The URL can be used to link to this page

Home My WebLink About05-066BUTTE COUNTY RESOLUTION NO. 05-066 RESOLUTION OF THE BOARD OF SUPERVISORS OF BUTTE COUNTY, CALIFORNIA, PROVIDING FOR AUTHORIZATION OF ISSUANCE AND SALE OF THERMALITO UNION SCHOOL DISTRICT 2005 GENERAL OBLIGATION BONDS, ELECTION OF 2004, IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,050,000 RESOLVED, by the Board of Supervisors (the "Board") of Butte County, California (the "County"), as follows: WHEREAS, an election was duly and regularly held in the Thermalito Union School District (the "District") on November 2, 2004, for the purpose of submitting to the qualified electors of the District the question whether general obligation bonds should be issued in the aggregate principal amount of $2,050,000 (the "Bonds"), to provide funding for a new library/media center, adding and expanding science labs, relocating music room and equipping facilities at Nelson Avenue Middle School; to improve student safety by rehabilitating student loading zones, sidewalks, and parking areas at all schools; and to provide new playground equipment and bleachers at District schools (the "Project"); WHEREAS, more than 55`%, of the votes cast in such election were in favor of the issuance of the Bonds; WHEREAS, the Bonds are payable from the levy of an ad vctlnrem tax against the taxable property in the District; WHEREAS, the Board has received a resolution of the Board of Trustees of the District requesting the issuance of the Bonds in the aggregate principal amount of two million fifty thousand dollars ($2,050,000), to be entitled "Thermalito Union School District (Butte County, California) 2005 General Obligation Bonds, Election of 2004," to finance the Project and other authorized costs; and WHEREAS, in its resolution, the District found and informed this Board that all acts, conditions and things required by law to be done or performed have been done and performed in strict conformity with the laws authorizing the issuance of general obligation bonds of the District, and the indebtedness of the District, including this proposed issue of Bonds, is within all limits prescribed by law; NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of Butte County, State of California, as follows: Section 1. Certain Definitions. As used in this Resolution, the terms set forth below shall have the meanings ascribed to t11em (unless otherwise set forth in the Bond Purchase Agreement, hereinafter defined): "Accreted h~terest" means, with respect to the Capital Appreciation Bonds, the Accreted Value thei°eof minus the Denominational Amowlt thereof as of the date of calculation. 20020.01 "Accreted Value" means with respect to the Capital Appreciation Bonds, as of the date of calculation, the Denominational Amount thereof, plus Accreted Interest thereon to such date of calculation, compounded semiannually on each January 1 and July 1 (commencing on January 1, 2006 (unless otherwise provided in the Bond Purchase Agreement)), assuming in any such semiannual period that such Accreted Value increases in equal daily amounts on the basis of a 360-day year of twelve 30-day months. "Bo1sd Prr~»se~st Date" means, (a) with respect to interest on the Current Interest Bonds, January 1 and July 1 of each year commencing on July 1, 2006, and with respect to principal of the Current Interest Bonds, July 1, of each year commencing on July 1 in such year as shall be set forth in the Bond Purchase Agreement, and, (b) with respect to the Capital Appreciation Bonds, July 1, of each year commencing on July 1 in such year as shall be set forth in the Bond Purchase Agreement. `Bond Purchase Agreet7~ent" means the Bond Purchase Agreement by and among the County, the District and the Underwriter, for the purchase and sale of the Bonds. "Bond Register" means the registration books for the Bonds maintained by the Paying Agent. "Capital Appreci~tio~~ Boa2ds" means the Bonds the interest component of which is compounded semiannually on each Bond Payment Date to maturity as shown in the table of Accreted Value for such Bonds in the Bond Purchase Agreement. "Cisrre~~t Interest Bonds" means the Bonds the interest on which is payable semiannually on each Bond Payment Date specified for each such Bond as designated and maturing in the years and in the amounts set forth in the Bond Purchase Agreement. "De~~ominationr~l A13101lnt" means, with respect to the Capital Appreciation Bonds, the initial purchase price thereof, which represents the principal amount thereof, and, with respect to the Current Interest Bonds, the principal amount thereof. "IaTforntatiols Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, NJ 07302, Attention: Editor; Mergent/FIS, Inc., 5250-77 Center Drive, Charlotte, NC 25217, Attention: Called Bond Dept.; Kenny S&P, 55 Water Street, New York, NY 10041., Attention: Notification Department; and, in accordance with then current guidelines of the Securities and Exchange Commission; or to such other addresses and/or such other national information services providing information or disseminating notices of redemption of obligations similar to the Bonds. "Mnh~ritt~ Valise" means the Accreted Value of any Capital Appreciation Bond on its maturity date. "Pal~in~~r Agent" means Wells Fargo Bank, National Association or any bank, trust company, national banking association or other financial institution appointed as paying agent for the Bonds, in the manner provided in this Resolution. "Priltcipal" or "I'rirzcif~nl Amoulrt" means, ~=ith respect to any Current Interest Bond, the principal or principal amount thereof and, with respect to any Capital Appreciation Bond, the Denominational Amount. "Record Drstc "means the 15th day of the month preceding each Bond Payment Date. -2- "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50"' Floor, New York, NY 10041-0099 Attention: Call Notification Department, Pax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the County may designate. "Bonds" means the Thermalito Union School District (Butte County, California) 2005 General Obligation Bonds, Election of 2004, issued by the County pursuant to this Resolution. "Term Bonds" means those Bonds for which mandatory redemption dates have been established in the Bond Purchase Agreement. "Transfer Amount" shall mean, with respect to any Outstanding Current Interest Bond, the Principal Amount and, with respect to any Capital Appreciation Bond, the Maturity Value. ""U~zderu~riter" means the underwriter identified by Government Financial Strategies, Inc., financial advisor to the District, and approved by the Superintendent of the District. Sectiofl 2. Authorization of Bonds. That for the purpose of raising money for real property acquisition or improvements, namely: (a) for the purpose of raising funds needed for the Project, and (b) to pay all necessary legal, financial, engineering and contingent costs in connection therewith, the Board hereby authorizes the issuance of the Bonds. Section 3. Sale of t11e Bonds; Approval of Bond Purchase Agreement. The Bond Purchase Agreement, substantially in the form attached hereto as Exhibit B, is hereby approved and the Treasurer-Tax Collector of the County, or a designee thereof, is hereby authorized to execute and deliver the Bond Purchase Agreement, with such changes therein, deletions therefrom and modifications thereto as the Treasurer-~hax Collector of the County, or a designee thereof, may approve, such approval to be conclusively evidenced by his execution and delivery thereof; provided, hoz~~ever, that the maximum true interest cost on the Bonds shall not exceed 8`% per annum and the Underwriter's discount, excluding original issue discount and reimbursable expenses, thereon shall not exceed 2`% of the aggregate of principal amount of Bonds issued. The Treasurer-Tax Collector of the County, or a designee thereof, is further authorized to enter into and execute the Bond Purchase Agreement with the Underwriter, if the conditions set forth in this Resolution are satisfied. As set forth in the Bond Purchase Agreement on the date of sale of the Bonds, the Bonds will be comprised of (a) a combination of Cur°rent Interest Bonds a~1d Capital Appreciation Bonds, or (b) solely Current Interest Bonds. If the Bonds are sold solely as Current Interest Bonds, all provisions in this resolution relating to Capital Appreciation Bonds shall have no force or effect. Sectio~~ 4. Bond Terms. (a) Denominrrtin~z; Interest; Dated Dates. 'The Bonds shall be issued as Bonds registered as to both principal and interest, in the denominations of, with respect to the Current Interest Bonds, $5,000 Denominational Amount or any integral multiple thereof, and with respect to the Capital Appreciation Bonds, $5,000 Maturity Value, or any integral multiple thereof (except that the first numbered Capital Appreciation Bond may be issued in a denomination such that the Maturity Value of such Capital Appreciation Bond shall not be in an integral multiple of $5,000). -3- Each Capital Appreciation Bond shall be dated, and shall accrete Accreted Interest from, its date of initial issuance. Capital Appreciation Bonds will not bear interest on a current basis. Each Current Interest Bond shall be dated as of its date of delivery or such other date as shall appear in the Bond Purchase Agreement (the "Dated Date"), and shall bear interest from the Bond Payment Date next preceding the date of authentication thereof unless it is authenticated as of a day during the period from the 16th day of the month next preceding any Bond Payment Date to that Bond Payment Date, inclusive, in which event it shall bear interest from such Bond Payment Date, or unless it is authenticated on or before June 15, 2006, in which event it shall bear interest from the Dated Date. The Bonds shall bear interest or accrete interest at a rate or rates such that the interest rate shall not exceed the maximum rate permitted by law. Interest shall be payable on the respective Sond Payment Dates. The Capital Appreciation Bonds shall mature in the years and shall be issued in the aggregate Denominational Amount set forth in the Bond Purchase Agreement and shall have an accretion rate and shall have the Maturity Values shown in the Accreted Value Table attached to the Bond Purchase Agreement; provided, however, that in the event that the amount shown in such Accreted Value Table and the Accreted Value calculated by the District differ, the latter amount shall be the Accreted Value of such Capital Appreciation Bond. (b) Redemption. (i) Optional Rederlrptiotl. The Current Interest Bonds shall be subject to optional redemption on the dates and at the redemption prices set forth in the Bond Purchase Agreement. The Capital Appreciation Bonds are not subject to optional redemption. (ii) Mnl~daiory Rerfemptioit. The Term Bonds s11a11 be subject to mandatory redemption from moneys in the Interest and Sinking Fund established in Section 11 hereof prior to their stated maturity date at the Principal Amount thereof, without premium on each July 1, in Principal Amounts as set forth in the Bond Purchase Agreement (iii) Selection of Bonds for Reder~rptioir. Whenever provision is made pursuant to Section 4(b)(i) hereof for the redemption of Bonds and less than all Outstanding Bonds are to be redeemed, the Paying Agent identified below, upon written instruction from the District, shall select Bonds for redemption as so directed and if not directed, in inverse order of maturity. Within a maturity, the Paying Agent shall select Bonds for redemption by lot. Redemption by lot shall be in such manner as the Paying Agent shall determine; provided, however, that the portion of any Current Interest Bond to be redeemed in part shall be in the Principal Amount of $5,000 or any integral multiple thereof. (iv) Notice of Re~~iempfion. When redemption is authorized or required pursuant to Section 4(b)(i) hereof, the Paying Agent, upon written instruction from the District given at least 60 days prior to the redemption date, shall. give notice (a "Redemption Notice") of the redemption of the Bonds. Such Redemption Notice shall specify: (A) the Bonds or designated portions thereof (in the case of redemption of the Bonds in part but not in whole) which are to be redeemed, (B) the date of -4- redemption, (C) the place or places where the redemption will be made, including the name and address of the Paying Agent, (D) the redemption price, (E) the CUSIP numbers (if any) assigned to the Bonds to be redeemed, (F) the Bond numbers of the Bonds to be redeemed in whole or in part and, in the case of any Bond to be redeemed in part only, the Principal Amount of such Bond to be redeemed, and (G) the original issue date, interest rate or Reoffering Yield and stated maturity date of each Bond to be redeemed in whole or in part. Such Redemption Notice shall further state that on the specified date there shall become due and payable upon each Bond or portion thereof being redeemed at the redemption price thereof, together with the interest accrued or accreted to the redemption date, and that from and after such date, interest with respect thereto shall cease to accrue or accrete. The Paying Agent shall take the following actions with respect to such Redemption Notice: (A) at least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall be given to the respective Owners of Bonds designated for redemption by registered or certified mail, postage prepaid, at their addresses appearing on the Bond Register; (B) at least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall be given by (i) registered or certified mail, postage prepaid, (ii) telephonically confirmed facsimile transmission, or (iii) overnight delivery service, to each of the Securities Depositories; (C) At least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall be given by (1) registered or certified mail, postage prepaid, or (2) overnight delivery service, to one of the Information Services. Neither failure to receive or failure to publish any Redemption Notice nor any defect in any such Redemption Notice so given shall affect the sufficiency of the proceedings for the redemption of the affected Bonds. Each check issued or other transfer of funds made by the Paying Agent for the purpose of redeeming Bonds shall bear or include the CUSIP number identifying, by issue and maturity, the Bonds being redeemed ~~ith the proceeds of such check or other transfer. (v) P~rti~zl Redemption of Bonds. Upon the surrender of any Bond redeemed in part only, the Paying Agent shall execute and deliver to the Owner thereof a new Bond or Bonds of like tenor and maturity and of authorized denominations equal in Transfer Amounts to the unredeemed portion of the Bond surrendered. Such partial redemption shall be valid upon payment of the amount required to be paid to such O~~ner, and t11e County and the District shall be released and discharged thereupon from all liability to the extent of such payment. (vi) Effect of Notice of Rede~iTptfon. Notice having been given as aforesaid, and the moneys for the redemption (including the interest to the applicable date of redemption) having been set aside in the District's Lnterest and Sinking Fund, the Bonds to be redeemed shall become due and payable on such date of redemption. If on such redemption date, money for the redemption of all the Bonds to be redeemed as provided in Section 4(b)(i) hereof, together with interest accrued to such redemption date, shall be held by the Paying Agent so as to be available therefor on such redemption date, and if notice of redemption thereof shall have been given as aforesaid, then from and after such redemption date, interest with respect to the Bonds to be redeemed shall cease to accrue or accrete and become payable. All money held by or on behalf of the Paying Agent for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed. -5- All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Section 4 shall be canceled upon surrender thereof and be delivered to or upon the order of the County and the District. All or any portion of a Bond purchased by the Cotmty or the District shall be canceled by the Paying Agent. (vii) Bonds No Longer Outsta~zdit2g. When any Bonds (or portions thereof), which have been duly called for redemption prior to maturity under the provisions of this Resolution, or with respect to which irrevocable instructions to call for redemption prior to maturity at the earliest redemption date have been given to the Paying Agent, in form satisfactory to it, and sufficient moneys shall be held by the Paying Agent irrevocably in trust for the payment of the redemption price of such Bonds or portions thereof, and, in the case of Current Interest Bonds, accrued interest with respect thereto to the date fixed for redemption, all as provided in this Resolution, then such Bonds shall no longer be deemed Outstanding and shall be surrendered to the Paying Agent for cancellation. Section 5. Execution of Bonds. The Bonds shall be signed by the manual or facsimile signatures of the Chairman of the Board of Supervisors, the Clerk of the Board and the Treasurer-Tax Collector, and the seal of the County shall be reproduced thereon. No Bond shall be valid or obligatory for any purpose or shall be entitled to any security or benefit under this Resolution unless and until the certificate of authentication printed on the Bond is signed by the Paying Agent as authenticating agent, that the Bond as authenticated has been duly issued, signed and delivered under this Resolution and is entitled to the security and benefit of this Resolution. Sectio~l 6. AUt~ointment of Pang Agent. Wells Fargo Bank, National Association is hereby appointed to act as the authenticating agent, bond registrar, transfer agent and paying agent for the Bonds. The Treasurer-Tax Collector may contract with any third party to perform the services of Paying Agent under this Resolution. The fees and expenses of the Paying Agent shall be the responsibility of the District and, to the extent not paid from the proceeds of the sale of the Bonds, may be paid in each year from the Interest and Sinking Fund of the District insofar as permitted by law including, specifically, section 15232 of the California Education Code. (a) The Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least CO days' written notice to the District and the Treasurer-Tax Collector. The Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Treasurer-Tax Collector and signed by the District. A successor Paying Agent shall be appointed by the District with the written consent of the Treasurer-Tax Collector, which consent shall not be unreasonably withheld, and shall be a bank or trust company organized under the laws of the state or any state of the United States, a national banking association or any other financial institution, having capital stock and surplus aggregating at ]east $50,OD0,000, and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. Such Paying Agent shall signify the acceptance of its duties and obligations hereunder by executing and delivering to the District and the Treasurer-Tax Collector, a written acceptance thereof. Resignation or removal of the Paying Agent shall be effective upon appointment and acceptance of a successor Paying Agent. (b) 111 the event of the resignation or removal of the Paying Agent, such Paying Agent shall pay over, assign and deliver any moneys held by it as Paying Agent to its successor, or, if there is no successor, to the Treasurer-Tax Collector. In the event that for any reason there shall be a vacancy in the office of the Paying Agent, the Treasurer-Tax Collector shall act as the Paying Agent. The County shall promptly cause to be published at District -Cr expense in an Authorized Newspaper t11e name and principal corporate trust office address of the Paying Agent appointed to replace any resigned or removed Paying Agent. Section 7. Payment. Payment of interest on any Current Interest Bond on any Bond Payment Date shall Ue made to the person appearing on the Bond Register as the Owner thereof as of the Record Date immediately preceding such Bond Payment Date, such interest to be paid by check mailed to such Owner on the Bond Payment Date at his address as it appears on the Bond Register or at such other address as he may have filed with the Paying Agent for that purpose on or before the Record Date. The Owner in an aggregate Principal Amount or Maturity Value of $1,000,000 or more may request in writing to the Paying Agent that such Owner be paid interest by wire transfer to the bank and account number on file with the Paying Agent as of the Record Date. The principal, and prepayment premiums, if any, payable on the Current Interest Bonds and the Accreted Value and prepayment premiums, if any, on the Capital Appreciation Bonds shall be payable upon maturity or redemption upon surrender at the principal office of the Paying Agent. The interest, Accreted Value, Principal and premiums, if any, on the Bonds shall Ue payable in lawful money of the United States of America. The Paying Agent is hereby authorized to pay the Bonds when duly presented for payment at maturity, and to cancel all Bonds upon payment thereof. The Bonds are general obligations of the District and do not constitute an obligation of the County except as provided in this Bond Resolution. No part of any fund of the County is pledged or oUligated to the payment of the Bonds. SectiotT 8. Bond Registration and Transfer. If the book entry system is no longer in effect as provided in Section 10, the District shall cause the Paying Agent to maintain and keep at its principal corporate trust office the Bond Register. While such book entry system is in effect, such books need not Ue kept, as the Bonds will be represented by one Bond for each maturity registered in the name of Cede & Co., as nominee for DTC (as hereinafter defined). Subject to the provisions of Section 7 above, the person in whose name a Band is registered on the Bond Register shall be regarded as the absolute owner of that Band for all purposes of this Resolution. Payment of or on account of the principal of and interest on any Bond shall be made only to or upon the order of that person; neither the District, the County nor the Paying Agent shall be affected Uy any notice to the contrary, but the registration may be changed as provided in this Section 8. All such payments shall be valid and effectual to satisfy and discharge the District's liability upon. the Bonds, including interest, to the extent of the amount or amounts so paid. So long as any of the Bonds remains outstanding, the District will cause the Paying Agent to maintain and keep at its principal office all books and records necessary for the registration, exchange and transfer of the Bonds as provided in this Section 8. Subject to the provisions of Section 7, the person in whose name a Bond is registered on the Bond Register shall be regarded as the absolute owner of that Band for all purposes of this Resolution. Payment of or on account of the Principal or Accreted Value of and premium, if any, and interest on any Bond shall be made only to or upon the order of that person; neither the District, the County nor the Paying Agent shall be affected by any notice to the contrary, but the registration may be changed as provided in this Section 8. All such payments shall be valid and effectual to satisfy and discharge the District's liability upon the Bands, including interest, to the extent of the amaunt or amounts so paid. Any Bond may be exchanged for Bonds of like tenor, maturity and Transfer Amow~t upon presentation and surrender at the principal affice of the Paying Agent, together with a request for exchange signed by the Owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent. A Bond may be transferred on the Bond Register only -7- upon presentation and surrender of the Bond at the principal office of the Paying Agent together with an assignment executed by the Owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent. Upon exchange or transfer, the Paying Agent shall complete, authenticate and deliver a new Bond or Bonds of like tenor and of any authorized denomination or denominations requested by the Owner equal to the Transfer Amount of the Bond surrendered and bearing or accruing interest at the same rate and maturing on the same date. Capital Appreciation Bonds and Current Interest Bonds may not be exchanged for one another. If any Bond shall become mutilated, the County, at the expense of the Owner of said Bond, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like series, tenor and Transfer Amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Paying Agent of the Bond so mutilated. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Paying Agent and, if such evidence be satisfactory to the Paying Agent and indemnity for the Paying Agent, the County and the District satisfactory to the Paying Agent shall be given by the owner, the County, at the expense of the Bond owner, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Paying Agent may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Paying Agent). The Paying Agent may require payment of a reasonable fee for each new Bond issued under this paragraph anal of the expenses which may be incurred by the County and the Paying Agent. If manual signatures on behalf of the County are required in connection with an exchange or transfer, the Paying Agent shall undertake the exchange or transfer of Bonds only after the new Bonds are signed by the authorized officers of the County. 111 all cases of exchanged or transferred Bonds, the County shall sign and the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All fees and costs of transfer shall be paid by the requesting party. Those charges may be required to be paid before the procedure is begun for the exchange or transfer. All Bonds issued upon any exchange or transfer shall be valid obligations of the District, evidencing the same debt, and entitled to the same security and benefit under this Resolution as the Bonds surrendered upon that exchange or transfer. Any Bond surrendered to the Paying Agent for payment, retirement, exchange, replacement or transfer shall be canceled by the Paying Agent. The District and the County may at any time deliver to the Paying Agent for cancellation any previously authenticated and delivered Bonds that the District and the Cowlty may have acquired in any manner whatsoever, and those Bonds shall be promptly canceled by the Paying Agent. Written reports of the surrender and cancellation of Bonds shall be made to the District and t11e County by the Paying Agent on or before May 10 and July 1 of each year. The canceled Bonds shall be retained for six years, then returned to the District or destroyed by the Paying Agent as directed by the District. Neither the District, the County nor the Paying Agent will be required (a) to issue or transfer any Bonds during a period beginning with the opening of business on the 15th business day next preceding either any Bond Payment Date or any date of selection of Bonds to be redeemed and ending with the close of business on the Bond Payment Date or any day on which the applicable notice of redemption is given or (b) to transfer any Bonds which have been selected or called for redemption in whole or in part. -8- Sectiolt 9. Forms of Bonds. The Bonds shall be in substantially the forms set forth in Exhibits B and C attached hereto and incorporated herein, allowing those officials executing the Bonds to make the insertions and deletions necessary to conform the Bonds to this Resolution, anal the Bond Purchase Agreement. Sectro~t 10. Book-Entr~System. Except as provided below, the owner of all of the Bonds shall Ue The Depository Trust Company, New York, New York ("DTC"), and the Bonds shall be registered in the name of Cede & Co., as nominee for DTC. The Bonds shall Ue initially executed and delivered in the form of a single fully registered Bond for each maturity date of the Bonds in the full aggregate principal amount of the Bonds maturing on such date. The County, the Paying Agent and the District may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for al] purposes of this Resolution, and neither the County, the Paying Agent nor the District shall be affected Uy any notice to the contrary. The County, the Paying Agent and the District shall not have any responsibility or obligation to any participant of DTC (a "Participant"), any person claiming a beneficial ownership interest in the Bonds under or through DTC or a Participant, or any other person which is not shown on the register of the District as being an owner, with respect to the accuracy of any records maintained by DTC or any Participant or the payment by DTC or any Participant by DTC or any Participant of any amount in respect of the principal or interest with respect to the Bonds. The County and the District shall cause to be paid all principal and interest with respect to the Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the District's oUligations with respect to the principal and interest with respect to t11e Bonds to the extent of the sum or sums so paid. Except under the conditions noted Uelow, no person other than DTC shall receive a Bond. Upon delivery Uy DTC to the District of written notice to the effect that DTC has determined to substitute a nesn~ nominee in place of Cede & Co., the term "Cede & Co." in this Resolution shall refer to such new nominee of DTC. If the District determines that it is in the best interest of the Ueneficial owners that they be aUle to obtain Bonds and delivers a written certificate to DTC and the County to that effect, DTC shall notify the Participants of the availability through DTC of Bonds. In such event, the County shall issue, transfer and exchange Bonds as requested by DTC and any other owners in appropriate amounts. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the District and t11e Cowzty and discharging its responsibilities with respect thereto under applicable law. Under such circumstances (if there is no successor securities depository), the County shall be obligated to deliver Bonds as described in this Resolution. Whenever DTC requests the District and the County to do so, the District and the Cow~ty will cooperate with DTC in taking appropriate action after reasonable notice to (a) make available one or more separate Bonds evidencing the Bonds to any DTC Participant having Bonds credited to its DTC account or (b) arrange for another securities depository to maintain custody of certificates evidencing the Bonds. Notwithstanding any other provision of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal and interest with respect to such Bond and all notices with respect to such Bond shall Ue made and given, respectively, to DTC as provided as in the representation letter delivered on the date of issuance of the Bonds. -9- Section 21. Establishment of Funds and Accounts; Delivery of Bonds; Disposition of Proceeds of the Bonds. (a) Estcrblislznle~Tt of Ft«~ds Rnc~ llccot-oils. (i) Building Fund. A fund, to be known as the "Thermalito Union School District, 2005 General Obligation Bonds, Election of 2004, Building Fund" (the "Building Fund"), is hereby created and established within the County Treasury, which fund shall be accounted for separate and distinct from all other District and County funds. Moneys deposited therein shall be used solely for the purpose for which the Bonds are being issued and shall be applied solely to authorized purposes which relate to the acquisition or improvement of real property. The interest earned on the moneys deposited to the Building Fund shall be retained in the Building Fund and used for the purposes thereof. (ii) Interest and Sinking Fund. A fund, to be known as the "Thermalito Union School District, 2005 General Obligation Bonds, Election of 2004, Interest and Sinking Fund" (the "Interest and Sinking Fund"), is hereby created and established within the County Treasury, which fund shall be accounted for separate and distinct from all other District and County funds. Moneys deposited therein shall be used only for payment of principal and interest on the Bonds. Any excess proceeds of the Bonds not needed for the authorized purposes set forth herein for which the Bonds are being issued shall be transferred to the Interest and Sinking Fund and applied to the payment of principal and interest on the Bonds at the direction of the District. If, after payment in full of the Bonds, there remain excess proceeds, any such excess amounts shall be transferred to the general fund of the District. Notwithstanding the foregoing provisions of this Section 11, any excess proceeds of the Bonds not needed for the authorized purposes set forth herein for which the Bonds are being issued shall be applied solely in a manner which is consistent with the requirements of applicable state and federal tax law, including but not limited to the requirements of federal tax law (if any) relating to the yield at which such proceeds are permitted to be invested. (b) Delivery of Bolyds. The proper officials of the County shall cause the Bonds to be prepared and, following their sale, shall have the Bonds signed and delivered, together with a true transcript of proceedings with reference to the issuance of the Bonds, to the original purchaser upon payment of the purchase price in funds which are immediately available to the Treasurer-Tax Collector. (c) Dispositio~~ of Proceeds of the Bo~1ds. On the date of delivery of the Bonds (the "Closing Date"), the proceeds of sale of the Bonds shall be paid by the Underwriter to the Treasurer Tax Collector for deposit in the Building Fund. Subject to federal tax restrictions, moneys in the funds created hereunder shall be invested in any lawful investment permitted by sections 16429.1 and 53601 of the California Government Code, in shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by section 53635 of the California Government Code, in the California Local Agency Investment Fund ("LAIF"), or in a guaranteed investment contract with a financial institution or insurance company which has, at the date of execution thereof, one or more outstanding issues of unsecured, uninsured and unguaranteed debt obligations, or a claims paying ability, rated not lower than the second highest rating category (without regard to subcategories) by Standard & Poor's Ratings Services and Moody's Investors Service. -10- The Underwriter, as a condition of its purchase of the bonds, must agree to pay costs of issuance in an amount up to $ . To the extent that costs of issuance result in an amount less than $ _, such excess amowlt shall constitute premium received from the Underwriter and shall be paid to the Treasurer Tax Collector for deposit in the h~terest and Sinking Fund. Section 12. Source of Pa, n~e~1t. There shall be levied by the County on all the taxable property in the District, in addition to all other taxes, a continuing direct and ad valorem tax annually during the period the Bonds are outstanding in an amount sufficient to pay the principal of and interest on the Bonds when due, which moneys when collected will be placed in the Interest and Sinking Fund of the District, which fund is irrevocably pledged for the payment of the principal of and interest on the Bonds when and as the same fall due. The moneys in the Interest and Sinking Fund, to the extent necessary to pay the principal of and interest on the Bonds as the same become due and payable, shall be transferred by the County to the Paying Agent, as paying agent for the Bonds, as necessary to pay the principal of and interest on the Bonds. Section 13. Acknowledgment of Tax Covenants. The County acknowledges that the District has, in the District Resolution, covenanted to: (a) assure that the proceeds of the Bond are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code (as hereinafter defined) or the private loan financing test of section 141(c) of the Code; (b) take no action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code; (c) take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bond; (d) not take, or permit or suffer to be taken any action with respect to the proceeds of the Bonds ti~hich, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code; (e) take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the registered owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds; and For purposes of t11is Section 13, the term "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and Einal regulations promulgated, and applicable official public guidance published, under the Code. Sectiolt 14. Acknowledgment of Continuing Disclosure Covenant. The County acknowledges that the District has, in the District Resolution, covenanted and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. For purposes of this Section 14, the term "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the District and dated the -11- date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 15. Official Statement The Underwriter is hereby authorized to prepare a preliminary official statement and an official statement relating to the Bonds to be used in connection with the offering and sale of the Bonds. The District and the Underwriter are hereby authorized to distribute copies of the preliminary official statement and the official statement to persons who may be interested in the purchase of the Bonds and is directed to deliver copies of any final official statement to the purchaser of the Bonds, in such time and manner as to conform with the requirements of Rule 15c2-12 of the Securities and Exchange Commission. Section 16. Insurance. In the event the Underwriter purchases bond insurance for the Bonds, and to the extent that the issuer of such bond insurance makes payment of the principal, interest or Accreted Interest on the Bonds, it shall become the owner of such Bonds with the right to payment of principal, interest or Accreted Interest on the Bonds, and shall be fully subrogated to all of the Owners' rights, including the Owners' rights to payment thereof. To evidence such subrogation (i) in the case of subrogation as to claims that were past due interest components, the Paying Agent shall note the issuer of such bond insurance's rights as subrogee on the Bond Register upon receipt of a copy of the canceled check issued by the issuer of such bond insurance for the payment of such interest to the Owners of the Bonds, and (ii} in the case of subrogation as to claims for past due principal or Accreted Interest, the Paying Agent shall note the issuer of such bond insurance as subrogee on the Bond Register upon surrender of the Bonds by the Owners thereof to the issuer of such bond insurance or the insurance trustee for the issuer of such bond insurance. Section 17. Defeasance. All or any portion of the outstanding maturities of the Bonds may be defeased prior to maturity in the following ways: (a) Caslz: by irrevocably depositing with the Paying Agent or with an independent escrow agent selected by the District and approved by the County an amount of cash which together with amounts then on deposit in the Interest and Sinking Fund is sufficient to pay all Bonds outstanding and designated for defeasance, including all principal and interest and premium, if any; or (b) Defeasance Obligations: by irrevocably depositing with the Paying Agent or with an independent escrow agent selected by the District, Defeasance Obligations (hereinafter defined) in such amount as will, in the opinion of an independent certified public accountant, together with interest to accrue thereon and moneys then on deposit in the Interest and Sinking Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge all Bonds outstanding and designated for defeasance (including all principal and interest represented thereby and prepayment premiums, if any) at or before their maturity date; then, notwithstanding that any of such Bonds shall not have been surrendered for payment, all obligations of the District anal the County with respect to all such designated outstanding Bonds shall cease and terminate, except only the obligation of the Cowlty and the Paying Agent or an independent escrow agent selected by the District and approved by the County to pay or cause to be paid from funds deposited pursuant to paragraphs (a) or (b) of thi s Section 17, to the owners of such designated bonds not so surrendered and paid all sums due with respect thereto. For purposes of this Section 17(b), Defeasance Obligations shall mean: (a) cash; (b) non-callable direct general obligations of the United States of America (including -12- obligations issued or held in book entry form on the Uooks of the Department of d1e Treasury) or obligations the payment of principal of and interest on which are unconditionally guaranteed Uy, the United States of America (including State and Local Government Securities) ("Federal Securities"); (c) direct obligations of the United States of America which have Ueen stripped Uy the Department of the Treasury of the United States of America; (d) CATS, TIGRS and similar securities; (e) Uonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed Uy the full faith and credit of the United States of America: (i) direct obligations or fully guaranteed certificates of Ueneficial ownership of the U.S. Export-Import Bank; (ii) certificates of beneficial ownership of the Farmers Home Administration; (iii) obligations of the Federal Financing Bank; (iv) participation certificates of the General Services Administration; (v) guaranteed Title XI financings of the U.S. Maritime Administration; (vii) U.S. government guaranteed public housing notes and Uonds; and (vii) project notes and. local authority Uonds of the U.S. Department of Housing and Urban Development; and (f) pre-refunded municipal obligations defined as follows: any Uonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have Ueen given by the obligor to call on the date specified in the notice, and (A) which are rated, based on the escrow, in the highest rating category of Moody's Investors Service or Standard & Poor's Ratings Services or any successors thereto; or (B)(I) which are fully secured as to principal and interest and redemption premium, if any, Uy a fund consisting only of cash or Federal Securities, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocaUle instructions, as appropriate, and (2) which fwzd is sufficient, as verified Uy a nationally recognized independent certified puUlic accountant, to pay principal of and interest and redemption premium, if any, on the Uonds or other obligations descriUed in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate. Secfio~2 1~. Necessary Acts and Conditions. This Board determines that all acts and conditions necessary to be performed by the Board precedent to and in the 'issuing of the Bonds in order to make them legal, valid and Uinding general obligations of the District have been performed and have been met, or will at the time of delivery of the Bonds have Veen performed and have been met, in regular and due form as required by law; that the full faith, credit and revenues of the District are pledged for the timely payment of the principal of and interest nn the Bonds; and that no statutory or constitutional limitation of indebtedness or taxation will have been exceeded in the issuance of the Bonds. Sectio~l 19. Apyroval of Actions. Officers of the Board and County officials and staff to do any and all things and to are hereby authorized and directed, jointly and severally, execute and deliver any and all documents which they nay deem necessary or advisable in order to proceed with the issuance of the Bonds and otherwise carry out, give effect to and comply with the terms and intent of this Resolution. Such actions heretofore taken by such officers, officials and staff are hereby ratified, confirmed and approved. Sectiol~ 20. Limited Liability. Notwithstanding anything to the contrary contained herein, in the Bonds or in any other document mentioned herein, neither the County nor the Board shall ]lave any liability hereunder or by reason hereof or in connection with the transactions contemplated hereby and the Bonds shall Ue payable solely from the moneys of the District available therefor as set forth in Section 12 hereof. -13- Sectio~i 21. Certified Cony to Auditor-Controller. The Clerk of the Board of Supervisors is hereUy directed to provide a certified copy of this Resolution to the. Auditor- Controller of Butte County. Section 22. Effective Date. This Resolution shall take effect immediately upon its passage. I hereUy certify that the foregoing resolution was duly adopted at a meeting of the Board of Supervisors of Butte County held on the 10th day of May, 2005, Uy the following vote: AYES: Supervisors Connelly, Dolan, Houx, Josiassen and Chair Yamaguchi NOES: None ABSENT: None Chair, Board of Supervisors ATTEST: By ! /~' ~. Clerk, Board of Supervisors -14- EXHIBIT A FORM OF BOND PURCHASE AGREEMENT [TO BE ATTACHED] Exhibit A Quint & 'I'himmiK LLP THERMALITO UNION 2005 General Obligation SCHOOL DISTRICT Bonds, Election of 2004 BOND PURCHASE AGREEMENT June 16, 2005 Butte County 25 County Center Drive Oroville, CA 95695 Thermalito Union School District 400 Grand Avenue Oroville, CA 95695 Ladies and Gentlemen: _____________ (the "Underwriter") offers to enter into this Bond Purchase Agreement (the "Bond Purchase Agreement") with Butte County, California (the "County"), and the Thermalito Union School District (the "District") which, upon your acceptance hereof, will be binding upon the County, the District and the Underwriter. This offer is made subject to the written acceptance of this Bond Purchase Agreement by the County and the District and delivery of such acceptance to us at or prior to 11:59 P.M., California time, on the date hereof. 1. Purchase atld Sale of the Bonds. Upon the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the County for reoffering to t11e public, and the County hereby agrees to sell in the name and on behalf of the District to the Underwriter for such purpose, all (but not less than all) of $ in aggregate principal amount of the District's 2005 General Obligation Bonds, Election of 2004 (the "Bonds"). The purchase price of the Bonds shall be $ (beitlg equal to the aggregate principal amount of the Bonds ($ ), plus original issue premium ($ ), less amount retained by the Underwriter in the total amount of $ to pay an underwriter's discount ($ ), costs of issuance ($ )and the mwzicipal bond insurance premium ($ )~ The Bonds are issued as Current lnterest Bonds and as Capital Appreciation Bonds (each as defined in the County Resolution described below). The Bonds shall bear or accrete interest at the rates and shall mature in the years shown on Appendix A hereto, which is incorporated herein by this reference. The Current lnterest Bonds shall bear interest payable from the date thereof, as specified in Section 2 herein, on each January 1 and July 1, commencing July 1, 2006. The Capital Appreciation Bonds shall accrete interest from their date, as specified in Section 2 herein, compounded semiannually on January 1 and July 1, 03/31/05 04/11/05 04/19/05 zoozo.ol commencing on January 1, 2006, and shall be paid at maturity as shown in Appendix A hereto. 2. The Bonds. The Bonds shall be dated their date of delivery. The Bonds shall mature on July 1 in the years shown in Appendix A hereto and shall otherwise be as described in, and shall be issued and secured pursuant to the provisions of the resolution of the District adopted on April 28, 2005 (the "District Resolution"), the resolution of the Board of Supervisors of the County adopted on May 10, 2005 (the "County Resolution" and, with the District Resolution, the "Resolutions"), and section 15100 et seq. of the California Education Code (the "Act") and other applicable provisions of law. Payment of under a municipal issued by principal of and interest on the Bonds when bond insurance policy (the "Municipal Bond (the "Municipal Bond Insurer"). due will be guaranteed Insurance Policy") to be Certain provisions for the optional and mandatory redemption of the Bonds not otherwise specified in the Resolutions are shown in Appendix A hereto, all as provided in the County Resolution. The Bonds shall be issued, authenticated and delivered under and i11 accordance with the provisions of this Bond Purchase Agreement and the Resolutions. 3. Use of Documents. The District hereby authorizes the Underwriter to use, in connection with the offer and sale of the Bonds, this Bond Purchase Agreement, the Official Statement (defined below) and the District Resolution and all information contained herein and therein and all of the documents, certificates or statements furnished by the District to the Underwriter in connection with the transactions contemplated by this Bond Purchase Agreement. The County hereby authorizes the Underwriter to use this Bond Purchase Agreement and the County Resolution and all information contained herein and therein and all of the documents, certificates or statements furnished by the County to the Underwriter in connection with the transactions contemplated by this Bond Purchase Agreement. 4. Public Offering of the Bonds. The Underwriter agrees to make a bona fide public offering of all the Bonds at the initial public offering price or yield to be set forth on the cover page of the Official Statement and Appendix A hereto. Subsequent to such initial public offering, the Underwriter reserves the right to change such initial public offering price or yield as it deems necessary in connection v~~ith the marketing of the Bonds. 5. Review of Official Statement. The Underwriter hereby represents that it has received and reviewed the preliminary official statement with respect to the Bonds, dated 2005 (the Preliminary Official Statement"). The District represents that it deemed the Preliminary Official Statement to be final as of its date, except for either revision or addition of the offering price(s), yield(s) to maturity, selling compensation, aggregate principal amount, delivery date, rating(s) and other terms of the Bonds which depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule"). The Underwriter agrees that prior to the time a final Official Statement relating to the Bonds (hereinafter defined) is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail (or other equally prompt means) not later than the first business day following the date upon which each such request is received. -2- 6. Closine. At 8:00 A.M., California time, on July 7, 2005, or at such other time or on such other date as shall have Ueen mutually agreed upon by you and us (the "Closing"), you will deliver to us (except as otherwise provided in the Resolutions), at the offices of The Depository Trust Company ("DTC") in New York, New York, or at such other place as we may mutually agree upon, the Bonds in fully registered book-entry form, duly executed and registered in the name of Cede & Co., as nominee of DTC, and in San Francisco, California, the other documents hereinafter mentioned; and the will accept such delivery and pay the purchase price thereof in immediately available funds by check, draft or wire transfer to or upon the order of Wells Fargo Bank, National Association, as paying agent (the "Paying Agent"), on behalf of the District. 7. Representations, Warranties and Agreements of the District. The District hereby represents, warrants and agrees with the Underwriter that: (a) Due Orgnr~izc~tiort. The District is a school district duly organized and validly existing under the laws of the State of California, ~~ith the power to request the issuance of the Bonds pursuant to the Act. (b) Due Autlaorizntiort. (i) At or prior to the Closing, the District will have taken all action required to be taken by it to authorize the issuance and delivery of the Bonds; (ii) the District has full legal right, power and authority to enter into this Bond Purchase Agreement, to adopt the District Resolution, to perform its obligations under each such document or instrument, and to carry out and effectuate the transactions contemplated by this Bond Purchase Agreement and the District Resolution; (iii) the execution and delivery or adoption of, and the performance by the District of the obligations contained in the Bonds, the District Resolution and this Bond Purchase Agreement have Ueen duly authorized and such authorization shall Ue in full force and effect at the time of the Closing; (iv) this Bond Purchase Agreement constitute the valid and legally binding obligation of the District; and (v) the District has duly authorized the consummation by it of all transactions contemplated Uy this Bond Purchase Agreement. The District will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of the District Resolution or this Bond Purchase Agreement without the prior written consent of the Under~~rriter prior to the Closing Date. (c) Conseatts. Other than the approving vote of the electorate of the District and adoption of the Resolutions, no consent, approval, authorization, order, filing, registration, qualification, election or referendum of or Uy any court or governmental agency or public body whatsoever is required in connection with the issuance, delivery or sale of the Bonds or the consummation of the other transactions effected or contemplated herein or hereby, except for such actions as may Ue necessary to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions of the United States as the Underwriter may reasonaUly request, or which have not Ueen taken or obtained; provided, Itowez~er, that the District shall not be required to subject itself to service of process uz any jurisdiction in which it is not sn subject as of the date hereof. (d) It~terf~al Revenue Code. The District has covenanted to comply with the Internal Revenue Code of 1986, as amended, with respect to the Bonds. (e) No Coa~flicts. To the Uest knowledge of the District, the issuance of the Bonds, and the execution, delivery and performance of t11is Bond Purchase Agreement, the Resolutions, and the Bonds, and the compliance with the provisions hereof do not conflict with or constitute on the part of the District a violation of or default under, the Constitution of the State of California or any existing law, charter, ordinance, regulation, decree, order or resolution and do not conflict with or result in a violation or breach of, or constitute a -3- default under, any agreement, indenture, mortgage, lease or other instrument to which the District is a party or by which it is bound or to which it is subject. (f) Litigcttio~l. As of the time of acceptance hereof, based on the advice of counsel to the District, No action, suit, proceeding, hearing or investigation is pending or, to the best knowledge of the District, threatened against the District: (i) in any way affecting the existence of the District or in any way challenging the respective powers of the several offices or of the titles of the officials of the District to such offices; or (ii) seeking to restrain or enjoin the sale, issuance or delivery of any of the Bonds, the application of the proceeds of the sale of the Bonds, or the collection of taxes of the District pledged or to be pledged or available to pay the principal of and interest on the Bonds, or the pledge thereof, or, the levy of any taxes contemplated by the Resolutions, or in any way contesting or affecting the validity or enforceability of the Bonds, this Bond Purchase Agreement or the Resolutions or contesting the powers of the District or its authority with respect to the Bonds, the Resolutions or this Bond Purchase Agreement; or (iii) in which a final adverse decision could (a) materially adversely affect the operations of the District or the consummation of the transactions contemplated by this Bond Purchase Agreement or the Resolutions, (b) declare this Bond Purchase Agreement to be invalid or unenforceable in whole or in material part, or (c) adversely affect the exclusion of the interest paid on the Bonds from gross income for federal income tax purposes and the exemption of such interest from California personal income taxation. (g) No Other Debt. Between the date hereof and the Closing, without the prior written consent of the Underwriter, neither the District directly, nor the County on behalf of the District, will have issued in the name and on behalf of the District any bonds, notes or certificates of participation except for such borrowings as may be described in or contemplated by the Official Statement. (h) Arbitrage Certificnte. The District has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the District is a bond issuer whose arbitrage certificates may not be relied upon. (i) Coi~tirzi~i~tg Disclosure. To assist the Under°writer in complying with S.E.C. Rule 15c2-12(b)(5) of the Rule, the District will undertake, pursuant to the Resolutions and a continuing disclosure certificate, to provide annual reports and notices of certain events.(the "Continuing Disclosure Undertaking"). A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. (j) Certificates. Any certificates signed by any officer of the District and delivered to the Underwriter shall be deemed a representation by the District to the Underwriter, but not by the person signing the same, as to the statements made therein. (k) Official Staterateut. The District has reviewed the Preliminary Official Statement and, to the best of its knowledge, as of its date and as of the date hereof, the information set forth therein contains no untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they ~n~ere made, not misleading in any material respect. The District will provide to the Underwriter a certificate dated as of the Closing stating that it has reviewed the Official Statement and to the best of its kno~ti~ledge, as of the Closing, the information set forth therein contains no untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under w}~ich they were made, not misleading in any material respect. -4- (1) Fi~taucirtl Stcttevteitts. The financial statements of the District contained in the Preliminary Official Statement and the Official Statement present fairly the financial position of the District as of the dates indicated and the results of its operations for the periods specified. S. Representations Warranties and Agreements of the County. The County hereby represents, warrants and agrees with the Underwriter that: (a) Due Orgalrizc~tio~~. The County is a political subdivision duly organized and validly existing under the laws of the State of California, with the power to issue the Bonds pursuant to the Act. (b) Due Authorization. (i) At or prior to the Closing, the County will have taken all action required to be taken by it to authorize the issuance and delivery of the Bonds; (ii) the County has full legal right, power and authority to enter into this Bond Purchase Agreement, to adopt the County Resolution, to issue and deliver the Bonds to the Underwriter on behalf of the District and to perform its obligations under each such document or instrument, and to carry out and effectuate the transactions contemplated by this Bond Purchase Agreement and the County Resolution; (iii) the execution and delivery or adoption of, and the performance by the County of the obligations contained in the Bonds, the County Resolution, and this Bond Purchase Agreement have been duly authorized and such authorization shall be in full force and effect at the time of the Closing; (iv) this Bond Purchase Agreement constitutes a valid and legally binding obligation of the County; and (v) the County has duly authorized the consummation by it of all transactions contemplated by this Bond Purchase Agreement. The County will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of the County Resolution or this Bond Purchase Agreement without the prior written consent of the Underwriter prior to the Closing Date. (c) Co~~se~zt. No consent, approval, authorization, order, Filing, registration, qualification, election or referendum of or by any court or governmental agency or public body whatsoever is required in connection wit11 the issuance, delivery or sale of the Bonds or the consummation of the other transactions effected or contemplated herein or hereby, except for such actions as may be necessary to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions of the United States as the Underwriter may reasonably request, or which Have not been taken or obtained; proz~rded, ho~~~ez~et•, that the County shall not be required to subject itself to service of process in any jurisdiction in which it is not sn subject as of the date hereof. (d) No Co»flicts. To the best knowledge of the County, the issuance of the Bonds, the execution, delivery and performance of this Bond Purchase Agreement, the County Resolution, and the Bonds, and the compliance with the provisions hereof do not conflict with or constitute on the part of the County a violation of or default under, the Constitution of the State of California or any existing law, charter, ordinance, regulation, decree, order or resolution and do not conflict with or result in a violation or breach of, or constitute a default under, any agreement, indenture, mortgage, lease or other instrument to which the County is a party or by which it is bound or to which it is subject. (e) Lifig«tion. As of the time of acceptance hereof, based on the advice of County Counsel, no action, suit, proceeding, hearing or investigation is pending or, to the best knowledge of the County, threatened against the County: (i) in any way affecting the existence of the County, or in any way challenging the respective powers of the several offices or of the titles of the officials of the County to such offices; or (ii) seeking to restrain -5- or enjoin the sale, issuance or delivery of any of the Bonds, the application of the proceeds of the sale of the Bonds, or the collection of taxes of the District pledged or to Ue pledged or availaUle to pay the principal of and interest on the Bonds, or the pledge thereof, or the levy of any taxes contemplated Uy the Resolutions or in any way contesting or affecting the validity or enforceaUility of the Bonds, this Bond Purchase Agreement or the County Resolution or contesting the powers of the County or its authority with respect to the Bonds, the County Resolution, or this Bond Purchase Agreement; or (iii) i~1 which a final adverse decision could (a) materially adversely affect the operations of the County with respect to the levy and collection of property taxes, the timely payment of deUt service on the Bonds, the investment of the proceeds of the Bonds, or the consummation of the transactions contemplated Uy this Bond Purchase Agreement or the County Resolution, (b) declare this Bond Purchase Agreement to be invalid or unenforceable in whole or in material part, or (c) adversely affect the exclusion of the interest paid on the Bonds from gross income for federal income tax purposes and the exemption of such interest from California personal income taxation. (f) Taxatioft. Pursuant to the County Resolution and California Education Code Section 15250, the County will levy ad valore~~t property taxes in sufficient amounts for the punctual payment of principal of and interest on the Bonds. (g) No Other Debt. Between the date hereof and the Closing, without the prior written consent of the Underwriter, the County will not have issued in the name and on Uehalf of the District any bonds, notes or certificates of participation except for such borrowings as may be descriUed in or contemplated by the Official Statement. (h) Official Statement. The County will provide to the Underwriter a certificate dated as of the Closing stating that it has reviewed the Official Statement and the Preliminary Official Statement and to the Uest of its knowledge, as of the Closing, the information set forth therein under the captions "THE BONDS" and "SECURITY AND SOURCE OF PAYMENT" contains no untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading in any material respect. (i) Certificates. Any certificates signed Uy any officer of the County and delivered to the Underwriter shall Ue deemed a representation Uy the County to the Underwriter, but not by the person signing the same, as to the statements made therein. that: 9. Covenants of the District. The District covenants and agrees with the Underwriter (a) Securities Lazos. The District will furnish such information, execute such instruments, and take such other action in cooperation with the Underwriter if and as the Underwriter may reasonaUly request in order to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions, ~~rovide~, Irou~ever, that the District shall not be required to consent to service of process in any jurisdiction in which they are not so subject as of the date hereof; (b) A~plicatiol7 of Procec~c~s. The District will apply the proceeds from the sale of the Bonds for the purposes specified in the Resolutions; (c) Official Statement. The District hereby agrees to deliver or cause to Ue delivered to the Underwriter, not later than the seventh (7th) business day following the date this Bond Purchase Agreement is signed, copies of a final Official Statement substantially in the form of the Preliminary Official Statement, with only such changes therein as shall have been -6- accepted by the Underwriter and the District (such Official Statement with such changes, if any, and including the cover page and all appendices, exhibits, maps, reports and statements included therein or attached thereto being herein called the "Official Statement") in such quantities as may be requested by the Underwriter in order to permit the Underwriter to comply with paragraph (b)(4) of the Rule and with the rules of the Municipal Securities Rulemaking Board. The District hereby authorizes the Underwriter to use and distribute the Official Statement in connection with the offering and sale of the Bonds; (d) Si~bsegtae~zt Events. The District hereby agrees to notify the Underwriter of any event or occurrence that may affect the accuracy or completeness of any information set forth in the Official Statement relating to the District, respectively, until the date which is ninety (90) days following the Closing or until such time (if earlier) as the Underwriter shall no longer hold any of the Bonds for sale; (e) References. References herein to the Preliminary Official Statement and the final Official Statement include the cover page and all appendices, exhibits, maps, reports and statements included therein or attached thereto; and (f) Amendments to Official Statement. For a period of ninety (90) days after the Closing or until such time (if earlier) as the Underwriter shall no longer hold any of the Bonds for sale, the District will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished with a copy, the Underwriter shall object in writing or which shall be disapproved by the Underwriter; and if any event relating to or affecting the District shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the District shall forthwith prepare and furnish (at the expense of the District) a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 10. Conditior7s fn Closing. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the County and the District contained herein and the performance by the District of its obligations herewlder, both as of the date hereof and as of the date of Closing. The Underwriter's obligations under this Bond Purchase Agreement are and shall be subject at the option of the Underwriter, to the following further conditions at the Closing: (a) Representations True. The representations and warranties of the County and the District contained herein shall be true, complete and correct in al] material respects at the date hereof and at and as of the Closing as if made at and as of the Closing, and the statements made in all certificates and other documents delivered to the Underwriter at the Closing pursuant hereto shall be true, complete and correct in all material respects on the date of the Closing; and each of the County and the District shall be in compliance with each of the agreements made by it in this Bond Purchase Agreement; (b} Obligations Performed. At the time of the Closing, (i) the Official Statement, this Bond Purchase Agreement, the District Resolution and the County Resolution shall be in full force and effect and shall not have been amended, -7- modified or supplemented except as may have been agreed to in writing by the Underwriter; (ii) all actions under the Act which, in the opinion of Quint & Thimmig LLP ("Bond Counsel"), shall be necessary in connection with the transactions contemplated hereby shall have been duly taken and shall be in full force and effect; and (iii) the County and the District shall perform or have performed all of their obligations required under or specified in the District Resolution, the County Resolution, this Bond Purchase Agreement or the Official Statement to be performed at or prior to the Closing; (c) Adverse Rulings. No decision, ruling or finding shall have been entered by any court or governmental authority since the date of this Bond Purchase Agreement (and not reversed on appeal or otherwise set aside), or to the best knowledge of the County or the District, pending or threatened which has any of the effects described in Section 7(f) or 8(e) hereof or contesting in any way the completeness or accuracy of the Official Statement; (d) Marketability. Between the date hereof and the Closing, the market price or marketability or the ability of the Underwriter to enforce contracts for the sale of the Bonds, at the initial offering prices set forth in the Official Statement, of the Bonds shall not have been materially adversely affected in the judgment of the Underwriter (evidenced by a written notice to the County and the District terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds) by reason of any of the following: (1) legislation enacted or introduced in the Congress or recommended for passage by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made: (i) by or on behalf of the United States Treasury Department, or by or on behalf of the Internal Revenue Service, with the purpose or effect, directly or indirectly, of causing inclusion in gross income for purposes of federal income taxation of the interest received by the owners of the Bonds; or (ii) by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction over the subject matter thereof, to the effect that Hie Bonds, or obligations of the general character of the Bonds, including any and all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended; (2) legislation enacted by the legislature of the State of California (the "State"), or a decision rendered by a court of the State, or a ruling, order, or regulation (final or temporary) made by State authority, which would have the effect of changing, directly or indirectly, the State tax consequences of interest on obligations of the general character of the Bonds in the 1lands of the holders thereof, or (3) the declaration of war or engagement in major military hostilities by the United States, any outbreak or escalation of hostilities or the occurrence of any other national emergency or calamity relating to the -8- effective operation of the government or the financial community in the United States; (4) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange; (5) the imposition by the New York Stock Exchange, other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds, or obligations of the general character of the Bonds, or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (6) an order, decree or injunction of any court of competent jurisdiction, or order, filing, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction over the subject matter thereof, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws, as amended and then in effect; (7) the withdrawal or downgrading of any rating of the District's outstanding indebtedness by a national rating agency; or (8) any event occurring, or information becoming known which, in the reasonable judgment of the Underwriter, makes wltrue in any material adverse respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances tinder which they were made, not misleading. (e) Delivery of Documents. At or prior to the date of the Closing, Bond Counsel shall deliver sufficient copies of the following documents, in each case dated as of the Closing Date and satisfactory in form and substance to the Underwriter: (1) Bond O~~inion. An approving opinion of Band Counsel, as to the validity and tax-exempt status of the Bonds, dated the date of the Closing, addressed to the County and the District; (2) Reliance Letter. A reliance letter from Bond Counsel to the effect that the Underwriter can rely upon the approving opinion described in (e)(1) above; (3) Supplemental O~~inion. A supplemental opinion of Bond Counsel, dated the Closing Date, addressed to the Underwriter to the effect that: (i) this Bond Purchase Agreement has been duly executed and delivered by the District and the County and, assuming due authorization, execution and delivery by and validity against the Underwriter, is a valid and binding agreement of the District and the -9- County, subject to bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and other laws relating to or affecting creditors' rights, to the application of equitable principles and to the exercise of judicial discretion in appropriate cases; (ii) the statements contained in the Official Statement under the captions "THE BONDS," "SECURITY AND SOURCE OF PAYMENT" and "Tax Matters," insofar as such statements purport to summarize certain provisions of the Bonds and the Resolutions and its opinion concerning certain federal tax matters relating to the Bonds are accurate in all material respects; (iii) the Bonds are not subject to the registration requirements of the Securities Act and the Resolutions are exempt from qualification under the Trust Indenture Act; and (iv) the Continuing Disclosure Undertaking satisfies section (b)5(i) of the Rule, which requires an undertaking for the benefit of the holders, including beneficial owners, of the Bonds to provide certain annual financial information and event notices to various information repositories at the time and in the manner required by the Rule; (4) Certificates. Certificates signed by appropriate officials of the County and the District to the effect that (i) such officials are authorized to execute this Bond Purchase Agreement, (ii) the representations, agreements and warranties of the County and the District herein are true and correct in all material respects as of the date of Closing, (iii) the District has complied with all the terms of the District Resolution and this Bond Purchase Agreement, and the County has complied with all the terms of the County Resolution and this Bond Purchase Agreement, which are necessary to be complied with prior to or concurrently with the Closing and such documents are in full force and effect, (iv) the District has reviewed the Official Statement and on such basis certifies that the Official Statement does not contain any untrue statement of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and (v) the Bonds being delivered on the date of the Closing to the Underwriter under this Bond Purchase Agreement substantially conform to the descriptions thereof contained v~ d1e County Resolution; (6) Arbitrage. Anon-arbitrage certificate of the District in a form satisfactory to Bond Counsel; (7) Municipal Bond Insurance. Evidence satisfactory to the Underwriter that the Bonds shall have received the Municipal Bond Insurance Policy; (8) Rating. Evidence satisfactory to the Underwriter that the Bonds s11a11 have been rated "AAA," by Standard & Poor's Ratings Services as a result of municipal bond insurance provided by the Municipal Bond Insurer, and that such rating has not been revoked or downgraded; -10- (9) District Resolution. A certificate, together with fully executed copies of the District Reso}cation, of the Secretary of the District Board of Trustees to the effect that: (i) such copies are true and correct copies of the District Resolution; and (ii) that the District Resolution was duly adopted and has not been modified, amended, rescinded or revoked and is in full force and effect on the date of the Closing. (10) District Counsel Opinion. An opinion of Counsel to the District in the form attached as Appendix B; (11) County Resolution. A certificate, together with fully executed copies of the County Resolution, of the Clerk of the County Board of Supervisors to the effect that: (i) such copies are true and correct copies of the County Resolution; and (ii) that the County Resolution was duly adopted and has not been modified, amended, rescinded or revoked and is in full force and effect on the date of the Closing; (12) County Counsel Opinion. An opinion of Counsel to the County in the form attached hereto as Appendix C; (13) Official Statement. Certificates ~of the appropriate officials of the District evidencing their determinations respecting the Official Statement in accord.~ance with the Rule; (74) Continuing Disclosure Certificate. /1 continuing disclosure certificate of the District as summarized in the Official Statement and in a form satisfactory to the Underwriter which complies with S.E.C. Rule 75c2- 12(b)(5). (15) Otller Documents. Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter may reasonably request to evidence compliance (i) by the County and the District with legal requirements, (ii) the truth and accuracy, as of the time of Closing, of the representations of the County and the District herein contained, and (iii) the due performance or satisfaction by the County and the District at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the District; and (f) Ter~~lit~rrtio~~. Not~~ithstanding anything to the contrary herein contained, if for any reason whatsoever the Bonds shall not have been delivered by the District to the Underwriter prior to the close of business, California Time, on August 7, 2005, then the obligation to purchase Bonds hereunder shall terminate and be of no further force or effect except with respect to the obligations of the District and the Underwriter under Section 11 hereof. -11- If the County and/or t11e District shall be unable to satisfy the conditions to the Underwriter's obligations contained in this Bond Purchase Agreement or if the Underwriter's obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement may be canceled Uy the Underwriter at, or at any time prior to, the time of Closing. Notice of such cancellation shall be given to the County and the District in writing, or Uy telephone or telegraph, confirmed in writing. Notwithstanding any provision herein to the contrary, the performance of any and all obligations of the County and the District hereunder and the performance of any and all conditions contained herein for the Uenefit of the Underwriter may be waived by the Underwriter in writing at its sole discretion. 11. Conditions to Obligations of the Count and the District. The performance by the County and the District of their obligations is conditioned upon (i) the performance Uy the Underwriter of its obligations hereunder; and (ii) receipt Uy the District and the Underwriter of opinions and certificates being delivered at the Closing by persons and entities other than the County and the District. 12. Costs and Expenses. The Underwriter shall pay all costs and expenses incurred in the issuance and sale of the Bonds, including Uut not limited to the fees and expenses of Bond Counsel and the financial adviser, bond insurance premiums, the cost of the printing and distribution of the Official Statement, Underwriter's discount and initial fees and expenses of the Paying Agent from original issue premium retained by the Underwriter. The aggregate amount of such costs and expenses paid by the Underwriter (excluding underwriter's discount) shall not exceed $ . If such costs and expenses are less than $ ,the Underwriter shall reimburse the District such remainder, which amount shall be deposited in the Interest and Sinking Fund established and held by the County pursuant to the County Resolution. Except to the extent paid Uy the Underwriter pursuant to the preceding sentences, the District shall pay any expenses incident to the performance of its obligations hereunder from the proceeds of the Bonds. All out-of-pocket expenses of the Underwriter, including the California Debt and investment Advisory Commission fee, travel (except in connection with securing a rating on the Bonds) and other expenses (except as provided above), shall be paid by t11e Underwriter. 13. Notices. Any notice or other communication to Ue given under this Bond Purchase Agreement (other than the acceptance hereof as specified in the first paragraph hereof) may be given by delivering the same in writing if to the County, to the Treasurcr- Tax Collector, Butte County, 25 County Center Drive, Oroville, CA 95695, or if to the District, to the Superintendent, Thermalito Union School District, 400 Grand Avenue, Oroville, CA 95695, or if to the Underwriter, to , 14. Parties in Interest• Survival of Representations and Warranties. This Bond Purchase Agreement when accepted Uy the District in writing as heretofore specified shall constitute the entire agreement among the County, the District and the Underwriter. This Bond Purchase Agreement is made solely for the Uenefit of the County, the District and the Underwriter (including the successors or assigns of the Underwriter). No person shall acquire or have any rights hereunder or by virtue hereof. All representations, warranties and agreements of the County and the District in this Bond Purchase Agreement shall survive regardless of (a) any investigation or any statement in respect thereof made Uy or on Uehalf of the Underwriter, (U) delivery of and payment by the Underwriter for the Bonds hereunder, and (c) any termination of this Bond Purchase Agreement. -12- 15. Execution in Counterparts. `t'his Bond Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original and all of which shall constitute but one and the same docwnent. 16. At~Ulicable Law. This Bond Purchase Agreement shall be interpreted, governed and enforced in accordance with the law of the State of California applicable to contracts made and performed in such State. Very truly yours, By The foregoing is hereby agreed to and accepted as of the date first above written: BUTTE COUNTY By Treasurer-Tax Collector THERMALITO UNION SCHOOL DISTRICT By Superintendent Principal -13- APPENDIX A INTEREST RATES, REOFFERING PRICES, MATURITIES, DEBT SERVICE, AND OPTIONAL AND MANDATORY REDEMPTION PROVISIONS Maturity Schedule $ _ Current Interest Bonds Maturity Principal Interest ul 1 Amount Rate Yield $ Ce~pitr~l Appreciation Bonds Original Reoffering Final Maturity Principal Principal Accretion Accreted Reoffering ul 1 Amount hmount Rate Value Yield REDEMPTION PROVISIONS G~rr~°~Tt Inte~~e~t Bolds. Optional Redemption. The Cw~rent Interest Bonds maturing on or after July 1, _ are subject to redemption prior to their respective stated maturities, at the option of the District, as a whole or in part on any ~ ate, by such mates°ities as are selected by the District (or if the District fails to designate such maturities, in inverse order of maturity) and by lot within a maturity, on or after July 1, at the following redemption prices (expressed as a percentage of the principal amount of Current Interest Bonds called for redemption), together ~~~ith interest accrued thereon to the date fixed for redemption: Redemption Period July 1, through June 30, July 1, and thereafter Redemption Price Sinking Fund Redemption. The Current h~terest Bonds maturing on July 1, _ ,are also subject to mandatory sinking fund redemption on July 1 in the years and in the amounts, as set forth i1 the following table, at a i°edemption price equal to one hundred percent (100%~) of the Appendix A principal amount thereof to be redeemed (without premiwn), together with interest accrued thereon to the date fixed for redemption. Redemption llate Principal ul 1 Amount Capital Apprcciatio~i Bo~ids. The Capital Appreciation Bonds are not subject to redemption prior to maturity. Appendix A APPENDIX B FORM OF DISTRICT COUNSEL OPINION Butte County 25 County Center Drive Oroville, CA 95695 Thermalito Union School District 400 Grand Avenue Oroville, CA 95695 [UNDERWRITER] Re: $ Thermalito Union School District 2005 General Obligation Bonds, Election of 2004 Ladies and Gentlemen: As counsel to the Thermalito Union School District (the "District"), I have reviewed the proceedings relating to the election of the District held on November 2, 2004 (the "Election"), at which the above-described bonds (the "Bonds") were authorized, the Official. Statement (the "Official Statement") for the Bonds, the Resolution of the Board of Trustees of the District adopted on April 28, 2005 (the "District Resolution"), and the Bond Purchase Agreement, dated as of June 16, 2005, by and among the District, Butte County, and as the underwriter (the "Bond Purchase Agreement"). Hairing revie~n~ed these documents, it is my opinion that: 1. The District is a school district duly organized and existing under the Constitution and the laws of the State of California. 2. The District Resolution was duly adopted at a meeting of the gove~°ning body of the District which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout. 3. To the best of my knowledge, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the District which would adversely impact the District's ability to complete the transactions described in and contemplated by the Official Statement, to restrain or enjoin the levy or collection of tax revenues pledged for the Bonds or in any way contesting or affecting the validity of the Election, the Bond Purchase Agreement, the District Resolution or the Bonds ar the transactions described in and contemplated by the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the Election, the Bond Purchase Agreement, the District Resolution or the Bonds or in which a final adverse decision could materially adversely affect the operations of the District. 1lppendix B Page 1 4. To the best of my knowledge, the obligations of the District under the Bonds, and the approval of the Official Statement and compliance with the provisions thereof, and the execution of and performance of the provisions of the Bond Purchase Agreement, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the District a breach of or default under any agreement or other instrument to which the District is a party or by which it is bound or any existing law, regulation court order or consent decree to which the District is subject. 5. The Election was validly ordered and the proceedings relating thereto were conducted in compliance with all requirements of the Constitution and the laws of the State of California. 6. No authorization, approval, consent, or other order of the State of California, or other governmental authority or agency within the State of California, is required for the valid authorization of the Bonds, the execution of the t3ond Purchase Agreement or the approval of the Official Statement. Very truly yours, Appendix B Page 2 APPENDIX C OPINION OF COUNTY COUNSEL Butte County 25 County Center Drive Oroville, CA 95695 Thermalito Union School District 400 Grand Avenue Oroville, CA 95695 [UNDERWRITER] Re: $ Thermalito Union School District 2005 General Obligation Bonds, Election of 2004 Ladies and Gentlemen: As counsel to the Board of Supervisors (the "Board") of Butte County, California (the "County"), I have reviewed the Official Statement (the "Official Statement") for the above-described bonds (the "Bonds") and the Resolution of the Board adopted on May 10, 2005, with respect to the Bonds (the "County Resolution"), and the Bond Purchase Agreement, dated as of June 16, 2005, by and among the Thermalito Union School District (the "District"), the County and as underwriter (the "Bond Purchase Agreement"). Having reviewed these documents, it is my opinion that: 1. The County is a political subdivision duly organized and existing pursuant to the Constitution and the laws of the State of California. 2. The County Resolution was duly adopted at a meeting of the governing body of the County which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout. 3. To my knowledge, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the County which would restrain or enjoin the levy or collection of tax revenues pledged for the Bonds or in any way contesting or affecting the validity of the County Resolution, the Bond Purchase Agreement or the Bonds wherein an unfavorable decision, ruling or findi~~g would adversely affect the validity and enforceability of the County Resolution, the Bond Purchase Agreement or the Bonds, or in which a final adverse decision could materially adversely affect the operations of the County. 4. To my knowledge, the issuance of the Bonds and the execution of and performance of the provisions of the Bond Purchase Agreement, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the County a breach of or default under any agreement or other instrument to Appendix C Page 1 which the County is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the County is subject. 5. No authorization, approval, consent, or other order of the State of California, or other governmental authority or agency within the State of California, is required for the valid authorization of the Bonds or the execution of the Bond Purchase Agreement. Very truly yours, Appendix C Page 2 EXHIBIT B FORM OF SERIES B BONDS (Current Interest Bonds] THERMALITO UNION SCHOOL DISTRICT (Butte County, California) GENERAL OBLIGATION BONDS ELECTION OF 2004 INTEREST RATE MATURITY DATE DATED DATE CUSIP .................................................................................................................. a..........................................,..............;......................................................... er annum ul 1 , 2005 .........................P..............................,...............~ .....~ -................ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The Thermalito Union School District (the "District") in Butte County, California (the "County"), for value received, promises to pay to the Registered Owner named above, or registered assigns, the Principal Amowlt on the Maturity Date, each as stated above, and interest thereon, calculated on a 30/360 day basis, until the Principal Amount is paid or provided for at the Interest Rate stated above, such interest to be paid on January 1 and July 1 of each year (the "Interest Payment Dates"), commencing July 1, 2006. This Bond will bear interest from the Interest Payment Date next preceding the date of authentication hereof, unless (a) it is authenticated as of a business day following the 15th day of the month immediately preceding any Interest Payment Date and on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b} it is authenticated on or before June 15, 2000, in which event it shall bear interest fi-om the Dated Date stated above. Principal, inter°est and redemption premium (if any) are payable in lawful money of the United States of America, without deduction for the paying agent services, to the person in whose name this Bond is registered (the "Registered Owner") on the Register maintained by Wells Fargo Bank, National Association, San Francisco, California (the "Paying Agent"). Principal and any redemption premium is payable upon presentation and surrender of this Bond at the principal corporate trust office of the Paying Agent. Interest is payable by check or draft mailed by the Paying Agent on each Interest Payment Date to the registered owner of this Bond by first-class mail at the address appearing on the Register at the close of business on the 15th day of the calendar month next preceding that Interest Payment Date (the "Record Date"). This Bond is one of a series of $ of bonds issued for the purpose of raising money for real property acquisition or improvements, namely (a) to provide funding for a new library/media center, adding and expanding science labs, relocating music room and equipping facilities at Nelson Avenue Middle School; to improve student safety by rehabilitating student loading zones, sidewalks, and parking areas at all schools; and to provide new playground equipment and bleachers at District schools, and (b) to pay all necessary legal, financial, engineering and contingent costs in connection therewith. The bond of this issue were authorized by the requisite 55`% vote of the electors of the District cast at an election held on November 2, 2004, upon the question of issuing bonds in the Exhibit B Page 1 amount of $2,050,000 (the "Authorization"), and issued pursuant to the resolution of the Board of Trustees of the District, adopted on April 28, 2005 (the "District Resolution"), and the resolution of the County Board of Supervisors adopted on May 10, 2005 (the "Bond Resolution"). This Bond and the issue of which this Bond is a part are payable as to both principal and interest from the proceeds of the levy of acl valorem taxes on all property subject to such taxes in the District, which taxes are unlimited as to rate or amount. The bonds of this issue arc comprised of $ principal amount of current interest bonds, of which this Bond is apart (a "Current Interest Bond") anal capital appreciation bonds of which $_ _ represents the Denominational Amount and $ represents the Maturity Value. The Bonds of this issue are issuable only as fully registered Bonds in the denominations of $5,000 or any integral multiple thereof. This Bond is exchangeable and transferable for Bonds of other authorized denominations at the principal corporate trust office of the Paying Agent, by the Registered Owner or by a person legally empowered to do so, upon presentation and surrender hereof to the Paying Agent, together with a request for exchange or an assignment signed by the Registered Owner or by a person legally empowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations and conditions provided in the Bond Resolution. Any tax or governmental charges shall be paid by the transferor. The District, the County and the Paying Agent may deem and. treat the Registered Owner as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal or interest and for all other purposes, and neither the District, the County nor the Paying Agent shall be affected by any notice to the contrary. The bonds maturing on or before July 1, ,are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after July 1, ,are subject to redemption prior to maturity, at the option of the District, from any available source of funds, on any date on and after July 1, , at a redemptio~~ price equal to the principal amount thereof, together with the premium set forth below (expressed as a percentage of the total principal amount redeemed), and accrued interest to the date fixed for redemption: Redemption Redemption Periods Premium July 1, ,through July 31, July 1, ,through July 31, July 1, and thereafter [If applicable:] The Bonds maturing on July 1, 20_ (the "Term Bonds") are also subject to mandatory sinking fund redemption on July 1 in the years, and in the amounts, as set forth in die following table, at a redemption price equal to one hundred percent (100`%,) of the principal amowzt thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the Term Bonds Have been redeemed pursuant to the preceding paragraph, the aggregate principal amount of Term Bonds to be redeemed under this paragraph shall be reduced on a pro rata basis in integral multiples of $5,000, as shall be designated pursuant to ~~ritten notice filed by the District with the Cow~ty and the Paying Agent. Exhibit B Page 2 Redemption Date Principal U, 1V 1 An10Unt If less than all of the Bonds of any one maturity shall be called for redemption, the particular Bonds or portions of Bonds of such maturity to Ue redeemed shall be selected by lot by the District in such manner as the District in its discretion may determine; provided, however, that the portion of any bond to be redeemed shall be in the principal amount of $5,000 or some multiple thereof and that, in selecting Bonds for redemption, the Paying Agent shall treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of such Bond Uy $5,000. 1f less than all of the Bonds shall be called for redemption, the particular Bonds or portions thereof to be redeemed shall be called in the inverse order of their maturities, unless otherwise directed by the District. When redemption is authorized or required, the Paying Agent shall give notice (a "Redemption Notice") of the redemption of the Bonds. Such Redemption Notice shall specify: (A) the Bonds or designated portions thereof (in the case of redemption of the Bonds in part Uut not in whole) which are to be redeemed, (B) the date of redemption, (C) the place or places where the redemption will be made, including the name and address of the Paying Agent, (D) the redemption price, (E) the CUSIP numbers (if any) assigned to the Bonds to be redeemed, (F) the Bond numbers of the Bonds to Ue redeemed in whole or in part and, in the case of any Bond to be redeemed in part only, the Principal Amount of such Bond to be redeemed, and (G) the original issue date, interest rate or Reoffering Yield and stated maturity date of each Bond to be redeemed in whole or in part. Such Redemption Notice shall further state that on the specified date there shall become due and payaUle upon each Bond or portion thereof Ueing redeemed at the redemption price thereof, together with the interest accrued or accreted to the redemption date, and that from and after such date, interest with i°espect thereto shall cease to accrue or accrete. The Paying Agent shall take the following actions wit11 respect to such Redemption Notice: (A) at least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall Ue given to the respective Owners of Bonds designated for redemption by registered or certified mail, postage prepaid, at their addresses appearing on the Bond Register; (B) at least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall be given Uy (i) registered or certified mail, postage prepaid, (ii) telephonically confirmed facsimile transmissio~l, or (iii) overnight delivery service, to each of the Securities Depositories; (C) At least 30 but not more than 45 days prior to the redemption date, such Redemption Notice shall be given Uy (1) registered or certified mail, postage prepaid, or (2) overnight delivery service, to o~1e of the Information Services. Neither the District, the County nor the Paying Agent will be required: (a) to issue or transfer any Bond during a period beginning with the opening of Uusiness on the 15th calendar day next preceding either any Interest Payment Date or any date of selection of any Bond to be redeemed and ending with the close of business on the Interest Payment Date or a day on which the applicable notice of redemption is given, or (U) to transfer any Bond which has been selected or called for redemption in whole or in part. Reference is made to the Bond Resolution foi° a more complete description of the provisions, among others, with respect to the nature and extent of the security for the Bonds of this series, the rights, duties and obligations of the District, the County, the Paying Agent and the Registered Owners, and the terms and conditions upon which the Bonds are issued Exhibit B Page 3 and secured. The owner of this Bond assents, by acceptance hereof, to all of the provisions of the Bond Resolution. It is certified and recited that all acts and conditions required by the Constitution and laws of the State of California to exist, to be performed or to have been met precedent to and in the issuing of the Bonds in order to make them legal, valid and binding general obligations of the District, have been performed and have been met in regular and due form as required by law; that payment in full for the Bonds has been received; that no statutory or constitutional limitation on indebtedness or taxation has been exceeded in issuing the Bonds; and that due provision has been made for levying and collecting ad valorem. property taxes on all of the taxable property within the District in an amount sufficient to pay principal and interest when due, and for levying and collecting such taxes the full faith and credit of the District are hereby pledged. THE BONDS ARE QUALIFIED TAX-EXEMPT OBLIGATIONS DESIGNATED BY THE DISTRICT FOR PURPOSES OF SECTION 265(b) OF THE INTERNAL REVENUE CODE OF 1986. This Bond shall be not be valid or obligatory for any purpose and shall not be entitled to any security or benefit under the Bond Resolution (described on the reverse hereof) until the Certificate of Authentication below has been manually signed by the Paying Agent. Unless this certificate 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 certificate 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 IS WRONGFUL since the registered owner hereof, Cede & Co., has a~1 interest herein. Exhibit B Page 4 IN WITNESS WHEREOF, the Thermalito Union School District, Butte County, California, has caused this Bond to be executed on behalf of the District and in their official capacities by the manual or facsimile signatures of the Chair of the Board of Supervisors of Butte County, the Clerk of said Board of Supervisors and the Treasurer-Tax Collector of Butte County, and has caused the seal of the County to be affixed hereon, all as of the date stated above. [SEAL] By By By BUTTE COUNTY Chair of the Board of Supervisors Clerk of the Board of Supervisors Treasurer-Tax Collector CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Bond Resolution referred to herein. Date of Authentication: By WELLS FARGO BANK, NAT[ONAL ASSOCIATION, as Paying Agent Authorised Signatory Exhibit B Page 5 FORM OF ASSIGNMENT For value received, the Luldersigned do(es) hereby sell, assign and transfer unto (Name, Address and 'I~ax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint attorney, to transfer the same on the registration books of the Paying Agent, with full power of substitution in the premises. Dated: Signature Guaranteed: NOT[CE: Signature(s) must he guaranteed vy an eligible guarantor. NOTICE: The signature(s) on this assignment must correspond with the name(s) as written nn the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Txhibit I3 Page 6 EXHIBIT C FORM OF SERIES B BONDS (Capital Appreciation Bonds) THERMALITO UNION SCHOOL DISTRICT (Butte County, California) GENERAL OBLIGATION BONDS ELECTION OF 2004 ................................................................................................................... v..................................................................................................................., ACCRETION RATE MATURITY DATE DATED DATE CUSIP ~ .........................................................:.........................................................J.........................................................:.........................................................t ..........% ...............~............... Juh'.1.!....... 2005 REGISTERED OWNER: CEDE & CO. DENOMINATIONAL AMOUNT: $ MATURITY VALUE: $ The Thermalito Union School District (the "District") in Butte County, California (the "County"), for value received, promises to pay to the Registered Owner named above, or registered assigns, the Maturity Value on the Maturity Date, each as stated above, such Maturity Value being comprised of the Denominational Amount and interest accreted thereon. This Bond will not bear current interest but will accrete interest, compounded on each January 1 and July 1, commencing January 1, 2006, at the Accretion Rate specified above to the Maturity Date, assuming that in any such semiannual period the sum of such compounded accreted interest and the Denomination Amount (such sum being herein called the "Accreted Value") increases in equal daily amounts on the basis of a 360-day year consisting of twelve 30-day months. Accreted Value is payable in ]awful money of the United States of America, without deduction for the paying agent services, to the person in whose name this Bond (or, if applicable, one or more predecessor bonds) is registered (the "Registered Owner") on the Register maintained by the Paying Agent, initially Wells Fargo Bank, National Association, San Francisco (t11e "Paying Agent"). Accreted Value is payable upon presentation and surrender of this Bond at the principal office of the Paying Agent. This Bond is one of a series of $ of bonds issued for the purpose of raising money for real property acquisition or improvements, namely (a) to provide funding for a new library/media center, adding and expanding science labs, relocating music room and equipping facilities at Nelson Avenue Middle School; to improve student safety by rehabilitating student loading zones, sidewalks, and parking areas at all schools; and to provide new playground equipment and bleachers at District schools, and (b) to pay all necessary legal, financial, engineering and contingent costs in connection therewith. The bond of this issue were authorized by the requisite 55`%, vote of the electors of the District cast at an election held on November 2, 2004, upon the question of issuing bonds in the amount of $2,050,000 (the "Authorization"), and issued pursuant to the resolution of the Board of Trustees of the District, adopted on April 28, 2005 (the "District Resolution"), and the resolution of the County Board of Supervisors adopted on May 10, 2005 (the "Bond Resolution"). This Bond and the issue of which this Bond is a part are payable as to both Exhibit C Page 1 principal and interest from the proceeds of the levy cif rid vc~lorc»i taxes on all property subject to such taxes in the District, which taxes are unlimited as to rate or amount. The bonds of this issue are comprised of $ principal amount of Current Interest Bonds (each a "Current Interest Bond") and Capital Appreciation Bonds, of which this bond is a part, in the Denominational Amotmt of $ and the Maturity Value of $ 'The Bonds of this issue are issuable only as fully registered Bonds in the denominations of $5,000 or any integral multiple thereof. This Bond is exchangeable and transferable for Bonds of other authorized denominations at the principal corporate trust office of the Paying Agent, by the Registered Owner or by a person legally empowered to do so, upon presentation and surrender hereof to the Paying Agent, together with a request for exchange or an assignment signed by the Registered Owner or by a person legally empowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations and conditions provided in the Bond Resolution. Any tax or governmental charges shall be paid by the transferor. The District, the County and the Paying Agent may deem and treat the Registered Owner as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal or interest and for all other purposes, and neither the District, the County nor the Paying Agent shall be affected by any notice to the contrary. Neither the District, the County nor the Paying Agent will be required: (a) to issue or transfer any Bond during a period beginning with the opening of business on the 15th calendar day next preceding either any Interest Payment Date or any date of selection of any Bond to be redeemed and ending with the close of business on the Interest Payment Date or a day on which the applicable notice of redemption is given, or (b) to transfer any Bond which has been selected or called for redemption in whole or in part. Reference is made to the Bond Resolution for a more complete description of the provisions, among others, with respect to the nature and extent of the security for the Bonds of this series, the rights, duties and obligations of the District, the County, the Paying Agent and the Registered Owners, and the terms and conditions upon which the Bonds are issued and secured. The owner of this Bond assents, by acceptance hereof, to all of the provisions of the Bond Resolution. It is certified and recited that all acts and conditions required by the Constitution and laws of the State of California to exist, to be performed or to have been met precedent to and in the issuing of the Bonds in order to make them legal, valid and binding general obligations of the District, have been performed and have been met in regular and due form as required by law; that payment i11 full for the Bonds has been received; that no statutory or constitutional limitation on indebtedness or taxation has been exceeded in issuing the Bonds; and that due provision has been made for levying and collecting ad valorem property taxes on all of the taxable property within the District in an amount sufficient to pay principal and interest when due, and for levying and collecting such taxes the full faith and credit of the District are hereby pledged. THE BONDS ARE QUALIFIED TAX-EXEMPT OBLIGATIONS DESIGNATED BY THE DISTRICT FOR PURPOSES OF SECTION 265(b) OF THE INTERNAL REVENUE CODE OF 1986. This Bond shall be not be valid or obligatory for any purpose and shall not be entitled to any security or benefit under the Bond Resolution (described nn the reverse exhibit C Page 2 hereof) until the Certificate of Authentication below has been manually signed by the Paying Agent. Unless this certificate 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 certificate 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 OK OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. IN WITNESS WHEREOF, the Thermalito Union School District, Butte County, California, has caused this Bond to be executed on behalf of the District and in their official capacities by the manual or facsimile signatures of the Chair of the Board of Supervisors of Butte County, the Clerk of said Board of Supervisors and the Treasurer-Tax Collector of Butte County, and has caused the seal of the Cowzty to be affixed hereon, all as of the date stated above. [SEAL] By BUTTE COUNTY By Chair of the Board of Supervisors By Clerk of the Board of Supervisors Treasurer-Tax Collector CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Bond Resolution referred to herein. Date of Authentication: By WELLS FARGO BANK, NATIONAL ASSOCIATION, as Paying Agent Authorized Signatory Exhibit C Page 3 FORM OF ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, I~ddress and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint attorney, to transfer the same on the registration books of the Paying Agent, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor. NOTICE: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every }articular, without alteration or enlargement or any change whatsoever. Exhibit C Page 4