the 2007 -A Bonds by the Underwriters; and WHEREAS, the City has determined that it is in the best public interest of the City to approve the above documents and authorize and approve the transactions contemplated thereby; NOW, THEREFORE, the City Council of the City of Anaheim, California does hereby resolve, determine and order as follows: SECTION 1: The City Council hereby approves the issuance of the 2007 -A Bonds by the Authority under and pursuant to the Bond Law; provided, that the aggregate principal amount of the 2007 -A Bonds shall not exceed $225,000,000. The 2007 -A Bonds shall be issued pursuant to the Indenture. The City Council hereby approves the Indenture in the form thereof on file with the City Clerk, together with such additions thereto and changes therein as are approved in accordance with Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. The Mayor, the City Manager, the City Treasurer, the Public Utilities General Manager and the Public Utilities Assistant General Manager- Finance and Administration, and their respective designees (each, an "Authorized Officer are each hereby authorized to execute, and the City Clerk is hereby authorized to attest and affix the seal of the City to, the final form of the Indenture, for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Indenture. 2 The City Council hereby approves the issuance of the 2007 -A Bonds in accordance with the terms and provisions of the Indenture (as executed and delivered). SECTION 2: The City Council hereby approves the Installment Purchase Agreement in the form thereof on file with the City Clerk, together with such additions thereto and changes therein as are approved in accordance with Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized to execute, and the City Clerk is hereby authorized to attest and affix the seal of the City to, the final form of the Installment Purchase Agreement, for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Installment Purchase Agreement. SECTION 3: The City Council hereby approves the Escrow Agreements in the forms thereof on file with the City Clerk, together with such additions thereto and changes therein as are approved in accordance with Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized to execute, and the City Clerk is hereby authorized to attest and affix the seal of the City to, the final forms of the Escrow Agreements, for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Escrow Agreements. SECTION 4: The City Council hereby approves the Continuing Disclosure Agreement in the form on file with the City Clerk, together with such additions thereto and changes therein as are approved by Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized to execute, and the City Clerk is hereby authorized to attest and affix the seal of the City to, the final form of the Continuing Disclosure Agreement, for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Continuing Disclosure Agreement. SECTION 5: The City Council hereby approves the Purchase Contract in the form thereof on file with the City Clerk, together with such additions thereto and changes therein as are approved by Section 7 hereof, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized to execute, and the City Clerk is hereby authorized to attest and to affix the seal of the City to, the final form of the Purchase Contract, for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Purchase Contract. SECTION 6: The City Council hereby approves the form of Preliminary Official Statement relating to the 2007 -A Bonds (the "Preliminary Official Statement in the form thereof on file with the City Clerk, with such additions thereto and changes therein as are approved by any Authorized Officer, upon consultation with the City Attorney, Fulbright Jaworski L.L.P., as Bond Counsel and Disclosure Counsel "Bond Counsel Each of the Authorized Officers is hereby authorized to execute and deliver a certificate deeming the Preliminary Official Statement final for purposes of SEC Rule 15c2 -12. Upon the pricing of the 2007 -A Bonds, each of the Authorized Officers is hereby authorized to prepare and execute a final Official Statement (the "Official Statement substantially in the form of the Preliminary Official Statement, with such additions thereto and changes therein as approved by any 3 Authorized Officer, upon consultation with the City Attorney and Bond Counsel. The City Council hereby authorizes the distribution of the Preliminary Official Statement and the Official Statement by the Underwriters in connection with the offering and sale of the 2007 -A Bonds. SECTION 7: The agreements approved in Sections 1, 2, 3, 4 and 5 of this Resolution shall, when executed and delivered pursuant to said sections, contain such additions and changes (including additions and changes necessary to satisfy the requirements of any provider of a municipal bond insurance policy relating to the 2007 -A Bonds) as shall have been approved by the Authorized Officers. Each Authorized Officer is hereby authorized to determine, in connection with the execution and delivery of the agreements approved in Sections 1, 2, 3, 4 and 5 hereof, the following with respect to the 2007 -A Bonds: (a) the aggregate principal amount of the 2007 -A Bonds, which shall not exceed $225,000,000; (b) the final 2007 -A Purchase Payment under the Installment Purchase Agreement, which shall be due and payable not later than October 1, 2036; (c) the yield on the 2007 -A Bonds, which shall not exceed 5.50 (d) the outstanding obligations of the City, the Authority and FARECa1 to be defeased by the 2007 -A Bonds; (e) the Underwriters' discount on the 2007 -A Bonds, which shall not exceed 0.70% of the principal amount thereof; and (f) the premium for any municipal bond insurance with respect to the 2007 -A Bonds, which shall not exceed 0.60% of the 2007 -A Bond payments insured. SECTION 8: Prior to the Crossover Date (as defined in the Installment Purchase Agreement), the 2007 -A Purchase Payments and all other payments with respect to Qualified Obligations (as defined in the Installment Purchase Agreement) shall be secured by a pledge, charge and lien upon the Surplus Revenues in the Qualified Obligations Account (as defined in the Installment Purchase Agreement) and shall be paid from Surplus Revenues in the Qualified Obligations Account unless otherwise paid from other sources of legally available funds. 2007 A Purchase Payments and all other payments with respect to Qualified Obligations shall be equally secured by the Surplus Revenues in the Qualified Obligations Account without priority for number or date. The Surplus Revenues in the Qualified Obligations Account shall be held in trust by the City Treasurer for the payment of the 2007 -A Purchase Payments and any other Qualified Obligations. From and after the Crossover Date, the 2007 -A Purchase Payments and any other Distribution System Parity Obligations (as defined in the Installment Purchase Agreement) shall be equally secured by the Distribution System Net Revenues (as defined in the Installment Purchase Agreement) and shall be paid from the Distribution System Net Revenues unless otherwise paid from other sources of legally available funds. From and after the Crossover Date, the Distribution System Net Revenues shall be held in trust by the Treasurer of the City for the payment of the 2007 -A Purchase Payments and any other Distribution System Parity Obligations. 4 SECTION 9: The Mayor, the City Manager, the Public Utilities General Manager and the Public Utilities Assistant General Manager Finance and Administration, the City Treasurer, the City Attorney and the City Clerk of the City and the other officers, employees and agents of the City are hereby authorized and directed, jointly and severally, for and in the name of the City, to do any and all things and to take all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2007 -A Bonds, to arrange for the insuring of all or any portion of the 2007 -A Bonds and to consummate the transactions contemplated by the Indenture, the Installment Purchase Agreement, the Continuing Disclosure Agreement, the Escrow Agreement, the Purchase Contract and this Resolution, and such actions previously taken by such officers, employees and agents are hereby ratified and confirmed. SECTION 10: This City Council hereby finds and determines that the transfer of title to Facilities to the Authority under the terms of the Installment Purchase Agreement is in the best interests of the City, and hereby agrees to transfer such title to the Authority. SECTION 11: This Resolution shall take effect from and after its date of adoption. 5 PASSED AND ADOPTED this 9th day of January, 2007, by the following vote: AYES: Mayor Pringle, Council Members Sidhu, Hernandez, Galloway, Kring NOES: NONE ABSENT: NONE [SEAL] ATTEST: 64313.1 6 Mayor STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF ANAHEIM I, Cathy Godoy, Acting City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 2007- 001 was introduced and adopted at a regular meeting of the City Council of the City of Anaheim duly called, noticed and held on the9th day of January, 2007, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Mayor Pringle, Council Members Sidhu, Hernandez Galloway, Kring NOES: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE AND I FURTHER certify that the Mayor of the City of Anaheim signed said Resolution No. 2007- 007 on the 9th day of January, 2007. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 9th day of January, 2007. (SEAL) 64313.1 CITY RK O THE CITY 01 NAHEIM I, Cathy Godoy, Acting City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original Resolution No. 2007- 007 duly passed and adopted by the Anaheim City Council on January 9 2007. 7 CIT CLERK OF T CI Y OF ANAHEI