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RESOLUTION OF THE BOARD OF SUPERVISORS OF BUTTE COUNTY AUTHORIZING THE ISSUANCE OF 2003-2004 TAX AND REVENUE ANTICIPATION NOTES FOR THE BUTTE COUNTY BOARD OF EDUCATION AND CERTAIN SCHOOL DISTRICTS WHEREAS, pursuant to Sections 53$50 et seq. of the Government Code of the State of California (the "Act") contained in Article 7.6 thereof, entitled "Temporary Borrowing," county boards of education and school districts organized and existing under the laws of the State of California are authorized to borrow money by the issuance of notes for any purpose for which the board of education or district, respectively, is authorized to expend moneys, including, but not limited to, current expenses, capital expenditures, and the discharge of any obligation or indebtedness; and Wf~IEREAS, Section 53$53 of the Act provides that such notes shall be issued in the name of the county board of education or the school district by the board of supervisors of the county (in the case of school districts, the county the superintendent of which has jurisdiction over such district), as soon as possible following the receipt of a resolution of the county board of education or the governing board of the school district requesting the borrowing; and WHEREAS, the Butte County Board of Education (the `Board of Education") has requested the Board of Supervisors (the "County Board") of Butte County (the "County") to issue and offer for sale tax and revenue anticipation notes in the name of and on behalf of the Board of Education under and pursuant to the provisions of the Act in an amount not to exceed thirty-two million five hundred thousand dollars ($32,50(},000); and WHF,REAS, the Board of Education expects to lend portions of the proceeds of its notes to the Chico Unified School District, the Gridley Unified School District, and the Paradise Unified School District (the "Districts"), and the governing board of each of the Districts has requested the County Board to issue a promissory note in the name of the District and to deliver the promissory note to the Board of Education to evidence the District's obligation to repay the loan of proceeds from the Board of Education's notes; and WHEREAS, the Board of Education has found and determined that the principal amount of its notes, when added to the interest payable thereon, does not exceed eighty-five percent (85°l0) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys to be received by the Board of Education for the County School Service Fund of the 1 7471 16.4 [4932.1 1 Butte County Board of Supervisors Butte County Office of Education {the "Office") during or allocable to Fiscal Year 2003-2004 and available far the payment of the interest on and principal of the notes, including the amounts to be paid by the Districts pursuant to their promissory notes; and WHEREAS, the governing board. of each of the Districts has found and determined that the principal amount of its promissory note, when added to the interest payable thereon, does not exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys to be received by each District for its general fund during or allocable to Fiscal Year 2003-2004 and available for the payment of the interest on and principal of the promissory notes. NOW, THEREFORE, the Board of Supervisors of Butte County hereby resolves as follows: Section 1. Findings. All of the above recitals are true and correct and the County Board hereby so finds and determines. Section 2. Board of Education Resolution Incorporated. The Resolution of the Board of Education adopted on August 11, 2003, is incorporated herein by reference and all of the provisions thereof are made a part hereof and shall be applicable to the Notes herein provided for, except as herein otherwise expressly provided. Section 3. Authorization of Issuance of the Notes• Terms Thereof. The County Board hereby determines to issue notes on behalf of the Board of Education in a principal amount not to exceed $32,500,000 under Section 53850 et se . of the Act, designated "Butte County Board of Education, Butte County, California, 2003-2004 Tax and Revenue Anticipation Notes" (the "Notes"). The Notes shall be dated the date of delivery thereof; shall mature (without option of prior redemption) on such date as shall be specified in the official notice of sale or note purchase agreement {the "Purchase Agreement") for the Notes; and shall bear interest, payable at maturity (if the maturity of the Nates is determined to be one year or earlier from the date of issuance) or payable one year from the date of issuance and at maturity (if the maturity of the Notes is determined to be more than one year from the date of issuance) and computed on a 30-day montht360-day year basis, at the rate or rates determined at the time of sale thereof, but not in excess of six percent (6%) per annum. Subject to Section 7 hereof, both the principal of and interest on the Notes shall be payable, only upon surrender thereof, in lawful money of the United States of America at the principal office of the Butte County Treasurer-Tax Collector (the "County Treasurer"}, who has been. appointed by the Board of Education as the paying agent for the Notes {the "Paying Agent"). Section 4. Amount of Borrowing. The aggregate principal amount of the Notes shall be no greater than the amount recited in Section 3 hereof, or such lesser amount as to which Kronick, Moskavitz, Tiedemann & Girard, band counsel to the Board of Education with respect to the Notes {"Bond Counsel"), will deliver an approving opinion regarding the excludability from gross income for federal tax purposes of interest thereof. The aggregate principal amount of the Notes so determined upon the sale of the Notes shall be specified in the Official Notice of Sale or the Purchase Agreement described. in Section 13 hereof. 2 747 l 16.4 [9932.1 1 ] Butte County Board of Supervisors Section 5. Form of the Notes. The Notes shall be issued in fully registered form, without coupons, in denominations of $5,000, or integral multiples thereof, and shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. Section 6. Execution of the Notes. The County Board hereby authorizes and directs the County Treasurer or one of his deputies to cause the blank spaces of the Notes to be filled in in accordance with the terms of the Notes specified in the Purchase Agreement and as the County Treasurer may otherwise deem to be appropriate. The County Board further authorizes and directs the County Treasurer or one of his deputies to execute the Notes and the Clerk of the County Board or one of his deputies to countersign the Notes and affix the seal of the County to the Notes by manual impression thereof, or by printing a facsimile thereof. Either of these signatures may be made by facsimile, provided that at least one such signature shall be manual. Section 7. Registration Transfer and Exchange of Notes. (A) The Notes shall be initially issued and registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, New York, New York (hereinafter, Cede & Co. and The Depository Trust Company are referred to collectively as "The Depository Trust Company") and shall be evidenced by a single Note. Registered ownership of the Notes, or any portion thereof; may not thereafter be transferred except as set forth in Section 7(B). (B} Registered ownership of the Notes, or any portions thereof, may not be transferred following issuance thereof except: (1) To any successor of The Depository Trust Company, or its nominee, or of any substitute depository designated pursuant to clause (2) of this subsection (B} (a "Substitute Depository"); provided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (2) To any Substitute Depository not objected to by the Paying Agent, upon (i) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor} from its functions as depository, or (ii} a determination by the Board of Education or the Paying Agent to substitute another depository for The Depository Trust Company {or its successor) because it is no longer able to carry out its functions as depositary; rop vided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or {3} To any person as provided below, upon {1}the resignation of The Depository Trust Company or its successor (ar any Substitute Depositary or its successor} from its functions as depository, or {2) a determination by the Board of Education or the Paying Agent to discontinue using a depository. {C) In the case of any transfer pursuant to clause (1) or clause (2) of subsection (B) of this section, upon receipt of all outstanding Notes by the Paying Agent, a single new Note, which the County shall prepare or cause to be prepared, shall be executed and delivered and registered 3 7471 16.4 [9932.1 l ] Butte County Board of Supervisors in the name of such successor ar such Substitute Depository, or its nominee, as the case may be. In the case of any transfer pursuant to clause (3) of subsection (B) of this section, upon receipt of all outstanding Notes by the Paying Agent, new Notes, which the County shall prepare or cause to be prepared, shall be executed and. delivered in such denominations and registered in the names of such persons as are determined by the Paying Agent pursuant to a written request of the County or the Board of Education. (D) The County, the Board of Education and the Paying Agent shall be entitled to treat the person in whose name any Note is registered as the owner thereof for all purposes of this resolution and for purposes of payment of interest on and principal of such Nate, notwithstanding any notice to the contrary received by the County, the Board of Education or the Paying Agent; and the County, the Board of Education and the Paying Agent shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the Notes; and neither the County, the Board of Education nor the Paying Agent shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including The Depository Trust Company or its successors (or any Substitute Depository or its successor), except to the registered owner of any Notes, and the Paying Agent may rely conclusively on its records as to the identity of the registered owners of the Notes. (E) Notwithstanding any other provisions of this resolution and so long as all outstanding Notes are registered in the name of The Depository Trust Company or its registered assigns, the County, the Board of Education, and the Paying Agent shall cooperate with The Depository Trust Company, as sole registered owner, and its registered assigns in effecting payment of the interest on and principal of the Notes by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due; all in accordance with the Blanket Letter of Representations to The Depository Trust Company, the provisions of which the Paying Agent may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein. (F) In the case of any transfer pursuant to clause (3) of subsection (B) of this section, any Nate may, in accordance with its terms, be transferred or exchanged for a like aggregate principal amount of Notes in authorized denominations, upon the banks required to be kept by the Paying Agent pursuant to the provisions hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Note for cancellation, and, in the case of a transfer, accompanied by delivery of a written instrument of transfer, duly executed in form approved by the Paying Agent. Whenever any Note shall be surrendered for transfer or exchange, the County shall execute and the Paying Agent shall deliver a new Note or Notes of authorized denominations far a like aggregate principal amount. The Paying Agent shall require the registered owner requesting such transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. (U) The Paying Agent will keep ar cause to be kept, at the Paying Agent's office, sufficient books for the registration and transfer of the Notes, which shall at all times be open to inspection by the County and the Board of F,ducation. Upon presentation for such purpose, the 4 747116.4 [9932.1 1 ] Butte County Board of Supervisors Paying Agent shall, under such reasonable regulations as the Paying Agent may prescribe, register or transfer or cause to be registered or transferred, on such books, Notes as hereinbefore provided. (H) If any Note shall become mutilated, the County, at the expense of the owner of such Note, shall execute, and. the Paying Agent shall thereupon deliver a new Note of like tenor bearing a different number in exchange and substitution for the Note so mutilated, but only upon surrender to the Paying Agent of the Note so mutilated. If any Note shall be lost, destroyed or stolen, evidence of the ownership thereof, and of such loss, destruction or theft may be submitted to the County and. the Paying Agent and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the County, at the expense of the owner, shall execute, and the Paying Agent shall thereupon deliver a new Note of like tenor and bearing a different number in lieu of and in substitution for the Note so lost, destroyed or stolen (or, if any such Note shall have matured, instead of issuing a substitute Note, the Paying Agent may pay the same without surrender thereof). The Paying Agent may require payment by the registered owner of a Note of a sum not exceeding the actual cast of preparing each new Note issued pursuant to this paragraph and of the expenses that may be incurred by the County, the Board of Education, and the Paying Agent. Any Note issued under these provisions in lieu of any Note alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the County, on behalf of the Board of Education, whether or not the Note so alleged to be lost, destroyed or stolen shall be at any time enforceable by anyone, and shall be entitled to the benefits of this resolution with all other Notes secured by this resolution. (I) All Notes surrendered for payment or registration of transfer, if surrendered to any person other than the Paying Agent, shall be delivered to the Paying Agent and shall be promptly cancelled. The Board of Education may at any time deliver to the Paying Agent for cancellation any Notes previously delivered hereunder that the Board of Education may have acquired in any manner whatsoever, and all Notes so delivered shall promptly be cancelled by the Paying Agent. No Note shall be delivered in lieu of ar in exchange for any Notes cancelled as provided herein, except as expressly permitted hereunder. All cancelled Notes held by the Paying Agent shall be disposed of as directed by the Board of Education. Section 8. Authorization of Issuance Execution and Delivery of the District Notes. The County Board hereby approves the request of each District to issue a promissory note on its behalf under the Act in a principal amount not to exceed, respectively, $10,000,000 for the Chico Unified School District, $5,000,000 for the Gridley Unified School District, and $7,500,000 for the Paradise Unified School District. Each promissory note shall be dated its date of delivery; shall mature (without option of prior redemption) on the same date as the Notes, and shall bear interest from its date, payable at the same times as interest on the Notes, computed on a 30-day montht360-day year basis, at the same rate as the Notes. The County Board hereby authorizes and directs the County Treasurer or one of his deputies to cause the blank spaces of the District promissory notes to be filled in in accordance with the terms of the Notes and as the County Treasurer may otherwise deem to be appropriate. The County Board further authorizes and directs the County Treasurer or one of his deputies to execute the District promissory notes and the Clerk of the County Board or one of her deputies to countersign them and affix the seal of the County thereto by manual impression thereof; or by printing a facsimile thereot: Either of these signatures may be made by facsimile, provided that at least one such signature shall be manual. 5 747116.4 [9932.1 I ] Butte County Board of Supervisors "f~he County Board further authorizes and directs the County Treasurer or one of his deputies to deliver the District promissory notes to the Board of Education concurrently with the delivery of the Notes to the purchaser thereof: Section 9. Deposit of Note Proceeds. From the moneys harrowed by the Board of Education, an amount not-to-exceed $10,000,000 shall be deposited in the County treasury in a proceeds fund, to be called the "Butte County Board of Education 2003-2004 Tax and Revenue Anticipation. Notes Proceeds Fund," to the credit of the Board of Education. A separate proceeds fund will be established in the County treasury far each of the Districts, to be called the " School District, 2003-2004 Tax and Revenue Anticipation Notes Proceeds Fund," and an amount of the Note proceeds equal to the principal amount of that District's promissory pate shall be deposited in said District's proceeds fund, to the credit of that District. Proceeds so credited to the Board of Education's proceeds fund may be withdrawn, used or expended by the Board of Education for any purpose for which it is authorized to invest or expend funds from the County School Service Fund, including, but not limited to, current expenses, capital expenditures or the discharge of any obligation of indebtedness of the Board of Education ar the Office. Proceeds credited to the Districts' respective proceeds funds may be withdrawn, used or expended by the Districts for any purposes for which they are authorized to invest or expend funds from their general funds, including, but not limited to, current expenses, capital expenditures or the discharge of any obligation of indebtedness of the District. Amounts in the Proceeds Funds of the Board of Education and each District shall be withdrawn and expended for any purpose for which the Board of Education, the Butte County Superintendent of Schools {the "Superintendent"), and the Districts are authorized to expend said funds, but only after exhausting funds otherwise available for such purposes (which are not restricted funds) and only to the extent that on any given day such other funds are not then available. For purposes of this Section, "funds otherwise available" excludes (a) amounts that are held or set aside in a reasonable working capital reserve in the amount set forth in the tax certificate of the Board of Education with respect to the Notes (the "Tax Certificate"), or in a District's supplement to the Tax Certificate with respect to its promissory note, which shall be no greater than 5°l0 of the Board of Education's, and each respective District's, working capital expenditures from its available hands in Fiscal Year 2002-2003, and (b) the "proceeds" of the Notes are equal to the initial offering price of the Notes to the public, as certified by the Underwriter. The Board of Education and each District has covenanted that, if on the date that is six months from the date of issuance of the Notes, all amounts in the Proceeds Fund (including investment earnings thereon) shall not have been so withdrawn and spent, it will promptly notify Bond Counsel, and, to the extent of its power and authority, comply with the instructions from Bond Counsel as to the means of satisfying the rebate requirements of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). Section 10. Tax Covenants. {A) Covenants by the Board of Education and the Districts. The County acknowledges and relies on the fact that the Board of Education and each District has covenanted and represented that it shall make no use of the proceeds of the Notes that would cause the Notes to be "arbitrage bonds" under Section 148 of the Code and that the Board of Education and each District will comply with the requirements of the Tax Certificate, to be entered into by the Board 6 7471 1 b.4 [9932. l 1 Butte County Board of supervisors of Education and each District as of the date of issuance of the Notes. The Board of Education and each District further stipulate that such representation and covenant shall survive payment in full or defeasance of the Notes. (B) County's Covenant. The County Board hereby covenants on behalf of itself and of the officers of the County that it will make no use of the proceeds of the Notes that would cause the Notes to be "arbitrage bonds" under Section 148 of the Code; and, to that end, so long as any of the Notes are outstanding, the County, and all of its officers having custody or control of such proceeds, shall comply with all requirements of (a) said section, including restrictions on the use and investment of proceeds of the Notes and the rebate of a portion of investment earnings on certain amounts, including proceeds of the Notes, if required, to the Federal government, and (b) of the Income Tax Regulations of the United States "treasury promulgated thereunder or any predecessor provisions, to the extent that such regulations are, at the time, applicable and in effect, so that the Notes will not be "arbitrage bonds." The County's covenants contained in this Section shall survive the payment of the Notes. (C) Rebate Exception. 'T'he County acknowledges and relies upon the fact that the Board of Education and each District has covenanted and represented that in the event the Notes shall be subject to the rebate requirements of Section 148 of the Code, the Board of Education and each District shall be responsible for making all calculations in a reasonable and prudent fashion relating to any rebate of excess investment earnings on the proceeds of the Notes or the District's promissory notes due to the United States Treasury. If so directed. by the Board of Education or any District, the County Treasurer shall segregate and set aside from the lawfully available sources held. by the County Treasurer on behalf of the Board of Education, or any District, the amount such calculations indicate may be required to be paid to the United States Treasury, and shall otherwise at all times, upon the direction of the Board of Education or any District, do and perform all acts and things necessary and within its power and authority, including complying with each applicable requirement of Section 103 and Sections 141 through 150 of the Code and complying with the instructions of Bond Counsel to ensure that interest paid on the Notes and the Districts' promissory notes shall, for the purposes of federal income taxes, be excludable from the gross income of the recipients thereof and exempt from such taxation. If so directed by the Board of Education, or any District, the County Treasurer will immediately set aside from revenues received by that entity during or allocable to the 2003-2004 Fiscal Year, or to the extent not available from such revenues, from any other money lawfully available, the amount of any such rebate in a separate fund which the County Treasurer hereby agrees to establish and maintain (1) on behalf of the Board of Education, called the "Butte County Board of Education, 2003-2004 Tax and Revenue Anticipation Nate Rebate Fund," and/or (2) on behalf of a District, called the " School District, 2003-2004 Tax and Revenue Anticipation Note Rebate Fund." {D) Remedies Limited to Note Owners. Notwithstanding any other provision of this Resolution to the contrary, no one other than the owners or former owners of the Notes shall be entitled to exercise any right or remedy under this Resolution on the basis of the Board of Education's, any District's or the County's failure to observe, or refusal to comply with, the covenants described in this Section. 7 7471 16.4 [9932.1 1 ] Butte County Board of Supervisors (E) Reliance on Opinion of Bond Counsel. Notwithstanding any provision of this Section, if the Board of Education, or any District, shall provide to the County Treasurer an opinion of Bond Counsel that any specified action required under this Section is no Langer required ar that some further or different action is required. to maintain the excludability from gross income for federal income tax purposes of interest on the Notes, the County 'Treasurer and the County may conclusively rely on such opinion. in complying with the requirements of this Section, and the covenants hereunder shall be deemed to be modified to that extent. Section 1 l . Payment of Notes. (A) Source of Payment. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts, and other moneys that are received or accrued by the Board of Education during fiscal year 2003-2004 and that are available therefor. The Notes shall be a general obligation. of the Board of Education, and, to the extent the Notes are not paid from the Pledged Revenues defined below, the Notes shall be paid with interest thereon from. any other moneys of the Board of Education lawfully available therefor, as provided herein and by law. The principal amount of the promissory note of each District, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts, and other moneys that are received or accrued by each District during fiscal year 2003-2004 and that are available therefor. The Promissory Note shall be a general obligation of each District, and, to the extent the Promissory Note is not paid from the Pledged Revenues defined below, the Promissory Note shall be paid with interest thereon from any other moneys of the District lawfully available therefor, as provided herein and by law. (B) Pledged Revenues. The Notes, and each District's promissory note, shall be secured by a pledge of and first lien and charge against the first unrestricted revenues to be received by the County on behalf of the Board of Education and each District, respectively, in such months and in such amounts as shall be determined by the Superintendent or the Superintendent's designee, prior to the date of sale of the Notes, sufficient to pay the principal of and interest on the Notes andlor promissory notes at maturity (such pledged amounts being hereinafter called the "Pledged Revenues"). The term "unrestricted revenues" shall mean taxes, income, revenue, cash receipts, and other moneys deposited in inactive or term deposits (but excepting certain moneys encumbered for a special purpose) of (1) the Board of Education, as provided in Section 5385b of the Act, which are intended as receipts for the County School Service Fund, including, but not limited to, those amounts paid by the Districts under the District promissory notes, and which are generally available for the payment of current expenses and other obligations of the Board of Education; and (2) a District, as provided in Section 53856 of the Act, which are intended as receipts for the General Fund of that District and which are generally available for the payment of current expenses and other obligations of the District. (C) Deposit of Pledged Revenues in Repayment Funds. The Board of Education and each District have agreed to deposit, and the County shall receive from the Board of Education and each District, the Pledged Revenues in the County treasury in a special fund designated as the "Butte County Board of Education, 2003-2004 Tax and Revenue Anticipation Notes Repayment Fund" and, for each District, a special fund designated the " School 8 747116.4 [9932.11] Butte County Board of Supervisors District, 2003-2004 Tax and Revenue Anticipation Note Repayment Fund," (herein called the "Repayment Funds"), not later than the date the Board of Education and/or District receive(s) such funds. Any moneys placed in the Repayment Funds shall be for the benefit of the holders of the Notes, and, until the Notes and the promissory notes of each District and all interest thereon are paid or until provision has been made for such payment, the moneys in the Repayment Funds shall be applied only for the purposes for which the Repayment Funds are created. (D) Disbursement of Moneys in Repayment Fund; Deficiencies. On the maturity date of the Notes and the Districts' promissory notes, the moneys in the Repayment Funds shall be used, to the extent necessary, to pay the principal of and interest on the Notes and the Districts' promissory notes. In accordance with Government Code Section 53857, the Board of Education and each District have agreed to make up any deficiency in the Repayment Fund from any other money of the Board of Education and the Districts that is lawfully available for the payment of the Notes, promissory notes, and the interest thereon. Section 12. Investment of Funds. Moneys held. by the County Treasurer in the Proceeds Funds and in the Repayment Funds may be invested {i) in any investments permitted by the Government Code, notwithstanding any limitations contained therein as to the maximum proportion of such funds that may be invested in any particular investment and meeting Standard & Poor's criteria for investments, or any equivalent criteria of any rating agency then rating the Notes, (ii) in investment agreements, including guaranteed investment contracts rated AAA by Standard & Poor's, or an equivalent rating of any rating agency then rating the Notes, and (iii) in the Local Agency Investment Fund within the treasury of the State of California. The proceeds of such investments shall be retained in each such respective Fund, provided that no moneys in the Repayment Funds shall be invested for a term that exceeds the term of the Notes and District promissory notes and that sufficient proceeds shall be invested to mature no later than the date on which any payment of interest or principal is due, to provide for such payment. Section 13. Sale of the Notes. The Notes will be sold either at a private sale to an underwriter or underwriters upon such terms and conditions as are acceptable to the Board of Education and cansistent herewith, or by competitive bid and awarded as set forth in an Official Notice of Sale or Note Purchase Agreement that the Financial Advisor and the Board. of Education, or its designee, are hereby authorized to prepare consistent with this Resolution. The County Treasurer, or the County Treasurer's designee, is hereby authorized to decide between competitive or private sale in conjunction with advice from the Board of Education's Financial Advisor, and to determine the term of the Notes up to a term of thirteen (13) months. If the sale is private, the Superintendent, or the Superintendent's designee, and the County Treasurer, and each of them individually, is authorized to negotiate the sale of no mare than $32,500,000 ofNotes at an interest rate of not more than six percent (6°l0). If the sale is by competitive bid, the Superintendent, or the Superintendent's designee, is hereby directed to execute, and the Clerk of the Board of Education is directed to publish, the Official Notice of Sale. The County Treasurer, or the County Treasurer's designee, is hereby authorized and directed to open the bids at the time and place specified in the Offcial Notice of Sale. The County Treasurer, or the County Treasurer's designee, is hereby authorized and 9 747116.4 [9932.11 ] Butte County Board of Supervisors directed to receive and record the receipt of all bids made pursuant to the Official Notice of Sale, to cause said bids to be examined for compliance with the Official Natice of Sale, to cause computations to be made as to which bidder has bid the lowest true interest cost, as provided in the Official Notice of Sale, to announce the bidder of the lowest true interest cost, to award the sale to that bidder, and to notify the Board of Education and the County Board of the foregoing. Section 14. Pa~g_ Agent. The County Board hereby authorizes and directs the County Treasurer, who has been appointed to act as the Paying Agent by the Board of Education and each District, to receive the payments of principal and interest made by the Board of Education on the Notes and the payments of principal and interest made by each District on its promissory note, to hold, allocate, use, and apply said payments and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. Section 15. Delivery of Notes. The proper officers of the County shall cause the Notes to be delivered to the purchasers thereof when the County `Treasurer has received confirmation ofreceipt of the proceeds. Section 16. Further Actions Authorized. Ali actions heretofore taken by the officers and agents of the County or this County Bward with respect to the issuance and sale of the Notes are hereby approved, confirmed, and ratified, and the employees and officers of the County, including the Chair of this County Board, the Clerk to the County Board, the County Treasurer, the County Auditor-Controller, and the designees of any of them, are further authorized and directed to make, execute and deliver to the purchaser or purchasers of the Notes (a) a certificate in the form customarily required by purchasers of bonds of public agencies generally, certifying to the genuineness and the execution of the Notes, and (b) a receipt in similar form evidencing the payment of the purchase price of the Notes which receipt shall be conclusive evidence that said purchase price of the Notes has been paid and has been received on behalf of the Board of Education. Any purchaser or subsequent taker or holder of the Notes is hereby authorized to rely upon and shall be justified in relying upon any such certificate or receipt with respect to the Notes. Such officers and any ather officers of the Board of Education or of the County are hereby authorized to execute any and all other documents required to consummate the sale and delivery of the Notes, including signature certificates, no-litigation certificates, certificates regarding continuing disclosure, and other certificates proposed to be distributed in connection with the sale of the Notes. Section l ~. Further Assurances. The County Board hereby covenants and warrants that the County and its appropriate officials have duly taken ail proceedings necessary to be taken by them, and will. take any additional proceedings necessary to be taken by them, for the levy, collection, and enforcement of the Pledged Revenues in accordance with law for carrying out the provisions of this Resolution and the Notes. Section l 8. Limited Liability. {A) Limited Responsibility for Official Statement. Neither the County Board nor any officer of the County has prepared or reviewed the off7cial statement of the Board of Education describing the Notes (the "Official Statement"), and this County Board and the various officers of the County take no responsibility for the contents ar distribution thereof; provided, hawever, 10 7471 16.4 [9932.11 Butte County Board of Supervisors that solely with. respect to a section contained or to be contained therein describing the County's investment policy, current portfolio holdings, and valuation procedures, as they may relate to funds of the Board of Education held by the County Treasurer, the County 'treasurer is hereby authorized and directed to prepare and review such information for inclusion. in the Board of Education's Official Statement and in a preliminary Official Statement, and to certify to the Board of Education prior to or upon the issuance of the Notes that the information contained in such section does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading. (B) Limited Liability. Except as provided in Section 18(A), neither the County Board nor the County or its officers, employees, and agents (including, but not limited to the County Treasurer) shall have any liability hereunder or by reason hereof or in connection with the transactions contemplated hereby, and the Notes and promissory notes of the Districts shall be payable solely from the moneys of the Board of Education and the Districts available therefor as set forth in Section 11 hereof. Without in any way limiting the immediately preceding sentence, nothing in this Resolution or in any other document related to issuance of the Notes and promissory notes of the Districts shall be deemed to impose any fiduciary responsibility on the County, the County Board or the County's officers (including the County Treasurer and the County Auditor-Controller), employees and agents with. regard to the issuance of the Notes and promissory notes of the Districts ar payment thereof other than that otherwise imposed by law. Section 19. Continuing Disclosure Certificate. The County acknowledges and relies upon the fact that the Board of Education has represented that it shall execute a Continuing Disclosure Certificate containing such covenants of the Board of Education as shall be necessary to comply with the requirements of Securities and Exchange Commission Rule 15c2-12, and that it will comply with and carry out all of the provisions of such Continuing Disclosure Certificate. The County assumes no responsibility for continuing disclosure requirements with respect to the Notes. Section 20. Effective Date. This Resolution shall take effect from and after its adoption. 7471 I b.4 [9932.11 ] Butte County Board of Supervisors PASSED AND ADOPTF,D by the Board of Supervisors of Butte County on September 9, 2003, by the following vote: AYES: Supervisors Dolan, Roux, Josiassen, Yamaguchi and Chair Beeler NOES: None ABSENT: None ABSTAIN: None ~, ~, r ~ ~;~ Chairman of the Board of Supervisors, County of Butte ATTEST: .-> ,~ ~ ~'. -~ P,xi.il McIntosh, thief Administrative Officer and Clerk of the Board of Supervisors Butte County, California 12 7471 16.4 [9932.1 1 ] Butte County Board of Supervisors CLERK'S CERTIFICATE Certified Copy of Resolution No. 03-142 Adopted on September 9, 2003 I, Paul McIntosh, Clerk of the Board of Supervisors of Butte County, California, hereby certify as follows: Attached hereto is a complete copy of a resolution that was duly adopted by the Board of Supervisors of Butte County at a meeting thereof that was duly called and held at the regular meeting place thereof on September 9, 2003, of which meeting all of the members of the Board of Supervisors of Butte County had due notice and at such meeting a quorum was present and acting throughout. The resolution has not been amended, modified or rescinded since the date of adoption and is now in full force and effect. Dated: September 9, 2003 By; ~~. ~ t~~ ~, Paul McIntosh, Clcrk of the Board of Supervisors, Butte County, California 7471 16.4 [9932.1 1 Butte County Board of Supervisors Exhibit A FOR1~I OF TAX AND REVENUE ANTICIPATION NOTE >aUTTE COUNTY BOARD OF EDUCATION BUTTE COUNTY, CALIFORNIA 2003-2004 TAX AND REVENUE ANTICIPATION NOTE INTEREST RATE: REGISTERED OV~JNER: PRINCIPAL SUM: DOLLARS CUSIP: The BUTTE COUNTY BOARD OF EDUCATION, Butte County, State of California (the "Board of Education"), acknowledges itself indebted, and promises to pay, to the Registered Owner stated above, or registered assigns {the "Owner"), on the Maturity Date stated above, the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon from the Issue Date stated above in like lawful money at the rate per annum stated above, on the Maturity Date stated above, calculated on the basis of 360-day year comprising twelve 30-day months. The Principal Sum and interest thereon is payable to the Owner upon presentation hereof at the principal office of the Butte County Treasurer-Tax Collector, Oroville, California. It is hereby certified, recited and declared that this Note is one of an authorized. issue of notes in the aggregate principal amount of Dollars ($ ~~ all of like tenor, issued pursuant to the provisions of a resolution of the Board of Supervisors (the "Board of Supervisors") of Butte County {the "County") duly passed and adopted on August 26, 2003 (the "Resolution"), and pursuant to Article 7.6 (commencing with section 53850) of Chapter 4, Part 1, Division 2, Title 5, of the California Government Code, and that ail conditions, things and acts required to exist, happen and be performed precedent to and in the issuance of this Note exist, have happened and have been performed in regular and due time, form and manner as required by law, and that this Nate, together with all other indebtedness and obligations of the Board of Education, does not exceed any limit prescribed by the Constitution or statutes of the State of California. The principal afinount of tl--e Plates, together with the interest thereon, shall be payable anl_y ~am tavP3~ i::Came, revenue, CaSii rcGeipts, and other moneys that are received by the County on behalf of the Board of Education during fiscal year 2003-2004, and that are available for the payment of cu~ier~t expenses and other obligations of the Board of Education (the "Unrestricted Revenues"). As security for the payment of the princiral of a.nd i~~tterest on the i~Totes, the Board of p'rl>>carion has ~,~~~nP~ th° ~^11~,.,;-~~- Y T___ _~ :• r y--~--b •~+•. y. iviiv vv ut~ Vd1i GJLI lI;t~~. d`aeVenj.le$: ta~ lrl an amount equal to percent ~%) of the principal amount of the Notes from the Unrestricted Revenues received by the County on behalf cf the Board of Education zn the mcr;th A-1 MATURITY DATE: September _, 2004 CEDE & CO. ISSUE DATE: September _, 2003 747116.4 [9932.11] Butte County Board of Supervisors of 2004; an amount equal to percent (_%) of the principal amount of the Notes from the Unrestricted Revenues received by the County on behalf of the Board of Education in the month of 2004; an amount equal to percent (_%) of the principal a~liour~t of rile ivotes from the unrestricted Revenues received by the County on behalf of the Board of Education in the month of 2004, and an amount equal to percent (_%) of the principal amount of the Notes plus an amount sufficient to pay interest an the Notes from the Unrestricted Revenues received by the County on behalf of the Board of Education in the month of 2004 (such pledged amounts being hereinafter called the "Pledged Revenues"). The principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be payable from the first money received by the Board. of Education from such Pledged Revenues, and to the extent not so paid, shall be paid from any other moneys of the Board of Education. The Notes are issuable as fully registered notes, without coupons, in denominations of $5,000 each or any integral multiple thereof. Subject to the limitations and conditions as provided in the Resolution, Notes may be exchanged far a like aggregate principal amount of Notes of other authorized denominations and of the same maturity. The Notes are not subject to redemption prior to maturity. This Note is transferable by the owner hereof, but only under the circumstances, in the manner and subject to the limitations provided in the Resolution. Upon registration of such transfer a new Note or Notes, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange for this Note. The County and the Board of Education may treat the Owner hereof as the absolute owner hereof for all purposes and neither the Co~.~nty nor the Board of Education shall. be affected by any notice to the contrary. Unless this Nate is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and any Note issued. is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON 1S WRONGFUL since the registered owner hereof, Cede & Ca., has an interest herein. A-2 747116.4 [9932.11 ] Butte County Board of Supervisors IN WITNESS WHEREOF, the Board. of Supervisors of Butte County, California, has caused this Nate to be issued in the name of the Board of Education and. to be executed by the Treasurer-Tax Collector and countersigned by the Clerk of the Board of Supervisors, all as of --- -~..~.~:..- ..r uL~ 3iaaiVU 27.UV VG. COUNTY OF )BUTTE, CALIFORNIA. By: Dick Puelicher, Treasurer-Tax Collector Countersigned: Clerk of the Board of Supervisors ASSIGNMENT For value received. the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within registered Note and hereby irrevocably constitute(s) and appoints attorney, to transfer the same on the Note register of the Treasurer-Tax Collector with full power of substitution in the premises. Dated: Signature: Note: The signature(s) on this Assignment must correspond with the name(s) as v,Titten on the face of the within Nate in every particular without alternation or enlargement or any change whatsoever. Signature CTuaranteed: Note: Signature(s) m ust be guaranteed by a qualified guarantor. A-3 747116.4 [9932.11] Butte County Board of Supervisors EORI~I O>F i3O1VI) COUNSEL OI'INIO1oI Butte County Board of Education. 1 ~co ra;,.a ~~. ~~~ i.iuU 45 Ll. l:Gl. Oroville, California 95965 Re: t~utte County Eaard of Education Butte County, California 2003-2004 Tax and Revenue Anticipation Notes Dear Board Members: We have acted as bond counsel to the Butte County Board of Education (the "Board of Education") in connection with the issuance by the Board of Supervisors of Butte County (the "Board of Supervisors") of $ principal amount of Butte County Board of Education, Butte County, California, 2003-2004 Tax and Revenue Anticipation Notes, dated September _ 2003 (the "Notes"), pursuant to Article 7.6 (commencing with Section 53850), Chapter 4, Part 1, Division 2, Title 5 of the California Government Code, pursuant to the provisions of Resolution No. 03-_ adopted by the Board of Education on August 11, 2003 (the "Board of Education Resolution"), and Resolution No. 03-_ adopted by the Board of Supervisors on August 26, 2003 (the "County Resolution") (the County Resolution and the Board of Education Resolution being referred to collectively as the "Note Resolution"). In such capacity, we have examined such law and such certified proceedings, certifications, and other documents as we have deemed necessary to render this opinion. Regarding questions of fact material to our opinion, we have relied upon the representations of the Board of Education contained in the Board of Education Resolution, the representations of the Board of Supervisors contained in the County Resolution, the representations of Butte County and Board of Education officials, and in the certified proceedings, and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Board of Education is duly created and validly existing as a county board of education with the power to request the Board of Supervisors to issue the Notes on its behalf and the power to perform its obligations under the Note Resolution. 2. The County Resolution has been. duly adopted by the Board of Supervisors and the Board of Education Resolution has been duly adopted by the Board of Education. The Note Resolution. creates a valid first lien on the funds pledged under the Nate Resolution for the security of the ?votes. 3. The Notes have been duly authorized, executed and delivered by the Board of Supervisors and are valid and bindif~g general obligations of the Board of Education enforceable to arr~nr,!~~n~e i~r;tt, t +~..,~.., va~ej cheir t~,i12&?. A-4 7471 ] 6.4 [9932.1 l Butte County Board of Supervisors 4. Interest on the Notes is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in detelii~~ii~g adjusted earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Board of Education comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, and continue to be, excludable frorn gross income for federal income tax purposes. The Board of Education has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause such interest on the Notes to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Notes. 5. Interest on the Notes is exempt from State of California personal income taxes. The rights of the holders of the Notes and the enforceability of the Notes, the Note Resolution, and the County Resolution are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Notes. Further, we express no opinion regarding tax consequences arising with respect to the Notes other than as expressly set forth herein. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this apinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may herea$er occur. i~ery truly years, KRONICK, MQSKC~ITZ, TIELEMA.NN & :iIRt~RB A Professional Corporation I II~EEREBY CERTIFY that the foregoing is a true and correct copy of the 1_egal opinion upon the Notes therein described that was manually signed by l~°onick, Tvloskovitz, Tiedemann ~: Cirard, a Professional Corporation, anal was dated as of the date of delivery of and payment for said Notes. Paul McIntosh, Clerk of the Board of Supervisors A-5 74'7116.4 [9932.11) Butte County Board of Supervisors