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Reso 1054-03/1998RESOLUTION NO. 1054 RESOLUTION OF THE BOARD OF DIRECTORS OF THE VALLECITOS WATER DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT, A REIMBURSEMENT AGREEMENT, A CERTIFICATE PURCHASE AGREEMENT AND A REMARKETING AGREEMENT WITH RESPECT TO THE EXECUTION AND DELIVERY OF VALLECITOS WATER DISTRICT CERTIFICATES OF PARTICIPATION (TWIN OAKS RESERVOIR PROJECT), AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $27,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the Vallecitos Water District (the "District") desires to pay for the acquisition, construction and installation of certain improvements to its water system, constituting a reservoir facility (the "Project"); WHEREAS, in order to finance the Project, the District desires to purchase the Project from the Vallecitos Water District Financing Corporation (the "Corporation"), and the Corporation desires to sell the Project to the District, pursuant to an Installment Purchase Agreement (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to Union Bank of California, N.A., as trustee (the "Trustee") pursuant to a Trust Agreement among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement"); WHEREAS, in consideration of such assignment and the execution and entering into of the Trust Agreement, the Trustee has agreed to execute and deliver Vallecitos Water District Water Revenue Certificates of Participation (Twin Oaks Reservoir Proj ect) (the "Certificates"), evidencing direct, undivided fractional interests in the installment payments (the "Installment Payments") payable under the Installment Purchase Agreement; WHEREAS, in order to secure the timely payment of the principal and interest evidenced DOCSLA1:241162.2 42111-1-GH1-02/27198 Resolution No. 1054 Page 2 by the Certificates and to provide a source of payment for the purchase of Certificates tendered by the owners thereof when such purchase is required in accordance with the terms of the Trust Agreement, the District proposes to enter into a Letter of Credit Reimbursement Agreement with Credit Local de France, acting through its New York Agency (the "Bank"), pursuant to which the Bank will provide a letter of credit (such Letter of Credit Reimbursement Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Reimbursement Agreement"); WHEREAS, PaineWebber Incorporated, as underwriter, has submitted to the District and the Corporation a proposal to purchase the Certificates in the form of a Certificate Purchase Agreement (such Certificate Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Certificate Purchase Agreement"); WHEREAS, in order to provide for the remarketing of Certificates tendered pursuant to the terms of the Trust Agreement, the District desires to enter into a Remarketing Agreement with PaineWebber Incorporated (such Remarketing Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Remarketing Agreement"); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Certificates has been prepared (such Preliminary Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Preliminary Official Statement"); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; (b) the Trust Agreement; (c) the Reimbursement Agreement; (d) the Certificate Purchase Agreement; (e) the Remarketing Agreement; and (f) the Preliminary Official Statement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; DOCSLA l :241162.2 421 I 1-1-GH I -02/27/98 Resolution No. 1054 Page 3 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Vallecitos Water District, as follows: Section 1. All of the recitals herein contained are true and correct and the Board so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The President of the Board of Directors, and such other member of the Board of Directors as the President may designate, the General Manager of the District and the Assistant General Manager of the District, and such other officer of the District as the General Manager may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Installment Payments in excess of $27,000,000, shall not result in the term of the Installment Purchase Agreement exceeding 35 years and shall not result in an interest rate on the Installment Payments during the initial Weekly Rate Period (as defined in the Trust Agreement) in excess of 4.50% per annum. Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Certificates evidencing principal in an aggregate amount of not to exceed $27,000,000, payable in the years and in the amounts, and evidencing principal of and interest on the Installment Payments as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The Reimbursement Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Reimbursement Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Reimbursement Agreement by such Authorized Officer. DOCSLA I :241162.2 42111-1-OH1-02/27/98 Resolution No. 1054 Page 4 Section 6. The Certificate Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Certificate Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Certificate Purchase Agreement by such Authorized Officer; provided, however, that the underwriter's discount for the sale of the Certificates shall not exceed 0.4% of the aggregate amount of principal evidenced by such Certificates. Section 7. The Remarketing Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Remarketing Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Remarketing Agreement by such Authorized Officer. Section 8. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Certificates is hereby authorized and approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to certify that the Preliminary Official Statement has been "deemed final" for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. Section 9. The preparation and delivery of a final Official Statement (the "Official Statement"), and its use in connection with the offering and sale of the Certificates, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are, and each of them is, hereby authorized and directed to execute the final Official Statement, and any amendment or supplement thereto, for and in the name of the District. Section 10. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Certificates and the transactions contemplated by the Installment Purchase Agreement, the Trust Agreement, the Reimbursement Agreement, the Certificate Purchase Agreement, the Remarketing Agreement, the Official Statement and this Resolution. DOCSLA L:241162.2 42111-I-GU 1-02/27/98 Resolution No. 1054 Page 5 Section 11. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the Certificates, or in connection with or related to any of the agreements or documents referenced herein, are hereby approved, confirmed and ratified. Section 12. This Resolution shall take effect immediately upon its date of adoption. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Vallecitos Water District at a regular meeting held on this 4th day of March, 1998 by the following roll call vote: AYES: Cruz, Davy, Ferguson, Hannan, Mason NOES: ABSTAIN: ABSENT: ATTEST: la4d Paul A. Davy, President Board of Directors Vallecitos Water District DOCSLA 1241 I62.2 42111-1-GH1-02/27/98 William W. Rucker, Secretary Board of Directors Vallecitos Water District