Tab_B-3TAX CERTI FI CATE
This Tax Certificate is executed and delivered by the Rosemead Community
Development Commission (the" Issuer") in connection with the issuance of $11,230,000
aggregate stated principal amount of its Rosemead Merged Project Area Tax A I I ocati on Bonds,
Seri es 2010A (the " Bonds'). The Bonds are bei ng i ssued pursuant to an I ndenture, dated as of
June 1, 2010 (the" Indenture" by and between the Issuer and U. S. Bank National Association,
as trustee (the " Trusted'). Pursuant to Secti on 6.16 of the I ndenture, and i n part pursuant to
Treasury Regulations Section 1.148-2(b)(2), the Issuer certifies, covenants, warrants and
represents as f of I ows:
ARTICLE I
IN GENERAL
1 . 1 The I ssuer. The Issuer i s a redevelopment agency duly organized and
existing under and by virtue of the I avrs of the State of Cal iforni a. The governing board of the
Issuer is comprised of the same members as the City Council of the City of Rosemead,
California (the" City"). The City has the general authority to exercise the power of eminent
domain in furtherance of its governmental purposes. The signatory of this Tax Certificate, who
i s si gni ng on behal f of the I ssuer, al so serves as the C i ty M anager of the Ci ty. See al so Sect i on
1.2 herein, regarding the role of the A uthori ty (as defined therein), which is a j of nt powers
authority formed by the Issuer and the City.
Proceeds of the Bonds wi 11 be used by the Issuer and the City to finance the
Project (as defined in Section 1.4 herein). Representations and covenants made in this Tax
Certificate by the Issuer are made on behalf of the City based on the control the City exercises
over the I ssuer as descri bed i n thi s Secti on.
1.2 Delivery of the Bonds On the date hereof, in exchange for receipt of
good f unds, the I ssuer i s del i veri ng the Bonds to the Rosemead Fi nanci ng Authori ty (the
"Authority" ) for resaleto E. J. De La Rosa & Co., Inc., as underwriter (the" Underwriter" for
resat a to the general publ i c.
1.3 Purpose of Tax Certificate. The Issuer is delivering this Tax Certificate
to Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), as bond counsel, with the
understanding that Bond Counsel will rely in part upon this Tax Certificate in rendering its
opinion that interest on the Bonds is excluded from gross i ncome f or federal income tax purposes
under Section 103 of the Internal Revenue Code of 1986.
1.4 Purpose of Financing The Bonds are being issued to (i) finance costs
within or for the benefit of the Issuer's Merged Project Area, including certain infrastructure
improvements, the acquisition of land and improvements relating to an aquatic center, a
community center and parking lot expansion and existing park and playground facilities and
equi pment and the repayment of a I oan by the Ci ty to the I ssuer (the " Proj ect" (i i) f and the
Reserve Account for the Bonds, and (i i i) pay certai n costs of i ssui ng the Bonds.
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1.5 Si ngl e I ssue. A I I the Bonds were sol d to the U nderwri ter on June 29,
2010 (the " Sal a Date'), pursuant to the same pl an of f i nanci ng, and are expected to be pai d out of
substantially the same source of funds. No other governmental obligations which are expected to
be paid out of substantially the same source of f unds as the Bonds have been or will be sol d
within the 31-day period beginning 15 days bef ore the Sale Date pursuant to the same pl an of
financing as the Bonds.
1.6 Definitions Capitalized terms used and not otherwise defined herein
shat I have the respecti ve meani ngs set f orth i n the I ndenture. U nl ess the context otherwi se
requi res, the f of I owi ng capi tal i zed terms have the f of I owi ng meani ngs:
"Adjusted Gross Proceeds" means Gross Proceeds, adj usted as set forth i n
Treasury Regulations Section 1.148-7(c)(3). Thus, Adjusted Gross Proceeds generally means
Gross Proceeds, less the sum of (i) Gross Proceeds held in the Bona Fide Debt Service Funds, as
described in Section 3.5 of this Tax Certificate (excluding any Restricted Amount) and (ii) Gross
Proceeds held in the Reserve Account (excluding any Excess Amount, as defined in Section 3.5
hereof).
"Available Construction Proceeds" means al I Sal a Proceeds (reduced by costs of
issuing the Bonds financed from Bond proceeds and by the amount of Sale Proceeds deposited in
the Reserve Fund), pl us al I I nvestment Proceeds earned or reasonabl y expected to be earned
thereon, plus Investment Proceeds earned or reasonably expected to be earned on amounts held
i n the Reserve Fund bef ore the earl i er of two years after the Cl osi ng Date or substanti al
comp) eti on of Proj ect constructi on.
'Bona Fide Debt Service Funds" means those funds and accounts identified in
Section 3.4.3 of this Tax Certificate.
" Bond Year" means the twel ve-month peri od begi nni ng on December 1 i n each
year and extendi ng to the next succeedi ng Decem ber 1, both dates i ncl usi ve, except that the f i rst
Bond Year shad I begi n on the Cl osi ng Date and end on December 1, 2010 (or on an earl i er date
selected by the Issuer in accordance with Treasury Regulations Section 1.148-1(b)).
" City Fund" means any f and or account (or porti on thereof) hod di ng Sad e
Proceeds that are tranf erred to the Ci ty through the repayment of an i nternal I oan, as descri bed i n
Section 2.1 herein, and Investment Proceeds thereon.
" Closing Date" means the date of thi s Tax Certif i cate.
" Code" means the Internal Revenue Code of 1986 (including amendments
thereto).
" Excess Amount" has the meani ng set f orth i n Secti on 3.5 of thi s Tax Certi f i cate.
"Governmental Unit" means any State, or political subdivision of aState, but
excludes the United States and its agencies or instrumented i ti es.
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" Gross Proceeds" has the meani ng used i n Secti on 1.148-1(b) of the Treasury
Regul ati ons, and general I y means al I proceeds deri ved f rom or rel ati ng to the Bonds, i ncl udi ng
Sal a Proceeds, I nvestment Proceeds, and other amounts expected to be used to pay debt servi ce
on the Bonds.
" Investment Proceeds" means earni ngs recce ved f rom i nvesti ng and rei nvesti ng
Sal a Proceeds and f rom i nvesti ng and rei nvesti ng such earni ngs.
' Investment Property' means any security or obligation, any annuity contract, or
any other i nvestment type property, but does not i ncl ude any Tax-Exempt Bond unl ess such
obligation is a" specified private activity bond" within the meaning of Section 57(a)(5)(C) of the
Code.
" Net Se/e Proceeds" means Sal a Proceeds, I ess such porti on of the Sal a Proceeds
deposi ted i n the Reserve Account, and I ess any amount i nested as part of a " m i nor porti on"
pursuant to Section 148(e) of the Code.
"Nongovernmental Person" means any person or entity other than a
Governmental Unit.
" Nonpurpose Investment" means any Investment Property in which Gross
Proceeds are invested.
"Opinion of Counsel" means a wri tten opinion of nationally recognized bond
counsel, del ivered to the Trustee, to the effect that i nterest on the Bonds wi I I not be i ncl uded i n
gross i ncome f or f ederal i ncome tax purposes.
" Prelininary Expenditures" means archi tectural, engi neeri ng, surveyi ng, soi l
testi ng, costs of i ssui ng the Bonds, and si m i I ar costs pai d wi th respect to the Proj ect i n an
aggregate amount not exceeding 20% of the issue price of the Bonds. However, Prel i mi nary
Expenditures do not include land acquisition, site preparation or si m i I ar costs incident to the
commencement of construction.
" Rebate Requirement" means the amount of rebatabl a arbi trage computed as of
the last day of any Bond Year pursuant to Section 1.148-3 of the Treasury Regulations.
" Restricted Amount" has the meani ng set forth i n Secti on 3.5 of thi s Tax
Certificate.
" Sale Proceeds" means the amount of $11,037,861.45, whi ch i s the stated
pri nci pal amount of the Bonds ($11,230, 000), 1 ess the net on gi nal i ssue di scount ($192,138.55).
" Tax-Exempt Bond" means any obligation the interest on which is excluded from
gross i ncome f or f ederal i ncome tax purposes pursuant to Secti on 103 of the Code or Secti on 103
of the I nternal Revenue Code of 1954, as amended (the " 1954 Code'), and Ti tl e X I I I of the Tax
Ref orm Act of 1986, as amended, as wet I as stock i n a regul aced i nvestment company to the
extent at I east 95 percent of i ncome to the stockhol der i s treated as i nterest that i s excl udabl e
from gross income under Section 103 of the Code.
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"Veld" means that discount rate described in Section 4.1 of this Tax Certificate.
1.7 Reliance. With respect to certain matters contained in this Tax
Certificate, the Issuer speci f i cal I y relies upon cert i f i cat i ons of the Underwriter outlined in the
certificate attached hereto as Exhibit A and on the certifications set forth in the other exhibits, if
any, attached hereto. The I ssuer i s not aware of any f acts or ci rcumstances that woul d cause i t to
questi on the accuracy or reasonabl eness of any representati on made i n thi s Tax Certif i cate or i n
any exhibit hereto.
1.8 Bank Qualified. The Issuer hereby designates all of the Bonds as
it qual if i ed tax-exempt obl i gati ons" pursuant to Secti on 265(b) of the Code. The I ssuer has not
designated and will not designate, and has not permitted and will not permit any subordinate
enti ty or i ssuer i ssui ng on behal f of the I ssuer to desi gnate, duri ng cal endar year 2010, any other
tax-exempt obl i gati ons as " qual if i ed tax-exempt obl i gati ons' pursuant to Secti on 265(b) of the
Code such that the aggregate amount of such other obl i gati ons, together wi th the amount of the
Bonds, i n total wi I I exceed $30,000, 000. The I ssuer has not i ssued and does not reasonabl y
expect to issue, either directly or through any subordi nate enti ty or on-behalf-of issuer, other tax-
exempt obl i gati ons duri ng cal endar year 2010 i n an aggregate amount that, together wi th the
amount of the Bonds, would exceed $30,000,000.
ARTICLE I I
GENERAL TAX LIMITATIONS
2.1 Application of Sale Proceeds The Sale Proceeds wi I I be used or
al I ocated as f of I ows:
Redevelopment Fund
$ 9,629,060.80
Expense Fund
151,040.65
Reserve Account
1,123,000.00
U nderwri ter' s D i scount
134, 760.00
TOTAL
$11,037,861.45
The pri ci ng numbers are attached hereto as Exhi bit B.
For i nternal tracki ng purposes, Sal e Proceeds i n the amount of $2,629,060.80
(reflected in the pricing numbers as a" Repayment of GF Loan") wi I I be transferred from the
Redevelopment Fund to the City on the Closing Date and deposited in the General Fund. For
purposes of thi s Tax Certif i cate, such amount wi I I be used by the Ci ty to pay or ref i nance capi tal
expenditures that are part of the Project.
A I I I nvestment Proceeds accrued i n respect of amounts hel d any f and or account
establ i shed i n connecti on wi th the Bonds shad I be retai ned therei n.
2.2 Expenditure of Gross Proceeds For purposes of this Tax Certificate,
Gross Proceeds wi I I be treated as spent when they are used to pay or rei mburse disbursements by
the I ssuer or the Ci ty that are (i) capi tat expendi tures of the Proj ect, (i i) costs of i ssui ng the
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Bonds, (i i i) i nterest on the Bonds through the I ater of three years after the Cl osi ng Date or one
year after the Project is placed in service, (iv) initial operating expenses directly associated with
the Proj ect (i n aggregate amount not exceedi ng 5% of the Sal e Proceeds), or (v) other
miscellaneous expenditures described in Treasury Regulations Section 1.148-6(d)(3)(ii). The
Issuer hereby covenants, certifies and warrants that no disbursement to be paid or reimbursed
from Gross Proceeds shad I have been previously paid or reimbursed from the proceeds of any
other obligation, whether issued by the Issuer or any other party (including the City). Absent an
Opinion of Counsel, al I expenditures of Gross Proceeds wi I I be made in respect of (a)
Preliminary Expenditures, (b) capital expenditures reimbursed in respect of payments made by
the Issuer or the City on or after 60 days prior to the date a reimbursement resolution was
properly adopted by the Issuer or the City, (c) costs of issuing the Bonds, or (d) other payments
described in (i) through (v) above that are made by the Issuer on or after the Closing Date. In
connection with all expenditures of Gross Proceeds described in (b), the reimbursement
al I ocati on wi I I be made no I ater than the I ater of 18 months after the Cl osi ng Date or the date on
whi ch the Proj ect i s pl aced i n servi ce, but i n no event I ater than three years after the date of
expenditure.
2.3 Governmental Bond Status
2.3.1 No Private Loan. Absent an Opinion of Counsel, neither the
Issuer nor the City will loan more than 5% of the Bond proceeds to one or more
Nongovernmental Persons other than in their roles as members of the general public and neither
the Issuer nor the City wi 11 loan more than 5% of the Bond proceeds to any Nongovernmental
Persons unless such loan enables the Issuer to finance a speci f i c essential governmental function
and such loan is paid with the proceeds of a governmental assessment of general application.
2.3.2 No Private Activity Bonds Absent an Opinion of Counsel,
neither the Issuer nor the City will al I ow more than 10% of Sale Proceeds and Investment
Proceeds of the Bonds or of the Project to be used directly or indirectly by any Nongovernmental
Person i n any trade or busi ness, other than as a member of the general publ i c. For purposes of
the precedi ng sentence, " 10%°' i s reduced to " 5%" f or nongovernmental use of any f aci I i ti es
f i nanced f rom proceeds of the Bonds which are disproportionate to or not related to the
governmental purposes of the Bonds. Absent an Opinion of Counsel, for purposes of this
Secti on 2.3, a Nongovernmental Person wi I I be treated as " usi ng" Bond proceeds to the extent
the Nongovernmental Person
(a) borrows Note proceeds,
or manager),
(b) uses the Project (e. g., as owner, lessee, service provider, operator
(c) acquires the output (or throughput) of the Project, if any, or
(d) acqui res or uses technol ogy level oped at the Proj ect, if any.
For purposes of this Section 2.3, theterm "use' means any activity or activities
which constitute a trade or business or group of trades or businesses, including any unrelated
trade or busi ness of a Nongovernmental Person. The term " use' shad I i ncl ude any contract for
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the management or operation of any portion of the Project unless (i) such contract, if entered into
pri or to June 9, 1993, meets the requi rements of Revenue Procedures 82-14 or 82-15, as
appropri ate, (i i) such contract, if entered i nto, materi al I y modif i ed or extended (other than
pursuant to a renevral opti on) after June 9, 1993, and bef ore M ay 16, 1997, meets the
requi rements of Revenue Procedure 93-19 or (i i i) such contract, if entered i nto, materi al I y
modif i ed or extended (other than pursuant to a renevral opti on) after M ay 15, 1997, meets the
requirements of Revenue Procedure 97-13.
2.4 Change in Use. The Issuer reasonably expects to use all Bond proceeds
and al I f aci I i t i es that are f i nanced f rom B and proceeds as set f orth i n Sect i on 2.3 of t h i s Tax
Certificate for t he ent i re stated term to maturity of the Bonds. Absent an Opinion of Counsel, the
I ssuer and the C i ty i n f act w i l l use al I B and proceeds and each f aci I i ty f i nanced f rom B and
proceeds as set f orth i n Secti on 2.3 of t h i s Tax Certi f i cate.
2.5 Registered Form. The Bonds are being issued in registered form.
2.6 Federal Guarantee. The I ssuer wi I I not di rectl y or i ndi rectl y use or
permit the use of any Bond proceeds or any other funds of the Issuer or any related party or take
or omi t to take any acti on that woul d cause the Bonds to be obl i gati ons that are "federal I y
guaranteed" within the meaning of Section 149(b) of the Code. In furtherance of this covenant,
the I ssuer wi I I not al I ow the payment of pri nci pal or i nterest wi th respect to the Bonds to be
guaranteed (di rectl y or i ndi rectl y) i n whol e or i n part by the U ni ted States or any agency or
i nstrumental i ty thereof. Except as provi ded i n the next sentence, the I ssuer wi I I not use 5% or
more of the proceeds of the Bonds to make or f i nance I oans the payment of pri nci pal or i nterest
wi th respect to whi ch i s guaranteed i n whol e or i n part by the U ni ted States or any agency or
i nstrumental i ty thereof, nor wi I I i t i nest 5% or more of the proceeds i n f ederal I y i nsured
deposits or accounts. The precedi ng sentence shad I not apply to:
(i) i nvestments i n the Redevel opment Fund, Ci ty Fund and
Expense Fund duri ng thei r temporary peri ods descri bed i n of thi s Tax
Certificate;
(i i) i nvestments i n the Bona Fi de Debt Servi ce Funds;
(iii) investments in the Reserve Account (to the extent it
compel i es wi th Secti on 3.5 herei n; and
(i v) investments in obligations issued by the United States
Department of Treasury.
2.7 1 nformation Reporting The Issuer will causea properly completed and
executed I RS Form 8038-G to be f i I ed wi th respect to the Bonds no I ater than November 15,
2010.
2.8 No Refundi ng Bond proceeds wi I I not be used di rectl y or i ndi rectl y to
make pri nci pal, i nterest or prem i um payments wi th respect to any governmental obl i gati on other
than the Bonds. See the explanation of the i nternal loan i n Section 2.1 herei n.
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2.9 No Pooling The Issuer will not use any Bond proceeds directly or
indirectly to make or finance loans to two or more ultimate borrowers.
2.10 No H edge Bonds The Issuer reasonably expects that more than 85% of
Net Sale Proceeds wi I I be expended for governmental purposes of the Bonds before July 15,
2013. Not more than 50% of Bond proceeds wi I I be i nested i n Nonpurpose I nvestments havi ng
a substanti al I y guaranteed yi el d for four years or more. I n addi ti on, the payment of I egal and
underwriting costs associated with issuance of the Bonds is not contingent, and at least 95% of
al I I egal and underwri ti ng costs associ aced with i ssuance of the Bonds wi I I be pai d no I ater than
180 days after the Cl osi ng Date.
2.11 Retention of Records The Issuer covenants to mai ntai n al I records
relating to the requirements of the Code and the representations, certifications and covenants set
forth i n thi s Tax Certif i cate unti I the date three years after the I ast outstandi ng Bond has been
retired. If any of the Bonds are refunded or prepaid by other Tax-Exempt Bonds (the
" Ref undi ng Obl i gati ons" the I ssuer covenants to mai ntai n al I records requi red to be retai ned by
thi s Secti on unti I the I ater of the date three years after the I ast outstandi ng Bonds have been
retired or the date three years after the last Refunding Obligations have been retired. The records
that must be retained include, but are not limited to:
(a) Basi c records and documents rel ati ng to the Bonds (i ncl udi ng the
ndenture, thi s Tax Certif i cate and the opi ni on of Bond Counsel);
(b) Documentation evidencing the expenditure of Bond proceeds;
(c) Documentation evidencing the use of the Project by public and
private sources (i.e., copiesof management contracts, research agreements, leases, etc.);
the Bonds; and
(d) Documentation evidencing all sources of payment or security for
(e) Documentati on pertai ni ng to any i nvestment of Bond proceeds
(i ncl udi ng the purchase and sal a of securi ti es, SL Gs subscri pti ons, yi el d cal cul ati ons f or each
class of investments, actual investment income received from the investment of proceeds,
guaranteed i nvestment contracts, and rebate cal cul ati ons).
2.12 Allocations to Expenditures Allocationsof SaleProceedsto
rei mbursements, if any, are expected to occur not I ater than 30 days after the Cl osi ng Date. AI I
other al locations of Bond proceeds to costs of the Proj ect wi I I occur not later than 18 months
after the date of the expendi ture or 18 months after the date the faci I i ty to whi ch the expendi ture
rel aces i s compl eted and actual I y operati ng at substanti al I y the I evel f or whi ch i t was desi gned,
but in al I events not later than 60 days after the end of the fifth Bond Year (or 60 days after none
of the Bonds are outstandi ng, if earl i er).
For purposes of private activity use (as described in Section 2.3.2 herein), the
Issuer will allocate Bond proceeds to portions of the Project expected to have no private activity
use usi ng a reasonabl a and consi stentl y appl i ed accounti ng method, i ncl udi ng al I ocati ng such
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amounts to discrete portions of the Project (for example, based on actual costs, total space, or fed r
market value), or on the basis of an undivided portion al I ocati on, or other reasonable method.
ARTICLE I I I
ARBITRAGE GENERAL
3.1 Reasonable Expectations This Article I I I states the Issuer's reasonable
expectati ons with respect to the amounts and uses of Bond proceeds and certai n other moneys.
3.2 Reoffering Price. The Issuer is delivering the Bonds to theAuthority for
subsequent del i very to the U nderwri ter on the date hereof i n exchange f or payment of
$10,903,101.45, whi ch represents the total amount of Sal a Proceeds, I ess an underwri ter' s
di scount of $134,760. 00, al I as set f orth i n Secti on 2.1 herei n and the pri ci ng materi al s attached
hereto as Exhibit B. Based upon advice of the Underwriter, as ref I ected in Exhibit A hereto, all
of the Bonds have been reoffered to the general publ i c (excl udi ng any bond house, broker or
other intermediary) at the prices set forth in the schedule attached to such Exhibit A. Such i ni ti al
reoff eri ng pri ce was reasonabl e under customary standards i n the appl i cabl e tax-exempt market
as of the Sal a Date.
3.3 Funds and Accounts The I ssuer wi I I cause the f of I owi ng f unds and
accounts to be establ i shed and mad ntai ned wi th respect to the Bonds:
Revenue Fund
Debt Service Fund
Interest Account
Principal Account
Si nki ng Account
Reserve Account
Redevelopment Fund
Expense Fund
Rebate Fund
City Fund (See Section 1.6 herein)
The I ssuer does not expect that either it or any other person benef i ti ng f rom the
issuance of the Bonds wi I I use any moneys i n any f and or account other than the Bona Fide Debt
Servi ce Funds to pay pri nci pal of, redempti on premi um, or i nterest on the Bonds, nor i s any
other f and or account, other than the Reserve Account, however establ i shed, so pl edged as
securi ty f or the Bonds that there i s a reasonabl a assurance that amounts hel d i n such other f and
or account wi I I be avai I able if needed to pay debt service on the Bonds.
3.4 Debt Service Funds
3.4.1 Payment of the Bonds The Bonds are limited obligations of the
I ssuer payabl e f rom PI edged Revenues (the " Tax Revenues" earni ngs f rom the i nvestment and
rei nvestment of Sal a Proceeds and certai n other moneys hel d by the Trustee.
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3.4.2 Revenues A I I Tax Revenues are to be col I ected and deposi ted to
the Revenue Fund and appl i ed as provi ded i n the I ndenture. Payments of debt servi ce on the
Bonds are expected to be deri ved f rom current Tax Revenues i n each year, and current Tax
Revenues are expected to equal or exceed debt servi ce on the Bonds duri ng each payment peri od.
Therefore, al I amounts transferred to and from the Revenue Fund i n respect of the Bonds are
expected to be derived from current revenues.
3.4.3 M atch Between Revenuesand Debt Service. The Debt Service
Fund (i ncl udi ng al I accounts therei n except the Reserve Account), the Revenue Fund (to the
extent amounts therei n are transf erred to the Debt Servi ce Fund or the accounts therei n)
(col I ecti vel y, the " Bona Fi de Debt Servi ce Funds") wi I I be used pri maxi I y to achi eve a proper
matchi ng of revenues and debt servi ce wi thi n each Bond Year. Such f unds i n the aggregate wi I I
be depleted at I east once a year except for a carryover amount not to exceed the greater of the
earni ngs on such f unds f or the i mmedi atel y precedi ng Bond Year or 1/1 2th of the pri nci pal and
interest payments on the Bonds for the immediately preceding Bond Year. Amounts contributed
to the Bona Fide Debt Service Funds wi I I be spent within thirteen months after the date of such
contribution, and any amounts received from the investment or reinvestment of monies held in
such f unds wi I I be expended wi thi n one year after the date of accumul ati on thereof i n any such
fund. To the extent the provisions of this Section 3.4.3 are satisfied, amounts i n the Bona Fide
Debt Servi ce Funds wi I I be i nested wi thout regard to yi el d.
3.5 Reserve Account. The Indenture establishes a Reserve Account with
respect to the Bonds. On the Closing Date, the amount deposited is equal to the Reserve
Account Requirement for the Bonds. Except for withdravrals because of overfunding, all
amounts held in the Reserve Account maybe used solely to pay debt service on the Bonds. The
amount held in the Reserve Account is not expected to exceed the least of (i) 10% of the state
principal amount of the Bonds, (i i) maximum annual debt service on the Bonds or (i i i) 125% of
average annual debt service on the Bonds. As reflected in Exhibit A hereto, the Underwriter has
advi sed that the amount requi red to be hel d i n the Reserve A ccount i s customary f or i ssues of
si mi I ar size and character as the Bonds. To the extent the amount held in the Reserve Account
does not exceed the least of (i) through (iv) above, such amount will be invested without regard
to yi el d. Amounts held in the Reserve Account in excess of the least of (i) through (iii) above
(the " Excess Amount") wi I I be i nested as provi ded i n Secti on 4.4 hereof.
3.6 Rebate Fund. A sped al account desi gnated the " Rebate Fund" has been
establ i shed pursuant to the I ndenture. The Trustee i s requi red to keep the Rebate Fund separate
and apart f rom al I other f unds and moneys hel d by the I ssuer. The I ssuer has covenanted not to
use moneys on deposi t i n any f and or account i n connecti on wi th the Bonds i n a manner whi ch
woul d cause the Bonds to be arbi trage bonds wi thi n the meani ng of Secti on 148 of the Code.
Accordi ngl y, a sped al f and desi gnated the Seri es 2010A Rebate Fund (the " Rebate Fund" ) has
been establ i shed. The amount requi red to be hel d i n the Rebate Fund at any poi nt i n ti me i s
determi ned pursuant to the requi rements of the Code, i ncl udi ng parti cul arl y Secti on 148(f) of the
Code and Treasury Regulations applicable thereto. Moneys in the Rebate Fund are neither
pl edged to nor expected to be used to pay debt servi ce i n respect of the Bonds. Sal e Proceeds
and I nvestment Proceeds hel d i n the Rebate Fund, if any, wi I I be i nested as set f orth i n Secti on
4.4 of thi s Tax Certif i cate. A I I other amounts i n the Rebate Fund wi I I be i nested wi thout regard
to yi el d.
OHS West:260941948
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3.7 Three-Year Temporary Period. On the Closing Date, Sale Proceeds are
being deposited in the Redevelopment Fund and City Fund asset forth in Section 2.1 for the
purpose of payi ng costs of the Proj ect. The Issuer reasonably expects that at least 85% of the
Net Sal a Proceeds wi I I be spent to pay costs of i ssui ng the Bonds and costs of the Proj ect before
July 15, 2013. The Issuer or the City heretofore has incurred or within six months after the
Cl osi ng Date wi I I i ncur a bi ndi ng obl i gati on to one or more unrel aced parti es i nvol vi ng an
expendi ture of not I ess than 5% of Net Sal a Proceeds. Compl eti on of the Proj ect and al I ocati ons
of Net Sal a Proceeds and I nvestment Proceeds to costs of the Proj ect and costs of i ssui ng the
Bonds wi I I proceed wi th due di I i gence. Amounts deposi ted i nto the Redevel opment Fund wi I I
be invested without regard to yield through July 15, 2013.
The Proj ect is expected to be completed or otherwise acqui red by June 30, 2012.
3.8 Expense Fund. There i s establ i shed under the I ndenture an Expense Fund
to pay f or the costs of i ssui ng the Bonds. As of the Cl osi ng Date, Sal e Proceeds are bei ng
deposited in the Expense Fund as set forth in Section 2.1 herein for such purposes. Amounts so
deposited in the Expense Fund wi I I be invested without regard to yield through three years after
the Cl osi ng Date.
3.9 No Other Replacement Proceeds Neither the Issuer nor any related
person wi I I use any Gross Proceeds of the Bonds di rectl y or i ndi rectl y to repl ace f unds of the
ssuer or any rel aced person, whi ch f unds are or wi I I be used di rectl y or i ndi rectl y to acqui re
I nvestment Property reasonabl y expected to produce a yi el d that i s materi al I y hi gher than the
yield on the Bonds. The weighted average maturity of the Bonds, 8.1775 years, does not exceed
120% of the expected weighted average economic useful I if e of the Project.
3.10 No Overissuance. Taking into account anticipated investment earnings,
proceeds from the sal e of the Bonds do not exceed the amount necessary to pay costs of the
Proj ect, f and the Reserve Account and pay costs of i ssui ng the Bonds.
3.11 No Abusive Arbitrage Device. The Bonds are not and wi I I not be part of
a transacti on or seri es of transacti ons that (a) enabl es the I ssuer or any rel aced person to expl of t
the difference between tax-exempt and texabl e i nterest rates to gad n a materi al f i nanci al
advantage and (b) overburdens the market for tax-exempt obl i gati ons i n any manner, i ncl udi ng,
wi thout I i m i tati on, by sel I i ng bonds that woul d not otherwi se be sol d, or sel I i ng more bonds, or
i ssui ng bonds sooner, or al I owi ng bonds to remai n outstandi ng I onger, than otherwi se woul d be
necessary.
3.12 No Expected Sale. It is not expected that the Projector any part thereof
financed in whole or in part by the Bonds wi I I be sold or otherwise disposed of before December
1, 2023, the I ast scheduled maturity date of the Bonds.
ARTICLE IV
ARBITRAGE -YIELD AND YIELD RESTRICTION
4.1 Yield. For purposes of thisTex Certificate, yield iscalculated asset forth
i n Secti on 148(h) of the Code and Treasury Regul ati ons Secti ons 1.148-4 and 1.148-5. Thus,
OHS West:260941948
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yi el d on the Bonds or yi el d on I nvestment Property general I y means that di scount rate whi ch,
when used i n computi ng the present val ue of al I uncondi ti onal I y payabl e payments representi ng
pri nci pal, i nterest and costs of qual i f i ed guarantees produces an amount equal to the i ssue pri ce
of the Bonds or the purchase price of the Investment Property, as appropriate. The aggregate
i ssue pri ce of the Bonds i s $11,037,861.45, whi ch represents the pri ce at whi ch the Bonds were
offered to the ultimate purchaser(s), as represented by the Underwriter in Exhibit A hereto. The
Y i el d on the Bonds has been cal cul aced by the U nderwri ter to be at I east 4.729998%.
4.2 No Qualified Guarantee. On the Closing Date, there are no qualified
guarantees that have been obtained in connection with the Bonds.
4.3 No Qualified Hedges No contract has been and (absent an Opinion of
Counsel) no contract wi I I be entered i nto such that fad I ure to take the contract i nto account woul d
di stort the yi el d on the Bonds or otherw i se woul d f ai I cl earl y to ref I ect the econom i c substance of
the transacti on.
4.4 Yield Restriction. Absent an Opinion of Counsel, if (A) after July 15,
2013, the total amount of unspent Sal e Proceeds (excl udi ng amounts hel d i n the Rebate Fund),
pl us (B) al I I nvestment Proceeds remai ni ng unspent after a one-year peri od begi nni ng on the date
of recce pt of such I nvestment Proceeds, pl us (C) any amounts hel d i n the Bona Fi de Debt Servi ce
Funds that remai n unexpended after 13 months f rom the date of accumul ati on therei n, pl us (D)
any Sal e Proceeds hel d i n the Rebate Fund pl us (E) the Excess Amount, at any ti me i n the
aggregate exceeds $100, 000, the excess wi I I be i nested ei ther (i) i n I nvestment Property wi th a
yi el d not exceedi ng the yi el d on the Bonds, (i i) i n assets that are not treated as I nvestment
Property (e. g., Tax-Exempt Bonds), or (i i i) i n assets that sati sfy the requi rements for qual if i ed
yi el d reducti on payments set forth i n Treasury Regul ati ons Secti on 1.148-5(c), subj ect to the
limitation set forth in Section 1.148-10(b)(1)(ii).
ARTI CLE V
REBATE
5.1 Undertakings Pursuant to the Indenture, the Issuer has covenanted to
comply with certain requirements of the Code. The Issuer acknowledges that the United States
Department of the Treasury has issued regul ati ons wi th respect to certain of these undertakings,
including the proper method for computing whether any rebate amount is due the federal
government under Section 148(f) of the Code. (Treasury Regulations Sections 1.148-1 through
1.14811, 1.1501 and 1.150 2.) The I ssuer f urther acknowl edges that the U ni ted States
Department of the Treasury may yet i ssue addi ti onal regul ati ons wi th respect to certai n other of
these undertaki ngs. The I ssuer covenants that i t wi I I undertake to determi ne what i s requi red
wi th respect to the rebate provi si ons contai ned i n Secti on 148(f) of the Code and sai d regul ati ons
from ti me to ti me and wi I I comply with any requi rements that may appl y to the Bonds. Except
to the extent i nconsi stent wi th any requi rements of the Code or f uture regul ati ons, the I ssuer wi I I
undertake the methodology described in this Tax Certificate.
5.2 Recordkeepi ng. The I ssuer shal I mad ntai n or cause to be mad ntai ned
detai I ed records wi th respect to each Nonpurpose I nvestment attri butabl e to Gross Proceeds,
OHS West:260941948
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i ncl udi ng: (a) purchase date, (b) purchase pri ce; (c) i of ormati on establ i shi ng f ai r market val ue
on the date such i nvestment became a Nonpurpose I nvestment; (d) any accrued i nterest pai d; (e)
f ace amount; (f) coupon rate, (g) peri odi ci ty of i nterest payments, (h) di sposi ti on pri ce; (i) any
accrued i nterest recei ved; and (j) di sposi ti on date. Such detai I ed recordkeepi ng i s requi red to
faci I i tate the cal cul ati on of the Rebate Requi rement.
5.3 Rebate Requirement Calculation and Payment.
(a) The I ssuer wi I I prepare or cause to be prepared a cal cul ati on of the
Rebate Requirement consistent with the rules described in this Section 5.3. The I ssuer wi I I
comp) ete the calculation of the Rebate Requirement within 55 days after the date on which there
are no outstanding Bonds.
(b) For purposes of cal cul ati ng the Rebate Requi rement (i) the
aggregate amount earned with respect to a Nonpurpose Investment shad I be determined by
assumi ng that the Nonpurpose I nvestment was acqui red for an amount equal to its fad r market
vat ue (determi ned as provi ded i n Secti on 1.148-5(d)(6) of the Treasury Regul ati ons, as
appl i cabl e) at the ti me it becomes a Nonpurpose I nvestment, and (i i) the aggregate amount
earned with respect to any N onpurpose Investment shall include any unrealized gain or I oss wi th
respect to the Nonpurpose Investment (based on the assumed purchase price at fair market value
and adjusted to take into account amounts received with respect to the Nonpurpose Investment
and earned on gi nal i ssue di scount or premi um) on the f i rst date when there are no outstandi ng
Bonds or when the i nvestment ceases to be a Nonpurpose I nvestment.
(c) The Issuer shall pay to the United States Department of the
Treasury not I ater than 60 days after the date when there are no outstandi ng Bonds, an amount
equal to 100% of the Rebate Requi rement (determi ned as of the end of the i mmedi atel y
precedi ng Bond Year), al I as set forth i n Secti on 1.148-3 of the Treasury Regul ati ons.
(d) Each payment requi red to be made pursuant hereto shad I be f i I ed
with the Internal Revenue Service Center, Ogden, Utah 84201, on or before the date such
payment is due, and shad I be accompanied by Form 8038 T. The Issuer shad I retai n records of the
cad cud ati ons requi red by thi s Secti on 5.3 unti I three years after the reti rement of the I ast of the
Bonds.
5.4 Exceptionsfrom Rebate Requirement.
(a) Bona Fide Debt Service Funds Exception. The Bona Fide Debt
Service Funds wi I I be exempted from the Rebate Requi rement to the extent that the provisions of
Section 3.4.3 hereof are satisfied.
(b) Six-M onth Expenditure Exception. In general, no rebate
cad cud ati ons wi I I be requi red with respect to Adj usted Gross Proceeds if al I such Adj usted Gross
Proceeds actual l y are spent within six months after the Closing Date.
(c) Eighteen-M onth Expenditure Exception. In general, no rebate
cad cud ati ons wi I I be requi red with respect to Sale Proceeds or Investment Proceeds, if at least
15% of expected Adj usted Gross Proceeds actual l y are spent within six months after the Closing
OHS West:260941948
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Date, at least 60% of expected Adjusted Gross Proceeds actual ly are spent within twelve months
after the Closing Date, and 100% of actual Adjusted Gross Proceeds actual Iy are spent within
eighteen months after the Closing Date. For purposes of the 15% and the 60% expenditure
exceptions I i sted in the previous sentence, the amount of Investment Proceeds that is included in
Adjusted Gross Proceeds is determined based only on the expected investment earnings as of the
CI osi ng Date. The requirement that 100% of actual Adjusted Gross Proceeds be spent within
eighteen months after the Closing Date wi I I be met if at least 95% of Adjusted Gross Proceeds is
spent within eighteen months and the remainder is held as a reasonable retai nage, as permitted by
contracts with the Issuer's contractors, and such remai nder is spent within thirty months after the
Closing Date.
(d) Two-Year Construction Expenditures Exception. In
determining the amount of Avai I abl e Construction Proceeds as of any date, there shad I be
included the amount of investment earnings reasonably expected after such date, together with
investment earnings actual I y received or accrued as of such date. See Section 1.6 of this Tax
Certificate, defining "Available Construction Proceeds." The Issuer reasonably expects that at
least 75% of Avai I abl e Construction Proceeds wi I I be expended for construction expenditures
with respect to the Project. For this purpose, construction expenditures include costs of
reconstructi on and rehabi I i tati on, but do not i ncl ude costs of acqui ri ng any i nterest i n I and or
other exi sti ng real or personal property. I n general, no rebate cad cud ati ons wi I I be requi red i n
respect of Avai I abl e Constructi on Proceeds i f Avai I abl e Constructi on Proceeds i n f act are spent
at least as quickly asfolIows.
10% withi n six months after the Cl osi ng Date
45% within twelve months after the Closing Date
75% within eighteen months after the Closing Date
100% within twenty-four months after the Closing Date
For purposes of the f i rst three expendi ture requi rements above, the amount of
I nvestment Proceeds i ncl uded i n the Avai I abl e Constructi on Proceeds i s determi ned based onl y
on the I ssuer' s reasonabl a expectati ons as of the Cl osi ng Date. The requi rement that 100% of
Avai I abl e Constructi on Proceeds be spent wi thi n twenty-four months after the Cl osi ng Date wi I I
be met if at I east 95% of Avai I abl e Constructi on Proceeds i s spent wi thi n twenty-four months
and the remai nder i s het d as a reasonabl a retai nage, as perm i tted by contracts wi th the I ssuer' s
contractors, and such remai nder i s spent wi thi n thi rty-six months after the Cl osi ng Date.
5.5 1 nvestmentsand Dispositions
(a) General Rule. No Investment Property may beaoquired with
Gross Proceeds for an amount (including transaction costs, except as otherwise provided in
Secti on 1.148-5(e) of the Treasury Regul ati ons) i n excess of the f ai r market vat ue of such
Investment Property. No Investment Property maybe sold or otherwise disposed of for an
amount (including transaction costs, except as otherwise provided in Section 1.148-5(e) of the
Treasury Regul ati ons) I ess than the fai r market vat ue of the I nvestment Property.
(b) Fai r M arket V al ue. I n general , the f ai r market vat ue of any
I nvestment Property i s the pri ce a wi I I i ng buyer woul d pay to a wi I I i ng sell I er to acqui re the
OHS West:260941948
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Investment Property, with no amount paid artificial I y to reduce or increase the yield on such
Investment Property. This Section 5.5 describes various safe harbors for determining fair market
val ue. Wi th an Opi ni on of Counsel, other methods may be used to establ i sh f ai r market val ue,
provided, however, that such methods comply with the requirements of Section 1.148-5(d)(6) of
the Treasury Regulations.
(c) Arm's-length Purchasesand Sales If Investment Property is
acquired pursuant to an arm's length transaction without regard to any amount paid to reduce the
yi el d on the I nvestment Property, the f ai r market val ue of the I nvestment Property shad I be the
amount paid for the Investment Property (without increasefor transaction costs, except as
otherwise provided i n Section 1.148-5(e) of the Treasury Regulations). If I nvestment Property is
sod d or otherwi se di sposed of i n an arm's I ength transacti on wi thout regard to any reducti on i n
the di sposi ti on pri ce to reduce the Rebate Requi rement, the fai r market vat ue of the I nvestment
Property shad I be the amount real i zed f rom the sal a or other di sposi ti on of the I nvestment
Property (without reduction for transaction costs, except as otherwise provided in Section 1.148-
5(e) of the Treasury Regulations).
(d) SLGS. If allnited States Treasury obligation isacquired directly
from or disposed of directly to the United States Department of the Treasury (as in the case of
the U ni ted States Treasury Securities- State and Local Government Series), such acquisition or
di sposi ti on shad I be treated as estabd i shi ng a market f or the obl i gati on and as estabd i shi ng the f ai r
market vat ue of the obl i gati on.
(e) I nvestment Contracts The purchase price of any Investment
Property acqui red pursuant to a guaranteed i nvestment contract (wi thi n the meani ng of Secti on
1.148-1(b) of the Treasury Regul ati ons) shad I be determi ned as provi led i n Secti on 1.148-5 of
the Treasury Regul ati ons. No i nvestment contract shad I be acqui red wi th Gross Proceeds unl ess
the requi rements of Secti on 1.148-5 of the Treasury Regul ati ons and thi s Secti on 5.5(e) are
sati sf i ed. Wi th respect to any i nvestment contract, the I ssuer wi I I obtai n f rom the provi der of the
investment contract, broker thereof or other party, such information, certification or
representation as wi I I enable the Issuer to determine that these requirements are satisfied.
The purchase pri ce of an i nvestment contract wi I I be consi dered to be f ai r market
vat ue if:
(i) the Issuer has made (or has had made on its behalf) a bona
f i de sod i ci tali on f or the i nvestment contract; the sod i ci tali on must have
specif i ed the materi al terms of the i nvestment contract (i. e., al I the terms
that could directly or indirectly affect the yiel d or the cost of the
i nvestment i ncl udi ng the col I ateral securi ty requi rements f or the
investment contract) and, unless the moneys invested pursuant to such
i nvestment contract wi I I be het d i n a reasonabl y requi red reserve f and or
the Bona Fide Debt Service Funds, the Issuer's reasonably expected
dravrdown schedul e f or the moneys to be i nested; the sod i ci tali on has a
I egi ti mate busi ness purpose (i. e., a purpose other than to i ncrease the
purchase pri ce or reduce the yi el d) for every term of the bi d specif i cati on;
OHS West:260941948
41555-10 14
(i i) al I bi dders have an equal opportuni ty to bi d so that, for
exa-npl e, no bi dder i s gi ven the opportuni ty to revi env other bi ds (a I ast
I ook) bef ore bi ddi ng;
(iii) the I ssuer sol i ci is bi ds f rom at I east three (3) i nvestment
contract providers with established industry reputati ons as competi ti ve
providers of investment contracts,
(i v) the I ssuer i ncl udes i n the bi d sped f i cati ons a statement to
potenti al bi dders that by subm i tti ng a bi d, the provi der i s maki ng certai n
representat i ons that the bi d i s bona f i de, and sped f i cal I y that 1) the bi dder
did not consult with any other potential provider about its bid, 2) the bid
was determined without regard to any other formal or informal agreement
that the potential provider had with the issuer or any other person, and 3)
the bi d was not subm i tted sol el y as a courtesy to the i ssuer or any other
person for purposes of satisfyi ng the requi rements of Section 1.148-5 of
the Treasury Regulations,
(v) at I east three bi ds meeti ng the qual if i cati on requi rements of
the bi d sol i ci tali on (as set f orth i n (i) above) have been recei ved f rom
diff erent provi ders of i nvestment contracts that have no materi al f i nanci al
i nterest i n the Bonds (the fol I owi ng i nvestment contract provi ders are
consi dered to have a materi al f i nanci al i nterest i n the i ssue. 1) a I ead
underwriter in anegotiated underwriting, but only until 15 days after the
i ssue date of the i ssue, 2) an enti ty acti ng as a f i nanci al advi sor wi th
respect to the purchase of the i nvestment contract at the ti me the bi d
specif i cati ons were f orwarded to potenti al provi ders, and 3) any rel aced
party to a provi der that i s di squal if i ed for one of the two precedi ng
reasons);
(vi) at I east one of the bi ds recei ved by the I ssuer that meets the
requi rements of the precedi ng paragraph i s f rom an i nvestment contract
provider with an established industry reputation as a competi ti ve provi der
of investment contracts;
(vi i) the i nvestment contract has a yi el d (net of any broker's
fees) at I east equal to the hi ghest yi el di ng of the qual ifyi ng bi ds recei ved
f rom the bi dders that have no materi al f i nanci al i nterest i n the Bonds, i f
the i nvestment contract i s not the hi ghest-yi el di ng of the qual ifyi ng bi ds,
the I ssuer must have si gnif i cant non-tax reasons, such as credi tworthi ness
of the bi dder, for fai I ure to purchase the hi ghest-yi el di ng i nvestment
contract offered;
(viii) if an agent for the Issuer conducts the bidding process, the
agent does not bid; and
OHS West:260941948
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(ix) the provider of the investment contract certifies as to a1I
administrative costs to be paid on behalf of the Issuer, including any fees
paid as broker commissions in connection with the investment contract.
(f) Deemed Acquisition or Sale. Thefair market valueof any
Investment Property not directly purchased with Gross Proceeds for which there is an establ i shed
securities market general I y is the price at which a wi I I i ng buyer would purchase Investment
Property f rom a wi I I i ng set I er i n a bona f i de, arm's I ength transacti on.
(g) Certificates of Deposit. The purchase price of a certif i cate of
deposi t i ssued by a commerci al bank that has a f i xed i nterest rate, a f i xed pri nci pal payment
schedule, afixed maturity and asubstantial penalty for early withdravral, will beconsidered to be
fair market value if:
(i) the yield on the certif i cate of deposit is not less than the
yi el d on reasonabl y comparabl a di rect obl i gati ons of the U ni ted States;
and
(ii) the yield on the certif i cate of deposit is not less than the
hi ghest publ i shed yi el d of the provi der thereof whi ch i s currentl y avai I abl e
on comparabl a certi f i cates of deposi t off ered to the publ i c.
(h) Broker Compensation. For purposes of computing the Yield on
any investment contract acquired through a broker, reasonable compensation received by such
broker, whether payabl e by or on behalf of the obl i gor or obl i gee of such i nvestment contract,
may be taken i nto account i n determi ni ng the cost of the i nvestment contract (as provi ded i n
Section 1.148-5(e)(2)(i i i) of the Treasury Regulations). For the calendar year 2010,
compensation is deemed reasonable if it does not exceed the lesser of i) $35,000 or i i) 0.2% of
the amount reasonably expected, as of the date of acquisition of the investment contract, to be
invested under the investment contract over its term, or $4,000 (if 0.2% of such amount
reasonabl y expected to be i nested under the i nvestment contract over i is term i s I ess than
$4,000). In addition, the total fees received by the broker with respect to the investment of any
proceeds of the Bonds that are taken i nto account wi th respect to al I i nvestment contracts, at any
time, may not exceed $100,000. All amounts referenced are to be adjusted for inflation after the
Closing Date.
5.6 Segregation of Proceeds In order to perform the calculations required by
the Code, i t i s necessary to track separatel y al I of the Gross Proceeds. To that end, the I ssuer
shal I cause to be establ i shed separate accounts or subaccounts, or shad I cause the Trustee to take
such other accounti ng measures as are necessary i n order to account f ul I y f or al I Gross Proceeds.
5.7 Filing Requirements The Issuer will f i I e or cause to be f i I ed such
reports or other documents with the Internal Revenue Service as are required by the Code.
5.8 Retention of Firm. The Issuer has decided to undertake its rebate
obl i gat i ons as f of I ows:
OHS West:260941948
41555-10 16
The Issuer initially has retained the firm of Bond Logistix LLC to
perform rebate calculations that maybe required to be made from time to time with respect to the
Bonds.
The I ssuer i ni ti al I y has retad ned the f i rm of
to perform rebate cal cul ati ons that may be requi red to be made f rom ti me to ti me wi th respect to
the Bonds.
The of the I ssuer has undertaken f ul I
responsi bi I i ty f or perf orm i ng rebate cal cul ati ons that may be requi red to be made f rom ti me to
time with respect to the Bonds.
X The I ssuer has deci ded not, at thi s ti me, to desi gnate a party
responsi bl e f or perf orm i ng rebate cal cul ati ons that may be requi red to be made f rom ti me to ti me
with respect to the Bonds and as a result undertakes and assumes ful I responsi bi I ity for rebate
compl i ance and acknowl edges that nei then bond counsel nor the Trustee has any such
responsibility (unless later engaged in writing for such purpose).
The I ssuer has determ i ned that under no ci rcumstances wi I I it earn
any arbi trage subj ect to rebate with respect to the Bonds.
ARTI CLE VI
OTHER MATTERS
6.1 Expectations The undersigned is an authorized representative of the
Issuer acting for and on behalf of the Issuer in executing this Tax Certificate. To the best of the
knowl edge and bel i of of the undersi gned, there are no other f acts, esti mates or ci rcumstances that
woul d materi al I y change the expectati ons as set forth herei n, and sad d expectati ons are
reasonabl e.
6.2 Amendments Notwithstanding any other provision of this Tax
Certificate, the Issuer may amend this Tax Certificate and thereby alter any actions al lowed or
required by this Tax Certificate if such amendment is signed by an authorized officer and is
supported by an opinion of counsel to the effect that such action (or inaction) will not adversely
affect the exclusion of interest on the Bonds f rom gross i ncome f or purposes of federal income
taxation.
OHS West:260941948
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6.3 Survival of Defcasance. Notvv ith~tandili~-, aiiv pi-ovision in this Tax
Certificate or the Indenture to the contrary, the to remit Ilic Rcl,ate Requirement, if
any, to the United States Department of the Trca',urV and to compl% \v ith a11 other requiremcats
corttainc(f in this Tax CcrtIFLCateshall survive dctcas<lnccOFtl]c t3omk.
Dated: July 15, 2010.
ROSEMEAD COM .11-UNITY
DEVELOP.NIFNT CC)'\ IMISSION
By:
Lxccutl\e Director
EXHIBITA
CERTIFICATE OF THE UNDERWRITER
E. J. De La Rosa & Co., Inc. (the" Underwriter") has served as the underwriter for
the $11,230,000 aggregate stated principal amount of the Rosemead Community Development
Commission Rosemead Merged Project Area Tex A I I ocat i on Bonds, Series 2010A (the
"Bonds' issued by the Rosemead Community Development Commission (the" Issuer").
Capi tal i zed terms used but not otherwi se def i ned herei n shad I have the meani ngs ascri bed thereto
i n the Tex Certif i cate to whi ch thi s certif i cate i s attached. On behalf of the U nderwri ter, the
undersi gned hereby certif i es and represents the fol I owi ng:
A. I ssue Price.
1. As of June 29, 2010 (the "Sale Date'), the Underwriter had offered or
reasonably expected to offer al I of the Bonds to the general publ i c (excluding bondhouses,
brokers, or si m i der persons or organizations acti ng i n the capacity of underwriters, placement
agents or whorl esal ers) i n a bona f i de publ i c off eri ng at the pri ces set f orth i n the schedul e
attached hereto (the " Schedul d').
2. Such pri ces of the Bonds represent the f ai r market pri ce of the Bonds as of
the Sad a Date and are reasonabl e under customary standards i n the appl i cabl e tax-exempt market.
3. As of the Sad a Date, al I of the Bonds were off ered to the general publ i c at
such pri ces, and the pri ces on the Schedul e ref I ect the f i rst pri ce at whi ch at I east 10% of each
correspondi ng maturi ty of the Bonds was sod d to the general publ i c; except f or the 2013 through
2018 maturities.
B. Yield.
Using a semi annual compounding convention, the yi eel d on the Bonds has been
computed by the Underwriter to beat least 4.729998%.
C. Average M aturity.
The weighted average maturity of the Bonds has been calculated to be 8.1775
years.
D. Reserve Account.
Thefunding of the Reserve Account relating to the Bonds with Bond proceeds is
reasonabl y requi red i n that i t was a materi al f actor i n sel I i ng the Bonds at the I owest possi bl e
yi eel d (gi ven other cheracteri sti cs of the Bonds) wi thout any regard to any benef i t f rom posi ti ve
net i nvestment eerni ngs on amounts heel d i n the Reserve Account, and i t i s reasonabl a and
customary i n marketi ng si mi I ar i ssues of governmental obl i gati ons.
OHS West:260941948.4
41555-10
The undersigned is authorized to execute this certificate on behalf of the
Underwriter, which is based on one or more of (i) personal knowledge, (ii) inquiry deemed
adequate by the undersigned, and (iii) institutional knowledge regarding the matters set forth
herein.
Dated: July 15, 2010.
E. I DE LA ROSA & CO., INC.,
as Underwriter
B L
Y• (JI4, (
thorizcd Representative
SCHEDULE A
[ See attached. ]
OHS West:260941948.4
41555-10
BOND PRICING
Fbsemead Community Development Commission
Merged Area TaxAllocation Bonds, Series 201 OA
R NAL PRICING NUMBERS (6-29-2010)
Maturity
Premium
Bond Component Date
Amount
Rate
Yield
Price
(-Discount)
Serial Bond:
12/01/2011
200,000
3.000%
1.540%
101.981
3,962.00
12/01/2012
750,000
3.000%
2.300%
101.609
12,067.50
12/01/2013
770,000
2.750%
3.000%
99.200
(6,160.00)
12/01/2014
800,000
3.125%
3.400%
98.887
(8,904.00)
12/01/2015
815,000
3.500%
3.800%
98.550
(11,817.50)
12/01/2016
850,000
4.000%
4.170%
99.052
(8,058.00)
12/01/2017
885,000
4.250%
4.470%
98.625
(12,168.75)
12/01/2018
915,000
4.375%
4.700%
97.765
(20,450.25)
12/01/2019
960,000
4.500%
4.850%
97.382
(25,132.80)
12/01/2020
1,000,000
4.750%
5.020%
97.831
(21,690.00)
7,945,000
(98,351.80)
2023 Term Bond:
12/01/2021 1,050,000 5.000% 5.300% 97.145
(29,977.50)
12/ 01 / 2022 1,100,000 5.000% 5.300% 97.145
(31,405.00)
12/01/2023 1,135,000 5.000% 5.300% 97.145
(32,404.25)
3,285,000
(93,786.75)
11,230,000 (192,138.55)
Dated Date
Delivery Date
First Coupon
Par Amount
Original Issue Discount
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
10,903,101.45
07/15/2010
07/15/2010
12/01/2010
11,230,000.00
(192,138.55)
11,037,861.45 98.289060%
(134,760.00) (1.200000)
10,903,101.45 97.089060%
Jun 29, 2010 9:29 am Page 3
EX H I BIT B
PRI Cl NG NUMBERS
[ See attached. ]
OHS West:260941948.4
41555-10
SDUFCESAND USES OF FUNDS
Fbsemead Community Development Commission
Merged Area TaxAllocation Bonds, Series 201 OA
R NAL PRICING NUMBERS (6-29-2010)
Sources:
Bond Proceeds:
Par Amount 11,230,000.00
Net Original Issue Discount (192,138.55)
11,037,861.45
Uses:
Project Fund Deposits:
Project Fund 7,000,000.00
Repayment of GFLoan 2,629,060.80
9,629,060.80
Other Fund Deposits:
2010 Debt Sarvice Reserve Fund 1,123,000.00
Delivery Date Expenses
Cost of Issuance 151,040.65
Underwriter's Discount 134,760.00
285,800.65
11,037,861.45
Jun 29, 2010 9:29 am Page 1
BOND SUM MARYSTATS11CS
Fbsemead Community Development Commission
Merged Area TaxAllocation Bon
ds, Series 201 OA
R NAL PRICING NUM BBRS (6-29-2010)
Dated Date
07/ 15/ 2010
Delivery Date
07/15/2010
Last Maturity
12/01/2023
Arbitrage Yield
4.729998%
True Interest Cost (-K)
4.915610%
Net Interest Cost (NIC)
4.863190%
All-In TC
5.127424%
Average Coupon
4.508972%
Average Life (years)
8.218
Duration of Issue (years)
6.765
Par Amount
11,230,000.00
Bond Proceeds
11,037,861.45
Total Interest
4,161,215.22
Net Interest
4,488,113.77
Total Debt Service
15,391,215.22
Ma)amumAnnual Debt Service
1,220,118.76
Average Annual Debt Service
1,150,506.12
Par
Average
Average
Bond Component
Value
Price Coupon
Life
Serial Bond
7,945,000.00
98.762 4.121%
6.487
2023 Term Bond
3,285,000.00
97.145 5.000%
12.404
11,230,000.00
8.218
All-In
Arbitrage
l1C
l1C
Yield
Par Value
11,230,000.00
11,230,000.00
11,230,000.00
+Accrued Interest
+ Premium (Discount)
(192,138.55)
(192,138.55)
(192,138.55)
- Underwriter's Discou
nt (134,760.00)
(134,760.00)
- Cost of Issuance Expense
(151,040.65)
- Other Amounts
Target Value
10,903,101.45
10,752,060.80
11,037,861.45
Target Date
07/ 15/ 2010
07/ 15/ 2010
07/ 15/ 2010
Yield
4.915610%
5.127424%
4.729998%
Jun 29, 2010 9:29 am Page 2
BOND PRICING
Fbsemead Community Development Commission
Merged Area TaxAllocation Bonds, Series 201 OA
R NAL PRICING NUMBERS (6-29-2010)
Maturity
Premium
Bond Component Date
Amount
Rate
Yield
Price
(-Discount)
Serial Bond:
12/01/2011
200,000
3.000%
1.540%
101.981
3,962.00
12/01/2012
750,000
3.000%
2.300%
101.609
12,067.50
12/01/2013
770,000
2.750%
3.000%
99.200
(6,160.00)
12/01/2014
800,000
3.125%
3.400%
98.887
(8,904.00)
12/01/2015
815,000
3.500%
3.800%
98.550
(11,817.50)
12/01/2016
850,000
4.000%
4.170%
99.052
(8,058.00)
12/01/2017
885,000
4.250%
4.470%
98.625
(12,168.75)
12/01/2018
915,000
4.375%
4.700%
97.765
(20,450.25)
12/01/2019
960,000
4.500%
4.850%
97.382
(25,132.80)
12/01/2020
1,000,000
4.750%
5.020%
97.831
(21,690.00)
7,945,000
(98,351.80)
2023 Term Bond:
12/01/2021 1,050,000 5.000% 5.300% 97.145
(29,977.50)
12/ 01 / 2022 1,100,000 5.000% 5.300% 97.145
(31,405.00)
12/01/2023 1,135,000 5.000% 5.300% 97.145
(32,404.25)
3,285,000
(93,786.75)
11,230,000 (192,138.55)
Dated Date
Delivery Date
First Coupon
Par Amount
Original Issue Discount
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
10,903,101.45
07/15/2010
07/15/2010
12/01/2010
11,230,000.00
(192,138.55)
11,037,861.45 98.289060%
(134,760.00) (1.200000)
10,903,101.45 97.089060%
Jun 29, 2010 9:29 am Page 3
BOND DEBT DA CE
Fbsemead Community Development Commission
Merged AreaTaxAllocation Bonds, Series 201 OA
R NAL PRICING NUM BBRS (6-29-2010)
Period
Ending
Principal
Coupon
Interest
Debt SONce
12/01/2010
177,477.
64
177,477
.64
12/01/2011
200,000
3.000%
469,793.
76
669,793
.76
12/01/2012
750,000
3.000%
463,793.
76
1,213,793
.76
12/01/2013
770,000
2.750%
441,293.
76
1,211,293
.76
12/01/2014
800,000
3.125%
420,118.
76
1,220,118
.76
12/01/2015
815,000
3.500%
395,118.
76
1,210,118
.76
12/01/2016
850,000
4.000%
366,593.
76
1,216,593
.76
12/01/2017
885,000
4.250%
332,593.
76
1,217,593
.76
12/01/2018
915,000
4.375%
294,981.
26
1,209,981
.26
12/01/2019
960,000
4.500%
254,950.
00
1,214,950
.00
12/01/2020
1,000,000
4.750%
211,750.
00
1,211,750
.00
12/01/2021
1,050,000
5.000%
164,250.
00
1,214,250
.00
12/01/2022
1,100,000
5.000%
111,750.
00
1,211,750
.00
12/ 01 / 2023
1,135,000
5.000%
56, 750.
00
1,191,750
.00
11,230,000
4,161,215.
22
15,391,215
.22
Jun 29, 2010 9:29 am Page 4
BOND DEBT DA CE
Fbsemead Community Development Commission
Merged Area TaxAllocation Bonds, Series 201 OA
R NAL PRICING NUM BBRS (6-29-2010)
Period
Ending
Principal
Coupon
Interest
Debt SONce
Annual
Debt SONce
12/01/2010
177,477.64
177,477.64
177,477.64
06/01/2011
234,896.88
234,896.88
12/01/2011
200,000
3.000%
234,896.88
434,896.88
669,793.76
06/01/2012
231,896.88
231,896.88
12/01/2012
750,000
3.000%
231,896.88
981,896.88
1,213,793.76
06/01/2013
220,646.88
220,646.88
12/01/2013
770,000
2.750%
220,646.88
990,646.88
1,211,293.76
06/01/2014
210,059.38
210,059.38
12/01/2014
800,000
3.125%
210,059.38
1,010,059.38
1,220,118.76
06/01/2015
197,559.38
197,559.38
12/01/2015
815,000
3.500%
197,559.38
1,012,559.38
1,210,118.76
06/01/2016
183,296.88
183,296.88
12/01/2016
850,000
4.000%
183,296.88
1,033,296.88
1,216,593.76
06/01/2017
166,296.88
166,296.88
12/01/2017
885,000
4.250%
166,296.88
1,051,296.88
1,217,593.76
06/01/2018
147,490.63
147,490.63
12/01/2018
915,000
4.375%
147,490.63
1,062,490.63
1,209,981.26
06/01/2019
127,475.00
127,475.00
12/01/2019
960,000
4.500%
127,475.00
1,087,475.00
1,214,950.00
06/ 01 /2020
105,875.00
105,875.00
12/01/2020
1,000,000
4.750%
105,875.00
1,105,875.00
1,211,750.00
06/ 01 / 2021
82,125.00
82,125.00
12/01/2021
1,050,000
5.000%
82,125.00
1,132,125.00
1,214,250.00
06/01/2022
55,875.00
55,875.00
12/01/2022
1,100,000
5.000%
55,875.00
1,155,875.00
1,211,750.00
06/01/2023
28,375.00
28,375.00
12/ 01 / 2023
1,135,000
5.000%
28, 375.00
1,163,375.00
1,191,750.00
11,230,000
4,161,215.22
15,391,215.22
15,391,215.22
Jun 29, 2010 9:29 am Page 5
NEF DEBT 93WCE
Fbsemead Community Development Commission
Merged AreaTaxAllocation Bonds, Series 201 OA
R NAL PRICING NUMBERS (6-29-2010)
Period
Ending
Principal
Interest
Total
Debt Szrvioe
2010 Debt
Service
Fbserve Fund
Net
Debt SONce
12/01/2010
177,477.64
177,477.64
8,484.89
168,992.75
12/01/2011
200,000
469,793.76
669,793.76
22,460.00
647,333.76
12/01/2012
750,000
463,793.76
1,213,793.76
22,460.00
1,191,333.76
12/01/2013
770,000
441,293.76
1,211,293.76
22,460.00
1,188,833.76
12/01/2014
800,000
420,118.76
1,220,118.76
22,460.00
1,197,658.76
12/01/2015
815,000
395,118.76
1,210,118.76
22,460.00
1,187,658.76
12/01/2016
850,000
366,593.76
1,216,593.76
22,460.00
1,194,133.76
12/01/2017
885,000
332,593.76
1,217,593.76
22,460.00
1,195,133.76
12/01/2018
915,000
294,981.26
1,209,981.26
22,460.00
1,187,521.26
12/01/2019
960,000
254,950.00
1,214,950.00
22,460.00
1,192,490.00
12/01/2020
1,000,000
211,750.00
1,211,750.00
22,460.00
1,189,290.00
12/01/2021
1,050,000
164,250.00
1,214,250.00
22,460.00
1,191,790.00
12/01/2022
1,100,000
111,750.00
1,211,750.00
22,460.00
1,189,290.00
12/ 01 / 2023
1,135, 000
56, 750.00
1,191, 750.00
1,145,460.00
46,290.00
11,230,000
4,161,215.22
15,391,215.22
1,423,464.89
13,967,750.33
Jun 29, 2010 9:29 am Page 6
OOST OF I s DANCE
Fbsemead Community Development Commission
Merged Area TaxAllocation Bonds, Series 201 OA
R NAL PRICING NUMBERS (6-29-2010)
Cost of Issuance $/1000
Amount
Bond Counsel:
5.34283
Disclosure Counsel:
3.11665
Fiscal Consultant:
0.89047
Underwriter's Counsel:
1.42476
Rating Agency:
1.24666
Printer:
0.26714
Trustee:
0.31167
Contingency:
0.84957
60,000.00
35,000.00
10, 000.00
16,000.00
14,000.00
3,000.00
3,500.00
9,540.65
13.44975 151,040.65
Jun 29, 2010 9:29 am Page 7
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