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83R-168 CITY OF ANAHEIM RESOLUTION NO. 83R-168 ~ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM, CALIFORNIA RELATING TO THE ISSUANCE OF ELECTRIC REVENUE ANTICIPATION NOTES OF SAID CITY PURSUANT TO ORDINANCE NO. 4416 OF SAID CITY COUNCIL. -. WHEREAS, the City Council of the City of Anaheim (the "City") at its meeting on April 26, 1983, adopted an Ordinance, des- ignated as Ordinance No. 4416, providing for the procedures for the issuance, sale and securing of Electric Revenue Anticipation Notes of the City and providing the terms and conditions of said Notes (the "Ordinance"); and WHEREAS, capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Ordinance; and WHEREAS, it is deemed to be in the best interest of the City to adopt the following resolution (the "Resolution"): NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ANAHEIM DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Representations and Warranties. The City represents and warrants, with respect to the Electric System, that: (a) It is a municipal corpq~Etion duly organized and val- idly existing under the Constitution and laws of the State of California, and has all requisite power and authority to conduct its business, to own its properties and to execute, deliver and perform all of its obligations under the Ordinance, this ReSOlution, the Dealer Bank Agreement, the Issuing and Paying Agent Agreement, and the Revolving Credit Agreement; and to issue each of the Notes. The Dealer Bank Agreement, the Issuing and Paying Agent Agreement and the Revolving Credit Agreement are herein/sometimes referred to as the "Related Agreements." (b) The issuance, execution, delivery and performance by the City of the Notes, the Ordinance, this Resolution and the Related Agreements have been duly authorized and do not (i) violate any pro- vision of the Charter, any law, rule, regulation, order, writ, judg- ment, injunction, decree, determination or award presently in effect having applicability to the Electric System, (ii) result in a breach of or constitute a default under any resolution of the City with respect to the Electric System or any indenture or loan or credit agreement or any other agreement, lease or instrument with respect to the Electric System to which the City is a party or by which the City or any of its Electric System properties may be bound or affected, or (iii) result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature, other than those imposed in the Ordinance, this Resolution and the Related Agreements, upon or with respect to any of the assets now owned or hereafter acquired by the City for the Electric System; and the City is not in any material respect in violation of or in default under any such law, rule, regu- lation, order, writ, judgment, injunction, decree, determination or award or any such indenture, agreement, lease or instrument material to its operation of the Electric System. (c) No authorization, consent, approval, license, exemption of or registration with any court or governmental department, commis- sion, board, bureau, agency or instrumentality, domestic or foreign, has been or will be necessary for the valid execution, delivery and performance by the City of the Ordinance, this Resolution and the Related Agreements, except for (i) those which have already been given, obtained or accomplished or (ii) those which are required in the future. (d) The Ordinance, this Resolution and the Related Agreements, when the Ordinance has become effective and such Agreements have been executed and delivered by the parties thereto, constitute legal, valid and binding obligations of the City enforce- able against the City in accordance with their respective terms, except as they may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally. (e) The Notes will be, when executed and delivered, valid and binding obligations of the City, enforceable in accordance with their respective terms, except as they may be limited by applicable bankruptcy, insolvency, moratorium,_~eorganization or similar laws affecting the enforcement of creditors' rights generally. Section 2. Covenants that Notes to Remain Tax Exempt, Arbitrage. The City hereby covenants that it will not use, or permit to be used, any of the property acquired out of, or the costs of which were reimbursed from, Note proceeds in such manner as would result in loss of tax exemption of interest on the Notes otherwise afforded under Section l03(a) of the ,Internal Revenue Code of 1954, as amended (the "Code"). The City covenants that it will not take any action or fail to take any action with respect to the investment of the proceeds of any Notes issued under the Ordinance or in any other respect which would result in constituting the Notes "arbitrage bonds" within the meaning of such term as used in Section l03(c) of the Code or which -2- would violate Treasury Regulations under Section l03(c) of the Code applicable to the Notes. <~ The City covenants that it will not expend, or permit to be expended, Note proceeds in any manner inconsistent with its reason- able expectations as certified in the Nonarbitrage Certificates to be executed from time to time with respect to the Notes; provided, how- ever, that the City may expend Note proceeds in any manner if the City first obtains an unqualified opinion of Mudge Rose Guthrie Alexander & Ferdon and Rourke & Woodruff ("Bond Counsel") that such expenditures will not impair the exemption from Federal income taxes of interest paid on the Notes. The City covenants that proceeds from any sale or other disposition of any portion of the Electric System or of any portion of the City's fuel inventory (including nuclear fuel) will be expended for additional construction of or improvements to the Electric System, for additions to the City's fuel inventory, or for the payment, purchase, or redemption of Notes or other City indebted- ness incurred in connection with the Electric System. The City covenants that it will not enter into, amend, modify or otherwise alter power sale contracts that would result in more than 25 percent of the annual output of an Electric System facility to be constructed, reconstructed or acquired with Note pro- ceeds being sold, on a take or payor take and pay basis, to one or more person each of whom (i) is not an "exempt person" within the meaning of Treasury Regulations Section 1.103-7(b) (2), and (ii) makes a guaranteed minimum payment or pays a demand charge exceeding three percent of the average annual debt service with respect to the por- tion of the Note Proceeds used to construct, reconstruct or, acquire such a facility; provided, however, that the City may amend, modify, alter or enter into power sale cont~~cts of such types if the City first obtains an unqualified opinion of Bond Counsel that such action will not impair the exemption from Federal income taxes of interest paid on the Notes. The City represents that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. Section 3. No Litigation. The City hereby represents that there is no litigation pending wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Notes, the Ordinance, this -- Resolution, the Revolving Credit Agreement, the Dealer Bank Agreement or the Issuing and Paying Agent Agreement, except for any such litigation as to which there has been rendered an opinion of Bond Counsel that such litigation is without merit. -3- - Section 4. Covenants Relating to Notes. The City hereby covenants that: (a) No Note issued under the Ordinance, other than any Note issued pursuant to the Revolving Credit Agreement, shall mature more than two hundred seventy (270) days from the date of issuance thereof. (b) A Note need not bear interest from its date, if the Determination given or delivered with respect to such Note pursuant to the Ordinance shall specify an interest rate of zero. (c) So long as any Note is Outstanding, the City will not at any time amend or modify the Ordinance or this Resolution, without the written consent of the holder of each Note Outstanding at such time. (d) Any person may rely upon the oral or written represen- tation of any officer listed as an Authorized Person in the Ordinance as to the availability of any other officer listed as an Authorized Person in the Ordinance when such Officer makes a Determination pur- suant to the Ordinance. Section 5. Additional Covenants Relating to the Notes and the Electric System. So long as any of the Notes are outstanding, the City makes the following covenants with the Note holders under the provisions of Section 1210 of the Charter (to be performed by the City or its proper officers, agents or employees), which covenants are necessary, convenient and desirable to secure the Notes and tend to make them more marketable; provided, however" that said covenants do not require the City to expend any moneys other than from the revenues of the Electric System. Covenant 1. Punctual PaYment. The City will duly and punctually payor cause to be paid the principal of and interest on every Note issued hereunder on the date, at the place and in the manner mentioned in the Notes and in accordance with this Resolution, in strict conformity with the terms of the Notes and of this Resolution, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and all resolutions supplemental thereto and 'of the Notes issued hereunder, and that the time of such payment and performance is of the essence of the City's contract with the Note holders. Covenant 2. Discharge Claims. In order to preserve and protect the security of the Notes, the City shall pay from amounts lawfully available therefor and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the -4- Electric System which, if unpaid, may become a lien or charge upon the property or revenues of the Electric System prior or superior to the lien of the Notes and impair the security of the Notes. The City shall also pay from amounts lawfully available therefor all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the Electric System or upon any part thereof or upon any of the revenues thereof. Covenant 3. Commencement of Use of Proceeds. As soon as funds are available therefor, the City will commence (to the extent not already commenced) the accomplishment of the purposes for which the Notes are issued and will continue the same with all practicable dispatch and in an economical manner. The City shall use the pro- ceeds of the Notes only for the purposes specified in the Ordinance and for no other purpose. Covenant 4. Operate Electric System in Efficient and Economical Manner. The City shall operate the Electric System in an efficient and economical manner and shall operate, maintain and preserve the Electric System in good repair and working order. Covenant 5. Against Sale, Eminent Domain, Existing and Future Agreements. Except as provided herein, the City covenants that the Electric System shall not be mortgaged or otherwise encu~ bered, sold, leased, pledged, or any charge placed thereon, or dis- posed of as a whole or substantially as a whole unless such sale or other disposition be so arranged so as to provide for the payment of the principal of and interest on the Notes. The City further cove- nants that it will not enter into any agreement which impairs the operation of the Electric System or any part of it necessary to secure adequate revenues to pay the principal of and interest on the Notes or which otherwise would impair the rights of the Note holders with respect to the revenues of the E!~ctric System. If any substan- tial part of the Electric System is sold, the payment therefor shall either be used for the acquisition and/or construction of improve- ments and extensions of the Electric System or shall be placed in the appropriate funds or accounts and shall be used to payor redeem the Notes in the manner provided in this Resolution. The City covenants that any amounts received as awards as a resul t of the taking of all or any part.! of the Electric System by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the City, shall either be used for the acquisition arid/or construction of improve- ments and extension of the Electric System or shall be placed in the appropriate funds or accounts and shall be used to pay the notes in the manner provided in this Resolution. - The City will not sell, lease or otherwise encumber any part of the Electric System except properties or facilities no longer useful or necessary to its efficient and economical operation. -5- ""'"..... - ~ v Covenant 6. Insurance. The City shall at all times main- tain with responsible insurers all such insurance on the Electric System as is customarily maintained by similar utilities systems with respect to works and properties of like character against accident to, loss of or damage to such works or properties and against loss of revenues. The City shall also maintain with responsible insurers worker's compensation insurance and insurance against public liabil- ity and property damage to the extent reasonably necessary to protect the City and the Note holders. Notwithstanding the foregoing, the City may provide any insurance required hereby through a self- insurance program. Covenant 7. Records and Accounts. The City shall keep proper books of record and accounts of the Electric System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Electric System. The City shall cause the books and accounts of the Electric System to be audited annually by an independent, certified public accountant or firm of certified public accountants. Covenant 8. Collection of Charges. The City will permit no free use of services of the Electric System. The City will pay promptly to the account of the Electric System from the City's General Fund (or other available funds) for all City use and services of the Electric System. The City will not grant or establish within any class of service preferential or discriminatory rates, fees or charges for use and services of the Electric System. For the pur- poses of setting such rates, fees and charges, service located out- side the the city limits of the City of Anaheim may be considered as separate classes of service. The City covenants that it shall at all times during the period any of the Notes are outstanding maintain and enforce valid regulations for the payment of bills for electric ser- vice and that such regulations shall._~t all times during such period provide that the City shall discontinue electric service to any user whose electric bill has not been paid'within the time fixed by said regulations. Covenant 9. Rates and Charges. In complying with the covenant concerning rates and charges set forth in Section l4 of the Ordinance, the City may (during the period in which the Revolving Credit Agreement is in full force and effect) anticipate the proceeds of additional Notes as the source of payment of interest on and prin- cipal payments of the Outstanding ~otes as they become due and payable. ' Covenant 10. Defense of Security for Notes. The C i t Y shall preserve and protect the security for the Notes and the rights of the Note holders and warrant and defend their rights against all claims and demands of all persons. -6- Section 6. Reaffirmation of Representations and Covenants. Each issuance of Notes by the City shall constitute an affirmation on the part of the City that the representations and war- ranties of this Resolution are true and correct as of the time of issuance of such Notes and that all agreements and covenants to be performed by the City pursuant to this Resolution on or before such date have been duly performed, unless prior to the issuance of such Notes, the City shall have received an opinion of Bond Counsel that the failure of the City to make such representations and warranties or to perform such agreements and covenantg~will not materially adversely affect the authorization of the City to issue such Notes. Such affirmation shall be evidenced by the execution and mailing to Bond Counsel on the date of each such issuance of a certificate signed by the Authorized Person, substantially in the form of Exhibit A hereto. Copies of such certificate shall also be mailed on such day to the dealer under the Dealer Bank Agreement and to the Issuing and Paying Agent. Section 7. Security for the Notes. The Notes shall be secured by a pledge, charge and lien upon the Surplus Moneys. All Notes shall be equally secured by the Surplus Moneys without priority for number, date of Notes, date of sale, date of execution, or date of delivery. The Surplus Moneys shall be held in trust by the Treasurer of the City for the benefit of the Note holders and shall be applied to the payment of principal of and interest on the Notes which have become due and payable; pro- vided, however, that, so long as none of the Notes or the interest thereon are due and payable and remain unpaid, nothing in this Resolution shall preclude the use of Surplus Moneys for any lawful purpose of the City including, but not limited to, the issuance of additional indebtedness payable solel~~rom the Surplus Moneys or the further pledge of the Surplus Moneys as security for such additional indebtedness, as long as such further pledge is subordinate and subject to the pledge, charge and lien created hereby and in the Ordinance as security for the Notes. Section 8. Events of Default and Remedies. If one or more of the fOllowing events of default shall occur and be continuing: (a) a default in the due and punctual payment of the prin- cipal of or interest on any Note when and as the same shall become due and payable; or -- (b) any representation or warranty of the City contained herein shall prove to be false in any material respect at the time such representation or warranty was made; or -7- (c) the City shall file any petition or action for relief which impacts the obligations of the City with respect to the Electric System under any bankruptcy, reorganization, insolvency or moratorium law, or any other law for the relief of, or relating to, debtors; then, and any such event the holder of any Note may, by notice in writing to the City, declare such Note to be, and it shall forthwith become, due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the City. Section 9. Resolution to Constitute Contract. The provisions of this Resolution shall constitute a part of the contract between the City and the Note holders, created pursu- ant to the Notes and the Ordinance, and such provisions shall be enforceable by mandamus or any other appropriate suit, action or pro- ceeding at law or in equity in any court of competent jurisdiction. Section 10. Effective Date. This Resolution shall become effective on the date that the Ordinance becomes effective. ADOPTED, SIGNED AND APPROVED this twenty-seventh] day of April, 1983. --A4~~ Mayor (SEAL] .f Attest: -- ~ j.)~--, City Cler -8- STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SSe CITY OF ANAHEIM ) I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 83R-l68 was introduced and adopted at an adjourned regular meeting provided by law, of the City Council of the City of Anaheim held on the 27th day of April, 1983, by the following vote of the members thereof: - AYES: COUNCIL MEMBERS: Kaywood, Pickler, Overholt, Bay and Roth NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None AND I FURTHER CERTIFY that the Mayor of the City of Anaheim signed said Resolution No. 83R-168 on the 27th day of April, 1983. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 27th day of April, 1983. ~~~~~ Y C ERK OF THE CIT F ANAHEIM (SEAL) I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 83R-l68 duly passed and adopted by the Anaheim City Council on April 27, 1983. ~~L~ -..