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RES FA-63RESOLUTION NO. FA-63 A RESOLUTION OF THE PALM DESERT FINANCING AUTHORITY AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF THE AUTHORITY'S ENERGY INDEPENDENCE PROGRAM, VARIABLE RATE DEMAND LEASE REVENUE BONDS, SERIES 2009 (FEDERALLY TAXABLE); APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH; AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO RECITALS: WHEREAS, the Palm Desert Financing Authority (the "Authority") is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated as of January 26, 1989, by and between the City of Palm Desert (the "City") and the Palm Desert Redevelopment Agency, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant to Article 4 of the Act to issue bonds for the purpose of financing and refinancing public capital improvements (as defined in the Act, including but not limited to paragraph (v) of Government Code Section 6546); and WHEREAS, the City has requested that the Authority issue, and the Authority desires to — issue, its Energy Independence Program, Variable Rate Demand Lease Revenue Bonds, Series 2009 (Federally Taxable) (the "Bonds") in order to (i) reimburse the City for the entire amount of its $2.5 million advance, authorized by Resolution No. 08-89 of the City Council of the City, adopted on August 28, 2008, to initially fund the Energy Independence Fund; (ii) finance the acquisition and construction or installation of distributed generation renewable energy sources and energy efficiency improvements on or in properties in the City pursuant to the City's Energy Independence Program; and (iii) pay certain costs related to the issuance of the Bonds; and WHEREAS, in connection with the issuance of the Bonds and to provide security therefore, it is proposed that the Authority will enter into (i) a Site Lease (as defined herein), under which the Authority will lease the Parkview Office Complex, also known as 73710 and 73720 Fred Waring Drive, Palm Desert, California, including the land and the improvements thereon (the "Leased Property"), from the City, and (ii) a Lease Agreement, under which the City will sublease the Leased Property from the Authority and make rental payments, calculated to be sufficient to allow the Authority to pay debt service on the Bonds; and WHEREAS, pursuant to the City's "Request for Proposals — Energy Program Financing," dated February 2009 (the "RFP"), and the authorization provided by the City Council of the City on May 21, 2009, to select Wells Fargo Bank, National Association, to assist the City with proceedings for a variable rate bond issue to provide financing for the City's Energy Independence Program, the Bonds will be issued as variable rate bonds and, from time to time, be subject to tender by bondholders pursuant to the terms of the Indenture, and the Authority P6401.1039\ 1142492.2 RESOLUTION NO. FA-63.. desires to appoint Wells Fargo Bank, National Association, to act as the tender agent (the "Tender Agent") under the Indenture with respect to the Bonds; and WHEREAS, there has been presented to the Authority the form of a Remarketing Agreement (the "Remarketing Agreement") with Wells Fargo Brokerage Services, LLC, as the remarketing agent (the "Remarketing Agent") pursuant to which the Remarketing Agent will perform certain duties, including the remarketing of any Bonds tendered or deemed tendered for purchase; and WHEREAS, in order to provide for additional liquidity for the payment of debt service on the Bonds and to enhance the credit quality of the Bonds, as contemplated by the submission of Wells Fargo Bank, National Association, in response to the RFP, Wells Fargo Bank, National Association, has agreed to provide an irrevocable letter of credit (the "Letter of Credit") with respect to the Bonds, on such terms as set forth in a term sheet, dated June 2, 2009, with respect to the Bonds; and WHEREAS, pursuant to Government Code Section 5922, in order to reduce the amount of interest rate risk or lower the cost of borrowing in connection with the issuance of the Bonds, the Authority desires to enter into an ISDA Master Agreement, as supplemented by a Schedule, a Credit Support Annex, and a Confirmation, each by and between the Authority and Wells Fargo Bank, National Association (collectively, the "Interest Rate Collar Documents"); and WHEREAS, the City Council has made a finding, after a duly noticed public hearing pursuant to Section 6586.5 of the California Government Code held on the date hereof, that the issuance of the Bonds will result in significant public benefit; and WHEREAS, in order to effect the issuance of the Bonds, the Authority Commission desires to approve the form of a Preliminary Official Statement for the Bonds, and to approve the forms of, and authorize the execution and delivery of, an Indenture, a Site Lease, a Lease Agreement, an Assignment Agreement, a Remarketing Agreement, the Interest Rate Collar Documents, and a Bond Purchase Contract for the Bonds, the forms of which are on file with the Secretary of the Authority. NOW, THEREFORE, THE PALM DESERT FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals; Acknowledgment of City Council Findings. The above recitals, and each of them, are true and correct. The Authority hereby acknowledges and concurs with the City Council's finding of significant public benefit and hereby approves and authorizes the issuance and sale of the Bonds. Section 2. Issuance of Bonds; Indenture. The Indenture (the "Indenture"), proposed to be entered into by and between the Authority and the Trustee (defined in Section 3 below), in the form presented and on file with the Secretary of the Authority (the "Authority Secretary"), is hereby approved. Subject to the parameters set forth in Section 4 below, the issuance of the Bonds is hereby approved and authorized. Subject to Section 4, each of the President, the Vice - President, and the Chief Administrative Officer, and any deputy of such officers (each, an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and P6401.1039\ 1 142492.2 2 RESOLUTION NO. FA-63 on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 3. Anvointment of Trustee and Tender Agent. The appointment of Wells Fargo Bank, National Association, as trustee (the "Trustee") and Tender Agent under the Indenture is hereby approved. Section 4. Terms of Sale of Bonds. The authorization set forth in this Resolution regarding the issuance and sale of Bonds are subject to the following parameters: (i) the aggregate principal amount of the Bonds shall not exceed $5,500,000; (ii) the initial interest rate on the Bonds during the term of the Interest Rate Collar Documents approved pursuant to Section 10 below shall not exceed 5.25% (excluding the fee of the Remarketing Agent and fee for the Letter of Credit to be issued by Wells Fargo Bank, National Association); and (iii) the underwriter's discount with respect to the Bonds shall be 1.00 percent of the principal amount thereof. Section 5. Site Lease. The Site Lease (the "Site Lease"), proposed to be entered into by and between the City and the Authority, in the form presented and on file in the office of the Secretary of the Authority, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Site Lease in substantially said form, with such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 6. Lease Agreement. The Lease Agreement (the "Lease Agreement"), proposed to be entered into by and between the Authority and the City, in the form presented and on file in the office of the Secretary of the Authority, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 7. Assignment Agreement. The Assignment Agreement (the "Assignment Agreement"), proposed to be entered into by and between the Authority and the Trustee, in the form presented and on file in the office of the Secretary of the Authority, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). Section 8. Bond Purchase Contract. The form of the Bond Purchase Contract by and among the City, the Authority, and Wells Fargo Institutional Securities, LLC (the "Underwriter") presented at this meeting, on file in the office of the Secretary of the Authority and incorporated herein by reference (the "Bond Purchase Contract"), is hereby approved, and any one of the P6401. 1039\ I 1 42492.2 3 RESOLUTION NO. FA-6161. Authorized Officers, acting singly, is hereby authorized to execute the Bond Purchase Contract in substantially the form hereby approved, with such additions thereto and changes therein as may be approved by such officer upon consultation with Bond Counsel. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Bond Purchase Contract; provided, however, that the Bond Purchase Contract shall be signed only if the terms of the agreement meet the parameters set forth in Section 4. Each of the Authorized Officers is authorized to determine the day on which the Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the Authority and may reject any terms presented by the Underwriter if determined not to be in the best interest of the Authority. Section 9. Remarketing Agreement. The Remarketing Agreement, proposed to be entered into by and between the Authority and Wells Fargo Brokerage Services, LLC, as the Remarketing Agent, in the form presented and on file in the office of the Secretary of the Authority, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute and deliver the Remarketing Agreement in substantially said form, with such changes therein as the Authorized Officer executing the document may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof); provided, that the Remarketing Agent's fees payable by the Authority under the Remarketing Agreement while the Bonds bear interest at a Weekly Rate shall be an annual fee equal to the greater of (i) $3,500, or (ii) one - eighth of one percent (0.125%) of the weighted average daily principal amount of the Bonds outstanding on the date of payment. Section 10. Interest Rate Collar Documents. The forms of the Interest Rate Collar Documents, as presented at this meeting and on file with the Secretary of the Authority, are hereby approved. Each Authorized Officer, acting singly, is hereby further authorized to execute and deliver, for and in the name of and on behalf of the Authority, the Interest Rate Collar Documents in substantially said forms, with such changes therein as the Authorized Officer executing the documents may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof); provided, that the maximum interest rate under the Interest Rate Collar Documents shall not exceed 5.25%. Section 11. Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"), in the form presented and on file with the Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement in substantially said form, with such additions or changes therein as such Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 of the Securities and Exchange Act of 1934 ("Rule 15c2-12"). The Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the Bonds in substantially the form hereby approved, together with such additions thereto and changes therein as are determined necessary by any one of the Authorized Officers to make the Preliminary Official Statement final as of its date for purposes of Rule 15c2-12, including, but not limited to, such additions and changes as are necessary to make all information set forth therein accurate and not misleading P6401.1039\ 1142492.2 4 RESOLUTION NO. FA-63 Section 12. Official Statement. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement (the "Official Statement"), and to execute the same for and in the name and on behalf of the Authority, with such additions or changes therein as such Authorized Officer may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof). The Underwriter is further authorized to distribute the final Official Statement for the Bonds and any supplement thereto to the purchasers thereof upon its execution on behalf of the Authority as described above. Section 13. Government Code Section 5922 Findings. In accordance with California Government Code Section 5922, the Authority hereby finds and determines that Interest Rate Collar Documents entered into in accordance with this Resolution and consistent with the requirements set forth herein are designed to reduce the amount or duration of payment, interest rate, spread or similar risk or result in a lower cost of borrowing to the Authority when used in combination with the issuance of the Bonds. Section 14. .Appointments of Financial Advisor, Bond Counsel, Disclosure Counsel, and Underwriter. In connection to the issuance of the Bonds, the appointments of Del Rio Advisors, LLC, as financial advisor, Richards, Watson & Gershon, A Professional Corporation, as Bond Counsel, Fulbright & Jaworski L.L.P., as Disclosure Counsel, and Wells Fargo Institutional Securities, LLC, as underwriter, are hereby approved and affirmed. Section 15. Other Acts. The Authorized Officers and all other officers of the Authority — are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents that they may deem necessary or advisable in order to consummate the sale, issuance and delivery of the Bonds, or otherwise to effectuate the purposes of this Resolution, the Indenture, the Site Lease, the Lease Agreement, the Assignment Agreement, the Remarketing Agreement, the Official Statement, the Bond Purchase Contract, and the Interest Rate Collar Documents and any such actions previously taken by such officers are hereby ratified and confirmed. Section 16. Effective Date. This Resolution shall take effect immediately upon adoption. P6401.1039\ l 142492.2 5 RESOLUTION NO. FA-63 PASSED AND ADOPTED by the Palm Desert Financing Authority Commission at a meeting held on the 25h day of June, 2009, by the following vote: AYES: BENSON, FERGUSON, FINERTY, and SPIEGEL NOES: NONE ABSENT: BELLY ABSTAIN: NONE ,/ eoi ROBERT A. SPIEG , PRTIENT ATTEST: SECRETARY P6401.1039\ 1 142492.2 6