HomeMy WebLinkAbout2004-112RESOLUTION NO. 2004-112
1
2
3
4
5
6
7
8
9
111
14
15
16
17
18
19
211
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
WHEREAS, local agencies are authorized by Section 53850 to 53858, both
inclusive, of the Government Code of the State of California (the "Act') (being Article 7.6,
Chapter 4, Part 1, Division 2, Title 5 of the Government Code) to borrow money by the
issuance of temporary notes;
WHEREAS, the legislative body (the "Legislative Body") of the local
agency specified in Section 25 hereof (the "Local Agency") has determined that a sum (the
"Principal Amount'), not to exceed the Maximum Amount of Borrowing specified in
Section 25 hereof, which Principal Amount is to be confirmed and set in the Pricing
Confirmation (as defined in Section 4 hereof), is needed for the requirements of the Local
Agency, to satisfy obligations of the Local Agency, and that it is necessary that said
Principal Amount be borrowed for such purpose at this time by the issuance of a note or
notes therefore in anticipation of the receipt of taxes, income, revenue, cash receipts and
other moneys to be received by the Local Agency for the general fund of the Local Agency
attributable to its fiscal year ending June 30, 2005 ("Fiscal Year 2004-2005");
WHEREAS, the Local Agency hereby determines to borrow, for the
purposes set forth above, the Principal Amount by the issuance of the Note (as hereinafter
defined);
WHEREAS, it appears, and this Legislative Body hereby finds and
determines, that the Principal Amount, when added to the interest payable thereon, does not
exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, income,
revenue (including, but not limited to, revenue from the state and federal governments), cash
receipts and other moneys of the Local Agency attributable to Fiscal Year 2004-2005 and
available for the payment of the principal of the Note and the interest thereon;
WHEREAS, no money has heretofore been borrowed by or on behalf of the
Local Agency through the issuance of tax anticipation notes or temporary notes in
anticipation of the receipt of, or payable from or secured by, taxes, income, revenue, cash
receipts or other moneys for Fiscal Year 2004-2005;
WHEREAS, pursuant to Section 53856 of the Act, certain moneys which
will be received by the Local Agency during and attributable to Fiscal Year 2004-2005 can
be pledged for the payment of the principal of the Note and the interest thereon (as
hereinafter provided);
WHEREAS, the Local Agency has determined that it is in the best interests
of the Local Agency to participate in the California Communities Cash Flow Financing
Program (the "Program"), whereby participating local agencies (collectively, the "Issuers")
will simultaneously issue tax and revenue anticipation notes;
DOCSLA1:466083.2 A -I
2004-112
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
1 FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
2 PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
3
4 WHEREAS, the Program requires the participating Issuers to sell their tax
5 and revenue anticipation notes to the California Statewide Communities Development
Authority (the "Authority") pursuant to note purchase agreements (collectively, "Purchase
6 Agreements"), each between such individual Issuer and the Authority, and dated as of the
date of the Pricing Confirmation, a form of which has been submitted to the Legislative
7 Body;
8 WHEREAS, the Authority, in consultation with RBC Dain Rauscher, Inc., as
9 financial advisor for the Program (the "Financial Advisor"), will form one or more pools of
notes (the "Pooled Notes") and assign each note to a particular pool (the "Pool') and sell a
10 series (the "Series") of bonds (the "Bonds") secured by each Pool pursuant to an indenture
(the "Indenture") between the Authority and Wells Fargo Bank, National Association, as
11 trustee (the "Trustee"), each Series distinguished by whether or what type(s) of Credit
Instrument(s) (as hereinafter defined) secure(s) such Series, by the principal amounts of the
12 notes assigned to the Pool, by whether interest on the Series of Bonds is a fixed rate of
13 interest or a variable rate of interest swapped to a fixed rate by the Authority, by whether
interest on the Series of Bonds is includable in gross income for federal income tax
14 purposes,or by other factors, and the Local Agency hereby acknowledges and approves the
discretion of the Authority to assign the Note to such Pool and such Indenture as the
15 Authority may determine;
16 WHEREAS, as additional security for the owners of each Series of Bonds,
17 all or a portion of the payments by all of the Issuers of the notes assigned to such Series may
or may not be secured (by virtue or in form of the Bonds, as indicated in the Pricing
18 Confirmation, being secured in whole or in part) by an irrevocable letter (or letters) of credit
or policy (or policies) of insurance or other credit instrument (or instruments) (collectively,
19 the "Credit Instrument") issued by the credit provider or credit providers designated in the
Indenture, as finally executed (collectively, the "Credit Provider"), pursuant to a credit
20 agreement or agreements or commitment letter or letters (collectively, the "Credit
21 Agreement') between the Authority and the respective Credit Provider;
22 WHEREAS, the net proceeds of the Note may be invested by the Local
Agency in Permitted Investments (as defined in the Indenture) or in any other investment
23 permitted by the laws of the State of California, as now in effect and as hereafter amended,
modified or supplemented from time to time;
24
WHEREAS, as part of the Program each participating Issuer approves the
25 Indenture, the alternative forms of Credit Agreements, if any, in substantially the forms
26 presented to the Legislative Body, with the final form of Indenture, type of Credit
Instrument and corresponding Credit Agreement to be determined and approved by delivery
27 of the Pricing Confirmation;
28 WHEREAS, pursuant to the Program each participating Issuer will be
responsible for its share of (a) the fees of the Trustee and the costs of issuing the applicable
DOCSLAI 466083.2 A-2
2004-112
2
3
Gl
10
11
12
13
14
15
16
17
21
22
213,
24
25
26
27
28
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
Series of Bonds, and (b), if applicable, the fees of the Credit Provider (which shall be
payable from, among other sources, moneys in the Costs of Issuance Fund established and
held under the Indenture), the Issuer's allocable share of all Predefault Obligations and the
Issuer's Reimbursement Obligations, if any (each as defined in the Indenture);
WHEREAS, pursuant to the Program, the underwriter will submit an offer to
the Authority to purchase, in the case of each Pool of Notes, the Series of Bonds which will
be secured by the Indenture to which such Pool will be assigned;
WHEREAS, it is necessary to engage the services of certain professionals to
assist the Local Agency in its participation in the Program;
NOW, THEREFORE, the Legislative Body hereby finds, determines,
declares and resolves as follows:
Section 1. Recitals. This Legislative Body hereby finds and determines
that all the above recitals are true and correct.
Section 2. (A) Authorization of Issuance. This Legislative Body
hereby determines to borrow solely for the purpose of anticipating taxes, income, revenue,
cash receipts and other moneys to be received by the Local Agency for the general fund of
the Local Agency attributable to Fiscal Year 2004-2005, by the issuance of a note or notes in
the aggregate Principal Amount under Sections 53850 et seq. of the Act, designated the
Local Agency's "2004 Tax and Revenue Anticipation Note," with an appropriate series
designation if more than one note is issued (collectively, the "Note"), to be issued in the
form of a fully registered note or notes at the Principal Amount thereof, to be dated the date
of its delivery to the initial purchaser thereof, to mature (without option of prior redemption)
not more than fifteen months thereafter on a date indicated on the face thereof and
determined in the Pricing Confirmation (the "Maturity Date"), and to bear interest, payable
at maturity (and if the maturity is more than twelve months from the date of issuance,
payable on the interim payment date set forth in the Pricing Confirmation) and computed
upon the basis of a 360-day year consisting of twelve 30-day months, or a 365 or 366-day
year, as the case may be, and actual days elapsed, at a rate or rates, if more than one Note is
issued, not to exceed twelve percent (12%) per annum as determined in the Pricing
Confirmation and indicated on the face of the Note (the "Note Rate"). If the Series of Bonds
issued in connection with the Note is secured in whole or in part by a Credit Instrument or
such Credit Instrument secures the Note in whole or in part and all principal of and interest
on the Note is not paid in full at maturity or if payment of principal of and/or interest on the
Note is paid (in whole or in part) by a draw under, payment by or claim upon a Credit
Instrument which draw, payment or claim is not fully reimbursed on such date, such Note
shall become a Defaulted Note (as defined in the Indenture), and the unpaid portion
(including the interest component, if applicable) thereof (or the portion (including the
interest component, if applicable) thereof with respect to which a Credit Instrument applies
DOCSLA1:466083.2 A-3
2004-112
1
2
3
4
5
6
7
11
12
13
14
15
16
17
18
19
211
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
for which reimbursement on a draw, payment or claim has not been fully made) shall be
deemed outstanding and shall continue to bear interest thereafter until paid at the Default
Rate (as defined in the Indenture). If the Note or the Series of Bonds issued in connection
with the Note is unsecured in whole or in part and the Note is not fully paid at maturity, the
unpaid portion thereof (or the portion thereof to which no Credit Instrument applies which is
unpaid) shall be deemed outstanding and shall continue to bear interest thereafter until paid
at the Default Rate. In each case, however, the obligation of the Local Agency with respect
to such Defaulted Note or unpaid Note shall not be a debt or liability of the Local Agency
prohibited by Article XVI, Section 18 of the California Constitution and the Local Agency
shall not be liable thereon except to the extent of any available revenues attributable to
Fiscal Year 2004-2005, as provided in Section 8 hereof. The percentage of the Note to
which a Credit Instrument, if any, applies (the "Secured Percentage") shall be equal to the
amount of the Credit Instrument divided by the aggregate amount of unpaid principal of and
interest on the unpaid notes (or portions thereof) of all Issuers, expressed as a percentage
(but not greater than 100%) as of the maturity date.
Both the principal of and interest on the Note shall be payable in lawful
money of the United States of America. The principal of and interest on the Note at
maturity shall be paid upon surrender of the Note at the corporate trust office of Wells Fargo
Bank, National Association in Los Angeles, California.
The Note shall be issued in conjunction with the note or notes of one or more
other Issuers as part of the Program and within the meaning of Section 53853 of the Act.
(B) Anything in this Resolution to the contrary notwithstanding, the Pricing
Confirmation may specify that a portion of the authorized Principal Amount of the Note
shall be issued as a taxable Note the interest on which is includable in the gross income of
the holder thereof for federal income tax purposes (a "Taxable Note"). In such event, the
Taxable Note shall be issued with an appropriate series designation and other terms
reflecting such taxability of interest income, including without limitation, a taxable Note
Rate and a taxable Default Rate; the term Note, and other terms as appropriate, shall be
deemed to include or refer to such Taxable Note; and the agreements, covenants and
provisions set forth in this Resolution to be performed by or on behalf of the Local Agency
shall be for the equal and proportionate benefit, security and protection of the holder of any
Note without preference, priority or distinction as to security or otherwise of any Note over
and other Note.
Section 3. Form of Note. The Note shall be issued in fully registered
form without coupons and shall be substantially in the form and substance set forth in
Exhibit A as attached hereto and by reference incorporated herein, the blanks in said forms
to be filled in with appropriate words and figures.
Section 4. Sale of Note; Delegation. The Note shall be sold to the
Authority pursuant to the Purchase Agreement. The form of the Purchase Agreement,
DOCSLA7:466083.2 A-4
2004-112
1
2
3
4
5
6
7
8
9
i"
14
15
16
17
21
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
including the form of the pricing confirmation supplement (the "Pricing Confirmation") set
forth as Exhibit A thereto, presented to this meeting are hereby approved. The authorized
representatives set forth in Section 25 hereof (the "Authorized Representatives") are each
hereby authorized and directed to execute and deliver the Purchase Agreement in
substantially said form, with such changes thereto as such Authorized Representative shall
approve, such approval to be conclusively evidenced by his or her execution and delivery
thereof; provided, however, that the Purchase Agreement shall not be effective and binding
on the Local Agency until the execution and delivery of the Pricing Confirmation. The
Authorized Representatives are each hereby further authorized and directed to execute and
deliver the Pricing Confirmation in substantially said form, with such changes thereto as
such Authorized Representative shall approve, such approval to be conclusively evidenced
by his or her execution and delivery thereof; provided, however, that the interest rate on the
Note shall not exceed twelve percent (12%) per annum, the discount on the Note, when
added to the Local Agency's share of the costs of issuance of the Bonds, shall not exceed
one percent (1.0%), and the Principal Amount shall not exceed the Maximum Amount of
Borrowing. Delivery of an executed copy of the Pricing Confirmation by fax or telecopy
shall be deemed effective execution and delivery for all purposes.
Section 5. Program Approval. The Pricing Confirmation shall indicate
whether and what type of Credit Instrument will apply.
The forms of Indenture, alternative general types and forms of Credit
Agreements, if any, presented to this meeting are hereby acknowledged, and it is
acknowledged that the Authority will execute and deliver the Indenture, one or more Credit
Agreements, if applicable, which shall be identified in the Pricing Confirmation, in
substantially one or more of said forms with such changes therein as the Authorized
Representative who executes the Pricing Confirmation shall require or approve
(substantially final forms of the Indenture and the Credit Agreement are to be delivered to
the Authorized Representative concurrent with the Pricing Confirmation), such approval of
the Authorized Representative and this Legislative Body to be conclusively evidenced by
the execution of the Pricing Confirmation.
Any one of the Authorized Representatives of the Local Agency is hereby
authorized and directed to provide the Financial Advisor or the underwriter with such
information relating to the Local Agency as the Financial Advisor or the underwriter shall
reasonably request for inclusion in the Preliminary Official Statement and Official Statement
of the Authority. Upon inclusion of the information relating to the Local Agency therein,
the Preliminary Official Statement and Official Statement or such other offering document
is, except for certain omissions permitted by Rule 15c2-12 of the Securities Exchange Act of
1934, as amended (the "Rule"), hereby deemed final within the meaning of the Rule with
respect to the Local Agency and any Authorized Representative of the Local Agency is
authorized to execute a certificate to such effect. If, at any time prior to the end of the
underwriting period, as defined in the Rule, any event occurs as a result of which the
DOCSLA7:466083.2 A-5
2004-112
1
2
Ell
11
17
18
19
20
21
23
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
information contained in the Preliminary Official Statement or other offering document
relating to the Local Agency might include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Local Agency shall promptly notify the
Financial Advisor and the underwriter.
Subject to Section 8 hereof, the Local Agency hereby agrees that if the Note
shall become a Defaulted Note, the unpaid portion (including the interest component, if
applicable) thereof or the portion (including the interest component, if applicable) to which a
Credit Instrument applies for which full reimbursement on a draw, payment or claim has not
been made by the Maturity Date shall be deemed outstanding and shall not be deemed to be
paid until (i) any Credit Provider providing a Credit Instrument with respect to the Note or
the Series of Bonds issued in connection with the Note, has been reimbursed for any
drawings, payments or claims made under or from the Credit Instrument with respect to the
Note, including interest accrued thereon, as provided therein and in the applicable Credit
Agreement, and, (ii) the holders of the Note, or Series of the Bonds issued in connection
with the Note, are paid the full principal amount represented by the unsecured portion of the
Note plus interest accrued thereon (calculated at the Default Rate) to the date of deposit of
such aggregate required amount with the Trustee. For purposes of clause (ii) of the
preceding sentence, holders of the Series of Bonds will be deemed to have received such
principal amount upon deposit of such moneys with the Trustee.
The Local Agency agrees to pay or cause to be paid, in addition to the
amounts payable under the Note, any fees or expenses of the Trustee and, to the extent
permitted by law, if the Local Agency's Note is secured in whole or in part by a Credit
Instrument (by virtue of the fact that the Series of Bonds is secured by a Credit Instrument),
any Predefault Obligations and Reimbursement Obligations (to the extent not payable under
the Note), (i) arising out of an "Event of Default" hereunder (or pursuant to Section 7
hereof) or (ii) arising out of any other event (other than an event arising solely as a result of
or otherwise attributable to a default by any other Issuer). In the case described in (ii) above
with respect to Predefault Obligations, the Local Agency shall owe only the percentage of
such fees, expenses and Predefault Obligations equal to the ratio of the principal amount of
its Note over the aggregate principal amounts of all notes, including the Note, of the Series
of which the Note is a part, at the time of original issuance of such Series. Such additional
amounts will be paid by the Local Agency within twenty-five (25) days of receipt by the
Local Agency of a bill therefor from the Trustee.
Section 6. No Joint Obligation. The Note will be issued in conjunction
with a note or notes of one or more other Issuers, assigned to secure a Series of Bonds. In
all cases, the obligation of the Local Agency to make payments on or in respect to its Note is
a several and not a joint obligation and is strictly limited to the Local Agency's repayment
obligation under this Resolution and the Note.
DOCSLA1:466083.2 A-6
2004-112
1
2
3
4
5
10
11
12
13
14
15
16
171
1
21
26
27
28
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
Section 7. Disposition of Proceeds of Note. A portion of the moneys
received from the sale of the Note in an amount equal to the Local Agency's share of the
costs of issuance (which shall include any fees and expenses in connection with any Credit
Instrument applicable to the Note or Series of Bonds) shall be deposited in the Costs of
Issuance Fund held and invested by the Trustee under the Indenture and expended as
directed by the Authority on costs of issuance as provided in the Indenture. The balance of
the moneys received from the sale of the Note to the Authority shall be deposited in the
Local Agency's Proceeds Subaccount hereby authorized to be created pursuant to, and held
and invested by the Trustee under, the Indenture for the Local Agency and said moneys may
be used and expended by the Local Agency for any purpose for which it is authorized to use
and expend moneys, upon requisition from the Proceeds Subaccount as specified in the
Indenture. Amounts in the Proceeds Subaccount are hereby pledged to the payment of the
Note. The Trustee will not create subaccounts within the Proceeds Fund, but will keep
records to account separately for proceeds of the Bonds allocable to the Local Agency's
Note on deposit in the Proceeds Fund which shall constitute the Local Agency's Proceeds
Subaccount.
Section 8. Source of Payment.
(A) The principal amount of the Note, together with the interest thereon,
shall be payable from taxes, income, revenue (including, but not limited to, revenue from the
state and federal governments), cash receipts and other moneys which are received by the
Local Agency for the general fund of the Local Agency and are attributable to Fiscal Year
2004-2005 and which are available for payment thereof. As security for the payment of the
principal of and interest on the Note, the Local Agency hereby pledges certain unrestricted
revenues (as hereinafter provided, the "Pledged Revenues") which are received by the Local
Agency for the general fund of the Local Agency and are attributable to Fiscal Year 2004-
2005, and the principal of the Note and the interest thereon shall constitute a first lien and
charge thereon and shall be payable from the first moneys received by the Local Agency
from such Pledged Revenues, and, to the extent not so paid, shall be paid from any other
taxes, income, revenue, cash receipts and other moneys of the Local Agency lawfully
available therefor (all as provided for in Sections 53856 and 53857 of the Act). The term
"unrestricted revenues" shall mean all taxes, income, revenue (including, but not limited to,
revenue from the state and federal governments), cash receipts, and other moneys, intended
as receipts for the general fund of the Local Agency attributable to Fiscal Year 2004-2005
and which are generally available for the payment of current expenses and other obligations
of the Local Agency. The Noteholders, Bondholders and Credit Provider shall have a first
lien and charge on such certain unrestricted revenues as hereinafter provided which are
received by the Local Agency and are attributable to Fiscal Year 2004-2005.
In order to effect the pledge referenced in the preceding paragraph, the Local
Agency hereby agrees and covenants to establish and maintain a special account within the
Local Agency's general fund to be designated the "2004 Tax and Revenue Anticipation
DOCSLA1:466083.2 A-7
2004-112
1
2
3
4
5
10
11
12
13
14
15
16
17
1s
211
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
Note Payment Account" (the "Payment Account") and further agrees and covenants to
maintain the Payment Account until the payment of the principal of the Note and the interest
thereon. Notwithstanding the foregoing, if the Local Agency elects to have Note proceeds
invested in Permitted Investments to be held by the Trustee pursuant to the Pricing
Confirmation, a subaccount of the Payment Account (the "Payment Subaccount") shall be
established for the Local Agency under the Indenture and proceeds credited to such account
shall be pledged to the payment of the Note. The Trustee need not create a subaccount, but
may keep a record to account separately for proceeds of the Note so held and invested by the
Trustee which record shall constitute the Local Agency's Proceeds Subaccount. Transfers
from the Payment Subaccount shall be made in accordance with the Indenture. The Local
Agency agrees to transfer to and deposit in the Payment Account the first amounts received
in the months specified in the Pricing Confirmation as Repayment Months (each individual
month a "Repayment Month" and collectively "Repayment Months") (and any amounts
received thereafter attributable to Fiscal Year 2004-2005) until the amount on deposit in the
Payment Account, together with the amount, if any, on deposit in the Payment Subaccount,
and taking into consideration anticipated investment earnings thereon to be received by the
Maturity Date, is equal in the respective Repayment Months identified in the Pricing
Confirmation to the percentage of the principal and interest due on the Note specified in the
Pricing Confirmation. In making such transfer and deposit, the Local Agency shall not be
required to physically segregate the amounts to be transferred to and deposited in the
Payment Account from the Local Agency's other general fund moneys, but, notwithstanding
any commingling of funds for investment or other purposes, the amounts required to be
transferred to and deposited in the Payment Account shall nevertheless be subject to the lien
and charge created herein.
Any one of the Authorized Representatives of the Local Agency is
hereby authorized to approve the determination of the Repayment Months and percentages
of the principal and interest due on the Note required to be on deposit in the Payment
Account and/or the Payment Subaccount in each Repayment Month, all as specified in the
Pricing Confirmation, by executing and delivering the Pricing Confirmation, such execution
and delivery to be conclusive evidence of approval by this Legislative Body and such
Authorized Representative; provided, however, that the maximum number of Repayment
Months shall be six and the maximum amount of Pledged Revenues required to be deposited
in each Repayment Month shall not exceed fifty percent (50%) of the aggregate principal
and interest due on the Note. In the event on the day in each such Repayment Month that a
deposit to the Payment Account is required to be made, the Local Agency has not received
sufficient unrestricted revenues to permit the deposit into the Payment Account of the full
amount of Pledged Revenues to be deposited in the Payment Account from said unrestricted
revenues in said month, then the amount of any deficiency shall be satisfied and made up
from any other moneys of the Local Agency lawfully available for the payment of the
principal of the Note and the interest thereon, as and when such other moneys are received
or are otherwise legally available.
DOCSLA1:466083.2 A-8
2004-112
1
2
3
4
5
6
7
8
9
10
11
12
13
1
21
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
(B) Any moneys placed in the Payment Account or the Payment
Subaccount shall be for the benefit of (i) the holder of the Note and the holders of Bonds
issued in connection with the Notes and (ii) (to the extent provided in the Indenture) the
Credit Provider, if any. The moneys in the Payment Account and the Payment Subaccount
shall be applied only for the purposes for which such Accounts are created until the principal
of the Note and all interest thereon are paid or until provision has been made for the
payment of the principal of the Note at maturity with interest to maturity (in accordance with
the requirements for defeasance of the Bonds as set forth in the Indenture) and, if applicable,
(to the extent provided in the Indenture and, if applicable, the Credit Agreement) the
payment of all Predefault Obligations and Reimbursement Obligations owing to the Credit
Provider.
(C) The Local Agency hereby directs the Trustee to transfer on the Note
Payment Deposit Date (as defined in the Indenture), any moneys in the Payment Subaccount
to the Bond Payment Fund (as defined in the Indenture). In addition, on the Note Payment
Deposit Date, the moneys in the Payment Account shall be transferred by the Local Agency
to the Trustee, to the extent necessary (after crediting any transfer pursuant to the preceding
sentence), to pay the principal of and/or interest on the Note, to make payments to a Swap
Provider, if any, as defined in the Indenture, pursuant to a Swap Agreement, if any, as
defined in the Indenture, or to reimburse the Credit Provider for payments made under or
pursuant to the Credit Instrument. In the event that moneys in the Payment Account and/or
the Payment Subaccount are insufficient to pay the principal of and interest on the Note in
full when due, such moneys shall be applied in the following priority: first to pay interest on
the Note; second to pay principal of the Note; third to reimburse the Credit Provider for
payment, if any, of interest with respect to the Note; fourth to reimburse the Credit Provider
for payment, if any, of principal with respect to the Note; and fifth to pay any
Reimbursement Obligations of the Local Agency and any of the Local Agency's pro rata
share of Predefault Obligations owing to the Credit Provider. Any moneys remaining in or
accruing to the Payment Account and/or the Payment Subaccount after the principal of the
Note and the interest thereon and any Predefault Obligations and Reimbursement
Obligations, if applicable, have been paid, or provision for such payment has been made,
shall be transferred to the general fund of the Local Agency, subject to any other disposition
required by the Indenture, or, if applicable, the Credit Agreement. Nothing herein shall be
deemed to relieve the Local Agency from its obligation to pay its Note in full on the
Maturity Date.
(D) Moneys in the Proceeds Subaccount and in the Payment Subaccount
shall be invested by the Trustee pursuant to the Indenture as directed by the Local Agency in
Permitted Investments as described in and under the terms of the Indenture. Any such
investment by the Trustee shall be for the account and risk of the Local Agency, and the
Local Agency shall not be deemed to be relieved of any of its obligations with respect to the
Note, the Predefault Obligations or Reimbursement Obligations, if any, by reason of such
investment of the moneys in its Proceeds Subaccount or the Payment Subaccount.
DOCSLA1:466083.2 A-9
2004-112
1
2
3
4
6
7
8
9
i"
1
17
18
19
20
21
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
(E) At the written request of the Credit Provider, if any, the Local
Agency shall, within ten (10) Business Days following the receipt of such written request,
file such report or reports to evidence the transfer to and deposit in the Payment Account
required by this Section 8 and provide such additional financial information as may be
required by the Credit Provider, if any.
Section 9. Execution of Note. Any one of the Authorized
Representatives of the Local Agency or any other officer designated by the Legislative Body
shall be authorized to execute the Note by manual or facsimile signature and the Secretary or
Clerk of the Legislative Body of the Local Agency, or any duly appointed assistant thereto,
shall be authorized to countersign the Note by manual or facsimile signature. Said
Authorized Representative of the Local Agency, is hereby authorized to cause the blank
spaces of the Note to be filled in as may be appropriate pursuant to the Pricing
Confirmation. The Authorized Representative is hereby authorized and directed to cause the
Authority to assign the Note to the Trustee, pursuant to the terms and conditions of the
Purchase Agreement, this Resolution and the Indenture. In case any Authorized
Representative whose signature shall appear on any Note shall cease to be an Authorized
Representative before the delivery of such Note, such signature shall nevertheless be valid
and sufficient for all purposes, the same as if such officer had remained in office until
delivery. The Note need not bear the seal of the Local Agency, if any.
Section 10. Intentionally Left Blank. This section has been included to
preserve the sequence of section numbers for cross-referencing purposes.
Section 11. Representations and Covenants of the Local Agency.
The Local Agency makes the following representations for the benefit of the
holder of the Note, the owners of the Bonds and the Credit Provider, if any:
(A) The Local Agency is duly organized and existing under and by virtue
of the laws of the State of California and has all necessary power and authority to (i) adopt
this Resolution and perform its obligations thereunder, (ii) enter into and perform its
obligations under the Purchase Agreement, and (iii) issue the Note and perform its
obligations thereunder.
(B) (i) Upon the issuance of the Note, the Local Agency shall have taken
all action required to be taken by it to authorize the issuance and delivery of the Note and
the performance of its obligations thereunder, and (ii) the Local Agency has full legal right,
power and authority to issue and deliver the Note.
(C) The issuance of the Note, the adoption of the Resolution and the
execution and delivery of the Purchase Agreement, and compliance with the provisions
hereof and thereof do not conflict with, breach or violate any law, administrative regulation,
DOCSLA7:466083.2 A-10
2004-112
1
2
3
4
5
6
7
8
9
111
13
14
15
16
17
18
19
20
21
23
24
25
26
27
28
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
court decree, resolution, charter, by-laws or other agreement to which the Local Agency is
subject or by which it is bound.
(D) Except as may be required under blue sky or other securities laws of
any state or Section 3(a)(2) of the Securities Act of 1933, there is no consent, approval,
authorization or other order of, or filing with, or certification by, any regulatory authority
having jurisdiction over the Local Agency required for the issuance and sale of the Note or
the consummation by the Local Agency of the other transactions contemplated by this
Resolution, except those the Local Agency shall obtain or perform prior to or upon the
issuance of the Note.
(E) The Local Agency has (or will have prior to the issuance of the Note)
duly, regularly and properly adopted a preliminary budget for Fiscal Year 2004-2005 setting
forth expected revenues and expenditures and has complied with all statutory and regulatory
requirements with respect to the adoption of such budget. The Local Agency hereby
covenants that it shall (i) duly, regularly and properly prepare and adopt its final budget for
Fiscal Year 2004-2005, (ii) provide to the Trustee, the Credit Provider, if any, the Financial
Advisor and the underwriter, promptly upon adoption, copies of such final budget and of
any subsequent revisions, modifications or amendments thereto and (iii) comply with all
applicable laws pertaining to its budget.
(F) The sum of the principal amount of the Local Agency's Note plus the
interest payable thereon, on the date of its issuance, shall not exceed fifty percent (50%) of
the estimated amounts of the Local Agency's uncollected taxes, income, revenue (including,
but not limited to, revenue from the state and federal governments), cash receipts, and other
moneys to be received by the Local Agency for the general fund of the Local Agency
attributable to Fiscal Year 2004-2005, all of which will be legally available to pay principal
of and interest on the Note.
(G) The Local Agency (i) has not defaulted within the past twenty (20)
years, and is not currently in default, on any debt obligation and (ii), to the best knowledge
of the Local Agency, has never defaulted on any debt obligation.
(H) The Local Agency's most recent audited financial statements present
fairly the financial condition of the Local Agency as of the date thereof and the results of
operation for the period covered thereby. Except as has been disclosed to the Financial
Advisor and the underwriter and the Credit Provider, if any, there has been no change in the
financial condition of the Local Agency since the date of such audited financial statements
that will in the reasonable opinion of the Local Agency materially impair its ability to
perform its obligations under this Resolution and the Note. The Local Agency agrees to
furnish to the Authority, the Financial Advisor, the underwriter, the Trustee and the Credit
Provider, if any, promptly, from time to time, such information regarding the operations,
financial condition and property of the Local Agency as such party may reasonably request.
DOCSLA1:466083.2 A-1 1
2004-112
1
2
3
4
5
6
7
11
12
13
14
15
16
17
18
211
27
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
(I) There is no action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, arbitrator, governmental or other board, body or official,
pending or, to the best knowledge of the Local Agency, threatened against or affecting the
Local Agency questioning the validity of any proceeding taken or to be taken by the Local
Agency in connection with the Note, the Purchase Agreement, the Indenture, the Credit
Agreement, if any, or this Resolution, or seeking to prohibit, restrain or enjoin the execution,
delivery or performance by the Local Agency of any of the foregoing, or wherein an
unfavorable decision, ruling or finding would have a materially adverse effect on the Local
Agency's financial condition or results of operations or on the ability of the Local Agency to
conduct its activities as presently conducted or as proposed or contemplated to be
conducted, or would materially adversely affect the validity or enforceability of, or the
authority or ability of the Local Agency to perform its obligations under, the Note, the
Purchase Agreement, the Indenture, the Credit Agreement, if any, or this Resolution.
(J) Upon issuance of the Note and execution of the Purchase Contract,
this Resolution, the Purchase Contract and the Note will constitute legal, valid and binding
agreements of the Local Agency, enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy or other laws affecting creditors'
rights generally, the application of equitable principles if equitable remedies are sought, the
exercise of judicial discretion in appropriate cases and the limitations on legal remedies
against local agencies, as applicable, in the State of California.
(K) The Local Agency and its appropriate officials have duly taken, or
will take, all proceedings necessary to be taken by them, if any, for the levy, receipt,
collection and enforcement of the Pledged Revenues in accordance with law for carrying out
the provisions of this Resolution and the Note.
(L) The Local Agency shall not incur any indebtedness secured by a
pledge of its Pledged Revenues unless such pledge is subordinate in all respects to the
pledge of Pledged Revenues hereunder.
(M) So long as the Credit Provider, if any, is not in payment default under
the Credit Instrument, the Local Agency hereby agrees to pay its pro rata share of all
Predefault Obligations and all Reimbursement Obligations attributable to the Local Agency
in accordance with provisions of the Credit Agreement, if any, and/or the Indenture, as
applicable. Prior to the Maturity Date, moneys in the Local Agency's Payment Account
and/or Payment Subaccount shall not be used to make such payments. The Local Agency
shall pay such amounts promptly upon receipt of notice from the Credit Provider that such
amounts are due to it.
DOCSLAI:466083.2 A-12
2004-112
1
2
3
4'
5
6
7
8
9
111
13
14
15
16
17
18
211
26
27
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
(N) So long as any Bonds issued in connection with the Notes are
Outstanding, or any Predefault Obligation or Reimbursement Obligation is outstanding, the
Local Agency will not create or suffer to be created any pledge of or lien on the Note other
than the pledge and lien of the Indenture.
Section 12. Tax Covenants. (A) The Local Agency shall not take any
action or fail to take any action if such action or failure to take such action would adversely
affect the exclusion from gross income of the interest payable on the Note or Bonds under
Section 103 of the Internal Revenue Code of 1986 (the "Code"). Without limiting the
generality of the foregoing, the Local Agency shall not make any use of the proceeds of the
Note or Bonds or any other funds of the Local Agency which would cause the Note or
Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, a "private
activity bond" within the meaning of Section 141(a) of the Code, or an obligation the
interest on which is subject to federal income taxation because it is "federally guaranteed" as
provided in Section 149(b) of the Code. The Local Agency, with respect to the proceeds of
the Note, will comply with all requirements of such sections of the Code and all regulations
of the United States Department of the Treasury issued or applicable thereunder to the extent
that such requirements are, at the time, applicable and in effect.
(B) The Local Agency hereby (i) represents that the aggregate face
amount of all tax-exempt obligations (including any tax-exempt leases, but excluding
private activity bonds), issued and to be issued by the Local Agency during calendar year
2004, including the Note, is not reasonably expected to exceed $5,000,000; or, in the
alternative, (ii) covenants that the Local Agency will take all legally permissible steps
necessary to ensure that all of the gross proceeds of the Note will be expended no later than
the day that is six months after the date of issuance of the Note so as to satisfy the
requirements of Section 148(f)(4)(B) of the Code.
(C) Notwithstanding any other provision of this Resolution to the
contrary, upon the Local Agency's failure to observe, or refusal to comply with, the
covenants contained in this Section 12, no one other than the holders or former holders of
the Note, the owners of the Bond, the Credit Provider, if any, or the Trustee on their behalf
shall be entitled to exercise any right or remedy under this Resolution on the basis of the
Local Agency's failure to observe, or refusal to comply with, such covenants.
of the Note.
(D) The covenants contained in this Section 12 shall survive the payment
(E) The provisions of this Section 12 shall not apply to a Taxable Note.
Section 13. Events of Default and Remedies.
If any of the following events occurs, it is hereby defined as and declared to
be and to constitute an "Event of Default":
DOCSLA1:466083.2 A-13
2004-112
1
2
3
4
5
6
7
8
9
111
1
14
15
16
17
18
19
�A
27
K3
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
(A) Failure by the Local Agency to make or cause to be made the transfers
and deposits to the Payment Account, or any other payment required to be paid hereunder,
including payment of principal and interest on the Note, on or before the date on which such
transfer, deposit or other payment is due and payable;
(B) Failure by the Local Agency to observe and perform any covenant,
condition or agreement on its part to be observed or performed under this Resolution, for a
period of fifteen (15) days after written notice, specifying such failure and requesting that it
be remedied, is given to the Local Agency by the Trustee or the Credit Provider, if
applicable, unless the Trustee and the Credit Provider shall all agree in writing to an
extension of such time prior to its expiration;
(C) Any warranty, representation or other statement by or on behalf of the
Local Agency contained in this Resolution or the Purchase Agreement (including the Pricing
Confirmation) or in any requisition or any financial report delivered by the Local Agency or
in any instrument furnished in compliance with or in reference to this Resolution or the
Purchase Agreement or in connection with the Note, is false or misleading in any material
respect;
(D) A petition is filed against the Local Agency under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law
of any jurisdiction, whether now or hereafter in effect and is not dismissed within 30 days
after such filing, but the Trustee shall have the right to intervene in the proceedings prior to
the expiration of such thirty (30) days to protect its and the Bond Owners' (or Noteholders')
interests;
(E) The Local Agency files a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, or consents to the filing of any petition against it under such law; or
(F) The Local Agency admits insolvency or bankruptcy or is generally
not paying its debts as such debts become due, or becomes insolvent or bankrupt or makes
an assignment for the benefit of creditors, or a custodian (including without limitation a
receiver, liquidator or trustee) of the Local Agency or any of its property is appointed by
court order or takes possession thereof and such order remains in effect or such possession
continues for more than 30 days, but the Trustee shall have the right to intervene in the
proceedings prior to the expiration of such thirty (30) days to protect its and the Bond
Owners' or Noteholders' interests.
Whenever any Event of Default referred to in this Section 13 shall have
happened and be continuing, the Trustee, as holder of the Note, shall, in addition to any
other remedies provided herein or by law or under the Indenture, if applicable, have the
DOCSLAL:466083.2 A-14
2004-112
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
right, at its option without any further demand or notice, to take one or any combination of
the following remedial steps:
(1) Without declaring the Note to be immediately due and payable,
require the Local Agency to pay to the Trustee, as holder of the Note, an amount equal to the
principal of the Note and interest thereon to maturity, plus all other amounts due hereunder,
and upon notice to the Local Agency the same shall become immediately due and payable
by the Local Agency without further notice or demand; and
(2) Take whatever other action at law or in equity (except for acceleration
of payment on the Note) which may appear necessary or desirable to collect the amounts
then due and thereafter to become due hereunder and under the Note or to enforce any other
of its rights hereunder.
Notwithstanding the foregoing, if the Local Agency's Note is secured in
whole or in part by a Credit Instrument or if the Credit Provider is subrogated to rights under
the Local Agency's Note, as long as the Credit Provider has not failed to comply with its
payment obligations under the Credit Instrument, the Credit Provider shall have the right to
direct the remedies upon any Event of Default hereunder, and the Credit Provider's prior
consent shall be required to any remedial action proposed to be taken by the Trustee
hereunder.
If the Credit Provider is not reimbursed for any drawing, payment or claim,
as applicable, used to pay principal of and interest on the Note due to a default in payment
on the Note by the Local Agency, or if any principal of or interest on the Note remains
unpaid after the Maturity Date, the Note shall be a Defaulted Note, the unpaid portion
(including the interest component, if applicable) thereof or the portion (including the interest
component, if applicable) to which a Credit Instrument applies for which reimbursement on
a draw, payment or claim has not been made shall be deemed outstanding and shall bear
interest at the Default Rate until the Local Agency's obligation on the Defaulted Note is paid
in full or payment is duly provided for, all subject to Section 8 hereof.
Section 14. Trustee. The Local Agency hereby directs and authorizes the
payment by the Trustee of the interest on and principal of the Note when such become due
and payable, from amounts received by the Trustee from the Local Agency in the manner set
forth herein. The Local Agency hereby covenants to deposit funds in such account or fund,
as applicable, at the time and in the amount specified herein to provide sufficient moneys to
pay the principal of and interest on the Note on the Note Payment Deposit Date. Payment of
the Note shall be in accordance with the terms of the Note and this Resolution.
Section 15. Sale of Note. The Note shall be sold to the Authority, in
accordance with the terms of the Purchase Agreement, hereinbefore approved, and issued
payable to the Trustee, as assignee of the Authority.
DOCSLA1:466083.2 A-15
2004-112
1
2
3
4
5
6
7
8
111
1
14
15
16
17
18
211
27
071
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
Section 16. Intentionally Left Blank. This section has been included to
preserve the sequence of section numbers for cross-referencing purposes.
Section 17. Approval of Actions. The aforementioned Authorized
Representatives of the Local Agency are hereby authorized and directed to execute the Note
and cause the Trustee to accept delivery of the Note, pursuant to the terms and conditions of
the Purchase Agreement and the Indenture. All actions heretofore taken by the officers
andagents of the Local Agency or this Legislative Body with respect to the sale and issuance
ofthe Note and participation in the Program are hereby approved, confirmed and ratified and
the Authorized Representatives and agents of the Local Agency are hereby authorized and
directed, for and in the name and on behalf of the Local Agency, to do any and all things and
take any and all actions and execute any and all certificates, agreements and other
documents which they, or any of them, may deem necessary or advisable in order to
consummate the lawful issuance and delivery of the Note in accordance with, and related
transactions contemplated by, this Resolution. The Authorized Representatives of the Local
Agency referred to above in Section 4 hereof are hereby designated as "Authorized Local
Agency Representatives" under the Indenture.
In the event that the Note or a portion thereof is secured by a Credit
Instrument, any one of the Authorized Representatives of the Local Agency is hereby
authorized and directed to provide the Credit Provider, with any and all information relating
to the Local Agency as such Credit Provider may reasonably request.
Section 18. Proceedings Constitute Contract. The provisions of the
Note and of this Resolution shall constitute a contract between the Local Agency and the
registered owner of the Note, and such provisions shall be enforceable by mandamus or any
other appropriate suit, action or proceeding at law or in equity in any court of competent
jurisdiction, and shall be irrepealable. The Credit Provider, if any, is a third party
beneficiary of the provisions of this Resolution and the Note.
Section 19. Limited Liability. Notwithstanding anything to the contrary
contained herein or in the Note or in any other document mentioned herein or related to the
Note or to any Series of Bonds to which the Note may be assigned, the Local Agency shall
not have any liability hereunder or by reason hereof or in connection with the transactions
contemplated hereby except to the extent payable from moneys available therefor as set
forth in Section 8 hereof.
Section 20. Amendments. At any time or from time to time, the Local
Agency may adopt one or more Supplemental Resolutions with the written consents of the
Authority and the Credit Provider, if any, but without the necessity for consent of the owner
of the Note or of the Bonds issued in connection with the Note for any one or more of the
following purposes:
DOCSLAI :4660832 A-16
2004-112
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
1
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
2 FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
3 PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
4 (A) to add to the covenants and agreements of the Local Agency in this
5 Resolution, other covenants and agreements to be observed by the Local Agency which are
not contrary to or inconsistent with this Resolution as theretofore in effect;
6 (B) to add to the limitations and restrictions in this Resolution, other
7 limitations and restrictions to be observed by the Local Agency which are not contrary to or
8 inconsistent with this Resolution as theretofore in effect;
9 (C) to confirm, as further assurance, any pledge under, and the subjection
to any lien or pledge created or to be created by, this Resolution, of any monies, securities or
10 funds, or to establish any additional funds or accounts to be held under this Resolution;
11 (D) to cure any ambiguity, supply any omission, or cure or correct any
defect or inconsistent provision in this Resolution; or
12
13 (E) to amend or supplement this Resolution in any other respect;
14 provided, however, that any such Supplemental Resolution does not adversely affect the
interests of the owners of the Note or of the Bonds issued in connection with the Notes.
15 Any modifications or amendment of this Resolution and of the rights and
16 obligations of the Local Agency and of the owner of the Note or of the Bonds issued in
connection with the Note may be made by a Supplemental Resolution, with the written
17 consents of the Authority and the Credit Provider, if any, and with the written consent of the
owners of at least a majority in principal amount of the Note and of the Bonds issued in
18 connection with the Note outstanding at the time such consent is given; provided, however,
19 that if such modification or amendment will, by its terms, not take effect so long as the Note
or any Bonds issued in connection with the Note remain outstanding, the consent of the
20 owners of such Note or of such Bonds shall not be required. No such modification or
amendment shall permit a change in the maturity of the Note or a reduction of the principal
21 amount thereof or an extension of the time of any payment thereon or a reduction of the rate
of interest thereon, or a change in the date or amounts of the pledge set forth in this
22 Resolution, without the consent of the owners of such Note or the owners of all the Bonds
23 issued in connection with the Note, or shall reduce the percentage of the Note or Bonds the
consent of the owners of which is required to effect any such modification or amendment, or
24 shall change or modify any of the rights or obligations of the Trustee without its written
assent thereto.
25
26 Section 21. Severability. In the event any provision of this Resolution
shall be held invalid or unenforceable by any court of competent jurisdiction, such holding
27 shall not invalidate or render unenforceable any other provision hereof.
28 Section 22. Appointment of Bond Counsel. The law firm of Orrick,
Herrington & Sutcliffe LLP, Los Angeles, California is hereby appointed as Bond Counsel
for the Program. The Local Agency acknowledges that Bond Counsel regularly performs
DOCSLA1:4660832 A-1 %
2004-112
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
1 SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
2 FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
3 PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
4
legal services for many private and public entities in connection with a wide variety of
5 matters, and that Bond Counsel has represented, is representing or may in the future
6 represent other public entities, underwriters, trustees, rating agencies, insurers, credit
enhancement providers, lenders, financial and other consultants who may have a role or
7 interest in the proposed financing or that may be involved with or adverse to Local Agency
in this or some other matter. Given the special, limited role of Bond Counsel described
8 above the Local Agency acknowledges that no conflict of interest exists or would exist,
waives any conflict of interest that might appear to exist, and consents to any and all such
9 relationships.
10 Section 23. Appointment of Financial Advisor and Underwriter. RBC
it Dain Rauscher, Inc., Los Angeles, California is hereby appointed as financial advisor for the
Program. Lehman Brothers, Inc., together with such co -underwriters, if any, identified in
12 the Purchase Contract, is hereby appointed as underwriter for the Program.
13 Section 24. Effective Date. This Resolution shall take effect from and
14 after its date of adoption.
15 Section 25. Resolution Parameters.
16 (C) Name of Local Agency: City of San Bernardino
17 (D) Maximum Amount of Borrowing: $20,000,000
18 (E) Authorized Representatives:
19 TITLE
20 1. Mayor
21 2. City Clerk
22 3. City Administrator
23 [Attach form of Certification of the Secretary or Clerk, as appropriate, with
24 respect to the Resolution.]
25
26
27
28
DOCSLAI.466083.2 A-18
2004-112
1
2
3
4
5
6
7
13
14
15i
16 III
17
211
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING AND APPROVING THE BORROWING OF
FUNDS FOR FISCAL YEAR 2004-2005; THE ISSUANCE AND SALE OF A 2004-
2005 TAX AND REVENUE ANTICIPATION NOTE THEREFOR AND
PARTICIPATION IN THE CALIFORNIA COMMUNITIES CASH FLOW
FINANCING PROGRAM
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a j t. reg. meeting thereof, held
on the 3rd day of May , 2004 by the following vote, to wit:
Council Members:
AYES NAYS ABSTAIN ABSENT
ESTRADA
x
LIEN LONGVILLE
x
MCGINNIS
x
DERRY
x
KELLEY
x
JOHNSON
x
McCAMMACK
x
City Clerk
The foregoing resolution is hereby approved this %-n+ day of May
2004.
Approved as to
Form and legal content:
JAMES F. ENMAN
City Alt y
IlkaBy:.
DOCSLAI :466083.2 1
A-19
h Valles, Mayor
of San Bernardino
2004-112
1
2
3
4
5
6
7
8
11
12
13
14
15
16
17
211
EXHIBIT A
CITY OF SAN BERNARDINO
2004 TAX AND REVENUE ANTICIPATION NOTE, [SERIES
Date of
Interest Rate Maturity Date Original Issue
REGISTERED OWNER:
PRINCIPAL AMOUNT: $20,000,000
FOR VALUE RECEIVED, the Local Agency designated above (the "Local
Agency"), acknowledges itself indebted to and promises to pay to the registered owner
identified above, or registered assigns, on the maturity date set forth above, the principal
sum specified above in lawful money of the United States of America, and to pay interest
thereon [on , 2005 and] at maturity at the rate of interest specified above (the
"Note Rate"). Principal of and interest on this Note are payable in such coin or currency of
the United States as at the time of payment is legal tender for payment of private and public
debts. Principal and interest at maturity shall be paid upon surrender hereof at the principal
corporate trust office of Wells Fargo Bank, National Association in Los Angeles, California,
or its successor in trust (the "Trustee"). Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30-day months. Both the principal of and interest on this Note
shall be payable only to the registered owner hereof as the same shall fall due; provided,
however, no interest shall be payable for any period after maturity during which the holder
hereof fails to properly present this Note for payment. If the Local Agency fails to pay this
Note when due or the Credit Provider (as defined in the Resolution hereinafter described and
in that certain Indenture of Trust, dated as of 1, 2004 (the "Indenture"), by
and between the California Statewide Communities Development Authority and Wells
Fargo Bank National Association, as trustee), if any, is not reimbursed in full for the amount
drawn on or paid pursuant to the Credit Instrument (as defined in the Resolution and the
Indenture) to pay all or a portion (including the interest component, if applicable) of this
Note on the date of such payment, this Note shall become a Defaulted Note (as defined in
the Resolution and the Indenture and with the consequences set forth in the Resolution and
the Indenture, including, without limitation, that this Note as a Defaulted Note (and any
related reimbursement obligation with respect to a credit instrument) shall bear interest at
the Default Rate, as defined in the Indenture).
It is hereby certified, recited and declared that this Note represents the
authorized issue of the Note in the aggregate principal amount authorized, executed and
delivered pursuant to and by authority of certain resolutions of the Local Agency duly
passed and adopted heretofore, under and by authority of Article 7.6 (commencing with
Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code
./ If more than one Series of Bonds is issued under the Program in Fiscal Year 2004-2005 and if the
Note is pooled with notes issued by other Issuers (as defined in the Resolution).
DOCSLA1:466083.2 A-20
2004-112
1
2
3
4
5
6
7
8
111
14
15
16
17
18
211
(collectively, the "Resolution"), to all of the provisions and limitations of which the owner
of this Note, by acceptance hereof, assents and agrees.
The principal of the Note, together with the interest thereon, shall be payable
from taxes, income, revenue, cash receipts and other moneys which are received by the
Local Agency for the general fund of the Local Agency and are attributable to Fiscal Year
2004-2005 and which are available for payment thereof. As security for the payment of the
principal of and interest on the Note, the Local Agency has pledged the first amounts of
unrestricted revenues of the Local Agency received on the last day of the Repayment
Months (as defined in the Resolution) identified in the Pricing Confirmation (as defined in
the Resolution) (and any amounts received thereafter attributable to Fiscal Year 2004-2005)
until the amount on deposit in the Payment Account (as defined in the Resolution) in each
such month, is equal to the corresponding percentages of principal of and interest due on the
Note as set forth in the Pricing Confirmation (such pledged amounts being hereinafter called
the "Pledged Revenues"), and the principal of the Note and the interest thereon shall
constitute a first lien and charge thereon and shall be payable from the Pledged Revenues,
and to the extent not so paid shall be paid from any other moneys of the Local Agency
lawfully available therefor as set forth in the Resolution. The full faith and credit of the
Local Agency is not pledged to the payment of the principal of or interest on this Note.
The Local Agency and the Trustee may deem and treat the registered owner
hereof as the absolute owner hereof for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and the Local Agency
and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to
exist, to have happened and to have been performed precedent to and in the issuance of this
Note do exist, have happened and have been performed in due time, form and manner as
required by the Constitution and statutes of the State of California and that the amount of
this Note, together with all other indebtedness of the Local Agency, does not exceed any
limit prescribed by the Constitution or statutes of the State of California.
IN WITNESS WHEREOF, the Legislative Body of the Local Agency has
caused this Note to be executed by the manual or facsimile signature of a duly Authorized
Representative of the Local Agency and countersigned by the manual or facsimile signature
of the Secretary or Clerk of the Legislative Body as of the date of authentication set forth
below.
Countersigned
By:
Title:
DOCSLAI :466083.2
CITY OF SAN BERNARDINO
I16-A
A-21
Title:
2004-112
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Purchase Agreement"), dated as of the
purchase date (the "Purchase Date") specified in Exhibit A attached hereto and made a part hereof,
entered into by and between the signatory local agency designated in Exhibit A (the "Local Agency")
and the California Statewide Communities Development Authority (the "Authority"), for the sale and
delivery of the principal amount specified in Exhibit A of the Local Agency's 2004 Tax and Revenue
Anticipation Note (the "Note") to be issued in conjunction with the notes of other Issuers (as hereinafter
defined) participating in the Program (as hereinafter defined), as detemrined in the Pricing Confirmation
(as hereinafter defined), pooled with notes of other Issuers and assigned to secure a series (the "Series")
of bonds (the "Bonds") designated in Exhibit A;
WITNESSETH:
WHEREAS, local agencies are authorized by Sections 53850 to 53858, both
inclusive, of the Government Code of the State of California (the "Act") (being Article 7.6, Chapter 4,
Part 1, Division 2, Title 5 of the Government Code) to borrow money by the issuance of temporary
notes;
WHEREAS, the legislative body of the Local Agency (the "Legislative Body") has
heretofore adopted its resolution finding that the Local Agency needs to borrow funds in its fiscal year
ending June 30, 2005 ("Fiscal Year 2004-2005") in the principal amount set forth in Exhibit A and that
it is necessary that said sum be borrowed at this time by the issuance of a note therefor in anticipation of
the receipt of taxes, income, revenue, cash receipts and other moneys to be received by the Local
Agency during or attributable to Fiscal Year 2004-2005;
WHEREAS, the Local Agency has adopted a resolution or resolutions (collectively or
singularly, as applicable, the "Resolution") authorizing the issuance and sale of the Note in the name and
on behalf of the Local Agency;
WHEREAS, the Local Agency has determined that it is in the best interests of the
Local Agency to participate in the California Communities Cash Flow Financing Program (the
"Program"), whereby participating local agencies (the "Issuers") will simultaneously issue tax and
revenue anticipation promissory notes for purchase by the Authority;
WHEREAS, under the Program, the Authority will form one or more pools of notes
(the "Pooled Notes") and assign each note to a particular pool (the "Pool") and sell a Series of Bonds
secured by each Pool pursuant to an indenture, dated as of July 1, 2004 (the "Indenture"), by and
between the Authority and Wells Fargo Bank, National Association (the "Trustee"), and sell each such
Series to Lehman Brothers, Inc., as representative of the underwriters of the Program (collectively, the
"Underwriter");
DOCSLA1:466105.1
40929-320 W W B
2004-112
WHEREAS, if so indicated in Exhibit A, the payment by the Local Agency of its Note
will be secured in whole or in part (jointly, but not severally, with notes of the other participating Issuers
assigned to the same Series of Bonds) by a letter of credit, policy of insurance, proceeds received from
a separate bond issue issued by the Authority for such purpose (the "Reserve Fund") or other credit
instrument (collectively, the "Credit InstrurumenP) to be issued by the entity or entities designated in
Exhibit A as the credit provider (the "Credit Provider");
WHEREAS, such Credit Instrument may be issued pursuant to a reimbursement
agreement, commitment letter, indenture or other agreement (the "Credit Agreement") as identified in
Exhibit A;
WHEREAS, in order to participate in the Program, the Local Agency has agreed to be
responsible for its share of the fees and expenses of the Trustee, and, if applicable, the Credit Provider,
and the costs of issuing the Bonds, and the costs, if applicable, of issuing the Credit Instrument, which
anticipated fees, expenses and costs of issuance will be deducted from the purchase price set forth in
Exhibit A and which unanticipated fees, expenses and costs of issuance will be billed to the Local
Agency as the same may arise;
WHEREAS, the costs of issuance which will be deducted from the purchase price set
forth in Exhibit A for the Local Agency shall not exceed one percent (1%) of the principal amount of
each Note; and
WHEREAS, pursuant to the Program, the Authority is submitting this offer to purchase
the Note pursuant to this Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1 _ Ohiigation to Porrhase. Upon the terns and conditions and in
reliance upon the representations, warranties and agreements set forth herein, the Authority shall
purchase from the Local Agency, and the Local Agency shall sell to the Authority, the Note, as
described herein and in the Resolution.
Sertinn 2- Pnrrhace Price. The purchase price of the Note shall be the purchase
price set forth in the pricing confirmation attached hereto as Exhibit A (the "Pricing Confirmation"). The
Note shall bear interest at an interest rate per annum set forth in the Pricing Confirmation, which is
hereby agreed to by and between the Authority and the Local Agency by its duly authorized
representative executing this Purchase Agreement on behalf of the Local Agency.
Sertinn I Ajinctmentc to Prinrmal Amnunt of Note and Pnrrhace. Price.
The Authority and the Local Agency hereby agree that the principal amount of the Note purchased by
the Authority and sold to the Authority by the Local Agency pursuant to this Purchase Agreement may
be reduced, as determined by the Authority and each Local Agency, based upon the advice of Orrick,
Herrington & Sutcliffe LLP ("Bond Counsel"), in order that the proceeds produced from such sale of
such Note will be an amount which will not be subject to either (i) yield restriction (in order for interest
to be excluded from gross income under Section 103 of the Internal Revenue Code of 1986, as
amended (the "Code")) or (ii) a rebate requirement (under Section 148 of the Code). The Authority
DOCSLAI:466105.1
40929-320 WWB 2
2004-112
and the Local Agency hereby further agree that the purchase price of the Note shall be reduced as a
result of any reduction of the principal amount of the Note required by this section.
Spetinn d_ DelmyPry of and Paympnt fnr the Nntp. The delivery of the Note
(the "Closing") shall take place at 8:00 a.m., California time, on the closing date set forth in the Pricing
Confirmation or at such other time or date as may be mutually agreeable to the Local Agency, the
Authority and the Underwriter, at the Los Angeles office of Orrick, Herrington & Sutcliffe LLP or such
other place as the Local Agency, the Authority and the Underwriter shall mutually agree. At the
Closing, the Local Agency shall cause the Note to be delivered to the Authority, duly executed and
authenticated, together with the other documents hereinafter mentioned, and the proceeds of the
purchase price of the Note set forth in the Pricing Confirmation shall be deposited in an amount
indicated in the Pricing Confirmation as the Deposit to Proceeds Fund which shall be held by the
Trustee for the Local Agency and the remainder in the Costs of Issuance Fund held thereunder.
If at any time prior to 90 days after the Closing Date, any event occurs as a result of
which information relating to the Local Agency included in the official statement of the Authority relating
to the Series of Bonds to which the Note is assigned (the "Official Statement') contains an untrue
statement of a material fact or omits to state any material fact necessary to make the statements therein
in light of the circumstances under which they were made, not misleading, the Local Agency shall
promptly notify the Authority and the Underwriter thereof, and if, in the opinion of the Authority or the
Underwriter, such event requires the preparation and publication of a supplement or amendment to the
Official Statement, the Local Agency shall cooperate with the Authority and the Underwriter in the
preparation of an amendment or supplement to the Official Statement in a form and in a manner
approved by the Authority and the Underwriter, and all reasonable expenses incurred thereby shall be
paid by the Local Agency.
gprtinn S. The Nntp, The Note shall be issued in substantially the form set forth
in the Resolution, without coupons in the full principal amount set forth in Exhibit A.
Spetinn 6_ Rppregpntntinnc and Warrnntipc of the Lneal Agency, The Local
Agency represents and warrants to the Authority and the Underwriter that:
(a) All representations and warranties set forth in the Resolution are true and
correct on the date hereof and are made for the benefit of the Authority and the Underwriter as if set
forth herein.
(b) The information relating to the Local Agency included in the Official Statement
does not contain any untrue statement of a material fact or omit to state any material fact necessary to
make the statements therein in light of the circumstance under which they were made not misleading.
(c) A copy of the Resolution has been delivered to the Authority and the
Underwriter, and the Resolution will not be amended or repealed without the consent of the Authority
and the Underwriter, which consent will not be unreasonably withheld.
(d) The Local Agency acknowledges that the Authority is authorized to execute the
Indenture, to assign the Note to the Trustee under the Indenture and to issue the Series of Bonds
pursuant to the Indenture.
DOCSLA7:466105.1
40929-320 W W B 3
2004-112
(e) The Local Agency shall provide the required Payment Account Deposit
Certification (upon a request therefor) in accordance with Section 5.06 of the Indenture.
(t) The Local Agency has not issued and will not issue any obligation or
obligations, other than the Note, to finance the working capital deficit for which the Note is being issued.
Sectinn 7. f nndifinns Prrredrnt to the Ctnging. Conditions precedent to the
Closing are as follows:
(a) The execution and delivery of the Note consistent with the Resolution.
(b) Delivery of a legal opinion addressed to the Local Agency (with a reliance letter
addressed to the Authority and the Underwriter), dated the date of closing of Bond Counsel with
respect to the validity of the Bonds in form and substance acceptable to the Authority and the
Underwriter.
(c) Delivery of a legal opinion, dated the date of Closing, of counsel to the Local
Agency, with respect to the due authorization, execution and delivery of the Note, in form and
substance acceptable to Bond Counsel.
(d) Approval by the Credit Provider of the credit of the Local Agency and inclusion
of the Local Agency's Note in the assignment, together with notes of other Issuers, to a Series of
Bonds, to secure the Series of Bonds, which approval in the event the Credit Instrument is the Reserve
Fund shall be evidenced by the issuance of an "SP-1+" rating with respect to the applicable Series of
Bonds by Standard & Poor's Ratings Services.
(e) Delivery of each certificate, document, instrument and opinion required by the
agreement between the Authority and the Underwriter for the sale by the Authority and purchase by the
Underwriter of the Series of Bonds to which the Pooled Note is assigned.
(f) Delivery of such other certificates, instruments or opinions as Bond Counsel
may deem necessary or desirable to evidence the due authorization, execution and delivery of
documents pertaining to this transaction and the legal, valid and binding nature thereof or as may be
required by the Credit Agreement, as well as compliance of all parties with the terms and conditions
thereof.
Cectinn R. Fventc Permitting the AnthnrO4 to Terminate. The Authority may
terminate its obligation to purchase the Note at any time before the Closing if any of the following
occurs:
(a) Any legislative, executive or regulatory action (including the introduction of
legislation) or any court decision which, in the judgment of the Authority, casts sufficient doubt on the
legality of obligations such as the Note, and the tax-exempt status of interest on obligations such as the
Bonds, so as to impair materially the marketability or to reduce materially the market price of such
obligations;
(b) Any action by the Securities and Exchange Conunission or a court which would
require registration of the Note, the Bonds or any instrument securing the Note or Bonds under the
DOCSLAIAW05.1
40929-320 WWB 4
2004-112
Securities Act of 1933, as amended, in connection with the public offering thereof, or qualification of the
Resolution or the Indenture under the Trust Indenture Act of 1939, as amended;
(c) Any restriction on trading in securities, or any banking moratorium, or the
inception or escalation of any war or major military hostilities which, in the judgment of the Authority,
substantially impairs the ability of the Underwriter to market the Bonds; or
(d) The Underwriter terminates its obligation to purchase the Series of Bonds to
which the Note is assigned pursuant to its agreement with the Authority for the purchase of such Series
of Bonds.
Neither the Underwriter nor the Authority shall be responsible for the payment of any
fees, costs or expenses of the issuance, offering and sale of the Local Agency's Note except the
Underwriter shall be responsible for California Debt and Investment Advisory Commission fees and for
its own internal costs. The fees, costs and expenses that are categorized in the "Costs of Issuance"
definition in the Indenture shall be paid from the Costs of Issuance Fund. The Local Agency shall pay
any additional costs attributable to it as set forth in the Resolution other than the fees, costs and
expenses so payable from the applicable Costs of Issuance Fund.
SPrtinn 9. lndcmnifiratinn, To the extent permitted by law, the Local Agency
agrees to indemnify and hold harmless the Authority and the Underwriter and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20
of the Securities Act of 1934, as amended) the Authority or the Underwriter, and the officers, directors,
agents and employees of the Authority and the Underwriter against any and all losses, claims, damages,
liabilities and expenses arising out of any statement or information in the Preliminary Official Statement
or in the Official Statement (other than statements or information regarding an Issuer other than the
Local Agency) that is untrue or incorrect in any material respect or the omission or alleged omission
therefrom of any statement or information (other than statements or information regarding an Issuer
other than the Local Agency) that should be stated therein or that is necessary to make the statements
and information therein not misleading in any material respect.
CPrtinn 10_ Credit Agreement, The Local Agency shall comply with all lawful and
proper requests of the Authority in order to enable the Authority to comply with all of the terms,
conditions and covenants binding upon it under the Credit Agreement.
Rectinn 11 _ NntirPc. Any notices to be given to the Underwriter under the
Purchase Agreement shall be given in writing to Lehman Brothers, Inc., 1100 Glendon Avenue, Suite
1101, Los Angeles, CA 90024, Attention: Mr. Kevin O'Brien. Any notices to be given to the
Authority under the Purchase Agreement shall be given in writing to the Authority, 1100 "K" Street,
Suite 101, Sacramento, CA 95814, Attention: Secretary.
Cectinn 12_ No A-dgnmPnt. The Purchase Agreement has been made by the
Local Agency and the Authority, and no person other than the Local Agency and the Authority or their
successors or assigns and the Underwriter shall acquire or have any right under or by virtue of the
Purchase Agreement. All of the representations, warranties and agreements contained in the Purchase
Agreement shall survive the delivery of and payment by the Authority for the Note and any termination
of the Purchase Agreement.
DOCSLA7:466105.1
40929-320 W W B 5
2004-112
Sertian I _ Applirah� Law The Purchase Agreement shall be interpreted,
governed and enforced in accordance with the laws of the State of California.
CerHnn 14_ FMeHvenPcc. The Purchase Agreement shall become effective upon
the execution hereof by the Authority and execution of the Pricing Confirmation by the Local Agency,
and the Purchase Agreement, including the Pricing Confirmation, shall be valid, binding and enforceable
from and after the time of such effectiveness.
Sertinn 15- Severnhih, In the event any provision of the Purchase Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Sertinn 16. Heap. Any headings preceding the text of several sections hereof
shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall
they affect its meaning, construction or effect.
DOCSLA1:466105.1
40929-320 W W 13
2004-112
Caution 17_ RrrrnHnn in Cahn i4im1c. This Purchase Agreement may be
executed and entered into in several counterparts, each of which shall be deemed an original, and all of
which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to
be executed by their duly authorized representatives as of the Purchase Date set forth in Exhibit A
attached hereto and incorporated herein.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
Member of the Commission
of the Authority
DOCSLAI:466105.1
40929-320 WWa
2004-112
Pricing Confirmation Supplement
Local Agency: City of San Bernardino
Pricing Information
Principal Amount of Note:
Interest Rate on Note:
Re -Offering Yield:
Purchase Price
Default Rate:
Purchase Price:
Less: Cost of Issuance: _%
Credit Enhancement: _%
Deposit to Note Proceeds Account:
Important Dates
Resolution Date of Local Agency:
Purchase Date:
Closing Date:
Maturity Date:
Interest Payment Date(s):
Note Payment Deposit Date:
First Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Second Pledge Month Ending:
Pledge Amount:
Pledge Percentage:
Investment Agreement Information
GIC Provider
Long Term Ratings (S&P/Moody's)
Short Term Credit Ratings (S&P/Moody's)
Interest Rate on G1C
DOCSLA1 *466105.1
40929-320 W W B A- I
2004-112
* By initialing the box at the end of this paragraph, the undersigned Local Agency
certifies that, in connection with the issuance of the Note under the Resolution and after reasonable
inquiry, it is the reasonable expectation of the Local Agency that the aggregate amount of all tax-exempt
obligations (excluding private activity bonds) issued or to be issued by the Local Agency during the
2004 calendar year, including the Note, all other notes and bonds, and all tax-exempt leases, executed
or delivered during the 2004 calendar year will not exceed $5,000,000 (See Secti n 3.8 of the
Certificate of the Local Agency if the Local Agency is unable to make this certification).
IN WITNESS WHEREOF, the Purchase Agreement, including this Pricing
Confirmation, is agreed and accepted to on the Purchase Date set forth above.
CITY OF SAN BERNARDINO
In
Authorized Representative
Print Name of Person Signing
* Please initial the box mly if applicable to the Local Agency
A-2
2004-112
CERTIFICATE OF THE LOCAL AGENCY
In connection with the California Communities Cash Flow Financing Program (the
"Program"), the undersigned duly elected (or appointed) and qualified officers identified in and
executing Section4.7 hereof (the "Authorized Representatives") of the local agency identified in
Section4.7 hereof (the "Local Agency"), acting for and on behalf of the Local Agency, hereby
certify, as of July 1, 2004 (the "Closing Date"), as follows with respect to the 2004 Tax and
Revenue Anticipation Note (the "Note") issued by the Local Agency:
I. CERTIFICATIONS REGARDING CERTAIN LOCAL AGENCY MATTERS
1.1. At all times mentioned herein, the Local Agency is a duly organized, validly
existing and operating local agency (as defined in Section53850 of the California Government
Code), under the laws of the State of California (the "State"). The Local Agency represents that,
pursuant to Government Code Section 5451, the Resolution creates a valid and binding pledge of
and lien on the Pledged Revenues, as defined in the Resolution for the benefit of the owner of the
Note as security for the payment of the Note to the extent set forth in the Resolution, enforceable
in accordance with the terms thereof.
1.2. The undersigned Authorized Representatives, under the resolution (the
"Resolution") adopted by the legislative body of the Local Agency (the "Legislative Body")
authorizing the borrowing of funds for Fiscal Year 2004-2005, are duly authorized to make this
certification for and on behalf of the Local Agency pursuart to the Resolution.
1.3. Attached hereto as Exhibit A is a true, correct and complete copy of the
Resolution, duly adopted by the Local Agency after an agenda of the meeting of the Legislative
Body at which such Resolution was adopted was posted at least 72 hours before said meeting, at
a location freely accessible to members of the public, and all of the members of the Legislative
Body had due notice of said meeting and a quorum thereof were present at said meeting. The
Local Agency has previously provided the California Statewide Communities Development
Authority (the "Authority") with a true, accurate and complete copy of the Resolution.
1.4. The Resolution has not been amended or revoked and is in full force and effect on
the date hereof, and there is no proceeding of the Legislative Body in conflict with or in any way
altering the Resolution.
1.5. The information contained in the Credit Questionnaire (including the Cashflow
Worksheet therein) (the "Credit Questionnaire") completed by the Local Agency and submitted
to the Authority and RBC Dain Rauscher Inc. as financial advisor (the "Financial Advisor") in
connection with the Program, was at the time submitted and is on the date of this Certificate true
and accurate. Representatives of the Local Agency have reviewed the Indenture, hereinafter
defined, including the Continuing Disclosure Agreement set forth in Article XI thereof. The
Local Agency shall notify the Trustee of the occurrence of any "Listed Event' which relates in
any way to the Local Agency, and will otherwise cooperate with the Trustee and the Authority in
satisfying any continuing disclosure obligation.
1.6. The Local Agency does not have a negative cash balance at the beginning of
Fiscal Year 2004-2005 in its general fund.
DOCSLA1:466230.1
40929-320 W W B
2004-112
1.7. The Local Agency has authorized or acknowledged, by all necessary action, the
execution, delivery, receipt and due performance of the Resolution, the Note, the Purchase
Agreement by and between the Authority and the Local Agency (severally and not jointly with
other local agencies), including the Pricing Confirmation Supplement attached thereto (the
"Purchase Agreement"), the Indenture, dated as of July 1, 2004 (the "Indenture"), by and
between Wells Fargo Bank, National Association (the "Trustee") and the Authority, pertaining to
the issuance of the California Statewide Communities Development Authority 2004 Local
Agency Tax and Revenue Anticipation Bonds, Series A (the "Bonds"), and any and all other
agreements and documents (the "Other Agreements") as may be required to be executed,
delivered and received by the Local Agency or the Authority in order to carry out, give effect to
and consummate the transactions contemplated by the Resolution. The Resolution, the Note, the
Indenture, the Purchase Agreement, and the Other Agreements are collectively referred to herein
as the "Documents."
I.S. None of the Documents applicable to the Local Agency have been amended,
modified or rescinded by the Local Agency and each of such Documents is in full force and
effect on the date hereof.
1.9. The representations and warranties of the Local Agency set forth in the applicable
Documents were on the date made and are on the date hereof true and accurate as though made
on and as of the date hereof.
1.10. The Purchase Agreement and the Note of the Local Agency have been duly
executed and delivered by the duly authorized officers of the Local Agency, and the Note and the
Purchase Agreement, when executed and delivered by the other parties thereto (where necessary)
and the obligations of the Local Agency under the Indenture will constitute legal, valid and
binding agreements of the Local Agency, enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy or other laws affecting creditors'
rights, the application of equitable principles if equitable remedies are sought, the exercise of
judicial discretion in appropriate cases and the limitations on legal remedies against public
entities in the State.
1.11. The Local Agency has complied with all provisions of applicable law in
connection with the adoption of the Resolution and the transactions contemplated under the
Resolution and the documents approved thereby.
1.12. The execution, delivery and performance by the Local Agency of the Note and the
Purchase Agreement and the execution, delivery and performance by the Authority of the
Indenture and the Bonds and, in each case the borrowing thereunder or in connection therewith
(and the application of the proceeds thereof) have been duly authorized or acknowledged by all
necessary action on the part of the Local Agency.
1.13. The Local Agency has full power and authority to acknowledge the Authority's
execution and delivery of the Indenture. The execution and delivery by the Authority of the
Indenture (and the Local Agency's obligations thereunder) (i) do not and will not contravene the
laws of the State providing for the organization and government of the Local Agency and (ii) do
not and will not conflict with, or result in the violation of, any applicable law.
2
2004-112
1.14. The Local Agency covenants that upon receipt from the Trustee of a request to
confirm that amounts constituting such Local Agency's repayment obligation described in
Section 8 of the Resolution have been transferred to and set aside in the Payment Account (as
defined in the Resolution), the Local Agency shall within five (5) Business Days (as defined in
the Indenture) after the date of such request, confirm such transfer to the Trustee by submitting
the Payment Account Deposit Certification in the form set forth in Exhibit C of the Indenture.
1.15. If prior to the Closing Date the Local Agency should have any reason to believe
that any of the representations or certifications contained herein or in the Documents are not true
and correct, the Local Agency covenants that it will notify Orrick, Herrington & Sutcliffe LLP,
("Bond Counsel").
II. CERTIFICATIONS REGARDING TAX MATTERS
2.1. The Local Agency shall not take any actions (or fail to take any actions) that
would cause interest on the Bonds to be included in gross income for federal income tax
purposes. Without limiting the generality of the foregoing, the Local Agency:
a) shall not allow the use of any proceeds of the Note to be used in the trade or
business of any nongovernmental person;
b) shall not loan any proceeds of the Note to any nongovernmental person;
c) shall take no actions that would cause the Bonds to be treated as "federally
guaranteed," within the meaning of Section 149(b) of the Internal Revenue Code of 1986 (the
"Code");
d) shall not use any proceeds of the Note to repay any principal or interest of any
outstanding tax-exempt obligation of the Local Agency apart from interest that accrues during a
one-year period commencing July 1, 2004;
e) shall not set aside or specifically earmark amounts to be used to satisfy the Local
Agency's repayment obligation described in Section8 of the Resolution earlier than the date
which is one year prior to the final maturity date of the Note of the Local Agency; and
f) shall take no actions that would cause the Bonds to be treated as "arbitrage
bonds," within the meaning of Section 148 of the Code.
III. CERTIFICATIONS REGARDING ARBITRAGE AND REBATE
The following are the certifications and the reasonable expectations of the Local Agency,
stated pursuant to Treasury Regulations Section 1.148-2(b), relating to the use and investment of
the proceeds of the Note:
3.1. The Note is being issued in anticipation of taxes or other revenues and will be
spent to pay lawful expenses of the Local Agency payable from its general fund.
3.2. Based upon the Local Agency's cashflow projections which are set forth in
Appendix C of the Official Statement relating to the Bonds (the "Cashflow Projections"), the
3
2004-112
Local Agency expects to allocate the proceeds of the Note to working capital expenditures within
13 months after July 1, 2004, using the methodology described in the next section.
3.3. Proceeds of the Note will be allocated to working capital expenditures of the
Local Agency on any date that the Local Agency's working capital expenditures exceed the
Local Agency's "available amounts." "Available amounts" include any cash, investments, or
other amounts held in any fund or account by the Local Agency that is available for the Local
Agency to use for working capital expenditures without legislative or judicial action and without
a legislative, judicial, or contractual requirement that those amounts be reimbursed. "Available
amounts" do not include proceeds of the Notes or amounts held in a reasonable working capital
reserve that is limited to either ten percent (10%) of the amount of the Note or the lesser of either
(i) five percent (5%) of the Local Agency expenditures paid out of current revenues during Fiscal
Year 2003-2004 or (ii) the amount that the Local Agency has historically and customarily
maintained as a working capital reserve.
3.4. The funds and accounts maintained by or for the benefit of the Local Agency that
are considered available for payment of the Local Agency's expenditures have been described in
the Credit Questionnaire, and their cash balances as of the date of issue have been taken into
account in the Cashflow Projections.
3.5. In preparing its cash flow analysis for Fiscal Year 2004-2005, the Local Agency
has reviewed its Fiscal Year 2003-2004 cash flows and has, where applicable, compared the
Fiscal Year 2003-2004 actual cash flows with the Fiscal Year 2003-2004 cash flows projected
just before the beginning of Fiscal Year 2003-2004. Taking this information into account and
such other information as is available to the Local Agency, the Local Agency believes that the
projected cash flow analysis for Fiscal Year 2004-2005 is reasonable and is based on reasonable
assumptions.
3.6. All of the proceeds of the Note, together with earnings thereon, less amounts
allocable to the Local Agency's costs of issuance set forth in the Purchase Agreement, will be
deposited into the Proceeds Fund established under the Indenture.
3.7. The Note will be repaid from the general funds of the Local Agency received after
all Note Proceeds are spent as described above. The moneys to be so used will be separately
accounted for until used to repay the Note.
3.8. If the Local Agency is unable to make the small issuer certification set forth in the
Pricing Confirmation Supplement, then the Agency hereby makes the following certifications:
All of the proceeds of the Note, together with earnings thereon, will be deposited into the Local
Agency's General Fund (the "General Fund") or a special fund created solely to hold proceeds of
the Note (the "Special Note Fund"). Note proceeds, together with earnings thereon, so deposited
may be withdrawn and expended by the Local Agency on any given day during Fiscal Year
2004-2005 for any purpose for which the Local Agency is authorized to expend funds from its
General Fund, but only after exhausting all funds that are available amounts as of such given
day, and for purposes of this requirement, available amounts excludes amounts that are held or
set aside in a reasonable working capital reserve that is limited to either ten percent (10%) of the
amount of the Note or the lesser of eithe r (i) five percent (5%) of the Local Agency expenditures
paid out of current revenues during Fiscal Year 2003-2004 or (ii) the amount that the Local
2004-112
Agency has historically and customarily maintained as a working capital reserve; provided, that
if on the date that is five (5) months from the date of issuance of the Note or on any date
thereafter, it appears that all remaining amounts in the Special Note Fund (or, if appropriate, all
remaining proceeds of the Note, including earnings thereon, held in the General Fund) will not
have been so withdrawn and spent by the date that is six (6) months from the date of issuance of
the Note, the Local Agency shall promptly notify Bond Counsel and, to the extent of its power
and authority, comply with the instructions four Bond Counsel as to the means of satisfying the
rebate requirements of Section 148 of the Code. The working capital reserve shall be funded
with any revenues of the Local Agency's General Fund but will not be funded with proceeds of
the Note. The working capital reserve will be tracked and administered as a separate account or
subaccount within the General Fund.
On the basis of the facts, estimates and circumstances in existence on the date of delivery,
it is not expected that the proceeds of the Note will be used in a manner that would cause the
Note to be an issue of arbitrage bonds within the meaning of Section 148 of the Code.
3.9. To the best knowledge and belief of the undersigned, there are no other facts,
estimates, or circumstances which would materially change the foregoing statements, and the
foregoing expectations are reasonable.
3.10. The Local Agency understands that Bond Counsel will rely upon this Certificate
in giving its opinion that interest on the Bonds is excluded from federal gross income.
IV. REQUEST TO AUTHORITY AND TRUSTEE, CERTIFICATIONS RELATING
THERETO AND SIGNATURE CERTIFICATIONS OF THE LOCAL AGENCY
4.1. The Trustee is hereby requested and authorized to authenticate and deliver the
2004 Tax and Revenue Anticipation Note of the Local Agency upon receipt of the purchase price
thereof. The Trustee is also hereby requested and authorized to authenticate and deliver the
Bonds upon receipt thereof from the Authority.
4.2. It is hereby acknowledged that the Authority is authorized to issue the Bonds,
upon receipt of the purchase price of the Note of the Local Agency together with the aggregate
purchase price of all other notes of the other Local Agencies participating in the Program and
whose notes will be pooled with the Local Agency's Note in connection with the issuance of the
Bonds.
4.3. The Trustee is hereby directed to deposit the proceeds of the Note in the amounts
as set forth in the Pricing Confirmation Supplement into the Costs of Issuance Fund and in the
Proceeds Fund.
4.4. Upon the deposit of proceeds as set forth in Section4.3 hereof, the Trustee is
requested and authorized to pay, from amounts held for the benefit of the Local Agency in the
Proceeds Account within the Proceeds Fund, the amounts on deposit in such Proceeds Account,
as indicated in Schedule I of the Pricing Confirmation Supplement to the Purchase Agreement, to
the Local Agency by [wire/check (circle one)]. If the Local Agency is to receive such amounts
5
2004-112
by wire, the Local Agency shall provide the Trustee with appropriate wiring instructions for the
financial institution which will receive such amounts
4.5. The amount requisitioned hereby will be applied to a purpose for which the Local
Agency is authorized to use and expend funds from the general fund of the Local Agency and
pending such application will be invested in investments which are legal for the investment of
funds of the Local Agency.
4.6. As of the date hereof, no event has occurred and is continuing which constitutes
an Event of Default under the Resolution or would constitute an Event of Default but for the
requirement that notice be given, or time elapse, or both.
4.7. ** The following named persons are duly elected (or appointed), qualified and acting
officers of the Local Agency presently holding the offices set forth opposite their respective
names below and by execution hereof each certifies that the signatures of the other officer or
officers hereto are the genuine signatures of such officer or officers (signatures of the officers
executing the Note, the Purchase Agreement and the Amended and Restated Joint Exercise of
Powers Agreement relating to the Authority (if applicable) must appear below):
AUTHORIZED REPRESENTATIVES OF CITY OF SAN BERNARDINO:
NAME TITLE SIGNATURE
Mayor
City Clerk
City Administrator
Please complete the following items of information, including the name of the Local Agency's
Authorized Representatives and the signatures of such Authorized Representatives.
M
2004-112
[Pricing terms and related provisions included herein are subject to change based upon the final
financing structure, including without limitation, provisions related to the Credit Provider, maturity, series
designation and interest payment date(s)]
This Indenture (the "Indenture'), dated as of July 1, 2004, by and between the
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY (the "Authority")
and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association duly
organized and existing under and by virtue of the laws of the United States of America, as trustee (the
"Trustee");
WITNESSETH:
WHEREAS, the local agencies named in Schedule I hereto (the "Local Agencies") have
determined to simultaneously issue their Tax and Revenue Anticipation Notes, in the respective principal
amounts set forth in Schedule I hereto (individually, a "Note" and, collectively, the "Notes") and to sell
the Notes to the Authority and participate in the California Communities Cash Flow Financing Program
(the "Program"); and
WHEREAS, each Local Agency has acknowledged the pooling of its Note with the
Notes issued by other Local Agencies participating in the Program and the assignment by the Authority
of said Local Agency's Note to the Trustee to secure payment of the Bonds issued under this Indenture
(the "Bonds', in order to achieve a lower net interest cost and lower costs associated with issuing its
Note; and
WHEREAS, each Local Agency has entered into a purchase agreement with the
Authority whereby the Authority has agreed to purchase such Local Agency's Note and in connection
therewith issue the Bonds; and
WHEREAS, each Local Agency has acknowledged that the Authority will enter into
this Indenture and issue, pursuant to the terms of this Indenture, the Bonds; and
WHEREAS, pursuant to the Program and this Indenture, the Authority has assigned its
interest in the Notes to the Trustee; and
WHEREAS, the Trustee, pursuant hereto, accepts the assignment of the Notes and all
duties, obligations and trusts of the Trustee established in this Indenture; and
WHEREAS, the Bonds are secured, in part, by a Credit Instrument which is a
municipal bond insurance policy issued by Financial Security Assurance, Inc.; and
DOCSLAI :466082.1
40929-320 WWB
2004-112
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and entering into of the
Indenture and delivery of the Bonds do exist, have happened and have been performed in regular and
due time, form and manner as required by law, and the parties hereto are now duly authorized to
execute and enter into the Indenture;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE
HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms
defined in this section shall, for all purposes hereof and of any amendment hereof or supplement hereto
and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein,
have the meanings defined herein, the following definitions to be equally applicable to both the singular
and plural forms of any of the terms defined herein (provided that the Credit Instruments shall be
governed by the respective definitions set forth therein):
"Authority means the California Statewide Communities Development Authority, a
public entity of the State of Califomia, created pursuant to the provisions relating to the joint exercise of
powers found in Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government
Code of the State of California.
"Authorized Authority Representative" means any member of the Commission of the
Authority.
"Authorized Denomination" means (i) for any Index Bond $25,000 or any multiple
thereof, or (ii) for any Fixed Rate Bond, $5,000 or any multiple thereof.
"Authorized Local Agency Representative" means the person or persons designated as
such in the Local Agency Note Resolution or any other person at the time designated to act on behalf of
such Local Agency by written certificate furnished to the Trustee, containing the specimen signature of
such person and signed on behalf of such Local Agency by an Authorized Local Agency
Representative.
"Authority Swap Obligation" means the amount payable by the Authority under the
Swap Agreement on each Swap Payment Date.
"BMA Index" means a per annum rate equal to: (i) the rate determined on the basis of
an index based upon the weekly interest rate resets of tax-exempt variable rate issues included in The
DOCSLAL466082.1
40929-320 W W B
2004-112
Bond Market Association Municipal Swap Index, produced by Municipal Market Data, and effective
on the Wednesday prior to any Index Bond BMA Reset Date; (ii) if the BMA Index is not published on
the Wednesday prior to any Index Bond BMA Reset Date, the rate determined by reference to the J.J.
Kenny High Grade Index and effective on the Wednesday prior to that Index Bond BMA Reset Date;
provided that, with respect to clauses (i) and (ii), if any Wednesday is not a Business Day, the BMA
Index shall be determined on the preceding Business Day; and (iii) if the BMA Index as described in
clauses (i) and (ii) is not available for any week, the BMA Index determined pursuant to clause (i) or (ii)
above for the next preceding Index Bond BMA Reset Date.
"BMA Index Bond Rate" means a per annum rate equal to the BMA Index Rate plus
or minus the BMA Margin applied on the basis of the actual number of days in the Index Bond
Calculation Period divided by 365, all as calculated by Trustee from time to time.
"BMA Index Rate" means, in respect of the Index Bond Calculation Period, a per
annum rate equal to the weighted arithmetic average of the BMA Index in effect for each day in the
Index Bond Calculation Period, calculated by multiplying each such BMA Index by the number of days
such BMA Index is in effect, determining the sum of such products and dividing such sum by the number
of days in the Index Bond Calculation Period.
"BMA Margin" means the number of basis points which will be added to or subtracted
from the BMA Index in calculating the BMA Index Bond Rate for such Series.
"Bond Payment Fund" means the fund by that name established in Section 3.02.
"Bond Purchase Agreement" means that certain Bond Purchase Agreement between
the Authority and the Purchaser relating to the purchase of the Bonds by the Purchaser.
"Bonds" means the California Statewide Communities Development Authority 2004
Tax and Revenue Anticipation Bonds, Series A1, authorized hereby and at any time Outstanding
hereunder that are issued by the Authority under and pursuant to Article II.
"Business Day" means any day except Saturday, Sunday or any day on which banks
located in the city in which the Principal Office of the Trustee or the Principal Office of the Credit
Provider is located, are required or authorized to remain closed.
"Certificate" or "Request" with respect to a Local Agency means an instrument in
writing signed on behalf of such Local Agency by an Authorized Local Agency Representative, and with
respect to the Authority means an instrument in writing signed on behalf of the Authority by an
Authorized Authority Representative or other person at the time designated to act on behalf of the
Authority by written certificate famished to the Trustee.
"Code" means the Internal Revenue Code of 1986 and the regulations issued or
applicable thereunder.
DOCSLAI :466082.1
40929-320 WWB
2004-112
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to a Local Agency or the Authority and related to the authorization, execution and delivery
of the Notes and the related sale of the Bonds, including, but not limited to, the Credit Provider's Credit
Instrument fees or premium or costs of issuance, as applicable, costs of preparation, reproduction and
delivery of documents, filing and recording fees, fees and charges of the Trustee and its counsel, bond
counsel fees and charges, other legal fees aid charges, fees and disbursements of consultants and
professionals, fees and charges for preparation, execution, safekeeping and delivery of the Bonds and
any other costs, charges or fees in connection with the original issuance of the Notes or the Bonds.
"Costs of Issuance Fund" means the fund by that name established pursuant to
Section 3.02 hereof.
"Credit Agreement" means the Credit Agreement, if any, identified in Schedule III and
dated the date indicated therein between the Authority and the Credit Provider as the same may be
amended from time to time. If there is more than one Credit Agreement, the term shall refer to each of
them separately and collectively.
"Credit Fund" means the fund of that name pursuant to Section 3.02 hereof.
"Credit Instrument" means the instrument designated in Schedule III as the Letter of
Credit/Policy of Insurance dated the date of issuance of the Bonds, issued by the Credit Provider
designated in Schedule III in favor of the Trustee, as the same may be amended from time to time. If
there is more than one Credit Instrument, the term shall refer to each of them separately and collectively.
Unless otherwise provided in the Credit Instrument, the Credit Instrument shall be deemed to enhance
the Notes which secure the Bonds.
"Credit Instrument Payment Certificate" means the Credit Instrument Payment
Certificate, if any, relating to the procedures for submission of claims under the Credit Instrument and
for apportionment of the policy limit, to the extent required.
"Credit Provider" means the entity, if any, identified as provider of the Credit Instrument
in Schedule III. If there is more than one Credit Provider, the term shall refer to each of them
separately and collectively.
"Defaulted Note" means a Note (i) the principal of and interest on which has been paid
in whole or in part with the proceeds of a drawing or claim or payment under or from the Credit
Instrument which remains not fully reimbursed on the Note Maturity Date or (ii) any of the principal of
or interest on which is not paid when due.
"Default Rate" means the rate of interest per annum payable with respect to the
outstanding portion of each Defaulted Note which (i) if the Defaulted Note is unpaid and no Credit
Instrument is applicable thereto, shall equal the Note Rate, or (ii) if the Defaulted Note is paid in whole
or in part by an unreimbursed draw or claim or payment under or from a Credit Instrument, is calculated
DOCSLAI:466082.1
40929-320 WWB
2004-112
in accordance with the applicable provisions of the Credit Instrument or the Credit Agreement;
provided, however, if the Credit Instrument or the Credit Agreement, if any contains no such provision
or provisions regarding the calculation of a default rate of interest, "Default Rate" means the Note Rate.
"Financial Advisor" shall mean RBC Dain Rauscher, Inc.
"Fixed Rate Bond" means a Bond bearing interest at a fixed rate of interest.
"Fund" shall mean, each of the Funds established pursuant to Section 3.02 hereof.
"Indenture" means this Indenture, dated as of July 1, 2004, by and between the Trustee
and the Authority, as originally executed and entered into and as it may from time to time be amended
or supplemented in accordance herewith.
"Index Bond" means a Bond bearing interest at the BMA Index Bond Rate or the
LIBOR Index Bond Rate until its Maturity Date or, if earlier, its Redemption Date.
"Index Bond Calculation Period" for any Index Bond means the period from and
including each Interest Payment Date for the Index Bond to but excluding the next succeeding Interest
Payment Date for the hidex Bond; provided that the first Index Bond Calculation Period shall mean the
period from and including the Effective Date for the Index Bond to but excluding the next succeeding
Interest Payment Date and the final Index Bond Calculation Period shall mean the last Interest Payment
Date before the Maturity Date (or, if earlier the Redemption Date) for the Index Bonds.
"Index Bond LIBOR Reset Date" means each Thursday (and, if the Effective Date is a
day other than a Thursday, the Thursday next preceding the Effective Date) or, if any Thursday is not a
Business Day, the next succeeding Business Day.
"Index Bond BMA Reset Date" means each Thursday (and, if the Effective Date is a
day other than a Thursday, the Thursday next preceding the Effective Date) or, if any Thursday is not a
Business Day, the next succeeding Business Day.
"Interest Fund" means the fund by that name established in Section 3.02.
"Interest Payment Date" means (i) for any Index Bond, the fast Business Day of each
calendar month and the Maturity Date for the Index Bond or, if earlier, the Redemption Date for the
Index Bond; and (ii) for any Fixed Rate Bond [--------And] the Maturity Date.
"Investment Agreement" means that certain investment agreement dated as of July 1,
2004, among the Trustee, the Authority and providing for the investment of certain
funds held hereunder.
DOCSLA1:466082.1
40929-320 WWB 5
Pa4z1zaM
"LIBOR Factor" means a percentage determined at the time of the sale of any Series of
hidex Bonds bearing interest at a LIBOR Index Bond Rate, provided that different percentages may
apply to separate Series of Index Bonds bearing interest at a LIBOR Index Bond Rate.
"LIBOR Index" means a per annum rate equal to: (i) the rate for deposits in U.S.
Dollars for the LIBOR Index Maturity which appears on Bloomberg as of 11:00 A.M., London time,
on each Index Bond LIBOR Reset Date; provided that for the first Index Bond Calculation Period, it
shall be the rate that is established two London Banking Days preceding the Effective Date.
"Bloomberg" means the display entitled "British Bankers Association LIBOR Rates" that currently
appears after entering "BBAMI" into a Bloomberg terminal (or such other page as may replace the
page `British Bankers Association LIBOR Rates" for the purpose of displaying London interbank
offered rates of major banks) on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S.
Dollar deposits); or (ii) if the LIBOR Index as described in clause (i) is not available on the applicable
Index Bond LIBOR Reset Date, the rate for deposits in U.S. Dollars for the LIBOR Index Maturity
which appears on the Reuters Screen LIBOR Page as of 11:00 A.M., London time, on the Index Bond
LIBOR Reset Date. If at least two rates appear on the Reuters Screen LIBOR Page, the rate for such
Index Bond LIBOR Reset Date will be the arithmetic mean of such rates. "Reuters Screen LIBOR
Page" means the display designated as page "LIBOR" on the Reuters Monitor Money Rates Service
(or such other page as may replace page LIBOR on that service for the purpose of displaying London
interbank offered rates of major banks). If the LIBOR Index as described under clause (i) or (ii) is not
available, the LIBOR Index means the rate for deposits in U.S. Dollars for the LIBOR Index Maturity
which appears on Bloomberg as of 11:00 a.m., London time, on the Business Day next preceding the
Index Bond LIBOR Reset Date.
"LIBOR Index Maturity" means a period of one month or any multiple thereof as
designated by the Treasurer at the time of the sale of the Index Bonds.
"LIBOR Index Bond Rate" means a per annum rate equal to the LIBOR Index Rate
multiplied by the LIBOR Factor applied on the basis of the actual number of days in the Index Bond
Calculation Period divided by 365.
"LIBOR Index Rate" means, in respect of the Index Bond Calculation Period, a per
annum rate equal to the weighted arithmetic average of the LIBOR Index in effect for each day in the
Index Bond Calculation Period, calculated by multiplying each such LIBOR Index by the number of
days such LIBOR Index is in effect, determining the sum of such products and dividing such sum by the
number of days in the hmdex Bond Calculation Period.
"London Banking Day" means any day on which dealings in deposits in U.S. Dollars are
transacted in the London interbank market.
"Local Agencies" means the California local agencies listed in Schedule I hereto and,
their successors and assigns.
DOCSLAI :466082.1
40929-320 W WB
2004-112
"Maturity Date" means the maturity date of the Bonds, being June 30, 2005.
"Moody's" means Moody's Investors Service.
"Note Maturity Date" means the maturity date of each Note, being.
"Note Rate" means the stated rate of interest payable on the Notes.
"Note Payment Deposit Date" means [June 24], 2005.
"Note Resolutions" means the respective resolutions adopted by the legislative bodies
of the Local Agencies authorizing the issuance of the Notes, acknowledging the form of this Indenture
and approving the execution and delivery of this Indenture and the Bonds by the Authority.
"Motes" means the tax and revenue anticipation notes issued by the Local Agencies in
the respective aggregate principal amounts described in Schedule I hereto.
"Opinion of Counsel" means a written opinion of counsel of recognized national standing
in the field of law relating to municipal bonds, appointed by the Authority and satisfactory to and
approved by the Trustee (who shall be under no liability by reason of such approval).
"Outstanding" when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 9.02 hereof) all Bonds except --
(1) Bonds cancelled by the Trustee or surrendered to the Trustee for cancellation;
(2) Bonds paid or deemed to have been paid within the meaning of Section 10.01;
and
(3) Bonds in lieu of or in exchange or substitution for which other Bonds shall have
been authenticated and delivered by the Trustee hereunder.
"Owner" means the registered owner of any Outstanding Bond.
"Payment Account Deposit Certification" means a certification of the Local Agency in
the form set forth in Exhibit C hereto that the deposit required to be made to the Payment Account
pursuant to the Note Resolution has been made.
"Payment Accounts" means the accounts created by the Local Agencies pursuant to the
Note Resolutions.
"Pennitted Investments" means any of the following to the extent then permitted by law:
(i) (a) Direct obligations (other than an obligation subject to variation in principal
repayment) of the United States of America ("United States Treasury
DOCSLA1:466082.1
40929-320 WWB
2004-112
Obligations"), (b) obligations fiilly and unconditionally guaranteed as to timely
payment of principal and interest by the United States of America,
(c) obligations frilly and unconditionally guaranteed as to timely payment of
principal and interest by any agency or instrumentality of the United States of
America when such obligations are backed by the full faith and credit of the
United States of America, or (d) evidences of ownership of proportionate
interests in future interest and principal payments on obligations described
above held by a bank or trust company as custodian, under which the owner of
the investment is the real party in interest and has the right to proceed directly
and individually against the obligor and the underlying government obligations
are not available to any person claiming through the custodian or to whom the
custodian may be obligated.
(ii) Obligations of instrumentalities or agencies of the United States of America.
These are specifically limited to:
-- Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities
which are purchased at prices exceeding their principal amounts)
Debt Obligations
-- Federal Home Loan Banks (FHL Banks)
Consolidated debt obligation
- Federal National Mortgage Association (FNMA)
Debt obligations
Mortgage backed securities (Excluded are stripped mortgage
securities -which are purchased at prices exceeding their principal
amounts).
Book entry securities listed in I and 2 above must be held in a trust account with the
Federal Reserve Bank or with a clearing corporation or chain of clearing corporations
which has an account with the Federal Reserve Bank.
(iu) Federal Housing Administration debentures.
(iv) Commercial paper, payable in the United States of America, having original
maturities of not more than 92 days and which are rated A+ by S&P and
Prime -I byMoody's.
(v) Interest bearing demand or time deposits issued by state banks or trust
companies, savings and loan associations, federal savings banks or any national
banking associations, the deposits of which are insured by the Bank Insurance
DOCSLA1:466082.1
40929-320 WWB
2004-112
Fund (BIF) or the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation (SAIF) or any successors thereto. These deposits:
(a) must be continuously and fiilly insured by BIF or SAIF, or (b) must have
maturities of less than 366 days and be deposited with banks the short term
obligations of which are rated A+ by S&P and P-1 by Moody's.
(vi) Money market mutual funds or portfolios investing in short-term US Treasury
securities rated AAAm or AAAm-G by S&P and Aaa by Moody's, including
those which the Trustee and its affiliates or subsidiaries provide advisory or
management services.
(vii) Investment agreements approved by the Credit Provider which are with
investment institutions, or with a financial entity whose obligations are
guaranteed or insured by a financial entity, having long-term obligations which
are rated "AA-" or higher by S&P and "Aa" or higher by Moody's as to long
term instruments and rated in the highest rating category by S&P and Moody's
as to short term instruments and which are approved by S&P and Moody's and
approved by the Credit Provider; provided that if such rating falls below AA -
or Aa3, by S&P or Moody's, respectively, the investment agreement shall
require the Trustee to replace such financial institution or shall provide for the
investment agreement to be collateralized at levels and under such conditions as
would be acceptable to S&P and Moody's to maintain an "A" rating in an "A"
rated structured financing (with a market value approach).
(viii) The Local Agency Investment Fund administered by the State of California.
(ix) Such other investments as are approved in writing by the Credit Provider and
S&P and reviewed by Moody's.
"Predefault Obligations" means (i) the respective obligations of the respective Local
Agencies to the Credit Provider under the Credit Instrument and/or the Credit Agreement, if any, (ii) all
indemnification to the Credit Provider by the respective Local Agencies, and (iii) all other amounts due
to the Credit Provider by the respective Local Agencies under the Credit Instrument and the Credit
Agreement, (including interest on overdue Predefault Obligations to the extent permitted by law), to the
extent they are not Costs of Issuance, in each case becoming due prior to an Event of Default under the
respective Note Resolutions.
"Pricing Confirmation Supplement" means that certain Pricing Confirmation Supplement
attached to each Purchase Agreement as agreed and accepted by each of the respective Local
Agencies.
"Principal Fund" means the fund by that name established pursuant to Section 3.02
hereof.
DOCSLAI :466082.I
40929-320 WWB
2004-112
"Principal Office of the Credit Provider" means a United States of America office of the
Credit Provider to or from which draws under, claims or payments pursuant to or from the Credit
Instrument are to be made.
"Principal Office of the Trustee" means the principal corporate trust office of the
Trustee, which, for the Trustee initially appointed hereunder, is located in Los Angeles, California or
such other place as the Trustee may designate in writing to the Authority.
"Proceeds Fund" means the fund by that name established pursuant to Section 3.02
hereof.
"Program" means the Authority's "California Cash Flow Financing Program" pursuant
to which the Bonds are issued to assist the Local Agencies in financing cash flow deficits.
"Purchase Agreement" means that certain Purchase Agreement by and between each of
the respective Local Agencies and the Authority relating to the Notes.
"Purchaser" means, collectively, the underwriters and purchasers of the Bonds listed in,
under and pursuant to the Bond Purchase Agreement.
"Reimbursement Obligations" means (i) the respective obligations of the respective
Local Agencies under the Credit Instrument and/or the Credit Agreement, including, without limitation,
obligations evidenced by Defaulted Notes, (ii) all indemnification to the Credit Provider by the
respective Local Agencies, and (iii) all other amounts at any time due to the Credit Provider by the
respective Local Agencies under the Credit Instrument and/or the Credit Agreement (including any
Predefault Obligations and interest on any overdue Reimbursement Obligations to the extent permitted
by law), exclusive of Costs of Issuance in each case becoming due as a result of or after an Event of
Default under the respective Note Resolutions.
"Representation Letter" shall mean the letter or letters of representation from the
Authority and the Trustee to, or other instrument or agreement among the Authority and the Trustee
with, a securities depository for the Bonds in which the Authority and the Trustee, among other things,
make certain representations to such securities depository with respect to the Bonds, the payment
thereof, and delivery of notices with respect thereto.
,,S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.
"Secured Percentage" means, with respect to any Credit Instrument and the Notes to
which it applies, an amount (i) equal to 100%, if the available amount of the Credit Instrument is greater
than or equal to the aggregate amount of principal of and interest on unpaid Notes (or unpaid portions
thereof) or (ii) equal to the available amount of the Credit Instrument divided by the aggregate amount of
unpaid principal of and interest on Notes (or unpaid portions thereof), expressed as a percentage, if the
available amount of the Credit Instrument is less than the aggregate amount of unpaid principal of and
interest on Notes (or unpaid portions thereof) as of the Maturity Date.
DOCSLA1:466082.1
40929-320 W W B 10
2004-112
"Series A-2 Bonds" means the California Statewide Communities Development
Authority 2004 Tax and Revenue Anticipation Bonds, Series A-2, authorized and at any time
Outstanding under the Series A-2 Indenture.
"Series X2 Indenture" means the Series A 2 Indenture, dated as of July 1, 2004, by
and between the Trustee and the Authority, as originally executed and entered into and as it may from
time to time be amended or supplemented in accordance therewith, relating to the Series A-2 Bonds.
"Series A-2 Trustee" means Wells Fargo Bank, National Association, a national
banking association duly organized and existing under and by virtue of the laws of the United States of
America, or any other bank or trust company at its principal corporate trust office which may at any
time be substituted in its place, as trustee under the Series A-2 Indenture.
"Series A-2 Owner" means the registered owner of any outstanding Series A-2 Bond.
"Swap Interest Payment Account" means the account by that name established in the
Interest Fund pursuant to Section 3.02 hereof.
"Swap Repayment Account" means the account by that name established in the Interest
Fund pursuant to Section 3.02 hereof.
"Swap Repayment Date" means the date or dates upon which the Authority is obligated
to make payments, if any, to the Swap Provider.
"Swap Agreement" means that certain swap agreement, if any, between the Authority
and the Swap Provider, as the same may be amended and supplemented.
"Swap Provider" means the party executing the Swap Agreement with the Authority.
"Tax Certificate" means the Tax Certificate and Agreement signed by the Authority on
the date of the initial issuance and delivery of the Bonds relating to the requirements of the Code.
"Trustee" means Wells Fargo Bank, National Association, a national banking
association duly organized and existing under and by virtue of the laws of the United States of America,
at the Principal Corporate Trust Office of the Trustee or any other bank or trust company at its principal
corporate trust office which may at any time be substituted in its place, as trustee under the Indenture.
"Underwriters" means Lehman Brothers, Citigroup Global Markets Inc., Banc of
America Securities LLC and E. J. De La Rosa & Co., Inc.
SECTION 1.02. Equal Security. In consideration of the acceptance of the
Bonds by the Owners and the issuance of the Credit Instrument by the Credit Provider as indicated on
Schedule III, this Indenture shall be deemed to be and shall constitute a contract among the Trustee, the
DOCSLAI :466082.1
40929-320 W W B 11
2004-112
Authority, and the Owners to secure the full and final payment of the interest on and principal of the
Bonds, all Predefault Obligations and all Reimbursement Obligations, subject to the agreements,
conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms
contained herein required to be observed or performed by or on behalf of the Trustee shall be for the
equal and proportionate benefit, protection and security of all Owners without distinction, preference or
priority as to benefit, protection or security of any Bonds over any other Bonds by reason of the number
or date thereof or the time of execution or delivery thereof or otherwise for any cause whatsoever, and
for the benefit of the Credit Provider except as expressly provided herein or therein. The Credit
Provider shall be deemed a third party beneficiary of all covenants and conditions contained in this
Indenture.
DOCSLA1:466082.1
40929-320 W W B 12
2004-112
ARTICLE II
CONDITIONS AND TERMS OF BONDS
SECTION 2.01. Initial Issuance of Bonds. The Bonds to be issued under this
Indenture are hereby created and such Bonds are designated as the "California Statewide Communities
Development Authority 2004 Tax and Revenue Anticipation Bonds, Series Al." The aggregate
principal amount of Bonds which may be issued and Outstanding under this Indenture shall not exceed
$ . The Trustee is hereby authorized and directed to authenticate the Bonds in the
aggregate principal amount of $ . The Bonds shall be initially delivered in the form of
one Bond registered in the name of "Cede & Co.," as nominee of The Depository Trust Company
("DTC").
SECTION 2.02. Denominations, Medium, Method and Place of Payment
and Dating of Bonds. The Bonds shall be prepared in the form of fully registered Bonds in Authorized
Denominations. The interest on and principal of the Bonds shall be payable in lawful money of the
United States of America. The Trustee may treat the Owner of any Bond as the absolute owner of such
Bond for all purposes, whether or not such Bond shall be overdue, and the Trustee shall not be affected
by any knowledge or notice to the contrary; and payment of the interest on and principal of such Bond
shall be made only to such Owner as above provided, which payments shall be valid and effectual to
satisfy and discharge the liability on such Bond to the extent of the sum or sums so paid. All Bonds paid
pursuant to the provisions of this section shall be cancelled and destroyed by the Trustee and shall not
be redelivered and a certificate of destruction shall be delivered to the Authority and Credit Provider.
The Bonds shall be dated the date of initial issuance.
The "Record Date" for purposes of determining ownership of Bonds on the Registration
Books maintained by the Trustee shall be the Business Day immediately preceding each Interest
Payment Date on the Bonds.
SECTION 2.03. Terms of the Bonds. The Bonds shall be issued as Fixed
Rate Bonds, shall mature on the Maturity Date and shall bear interest at the Note Rate.
Interest shall be payable on each Interest Payment Date. Interest and principal payable
on the Maturity Date, shall be payable upon surrender of the Bond by the Owner thereof, at the
Principal Office of the Trustee.
The interest payable on the Notes and on the Fixed Rate Bonds shall be computed on
the basis of a 360-day year of twelve 30-day months. The interest payable on the Index Bonds shall be
computed on the basis of a 365 or 366-day year, as the case may be, and actual days elapsed.
The Bonds shall not be subject to prepayment or redemption prior to the Maturity Date.
DOCSLA1:466082.1
40929-320 W W B 13
SECTION 2.04. Form of Bonds. The Bonds and the form of assignment to
appear thereon shall be in substantially the fortis in Exhibit A hereto, with appropriate or necessary
insertions, omissions and variations as permitted or required thereby or hereby. The Bonds may be
prepared in typewritten, lithographed or printed form.
SECTION 2.05. Execution of Bonds. The Bonds shall be executed by the
Chair or Vice -Chair of the Authority and attested by the Secretary of the Authority by manual or
facsimile signature aid shall be authenticated by the Trustee by the manual signature of an authorized
officer of the Trustee. The Bonds need not bear the seal of the Authority, if any.
SECTION 2.06. Transfer and Exchange of Bonds. All Bonds are transferable
or exchangeable by the Owner thereof, in person or by his attorney duly authorized in writing, at the
Principal Office of the Trustee in the books required to be kept by the Trustee pursuant to the
provisions of Section 2.07, upon surrender of such Bonds accompanied by delivery of a duly executed
written instrument of transfer or exchange in a form approved by the Trustee. Whenever any Bond or
Bonds shall be surrendered for transfer or exchange, the Trustee shall execute and deliver a new Bond
or Bonds of authorized denominations representing the same aggregate principal amount, except that the
Trustee shall require the payment by any Owner requesting such transfer or exchange of any tax or
other governmental charge required to be paid with respect to such transfer or exchange. All Bonds
surrendered pursuant to the provisions of this Section shall be cancelled by the Trustee and shall not be
redelivered.
SECTION 2.07. Bond Registration Books. At the Principal Office of the
Trustee, the Trustee will keep sufficient books for the registration of the ownership, transfer or exchange
of the Bonds, which books shall be available for inspection by the Authority, the Credit Provider, the
Local Agencies or any Owner or such Owner's agent duly authorized in writing at reasonable hours and
under reasonable conditions during regular business hours; and upon presentation for such purpose the
Trustee shall, under such reasonable regulations as it may prescribe, register the ownership, transfer or
exchange of the Bonds in such books as hereinabove provided. The ownership of any Bonds may be
proved by the books required to be kept by the Trustee pursuant to the provisions of this Section.
SECTION 2.08. Temporary Bonds. The Bonds may be initially delivered in
temporary form exchangeable for definitive Bonds when ready for delivery, which temporary Bonds
shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by
the Trustee, shall•be in fully registered form and shall contain such reference to any of the provisions
hereof as may be appropriate. Every temporary Bond shall be executed and delivered by the Trustee
upon the same conditions and terms and in substantially the same manner as definitive Bonds. If the
Trustee executes and delivers temporary Bonds, it will prepare and execute definitive Bonds without
delay, and in that case, upon demand of the Owner of any temporary Bonds, such definitive Bonds shall
be exchanged without cost to such Owner for temporary Bonds at the Principal Office of the Trustee
upon surrender of such temporary Bonds, and until so exchanged such temporary Bonds shall be
entitled to the same benefit, protection and security hereunder as the definitive Bonds executed and
DOCSLA1:466082.1
40929-320 WWB 14
2004-112
delivered hereunder. All temporary Bonds surrendered pursuant to the provisions of this Section shall
be cancelled by the Trustee and shall not be redelivered.
SECTION 2.09. Bonds Mutilated, Destroyed, Lost or Stolen If any Bond
shall become mutilated, the Trustee shall execute and deliver a new Bond of like tenor in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated,
and every mutilated Bond so surrendered to the Trustee shall be cancelled by it. If any Bond shall be
lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee,
and if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be
given, the Trustee shall authenticate and deliver a new Bond of like tenor and principal amount in lieu of
and in substitution for the destroyed, lost or stolen Bond. The Trustee may require payment of a sum
not exceeding the actual cost of preparing each new Bond authenticated and delivered by it under this
Section and of the expenses which may be incurred by it under this Section. Any replacement Bond
executed and delivered under the provisions of this Section in lieu of and in substitution for any
mutilated, destroyed, lost or stolen Bond shall be equally and proportionately entitled to the benefit,
protection and security hereof with all other Bonds executed and delivered hereunder; and the Trustee
shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for
the purpose of determining the principal amount of Bonds which may be executed and delivered
hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both
the original and the replacement Bond shall be treated as one and the same. Notwithstanding any other
provisions of this Section, rather than authenticating and delivering a new Bond for a mutilated,
destroyed, lost or stolen Bond, the Maturity Date of which has occurred or is about to occur, the
Trustee may make payment of the principal evidenced and represented by such mutilated, destroyed,
lost or stolen Bond directly to the Owner thereof under such regulations as the Trustee may prescribe.
SECTION 2.10. Special Covenants as to Book -Entry Only System
(a) Except as otherwise provided in subsections (b) and (c) of this Section 2.10,
the Bonds initially executed and delivered hereunder shall be registered in the name of Cede & Co., as
nominee for DTC, or such other nominee as DTC may request. Payment of the principal of and interest
on each Bond registered in the name of Cede & Co. shall be made to the account, in the manner and at
the address indicated in or pursuant to the Representation Letter delivered to DTC by the Authority.
(b) The Bonds executed and delivered hereunder shall be in the form of a single
authenticated fully registered bond for each one hundred fifty million dollars of principal amount (or
excess fiaction thereof). Upon initial execution of the Bonds, the ownership of all such Bonds shall be
registered in the registration records maintained by the Trustee pursuant to Section 2.07 in the name of
Cede & Co., as nominee of DTC, or such other nominee as DTC may request. The Trustee, the
Authority and the Local Agencies may treat DTC (or its nominee) as the sole and exclusive Owner of
the Bonds registered in its name for the purposes of payment of the principal of and interest on such
Bonds, giving any notice permitted or required to be given to an Owner under the Indenture, registering
the transfer of Bonds, obtaining any consent or other action to be taken by the Owners and for all other
purposes whatsoever; and neither the Trustee, the Authority nor the Local Agencies shall be affected by
DOCSLA1:466082.1
40929-320 W W B 15
2004-112
any notice to the contrary. Neither the Trustee nor the Local Agencies shall have any responsibility or
obligation to any Participant (which shall mean, for purposes of this Section 2.10, securities brokers and
dealers, banks, trust companies, clearing corporations and other entities, some of whom directly or
indirectly own DTC), any person claiming a beneficial ownership interest in the Bonds under or through
DTC or any Participant, or any other person which is not shown on the registration records as being an
Owner, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the
payment by DTC or any Participant of any amount in respect of the principal or interest represented by
such Bonds, (iii) any notice which is permitted or required to be given to the Owners under the
Indenture or (iv) any consent given or other action taken by DTC as Owner. The Trustee shall pay all
principal of, premium, if any, and interest on the Bonds only at the times, to the accounts, at the
addresses and otherwise in accordance with the Representation Letter. Upon delivery by DTC to the
Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of
its then existing nominee, the Bonds will be transferable to such new nominee in accordance with
subsection (f) of this Section 2.10.
(c) In the event that the Authority determines that it is in the best interests of the
beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Trustee shall, upon the
written instruction of the Authority, so notify DTC, whereupon DTC shall notify the Participants of the
availability through DTC of Bonds. In such event, the Bonds will be transferable in accordance with
subsection(l) of this Section 2.10. DTC may determine to discontinue providing its services with
respect to the Bonds at any time by giving written notice of such discontinuance to the Local Agencies,
the Authority or the Trustee and discharging its responsibilities with respect thereto under applicable
law. In such event, the Bonds will be transferable in accordance with subsection (1) of this
Section 2.10. Whenever DTC requests the Local Agencies, the Authority or the Trustee to do so, the
Trustee, the Authority and the Local Agencies will cooperate with DTC in taking appropriate action
after reasonable notice to arrange for another securities depository to maintain custody of all certificates
evidencing the Bonds then Outstanding. In such event, the Bonds will be transferable to such securities
depository in accordance with subsection (f) of this Section 2.10, and thereafter, all reference in this
Indenture to DTC or is nominee shall be deemed to refer to such successor securities depository and
its nominee, as appropriate.
(d) Notwithstanding any other provision of this Indenture to the contrary, so long as
all Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to
the principal and interest represented by each such Bond and all notices with respect to each such Bond
shall be made and given, respectively, to DTC as provided in the Representation Letter.
(e) The Authority shall execute and deliver the Representation Letter and, in
connection with any successor nominee for DTC and any successor depository, enter into comparable
arrangements, and shall have the same rights with respect to its actions thereunder as it has with respect
to its actions under this Indenture.
(f) In the event that any transfer or exchange of Bonds is authorized under
subsection (b) or (c) of this Section 2.10, such transfer or exchange shall be accomplished upon receipt
DOCSLAI :466082.1
40929-320 W W B 16
2004-112
by the Trustee from the Owner thereof of the Bonds to be transferred or exchanged and appropriate
instruments of transfer to the pernutted transferee, all in accordance with the applicable provisions of
Section 2.06. In the event Bonds are issued to holders other than Cede & Co., its successor as
nominee for DTC as holder of all the Bonds, another securities depository as holder of all the Bonds, or
the nominee of such successor securities depository, the provisions of Sections 2.02, 2.03 and 2.06
shall also apply to, among other things, the registration, exchange and transfer of the Bonds and the
method of payment of principal of, premium, if any, and interest on the Bonds.
DOCSLA1:466082.1
40929-320 W W B 17
2004-112
ARTICLE III
PROCEEDS OF BONDS
SECTION 3.01. Delivery of Bonds. The Trustee is hereby authorized to, and
shall, authenticate and deliver the Bonds to the Purchaser pursuant to the Bond Purchase Agreement
upon receipt of (a) the Request of the Authorized Authority Representative, (b) the Notes, and (c) the
net proceeds of sale of the Bonds.
SECTION 3.02. Establishment of Funds and Deposit of Proceeds of
Bonds. The Trustee shall establish and maintain hereunder, in trust, the Costs of Issuance Fund, the
Proceeds Fund, the Bond Payment Fund, the Interest Fund, the Principal Fund, the Credit Fund and the
Rebate Fund. In the event the Authority enters into a Swap Agreement, the Trustee shall establish
within the Interest Fund the Swap Interest Payment Account and the Swap Repayment Account. The
proceeds received from the sale of the Bonds are to be deposited in the following funds in the following
amounts:
Costs of Issuance Fund $
Proceeds Fund $
SECTION 3.03. Use of Money in the Costs of Issuance Fund and the
Proceeds Fund.
(a) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the
Trustee, to pay the Costs of Issuance upon receipt of (i) a Request of an Authorized Authority
Representative, which Request shall be sequentially numbered, stating the person to whom payment is
to be made, the amount to be paid, the purpose for which the obligation was incurred and that such
payment is a proper charge against said fund and (ii) an original invoice or invoices or evidence of the
Authority's or Purchaser's payment of an invoice when such requisition is in reimbursement thereof On
February 1, 2005, or on such earlier date upon Request of an Authorized Authority Representative,
amounts, if any, remaining in the Costs of Issuance Fund (and not required to pay identified Costs of
Issuance, including any additional fees or expenses of the Credit Provider or the Trustee, or any
identified Predefault Obligations and Reimbursement Obligations) shall be transferred to the Proceeds
Fund and credited to and returned by the Trustee by check to each Local Agency in proportion to the
amounts initially deposited in the Costs of Issuance Fund attributable to each such Local Agency.
(b) All moneys in the Proceeds Fund shall be held by the Trustee in trust and
applied as provided herein and, pending such application, are hereby pledged to the payment of the
Bonds and shall be subject to a lien and charge in favor of the Owners and for the further security of the
Owners. Funds in the Proceeds Fund shall be credited to each of the Local Agencies initially m
amounts set forth in Schedule II, which is attached hereto and made a part hereof. Moneys in the
Proceeds Fund shall be disbursed to each Local Agency in the amounts set forth in Schedule II relating
to such Local Agency, as soon as practical, pursuant to a Request of an Authorized Authority
DOCSLAL466082.1
40929-320 W W B 18
2004-112
Representative and a written requisition of the Local Agency in substantially the form set forth in
Exhibit B attached hereto, submitted in advance of the requested payment date (by facsimile, hand
delivery or mail), and once disbursed, shall be held and invested by the Local Agency as permitted by
law and used and expended for any purpose for which the Local Agency is authorized to use and
expend moneys.
(c) The Trustee shall not create subaccounts within the Proceeds Fund, but shall
keep records to account separately for funds in the Proceeds Fund attributable to each Local Agency.
Said record of separate accounting by the Trustee for each Local Agency shall be deemed a "Proceeds
Subaccount" for the purposes of each Local Agency's Note Resolution. To the extent that the Trustee
so holds moneys and/or securities in the Proceeds Fund on behalf of a Local Agency on the first day of
any Repayment Month, such moneys and securities (up to the amount required to be set aside by the
Local Agency in its Payment Account in such Repayment Month) shall no longer be subject to
disbursement and shall be deemed to be held by the Trustee on behalf of the Local Agency in the Local
Agency's Payment Account. In the event that a Local Agency has invested funds in the Investment
Agreement and, amounts held by the Trustee in the Local Agency's Payment Account on the fast day of
any Repayment Month are less than the amount required to be the Payment Account for such
Repayment Month, the Trustee shall immediately notify the Local Agency of such deficiency.
(d) For purposes of payments from the Costs of Issuance Fund, the Trustee may
consolidate the Costs of Issuance Fund with the costs of issuance funds under the Series A-2 Indenture,
and the Trustee may pay any invoices submitted under either this Indenture, or such other Series
Indenture from such consolidated fund.
DOCSLAI:466082.1
40929-320 W W B 19
2004-112
ARTICLE IV
TRUSTEE'S DUTIES REGARDING NOTES
SECTION 4.01. Authenticating Agent. The Trustee shall be the authenticating
agent for the Local Agencies in connection with the issuance of the Notes under the Note Resolutions.
SECTION 4.02. Registrar and Paying Agent. The Trustee shall be the
registrar and paying agent for the Notes. As long as any Notes are outstanding under the applicable
Note Resolution, each Local Agency shall maintain and keep at the Principal Office of the Trustee an
office or agency for the payment of principal of and interest on the Notes and for the registration and
transfer of the Notes.
SECTION 4.03. Return of Paid Notes. Each Note, when paid in full (including
by reimbursement to the Credit Provider as provided in Section 5.03 hereof), shall be cancelled by the
Trustee and returned to the respective Local Agency that issued such Note.
DOCSLAI:466082.1
40929-320 W W B 20
2004-112
ARTICLE V
NOTE PAYMENTS
SECTION 5.01. Assignment of Notes. The Notes and all right, title and
interest of the Authority therein and to all payments thereon, are hereby irrevocably assigned and
pledged and transferred to the Trustee for the benefit of the Owners of the Bonds and the Credit
Provider and the Swap Provider, if any, and the payments on the Notes shall be used for the punctual
payment of the interest on and principal of the Bonds or the reimbursement of drawings under or
payments made pursuant to or from the Credit Instrument and the Swap Provider, if any, and the Notes
shall not be used for any other purpose while any of the Bonds remain Outstanding. This assignment,
transfer and pledge shall constitute a fast and exclusive lien on the principal and interest payments of and
all other rights under the Notes for the foregoing purpose in accordance with the terms hereof. Each
Local Agency has approved, and the Trustee hereby accepts, such assignment of the Notes.
All principal and interest payments on the Notes shall be paid directly by each Local
Agency to the Trustee. All principal and interest payments on the Notes received by the Trustee shall
be held in trust by the Trustee under the terms hereof and shall be deposited by it, as and when
received, in the Bond Payment Fund, and all money in such fund shall be held in trust by the Trustee for
the benefit and security of the Owners and the Credit Provider to and the Swap Provider, if any, to the
extent provided herein. If the Trustee receives Note repayments from a Local Agency which, together
with other amounts on deposit in the Bond Payment Fund allocable to such Local Agency, are in excess
of the amounts required to pay the principal of and interest due on such Local Agency's Note, such
excess amounts shall remain in the Bond Payment Fund, and subject to any rebate requirements as
specified in Section 5.08 hereof, shall be transferred to such Local Agency following payment of the
amount of Bonds corresponding to such Local Agency's Note and reimbursement of the Credit
Provider for drawings, if any, under or payments pursuant to or from the Credit Instrument and payment
to such Credit Provider of ary Reimbursement Obligations and Predefault Obligations applicable to
such Local Agency.
Moneys received by the Trustee attributable to a Local Agency shall not be used in any
manner (directly or indirectly) to make up any deficiency in any other Local Agency's Note repayments.
Attached as Exhibit D hereto is a form of Deposit Notice to be used by a Local Agency
to transfer payments of principal and interest on its Note to the Trustee.
SECTION 5.02. Use of Money in the Bond Payment Fund and Amounts
Received from Swap Provider, if any. The Trustee shall deposit the money contained in the Bond
Payment Fund and amounts received from the Swap Provider, if any, at the following respective times in
the following respective funds in the manner and priority hereinafter provided, and the money in each of
such funds shall be disbursed only for the purposes and uses hereinafter authorized (subject to
Section 5.03 hereof):
DOCSLA1:466082.1
40929-320 W WB 21
2004-112
(a) Interest Fund.
(i) If the Authority has not entered into a Swap Agreement, the Trustee
shall deposit in the Interest Fund that amount of money representing the interest due and payable on the
Bonds on such date; and such money shall be used by the Trustee solely for the purpose of paying
interest on the Bonds on such date.
(ii) If the Authority has entered into a Swap Agreement, on each Interest
Payment Date all moneys in the Swap Interest Payment Account shall be used and withdrawn by the
Trustee solely for the purpose of paying the interest on the Bonds. On each Swap Repayment Date, the
Trustee shall deposit in the Swap Repayment Account the Authority Swap Obligation which shall be
used and withdrawn by the Authority solely for purposes of paying the Authority Swap Obligation.
(b) Principal Fund. The Trustee, on the Maturity Date, shall deposit in the Principal
Fund that amount of money representing the principal becoming due and payable on the Bonds on such
Maturity Date. All moneys in the Principal Fund shall be used and withdrawn by the Trustee solely for
the purpose of paying the principal of the Bonds on the Maturity Date.
(c) Rebate Fund. The Trustee shall deposit in the Rebate Fund that amount of
money representing the amount of interest earned on funds deposited in the Bond Payment Fund in
excess of the permissible arbitrage yield as set forth in the Tax Certificate. All moneys in the Rebate
Fund shall be used and withdrawn by the Trustee solely in accordance with the provisions of Section
5.08 hereof.
Subject to the rebate requirements set forth in Section 5.08 hereof, moneys held in the
Bond Payment Fund, the Principal Fund or the Interest Fund on the Maturity Date after the payment by
the Trustee of all of the principal of and interest on the Bonds and the Authority Swap Obligation shall
be returned by the Trustee to each Local Agency (other than a Local Agency which is in default in the
payment of the principal of and interest on its Note) by check in an amount equal to the proportion of
the amount initially received from each Local Agency and deposited in the Bond Payment Fund over all
amounts received from all Local Agencies and deposited in the Bond Payment Fund multiplied by the
remaining balance m the Bond Payment Fund.
SECTION 5.03. Draws under or Payments Pursuant to or in Connection
With Credit Instrument; Payment of Principal and Interest
The other provisions of this Article V notwithstanding, the Trustee shall, in accordance
with the second sentence hereof, draw upon or request payment under the Credit Instrument by the
times required therein and in accordance with the terms thereof, at such time and in sufficient amounts to
make timely payment of the principal of and interest on the Bonds (up to the amount covered by such
Credit histnunent). For purposes of this Section and as provided in Section 5.05 hereof, interest on the
Bonds is deemed to include the Authority Swap Obligation. The Trustee shall draw upon and request
payment pursuant to the Credit Instrument on, or before in accordance with Section 5.09 hereof, each
DOCSLA1:466082.I
40929-320 W W 8 22
2004-112
Interest Payment Date if the amounts in the Principal Fund and/or the Interest Fund, as appropriate, are
insufficient to pay the full amount of the principal of and/or interest on the Bonds. Except as otherwise
explicitly provided in the Credit Instrument (and subject to the next paragraph of this Section), each
Bond shall be paid first from all available moneys in the Interest Fund and Principal Fund. To the extent
amounts in the Principal Fund and Interest Fund, together with the maximum amount available under the
Credit Instrument is insufficient to pay the Bonds in full, moneys drawn under or paid pursuant to the
Credit Instrument shall be used to pay each Bond pro rata, and allocated to each Note pro rata in
accordance with the unpaid principal thereof and interest thereon, and shall be applied to pay, and
allocated to, interest first and then principal. Pending application as aforesaid, moneys drawn under or
paid pursuant to the Credit Instrument shall be deposited in Credit Fund, which shall be maintained by
the Trustee and held in trust apart from all other moneys and securities held under this Indenture or
otherwise, and over which the Trustee shall have the exclusive and sole right of withdrawal for the
exclusive benefit of the Owners. Moneys in the Credit Fund derived from a draw under or payment
pursuant to a Credit Instrument in the form of a letter of credit or policy of insurance shall be held in
cash and shall not be applied to satisfy any costs, expenses or liabilities of the Trustee.
If the amount available under the Credit Instrument is equal to 100% of the principal of
and all interest on the Bonds, notwithstanding anything to the contrary contained in this Section or this
Article, if the Credit Provider honors a drawing or payment request made pursuant to this Section on
the Credit Instrument to pay such principal and/or interest or resulting from deficiency in the payment of
principal of or interest on a Note or Notes in order to pay principal of or interest due on the Bonds on
such date, moneys so drawn or paid under the Credit Instrument shall be credited to the Credit Fund
and applied to the payment of such principal and/or interest as provided in the preceding paragraph of
this Section, except that, moneys, if any, on deposit in the Principal Fund and Interest Fund that would
have been applied to pay such principal or interest absent this Section and such drawing or payment on
the Credit Instrument shall be applied by the Trustee to reimburse the Credit Provider by wire transfer
as soon as possible and, in any case, prior to 1:00 p.m., Los Angeles time, on the day such drawing or
payment request is honored, in the amount of such payment or disbursement by the Credit Provider
honoring such drawing or payment request. Subject to the provisions of Section 5.08 hereof, any
moneys at any time on deposit in the Bond Payment Fund allocable to a Local Agency in excess of the
amounts required to be deposited therein on the Maturity Date pursuant to Section 5.02 hereof shall be
applied by the Trustee to the payment of any of such Local Agency's Predefault Obligations specified
by the Credit Provider in writing to the Trustee. Any amounts on deposit in the Credit Fund derived
from a draw under or payment pursuant to a Credit Instrument in the form of a letter of credit or policy
of insurance and remaining following a date on vhich a payment of principal of and interest on the
Bonds is made shall promptly be remitted by the Trustee to the Credit Provider.
In the event of default by any Local Agency in the payment of any of the principal of or
interest on its Note (other than the uninsured Local Agencies), upon payment by the Credit Provider of
a drawing or payment request under the Credit Instrument with respect to the payment of such principal
or interest, the Credit Provider shall be deemed to have purchased the Secured Percentage of such
Note. The Credit Provider will succeed and be subrogated to the rights of the Owners of the Bonds
DOCSLA1:466082.1
40929-320 W W B 23
2004-112
with respect to the Secured Percentage of such Note, and the Trustee shall hold such Note for the
benefit of the Credit Provider (in the Secured Percentage) and also for the benefit of the Bond Owners
(to the extent the Secured Percentage of the Credit Instrument is less than 100%) in accordance with
the provisions of the Credit Agreement. Any Note described in the preceding sentence shall be a
Defaulted Note and the unpaid portion thereof shall be deemed Outstanding and shall not be deemed
paid until all amounts due to the Credit Provider (as provided therein and in the Credit Instrument
and/or the Credit Agreement, if any) and to the Bond Owners with respect to the unsecured portion
thereof have been paid in full, including interest accrued thereon as provided therein and in the Credit
Agreement. The interest on the unpaid portion of a Defaulted Note (or the portion thereof with respect
to which a Credit Instrument applies for which no reimbursement on a draw or payment thereunder has
been made) shall be payable at the Default Rate and upon demand and shall be computed on the basis
of a 360-day year, actual number of days elapsed; provided that, no interest shall accrue on the portion
of a Defaulted Note which is paid with a drawing on or payment pursuant to the Credit Instrument to
the extent such portion of a Defaulted Note is paid (and reimbursement is made to the Credit Provider
with respect to the drawing on or payment pursuant to the Credit Instrument by 1:00 p.m., Los Angeles
time, on the date of such draw or payment). Upon payment in full of a Note, and reimbursement to the
Credit Provider with respect to the drawing under or payment pursuant to the Credit Instrument with
respect to such Note and payment of all Predefault Obligations and Reimbursement Obligations due and
owing such Credit Provider with respect to such Note, from amounts available in the Principal Fund or
Interest Fund or otherwise, the Trustee shall, with the consent of the Credit Provider cancel such Note
and surrender it to the Local Agency that issued it; provided that, each Note shall be deemed
Outstanding and shall not be cancelled by the Trustee until (i) the Owners have been paid in full with
respect to such Note, and (ii) the Credit Provider has been so reimbursed for the drawings or payments
made under the Credit hnstrument with respect to such Note and all Predefault Obligations and
Reimbursement Obligations due and owing such Credit Provider with respect to such Notes have been
paid.
SECTION 5.04. Credit Instrument.
Each of the Local Agencies, in its respective Pricing Confirmation Supplement, has (if
the Credit Instrument is a letter of credit or policy of insurance) acknowledged the delivery by the
Authority to the Trustee of the Credit Instrument on or prior to the date of delivery of the Bonds. Each
of the Local Agencies has authorized and acknowledged that the Authority shall execute and deliver,
where and if applicable, the Credit Agreement on behalf of said Local Agency. The Trustee shall hold
and maintain such Credit Instrument for the benefit of the Owners until the Credit Instrument terminates
in accordance with its terms. The Trustee shall diligently enforce all terms, covenants and conditions of
such Credit Instrument, including payment when due of any draws on or claims under the Credit
Instrument, and will not consent to or agree to or permit any amendments or modifications thereof which
would materially adversely affect the rights or security of the Owners. If at any time during the term of
the Credit Instrument (if the Credit Instrument is a letter of credit or policy of insurance) any successor
Trustee shall be appointed and qualified under this Indenture, the resigning or removed Trustee shall
request that the Credit Provider transfer such Credit Instrument to the successor Trustee pursuant to the
DOCSLA1:466082.1
40929-320 WWB 24
2004-112
applicable provision set forth in the Credit Agreement and Section 8.02 hereof if the resigning or
removed Trustee fails to make this request, the successor Trustee shall do so before accepting
appointment.
SECTION 5.05. Provisions Relating to Swap; Right to Enforce Swap
Agreement Limited All amounts received by the Trustee pursuant to the Swap Agreement shall be
deposited when received into the Swap Interest Payment Account and used to pay interest on the
Bonds. In consideration of such use, the Authority Swap Obligation shall be deemed the payment of
interest on the Bonds for all purposes under this Indenture. Anything in this Indenture to the contrary
notwithstanding, neither the Trustee nor any Bondholder shall have any right under this Indenture or
under the Swap Agreement to enforce the rights of the Authority to receive payments under the Swap
Agreement.
SECTION 5.06. Investments. Any money held by the Trustee at any time in
any Fund created hereunder other than the Credit Fund and the Rebate Fund shall, to the fullest extent
practicable, be invested as directed in writing by an Authorized Authority Representative in Permitted
Investments which will, as nearly as practicable, mature on or before the dates on which such money is
anticipated to be needed for disbursement hereunder. In the absence of any written direction from the
Authority, the Trustee shall invest any nnney held in any Fund created hereunder (other than the Credit
Fund and the Rebate Fund) in Permitted Investments identified in clause (vi) of the definition thereof
which will, as nearly as practicable, mature on or before the dates on which such money is anticipated to
be needed for disbursement hereunder. The amounts held in the Proceeds Fund will be accounted for
separately for the respective Local Agencies. The Trustee may act as principal or agent in the
acquisition or disposition of any investment and may at its sole discretion, for the purpose of any such
investment, except with respect to the Credit Fund, commingle any of the money held by it hereunder.
The Trustee shall not be liable or responsible for any loss suffered in connection with any such deposit
or investment made by it under the terms of and in accordance with this Section. The Trustee may
present for redemption or sell any such deposit or investment whenever it shall be necessary in order to
provide money to meet any payment of the money so deposited or invested, and the Trustee shall not
be liable or responsible for any losses resulting from any such deposit or investment presented for
redemption or sold. Any interest or profits on such deposits and investments received by the Trustee
shall be credited to the fund, account or subaccount from which such investment was made.
Moneys in the Credit Fund shall be invested as specified in Section 5.03 hereof.
Moneys in the Rebate Fund shall not be invested.
SECTION 5.07. Confirmation of Deposits to Payment Accounts. (a) The
Trustee shall, on the fifteenth day of each month identified as a Repayment Month, unless the
Repayment Month is June, in which case on June 1, for each Local Agency in its respective Note, send
a request for a Payment Account Deposit Certification, substantially in the form of Exhibit C attached
hereto, requesting that such Local Agency confirm and certify that it has made the required deposit (in
the amount and on the date specified in the Pricing Confirmation Supplement for each Local Agency
attached to the Purchase Agreement) into its Payment Account created pursuant to its Note Resolution.
DOCSLAL466082.I
40929-320 W W B 25
2004-112
Such Payment Account Deposit Certification shall be signed by an Authorized Local Agency
Representative and delivered to the Trustee within seven Business Days after the date of such request.
In the event that the Trustee has not received the Payment Account Deposit Certification from a Local
Agency within seven Business Days following the date such Payment Account Deposit Certification was
due from a Local Agency, the Trustee shall be entitled to conclude that the deposit into such Local
Agency's Payment Account has not been made and shall immediately notify each rating agency then
rating the Bonds, the Underwriters, the Financial Advisor and the Credit Provider of such event, which
constitutes an "Event of Default" under such Local Agency's Note Resolution. Upon the occurrence of
such an event, the Trustee shall at the Credit Provider's direction exercise the rights and remedies set
forth in Article VII hereof. Notwithstanding anything to the contrary in this Section, any Local Agency
for which the Trustee is holding or investing moneys or securities on behalf of said Local Agency (which
moneys or securities are intended to be that Local Agency's Payment Account deposit, either pursuant
to Section 3.03(c) hereof or through some other arrangement between the Trustee and the Local
Agency) need not present a Payment Account Deposit Certification; likewise, the Trustee need not send
a request for a Payment Account Deposit Certification to said Local Agency.
(b) On the Note Payment Deposit Date, the Trustee shall transfer all amounts held
by it on behalf of each Local Agency to the Bond Payment Fund.
SECTION 5.08. Rebate Fund. (a) Within the Rebate Fund, the Trustee shall
maintain such accounts as shall be necessary to comply with the instructions of the Authority pursuant to
the terms and conditions of the Tax Certificate. Subject to the transfer provisions provided in
paragraph (E) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee in
trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for
payment to the federal government of the United States of America. Neither the Authority nor any
Owner shall have any rights in or claim to such money. All amounts deposited into or on deposit in the
Rebate Fund shall be governed by this Section and by the Tax Certificate. The Trustee shall be deemed
conclusively to have complied with such provisions if it follows the directions of the Authority including
supplying all necessary information in the manner provided in the Tax Certificate, and shall have no
liability or responsibility to enforce compliance by the Local Agencies or the Authority with the terms of
the Tax Certificate.
(b) Upon the Authority's written direction, an amount shall be deposited to the
Rebate Fund by the Trustee from deposits by the Authority, if and to the extent required, so that the
balance in the Rebate Fund shall equal the Rebate Requirement. Computations of the Rebate
Requirement shall be fiunished by or on behalf of the Authority in accordance with the Tax Certificate.
(c) The Trustee shall have no obligation to rebate any amounts required to be
rebated pursuant to this Section, other than from moneys held in the funds and accounts created under
this Indenture or from other moneys provided to it by the Authority.
DOCSLA1:466082.1
40929-320 WWB 26
2004-112
(d) At the written direction of the Authority, the Trustee shall invest all amounts held
in the Rebate Fund in Investment Securities, subject to the restrictions set forth in the Tax Certificate.
The Trustee shall not be liable for any consequences arising from such investment.
(e) Upon receipt of the Authority's written directions, the Trustee shall remit part or
all of the balances in the Rebate Fund to the United States, as so directed. Any funds remaining in the
Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any
Rebate Requirement, or provision made therefor satisfactory to the Trustee, shall be withdrawn and
remitted to the Authority.
(t) Notwithstanding any other provision of this Indenture, including in particular
Article X hereof, the obligation to remit the Rebate Requirement to the United States and to comply
with all other requirements of this Section and the Tax Certificate shall survive the defeasance or
payment in full of the Bonds.
SECTION 5.09. Credit Provider Requirements; Subrogation.
Notwithstanding anything to the contrary contained herein, as long as the Credit Instrument shall be in
full force and effect and the Credit Provider shall be Financial Security Assurance Inc. ("FSA'), the
Authority and the Trustee shall comply with the following provisions.
(a) Upon payment of a claim under the Credit Instrument the Trustee shall establish
a separate special purpose trust account for the benefit of Bondholders to be designated as the "Policy
Payments Account" and over which the Trustee shall have exclusive control and sole right of
withdrawal. The Trustee shall receive any amount paid under the Credit Instrument in trust on behalf of
Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such
amount only for purposes of making the payments for which a claim was made. Such amounts shall be
disbursed by the Trustee to Bondholders in the same manner as principal and interest payments are to
be made with respect to the Bonds hereunder. Amounts held in the Policy Payments Account shall not
be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the
Trustee. Any funds remaining in the Policy Payments Account following a payment date with respect to
the Bonds shall promptly be remitted to FSA.
(b) FSA shall, to the extent it makes any payment of principal of or interest on the
Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms
of the Credit Instrument.
(c) FSA shall be deemed a third party beneficiary to this Indenture.
(d) The rights of FSA to direct or consent to the Authority, the Trustee or
Bondholder actions under this Indenture shall be suspended during any period in which FSA is in default
in its payment obligations under the Credit Instrument (except to the extent of amounts previously paid
by FSA and due and owing to FSA) and shall be of no force or effect in the event the Credit Instrument
DOCSLAL466082.1
40929-320 W W B 27
2004-112
is no longer in effect or FSA asserts that the Credit Instrument is not in effect or FSA shall have
provided written notice that it waives such rights.
(e) The rights granted FSA under this Indenture to request, consent to or direct any
action are rights granted to FSA in consideration of its issuance of the Credit Instrument. Any exercise
by FSA of such tights is merely an exercise of FSA's contractual rights and shall not be construed or
deemed to be taken for the benefit or on behalf of the Bondholders nor does such action evidence any
position of FSA, positive or negative, as to whether Bondholder consent is required in addition to
consent of FSA.
(0 Copies of any amendment to the Indenture shall be delivered to S&P, Moody's
and such other rating agency then rating the Bonds at least 10 days prior to the effective date thereof.
(g) The Authority shall pay or reimburse FSA for reasonable charges, fees, costs
and expenses FSA incurs in connection with (i) the administration, enforcement, defense or preservation
of any rights or security in respect of the Indenture, (ii) the pursuit of any remedies under the Indenture
or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or
related to, the Indenture whether or not executed or completed, (iv) the violation by the Authority or
Local Agency of any law, Wile or regulation, or any judgment, order or decree applicable to it or (v) any
litigation or other dispute in connection with the Indenture or the transactions contemplated thereby,
other than amounts resulting from the failure of FSA to honor its obligations under the Credit Instrument.
(h) Payments required to be made to FSA shall be payable solely from payments
received from the trust estate created by this Indenture and shall be paid (i) prior to an event of default,
to.the extent not paid from the Bond Payment Fund, and (ii) after an event of default, with respect to
amounts other than principal and interest on the Bonds, on the same priority as payments to the Trustee
for expenses. The obligations to FSA shall survive discharge or termination of the Indenture.
(i) FSA shall be entitled to pay principal or interest on the Bonds that shall become
due for payment but shall be unpaid by reason of Nonpayment by the Authority (as defined in the Credit
Instrnnent) whether or not FSA has received a Notice (as defined in the Credit Instrument) of
Nonpayment or a claim upon the Bond Insurance Policy.
0) Notwithstanding anything to the contrary herein, the Credit Provider, so long as
it has not failed to comply with its payment obligations under the Credit Instrument, shall have the right
to direct remedies upon any Event of Default hereunder.
(k) FSA shall be provided with the following:
(i) notice of any default known to the Trustee within five Business Days
after knowledge thereof,
(ii) notice of the resignation or removal of the Trustee and the appointment
of, and acceptance of duties by, any successor thereto;
DOCSLA1:466082.1
40929-320 W W B 28
2004-112
(iii) the commencement of any proceeding by or against the Authority or
any Local Agency commenced under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding");
(iv) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds;
(v) a full original transcript of all proceedings relating to the execution of any
amendment or supplement to the Indenture; and
(A) all reports, notices and correspondence to be delivered under the terms
of the Indenture.
0) The Trustee shall follow the procedures set forth in the Credit Instrument
Payment Certificate in connection with the submission of notices of claims under the Credit Instrument
and in connection with the apportionment of the Policy Limit between different series of bonds in the
event of a Shortfall, as those terms are defined in the Credit Instrument Payment Certificate.
DOCSLAI:466082.1
40929-320 W W B 29
2004-112
SECTION 6.01.
ARTICLE VI
COVENANTS
Compliance with Indenture. The Trustee shall not
authenticate or deliver any Bonds in any manner other than in accordance with the provisions hereof;
and the Authority shall not suffer or permit any default to occur hereunder, but will faithfully observe and
perform all the agreements, conditions, covenants and terms contained herein required to be observed
and performed by it.
SECTION 6.02. Amendment of Notes. The Authority and the Trustee shall not
amend or permit the amendment of the Notes without the prior written consent of the applicable Credit
Provider, if any, and without (a)(1) a determination that such amendment does not materially adversely
affect the interest of the Owners or (2) the written consents of the Owners of a majority in aggregate
principal amount of the Bonds then Outstanding, and (b) an Opinion of Counsel to the effect that such
amendment will not cause interest on the Bonds to be includable in gross income for federal income tax
purposes; provided that, no such amendment shall reduce the rate of interest or amount of principal or
extend the time of payment thereof with respect to any Note.
SECTION 6.03. Observance of Laws and Regulations. The Authority shall
faithfiilly observe and perform all lawful and valid obligations or regulations now or hereafter imposed on
it by contract, or prescribed by any state or national law, or by any officer, board or commission having
jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or
privilege now owned or hereafter acquired by it, including its right to exist and carry on its business, to
the extent that such observance or performance is material to the transactions contemplated hereby.
SECTION 6.04. Tax Covenants. (a) The Authority shall not take any action,
or fail to take any action, if such action or failure to take such action would adversely affect the
exclusion from gross income of the interest payable on the Bonds under Section 103 of the Code.
Without limiting the generality of the foregoing, the Authority shall comply with the requirements of the
Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive
payment in full or defeasance of the Bonds.
(b) In the event that at any time the Authority is of the opinion that for purposes of
this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by
the Trustee under this Indenture, the Authority shall so instruct the Trustee under this Indenture in
writing, and the Trustee shall take such action as may be necessary in accordance with such instructions.
(c) Notwithstanding any provisions of this Section, if the Authority shall provide to
the Trustee an Opinion of Counsel that any specified action required under this Section is no longer
required or that some further or different action is required to maintain the exclusion from gross income
for federal income tax purposes of interest payable on the Bonds, the Trustee may conclusively rely on
DOCSLA1:466082.1
40929-320 W W B 30
2004-112
such opinion in complying with the requirements of this Section and of the Tax Certificate, and the
covenants hereunder shall be deemed to be modified to that extent.
SECTION 6.05. Liens. So long as any Bonds are Outstanding, or any
Predefault Obligation or Reimbursement Obligation is unpaid, the Authority shall not create or suffer to
be created any pledge of or lien on the Notes other than the pledge and lien hereof.
SECTION 6.06. Accounting Records and Statements. The Trustee shall
keep proper books of record and account in accordance with trust accounting standards in which
complete and correct entries shall be made of all transactions relating to the receipt, investment,
disbursement, allocation and application of the Note repayments and the proceeds of the Notes and the
Bonds. Such records shall specify the account or fund to which each investment (or portion thereof)
held by the Trustee is to be allocated and shall set forth, in the case of each investment: (a) its purchase
price; (b) identifying information, including par amount, coupon rate, and payment dates; (c) the amount
received at maturity or its sale price, as the case may be; (d) the amounts and dates of any payments
made with respect thereto; and (e) such documentation as is required to be obtained as evidence to
establish that all investments have been purchased in arms' length transactions with no amounts paid to
reduce the yield on the investments.
Such records shall be open to inspection by the Credit Provider, the Authority and any
Local Agency at any reasonable time during regular business hours on reasonable notice.
SECTION 6.07. Recordation and Filing. The Trustee shall file, at the written
direction of the Authority or the Credit Provider, record, register, renew, refile and rerecord all such
documents, including financing statements (or continuation statements in connection therewith), as may
be required by law in order to maintain at all times a security interest in the Notes under and pursuant to
the Indenture, all in such manner, at such times and in such places as may be required in order to fully
perfect, preserve and protect the benefit, protection and security of the Owners and the Credit Provider
and the rights of the Trustee hereunder, and the Trustee shall do whatever else may be necessary or be
reasonably required in order to perfect and continue the pledge of and lien on the Notes and Note
payments as provided herein.
SECTION 6.08. Further Assurances. Whenever and so often as requested to
do so by the Trustee, the Credit Provider or any Owner, the Authority shall promptly execute and
deliver, or cause.to be executed and delivered, all such other and further assurances, documents or
instruments and promptly do or cause to be done all such other and further things as may be necessary
or reasonably required in order to further and more fully vest in the Trustee, the Credit Provider and the
Owners the benefit, protection and security conferred, or intended to be conferred, upon them hereby.
SECTION 6.09. Satisfaction of Predefault Obligations. Subject to the
restrictions and provisions of Section 5.08 hereof, in accordance with any applicable provisions of the
Credit Instrument or Credit Agreement, if any, upon receipt of a Request of an Authorized Authority
Representative or a Request of any Authorized Local Agency Representative, resulting from the
DOCSLAI:466082.1
40929-320 W W B 31
2004-112
Authority's or such Local Agency's receipt of notice and request for payment of Predefault Obligations
from the Credit Provider, if any, pursuant to applicable provisions of the Credit Instrument, Credit
Agreement, if any, the Trustee shall remit to the Credit Provider moneys held by the Trustee and
allocable to such liable Local Agency which moneys are available under the Indenture for payment of
such amounts due to the Credit Provider. However, the amount remitted from such moneys which are
allocable to a specific Local Agency shall not exceed that Local Agency's allocable share of the total
amount due to the Credit Provider. If such moneys held by the Trustee are insufficient to pay the Local
Agency's pro rata share of such Predefault Obligations, the Local Agency shall pay the amount of the
deficiency to the Trustee for remittance to the Credit Provider. Moneys thus received by the Trustee
from the Local Agencies shall be deposited in the Bond Payment Fund and shall be paid to the Credit
Provider, by the fifteenth day after delivery by the Credit Provider to the Local Agency or Local
Agencies of notice that amounts are due to the Credit Provider, pursuant to applicable provisions of the
Credit Agreement.
DOCSLA1:466082.1
40929-320 W W B 32
2004-112
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
SECTION 7.01. Action on Default. If any default in the payment of principal of
or interest on a Note or any other "Event of Default" defined in a Note Resolution shall occur and be
continuing, then such default shall constitute an "Event of Default" hereunder, and in each and every such
case during the continuance of such Event of Default the Trustee or the Owners of not less than a
majority in aggregate principal amount of Bonds at the time Outstanding shall, upon notice in writing to
such Local Agency, exercise the remedies provided to the owner of the Note then in default or under
the Note Resolution pursuant to which it was issued which are necessary or desirable to collect the
principal of the Note and the interest thereon to maturity.
SECTION 7.02. Other Remedies of the Trustee. The Trustee shall have the
tight
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce
its rights against any Local Agency or any supervisor, council member, board member, trustee, member,
officer or employee thereof, and to compel such Local Agency or any such supervisor, council member,
board member, trustee, member, officer or employee thereof to observe or perform its or his or her
duties under applicable law and the agreements, conditions, covenants and terms contained in the
applicable Note or Note Resolution, required to be observed or performed by it or him or her;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee or the Owners, the Credit Provider; or
(c) by suit in equity upon the happening of any default hereunder to require any
Local Agency and any supervisor, council member, board member, trustee, member, officer and
employee thereof to account as the trustee of any express trust.
SECTION 7.03. Non -Waiver. A waiver by the Trustee of any default hereunder
or breach of any obligation hereunder shall not affect any subsequent default hereunder or any
subsequent breach of an obligation hereunder or impair any rights or remedies on any such subsequent
default hereunder or on any such subsequent breach of an obligation hereunder. No delay or omission
by the Trustee to exercise any right or remedy accruing upon any default hereunder shall impair any such
right or remedy or shall be construed to be a waiver of any such default hereunder or an acquiescence
therein, and every right or remedy conferred upon the Trustee by applicable law or by this article may
be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is
abandoned or determined adversely to the Trustee, the Credit Provider, the Authority or the Local
Agencies, the Authority, the Trustee, the Credit Provider and the Local Agencies shall be restored to
DOCSLAL466082.1
40929-320 WWB 33
2004-112
their former positions, rights and remedies as if such action, proceeding or suit had not been brought or
taken.
Notwithstanding anything to the contrary, no waiver by the Trustee of any default
hereunder or breach of any obligation hereunder with respect to any Local Agency shall be effective
without the prior written consent of the Credit Provider.
SECTION 7.04. Application of Funds. (a) All moneys received by the Trustee
pursuant to any right given or action taken under the provisions of this Article VII shall be deposited into
a segregated payment account in the Bond Payment Fund which the Trustee shall establish and maintain
as necessary relating to the defaulting Local Agency's Note and be applied by the Trustee after
payment of all amounts due and payable under Section 8.03 hereof in the following order upon
presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or
upon the surrender thereof if fiilly paid; provided that (i) all amounts in the Credit Fund shall be applied
(without regard to Section 8.03 hereof) solely to payment of the principal of and interest on the Bonds,
and (h) all moneys in the defaulting Local Agency's payment account in the Bond Payment Fund
allocable to reimbursement of the Credit Provider for drawings or payments under the Credit
Instrument, shall be applied solely to reimburse such Credit Provider; and provided, further, that the
Trustee shall obtain and follow the instruction contained in an Opinion of Counsel and rebate or set
aside for rebate from the specified funds held hereunder, subject to the prior payment in full of all
amounts applicable to the respective Local Agency specified in clause (ii) above, any amount pursuant
to such instructions required to be paid to the United States of America under the Code:
Fast, Costs and Expenses: to the payment of the fees, costs and expenses of the
Trustee and of the Owners in declaring such Event of Default, including reasonable compensation to its
or their agents, attorneys and counsel;
Second, Interest: to the payment to the persons entitled thereto of all payments of
interest on the Bonds then due, and, if the amount available shall not be sufficient to pay in fiill any
payment or payments coming due on the same date, then to the payment thereof ratably, according to
the amounts due thereon, to the persons entitled thereto, without any discrimination or preference,
subject to subsection (B) of this Section;
TTiird, Principal to the payment to the persons entitled thereto of the unpaid principal of
the Bonds which• shall have become due, with interest on the overdue principal and interest on the
Bonds at a rate equal to the Default Rate and, if the amount available shall not be sufficient to pay in full
all the amounts due with respect to the Bonds on any date, together with such interest, then to the
payment thereof ratably, according to the amounts of principal due on such date to the persons entitled
thereto, without any discrimination or preference, subject to subsection (B) of this Section; and
Fourth Predefault Obligations and Reimbursement Obligations: to the payment of all
Predefault Obligations and Reimbursement Obligations applicable to such Local Agency, subject to
subsection (B) of this Section.
DOCSLAI:466082.1
40929-320 w W B 34
2004-112
(b) If, upon the drawing or payment under the Credit Instrument then in effect, in
the full amount pemiltted under the Credit Instrument, any Owner (other than the Credit Provider by
right of subrogation) remains unpaid in full, no moneys received by the Trustee pursuant to any right
given or action taken under the provisions of this Article VII shall be transferred to the Credit Provider
until all Owners (other than the Credit Provider by right of subrogation) are paid in full.
SECTION 7.05. Remedies Not Exclusive; Credit Providers' Control of
Remedies. No remedy conferred herein upon or reserved herein to the Trustee is intended to be
exclusive and all remedies shall be cumulative and each remedy MI be in addition to every other
remedy given hereunder or now or hereafter existing under applicable law or equity or by statute or
otherwise and may be exercised without exhausting and without regard to any other remedy conferred
by any other applicable law.
Subject to Section 5.090) hereof, the Credit Provider, so long as it has not failed to
comply with its payment obligations under the Credit Instrument, shall have the right to direct the
remedies upon any Event of Default hereunder but only (a) with respect to any Note or Notes to which
such Credit Instrument is applicable, (b) if the amount available to be paid or drawn under the Credit
Instrument equals the full amount of interest and principal with respect to the Bonds remaining unpaid to
Owners in the case in which the Credit Instrument secures the payment of less than 100% of the debt
service on all of the Notes (and thereby the Bonds), and (c) so long as in the opinion of nationally
recognized bond counsel or the Financial Advisor such action Nall not materially adversely affect the
rights of any Owner; in such circumstances, the prior consent of the Credit Provider shall be required to
any remedial action proposed to be taken by the Trustee hereunder with respect to such Note or
Notes, except that this consent requirement shall not affect or impair in any way the right of action of
any Owner to institute suit directly against a Local Agency to enforce payment of the Note and such
Local Agency shall be directly obligated to each Owner of the Bonds. The Trustee shall immediately
notify such Credit Provider of any Event of Default of which the Trustee has actual knowledge.
SECTION 7.06. Exercise of Remedies; Relative Rights of Credit Provider
and Bond Owners. Upon the exercise by any Owner, the Trustee, or the Credit Provider of its right of
action to institute suit directly against a Local Agency to enforce payment of the Note, any moneys
recovered by such action shall be deposited with the Trustee and applied as provided in Section 7.04, if
any, and in this Section 7.06.
All amounts received in respect of the principal of or interest on a Defaulted Note shall
be applied pro rata to the claims with respect to such principal and interest of the Credit Provider in
accordance with its Secured Percentage, and the Bond Owners in accordance with the percentage
remaining net of the Secured Percentage, and, with respect to each, in accordance with Section 7.04
hereof and subject to Section 7.04(B) hereof.
SECTION 7.07. Limited Liability of the Authority. Except as expressly
provided herein, the Authority shall not have any obligation or liability to the Trustee, the Owners or the
Credit Provider, with respect to the payment when due of the Notes by the Local Agencies, or with
DOCSLA1:466082.1
40929-320 WWB 35
2004-112
respect to the observance or performance by the Local Agencies of the other agreements, conditions,
covenants and terms contained in the Notes and the Note Resolutions, or with respect to the
performance by the Trustee of any obligation contained herein required to be performed by it.
Notwithstanding anything to the contrary contained in the Bonds, the Indenture or any other document
related thereto, the Authority shall not have any liability hereunder or by reason hereof or in connection
with any of the transactions contemplated hereby except to the extent payable from moneys received
from or with respect to the Notes and available thereof in accordance with the Indenture.
SECTION 7.08. Limited Liability of the Local Agencies. Except as
expressly provided in the respective Notes and Note Resolutions, the Local Agencies shall not have any
obligation or liability to the Authority, the Trustee, the Owners or the Credit Provider, with respect to
the Indenture or the preparation, execution, delivery, transfer, exchange or cancellation of the Bonds or
the receipt, deposit or disbursement of the principal of and interest on the Notes by the Trustee, or with
respect to the performance by the Trustee of any obligation contained herein required to be performed
by it.
Notwithstanding anything to the contrary herein or in any Note or document referred to
herein, no Local Agency shall incur any obligation under Article VII, Section 3.03(b) or Section 5.01 or
otherwise hereunder, except to the extent payable from unencumbered revenues attributable to its
2004-2005 fiscal year, nor shall any Local Agency incur any obligation on account of any default, action
or omission of any other Local Agency.
SECTION 7.09. Limited Liability of the Trustee. Except as expressly
provided herein, the Trustee shall not have any obligation or liability to the Owners or the Credit
Provider, with respect to the payment when due of the Notes by the Local Agencies, or with respect to
the observance or performance by the Local Agencies of the other agreements, conditions, covenants
and terms contained in the Notes and the Note Resolutions.
DOCSLAI :466082.1
40929-320 WWB 36
2004-112
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Employment and Duties of the Trustee. The Authority
appoints and employs the Trustee to receive, deposit and disburse the proceeds of and payments on the
Notes as provided herein, to prepare, execute, deliver, transfer, exchange and cancel the Bonds as
provided herein, to pay the interest on and principal of the Bonds to the Owners thereof as provided
herein and to perform the other obligations of the Trustee and exercise the remedies contained herein; all
in the manner provided herein and subject to the conditions and terms hereof. By executing and
delivering the Indenture, the Trustee undertakes to perform such obligations.
SECTION 8.02. Removal and Resignation of the Trustee. The Authority,
with the consent of the Credit Provider may at any time remove the Trustee by giving written notice of
such removal by mail to the Trustee, all of the Local Agencies, all Owners of Bonds, the Credit
Provider and the Trustee may at any time resign by giving written rotice by mail of such resignation to
such Credit Provider, the Authority, the Local Agencies and all Owners of Bonds. The Credit Provider
may at any time remove the Trustee if (i) such Credit Provider is not in default on its or their payment
obligations under the Credit Instrument and (ii) there are no unpaid Notes deemed outstanding that are
not Defaulted Notes with respect to which such Credit Provider's Secured Percentage is 100%. The
Credit Provider shall give written notice by mail of such removal to the Trustee, the Authority, all of the
Local Agencies and all Owners. If such removal is at the request of the Credit Provider and the Trustee
has not been removed due to its willful misconduct or negligence hereunder, such Credit Provider shall
reimburse the Authority and the Local Agencies for any additional costs resulting from such removal.
Upon giving any such notice of removal or upon receiving any such notice of removal or resignation, the
Authority shall promptly appoint a successor Trustee acceptable to the Credit Provider by an instrument
in writing; provided, that if the Authority does not appoint a successor Trustee within sixty (60) days
following the giving of any such notice of removal or the receipt of any such notice of resignation, the
removed or resigning Trustee may petition any appropriate court having jurisdiction to appoint a
successor Trustee. Any successor Trustee shall be a bank or trust company doing business and having
a principal corporate trust office either in Los Angeles or San Francisco, California, having a combined
capital (exclusive of borrowed capital) and surplus (or the parent holding company of which has a
combined capital and surplus) of at least seventy-five million dollars ($75,000,000) and subject to
supervision or examination by state or national authorities. If such bank or trust company publishes a
report of condition at least annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purposes of this section the combined capital and
surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
Any removal or resignation of a Trustee and appointment of a successor Trustee shall
become effective only upon the written acceptance of the appointment by the successor Trustee.
DOCSLA1:466082.1
40929-320 W W B 37
SECTION 8.03. Compensation of the Trustee. The Authority, solely from
amounts held in the Costs of Issuance Fund or paid by the Local Agencies specifically for such purpose,
shall from time to time, subject to any agreement then in effect with the Trustee, pay the Trustee
compensation for its services and reimburse the Trustee for all its advances and expenditures hereunder,
including, but not limited to, advances to and fees and expenses of accountants, agents, appraisers,
consultants, counsel or other experts employed by it in the observance and performance of its rights and
obligations hereunder; provided, that the Trustee shall not have any lien for such compensation or
reimbursement against any money held by it in any of the funds established hereunder, although the
Trustee may take whatever legal actions are available to it directly against the Local Agencies to recover
such compensation or reimbursement.
SECTION 8.04. Protection of the Trustee. The Trustee shall be protected and
shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent,
notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document
which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the
proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make
any investigation or inquiry as to any statements contained or matters referred to in any such instrument,
but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such
statements. The Trustee may consult with counsel, who may be counsel to the Authority or the Local
Agencies, with regard to legal questions arising hereunder, and the opinion of such counsel shall be full
and complete authorization and protection in respect to any action taken or suffered by it hereunder in
good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the payments on the Notes, or
of the assignment made to it of all rights to receive the payments on the Notes and shall not be deemed
to have knowledge of any Event of Default unless and until it shall have actual knowledge thereof or
have received written notice thereof at the Principal Office of the Trustee. The Trustee shall not be
accountable for the use or application by the Local Agencies, or any other party, of any funds which the
Trustee properly releases to the Local Agencies or which the Local Agencies may otherwise receive
from time to time. The Trustee makes no representation concerning, and has no responsibility for, the
validity, genuineness, sufficiency, or performance by parties other than the Trustee of the Indenture, any
Bond, any Note, any Note Resolution, the Credit Instrument or the Credit Agreement or of any other
paper or document, or for taking any action on them (except as specifically and expressly stated for the
Trustee in the Indenture).
Whenever in the observance or performance of its rights and obligations hereunder or
under the Bonds the Trustee shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and established by a
Certificate of the Authority, and such Certificate of the Authority shall be full warrant to the Trustee for
any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the
DOCSLAL466082.1
40929-320 W W B 38
2004-112
Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional
evidence as to it may seem reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any
action which any Owner may be entitled to take with like effect as if it were not a party hereto. The
Trustee, either as principal or agent, may also engage in or be interested in any financial or other
transaction with the Local Agencies, and may act as agent, depository or trustee for any committee or
body of Owners or of owners of obligations of the Local Agencies as freely as if it were not the Trustee
hereunder.
The Trustee shall not be answerable for the exercise of any of its rights hereunder or for
the performance of any of its obligations hereunder or for anything whatsoever in connection with the
funds established hereunder, except only for its own willful misconduct or negligence.
No provision hereof shall require the Trustee to expend or risk its own funds or
otherwise incur any financial or other liability or risk in the performance of any of its obligations
hereunder, or in the exercise of any of its rights hereunder, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and before taking any remedial action hereunder (other than drawing on or
requesting payment under the Credit Instrument) the Trustee may require that indemnity satisfactory to it
be famished for all expenses to which it may be put and to protect it from all liability thereunder.
SECTION 8.05. Notices to Rating Agencies. The Trustee shall notify each
rating agency then rating the Bonds, in writing, upon occurrence of any of the following events: (i) any
amendment, supplement or other change to the Indenture from the form originally executed and entered
into; (n) any amendment, supplement or other change to the Credit Agreement from the form originally
executed and entered into; (iii) any amendment, supplement or other change to the Credit Instrument
from the form originally executed and entered into; (iv) any amendment, supplement or other change to
any Note or Note Resolution (that the Trustee is aware of); and (v) the tennination of the Credit
hismirrrent; provided, however, that the Trustee shall incur no liability for failure to so notify.
SECTION 8.06. Relation to Series A 2 Trustee. Prior to the discharge of the
Series A 2 Indenture, the bank or trust company appointed as Trustee hereunder shall also serve as the
Series A-2 Trustee.
DOCSLAI:466082.1
40929-320 W W B 39
2004-112
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO THE INDENTURE
SECTION 9.01. Amendment or Supplement of Indenture. The Indenture and
the rights and obligations of the Owners and the Trustee hereunder may be amended or supplemented
at any time by an amendment hereof or supplement hereto which shall become binding when the written
consents of the Credit Provider and of the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02, are filed with the
Trustee. No such amendment or supplement shall (1) reduce the rate of interest on any Bond or reduce
the amount of principal of any Bond or extend the Maturity Date thereof (it being understood, however,
that any such extension shall have no effect on duration of the Credit Instrument) without the prior
written consent of the Owner of the Bond so affected, or (2) reduce the percentage of Owners whose
consent is required by the terms of this Indenture for the execution of certain amendments hereof or
supplements hereto, or (3) modify any of the rights or obligations of the Trustee without its prior written
consent thereto.
The Indenture and the rights and obligations of the Owners and the Trustee hereunder
may also be amended or supplemented at any time by an amendment hereof or supplement hereto
which shall become binding upon execution with the prior written consent of the Credit Provider, but
without the written consents of any Owners, in order to make any modifications or changes necessary
or appropriate in the Opinion of Counsel to preserve or protect the exclusion from gross income of
interest on the Bonds for federal income tax purposes, or, but only to the extent that such amendment
shall not materially adversely affect the interests of the Owners, for any purpose including, without
limitation, one or more of the following purposes --
(a) to add to the agreements, conditions, covenants and terms contained herein
required to be observed or performed by the Authority, other agreements, conditions, covenants and
terms thereafter to be observed or performed by the Authority, or to surrender any right reserved herein
to or conferred herein on the Authority;
(b) to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein or in regard to questions
arising hereunder which the Authority may deem desirable or necessary; or
(c) to modify, amend or supplement this Indenture or any supplement hereto in such
manner as to permit the qualification hereof and thereof under the Trost Indenture Act of 1939 or any
similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the
securities laws of the United States of America or of any of the states of the United States of America
and, if the Authority or Bond Counsel so determine, to add to this Indenture or any supplement hereto
such other terms, conditions and provisions as may be pemutted by said Trust Indenture Act of 1939 or
similar federal statute.
DOCSLA1:466082.1
40929-320 wwB 40
2004-112
SECTION 9.02. Disqualified Bonds. Bonds held for the account of the
Authority or the Local Agencies (but excluding Bonds held in any pension or retirement fund of the
Local Agencies) shall not be deemed Outstanding for the purpose of any consent or other action or any
calculation of Outstanding Bonds provided herein, and shall not be entitled to consent to or take any
other action provided herein, and the Trustee may adopt appropriate regulations to require each Owner,
before such Owner's consent provided for herein shall be deemed effective, to reveal if the Bonds as to
which such consent is given are disqualified as provided in this Section.
SECTION 9.03. Procedure for Amendment with Written Consent of the
Owners and the Credit Provider. The Indenture may be amended by supplemental agreement or
indenture as provided in this Section 9.03 in the event the consent of the Owners or the Credit Provider
is required pursuant to Section 9.01 hereof. A description of the proposed amendment or supplement,
together with a request to the Owners (and the Credit Provider) for their consent thereto. shall be
mailed by the Trustee to each Owner and the Credit Provider, at the addresses specified in
Section 12.06 hereof, and with respect to the Owners, at their respective addresses as set forth in the
bond registration books maintained pursuant to Section 2.07 hereof, but failure to receive copies of
such description and request so mailed shall not affect the validity of the supplemental agreement when
assented to as in this Section provided. Nothing herein shall be deemed to require the mailing of the
supplemental agreement itself to the Owners.
Such supplemental agreement or indenture shall not become effective unless there shall
be filed with the Trustee the written consent of the Owners of at least a majority in aggregate principal
amount of the Bonds then Outstanding and the Credit Provider (exclusive of Bonds disqualified as
provided in Section 9.02 hereof) and notices shall have been mailed as hereinafter in this Section
provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds
for which such consent is given, which proof shall be acceptable to the Trustee. Any such consent shall
be binding upon the Owner giving such consent and on any subsequent Owner (whether or not such
subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving
such consent or a subsequent Owner by filing such revocation with the Trustee prior to the date when
the Trustee has received the required percentage of consents of the Owners and acknowledged the
same to the Local Agencies.
After the Owners of the required percentage of Bonds and the Credit Provider shall
have filed their consents to such supplemental agreement or indenture, the Trustee shall acknowledge to
the Authority and" the Credit Provider, the effectiveness of the agreement and shall mail a notice to the
Local Agencies, the Credit Provider and the Owners in the manner hereinbefore provided in this
Section for the mailing of such description, stating in substance that such supplemental agreement or
indenture has been consented to by the Owners of the required percentage of Bonds and is effective as
provided in this Section (but failure to mail copies of said notice shall not affect the validity of such
supplemental agreement or indenture or consents thereto). A record, consisting of the papers required
by this Section to be filed with the Trustee, shall be proof of the matters therein stated until the contrary
is proved.
DOCSLAI:466082.1
40929-320 W WB 41
alispoe i
SECTION 9.04. Endorsement or Replacement of Bonds after Amendment
or Supplement. After the effective date of any action taken as hereinabove provided, the Trustee may
detemune that the Bonds may bear a notation by endorsement in form approved by the Trustee as to
such action, and in that case upon demand of the Owner of any Outstanding Bond and presentation of
the Bond for such purpose at the office of the Trustee a suitable notation as to such action shall be made
on such Bond. If the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee
shall be necessary to conform to such action shall be prepared, and in that case upon demand of the
Owner of any Outstanding Bonds such new Bonds shall be exchanged without cost to each Owner for
Bonds then Outstanding at the office of the Trustee upon surrender of such Outstanding Bonds. All
Bonds surrendered to the Trustee pursuant to the provisions of this Section shall be cancelled by the
Trustee and shall not be redelivered.
SECTION 9.05. Amendment or Supplement by Mutual Consent. The
provisions of this article shall not prevent any Owner from accepting any amendment or supplement as
to the particular Bonds owned by said Owner; provided, that due notation thereof is made on such
Bonds.
DOCSLA1:466082.1
40929-320 WWB 42
2004-112
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Bonds and Indenture.
(a) If the Trustee shall pay or cause to be paid or there shall otherwise be paid to
the Owners of all Outstanding Bonds the interest and principal thereof at the times and in the manner
provided herein and therein, then such Owners shall cease to be entitled to the pledge of and lien on the
Notes and Note payments and any interest in the funds held hereunder as provided herein, and all
agreements and covenants of the Authority to such Owners hereunder shall thereupon cease, terminate
and become void and shall be discharged and satisfied.
(b) Any Outstanding Bonds shall on the Maturity Date be deemed to have been
paid within the meaning of and with the effect expressed in subsection (a) of this section if there shall be
on deposit with the Trustee moneys which are sufficient to pay the interest on and principal of such
Bonds payable on and prior to the Maturity Date.
(c) Any Outstanding Bonds shall prior to the Maturity Date be deemed to have
been paid within the meaning of and with the effect expressed in subsection (a) of this section if there
shall lave been deposited with the Trustee either moneys in an amount which shall be sufficient or
United States Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the
full faith and credit of the United States of America are liedged for the payment of interest and
principal, and which are purchased with moneys and are not subject to redemption except by the holder
thereof prior to maturity (including any such securities issued or held in book -entry form on the books of
the Department of the Treasury of the United States of America), the interest on and principal of which
when paid will provide money which, together with the moneys, if any, deposited with the Trustee at the
same time, shall be sufficient, in the opinion of an independent expert delivered to the Trustee and the
Credit Provider, to pay when due the interest on such Bonds and the principal of such Bonds on the
Maturity Date.
(d) After the payment of the interest on and principal of all Outstanding Bonds as
provided in this Section, at the Request of an Authorized Authority Representative (if provided), the
Trustee shall execute and deliver to the Authority and the Local Agencies all such instruments as they
may deem necessary or desirable to evidence the discharge and satisfaction of the Indenture, and the
Trustee shall pay over or deliver to the Local Agencies all money or deposits or investments held by it
pursuant hereto which are not required for the payment of the interest on and principal of such Bonds
and the Trustee shall surrender the Credit Instrument to the Credit Provider, for cancellation by the
same.
(e) Notwithstanding anything to the contrary herein, the Indenture shall not be
discharged without the prior written consent of the Credit Provider until all Predefault Obligations and
Reimbursement Obligations have been paid or payment duly provided for by the Trustee's retention of
DOCSLAI:466082.1
40929-320 wwB 43
2004-112
sufficient funds to pay all Predefault Obligations and Reimbursement Obligations due or to become due
as of the date of such discharge.
SECTION 10.02. Unclaimed Money. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest on
or principal of any Bonds which remains unclaimed for two (2) years after the date when the payments
on such Bonds have become payable, if such money was held by the Trustee on such date, or for two
(2) years after the date of deposit of such money if deposited with the Trustee after the date when the
interest on and principal of such Bonds have become payable, shall be repaid by the Trustee to the
Authority as its absolute property free from trust, and the Trustee shall thereupon be released and
discharged with respect thereto and the Owners shall look only to the Authority for the payment of the
interest on and principal of such Bonds it being understood that the Credit Instrument shall no longer be
in effect at that time; provided, that before being required to make any such payment to the Authority,
the Trustee may, as a charge on such funds, give notice by mail to all Owners that such money remains
unclaimed and that after a date named in such notice, which date shall not be less than sixty (60) days
after the date of giving such notice, the balance of such money then unclaimed will be returned to the
Authority.
DOCSLA1:466082.I
40929-320 W W B 44
2004-112
ARTICLE XI
CONTINUING DISCLOSURE AGREEMENT
SECTION 11.01. Continuing Disclosure Agreement. Article XI of this
Indenture constitutes a continuing disclosure agreement (the "Disclosure Agreement"), which is entered
into by the Authority and the Trustee for the benefit of the Owners and beneficial owners of the Bonds
and in order to assist the Participating Underwriters in complying with Rule 15c2-12(b)(5) under the
Securities Exchange Act of 1934.
SECTION 11.02. Definitions. In addition to the defmitions set forth in Article I,
which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Disclosure Representative" shall mean the Authorized Authority Representative, or
such other officer or employee as the Authority shall designate in writing to the Dissemination Agent and
the Trustee from time to time.
"Dissemination Agent" shall mean the Trustee, acting in its capacity as Dissemination
Agent hereunder, or any successor Dissemination Agent designated in writing by the Authority and
which has filed with the Trustee a written acceptance of such designation.
"Listed Events" shall mean any of the events listed in Section 11.03 hereof.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. The National Repositories currently approved by the
Securities and Exchange Commission may be found at the following Internet address:
http://Www.see.govlconsumerinrmsir.htm.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds
required to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time to
time.
"State Repository" shall mean any public or private repository or entity designated by
the State of California as a state repository for the purpose of the Rule and recognized as such by the
Securities and Exchange Commission. As of the date of this Indenture, there is no State Repository.
DOCSLAI:466082.1
40929-320 W W B 45
2004-112
SECTION 11.03. Reporting of Significant Events.
(a) Pursuant to this Section the Authority shall give, or cause to be given, notice of
the occurrence of any of the following events with respect to the Bonds, if material:
Bonds.
1. principal and interest payment delinquencies.
2. non-payment related defaults.
3. modifications to rights of Owners.
4. contingent or unscheduled Bond calls.
5. defeasances.
6. rating changes.
7. adverse tax opinions or events adversely affecting the tax-exempt status of the
8. unscheduled draws on any debt service reserves reflecting financial difficulties.
9. unscheduled draws on the Credit Instrument reflecting financial difficulties.
10. substitution of the Credit Provider or any failure by the Credit Provider to
perform on the Instrument.
11. release, substitution or sale of property securing repayment of the Bonds.
(b) The Trustee shall, within three (3) Business Days of obtaining actual knowledge
of the occurrence of any of the Listed Events, without malting any detemunation as to materiality,
contact the Disclosure Representative, inform such person of the event, and request that the Authority
promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to
subsection (f) of this Section. For purposes of this Disclosure Agreement, "actual acknowledge' of
such Listed Events shall mean knowledge by an officer of the Trustee at the Principal O the Trustee with
regular responsibility for matters related to the Indenture and Bonds.
(c) Whenever the Authority obtains knowledge of the occurrence of a Listed Event,
whether because of a notice from the Trustee pursuant to subsection (b) or otherwise, the Authority
shall as possible determine if such event would be material under applicable federal securities laws.
(d) If the Authority has determined that knowledge of the occurrence of a Listed
Event be material under applicable federal securities laws, the Authority shall promptly notify the
Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the
occurrence pursuant to subsection (f).
DOCSLA1:466082.1
40929-320 W W B 46
2004-112
(e) If in response to a request under subsection (b), the Authority determines that
the Listed Event would not be material under applicable federal securities laws, the Authority shall so
notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the
occurrence pursuant to subsection (f).
(f) If the Dissemination Agent has been instructed by the Authority to report the
occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the
Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing,
notice of Listed Events described in clauses (a) 4 and 5 shall not be given under this subsection any
earlier than the notice (if any) of the underlying event is given to Owners of affected Bonds pursuant to
this Indenture unless otherwise directed by the Authority in writing.
SECTION 11.04. Termination of Reporting Obligation. The Authority's,
Trustee's and Dissemination Agent's obligations under this Article XI shall terminate upon the
defeasance, prior redemption or payment in full of all of the Bonds.
SECTION 11.05. Dissemination Agent. The Authority may, from time to time,
appoint or engage a Dissemination Agent to assist them in carrying out its obligations under this
Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor
Dissemination Agent. The initial Dissemination Agent shall be the Trustee. The Dissemination Agent
may resign at any time by providing at least thirty (30) days Witten notice to the Authority and the
Trustee, if different.
SECTION 11.06. Amendment; Waiver. The Authority may, from time to time,
appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent. Notwithstanding any other provision of this Disclosure Agreement, the Authority
and the Dissemination Agent and the Trustee may amend this Disclosure Agreement (and the Trustee
and the Dissemination Agent shall agree to any amendment so requested by the Authority, provided
neither the Trustee or Dissemination Agent shall be obligated to enter into an amendment increasing or
modifying its duties or obligations hereunder), and any provision of this Disclosure Agreement may be
waived, provided the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Section 11.03(a) it may
only be in connection with a change in circumstances fiat arises from a change in legal requirements,
change in law, or change in the identity, nature, or status of the Authority or type of business conducted
thereby;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel or counsel expert in federal securities laws addressed to
the Authority and the Trustee, have complied with the requirements of the Rule at the time of the
primary offering of the Bonds, after taking into account any amendments or interpretations Rule, as well
as any change in circumstances;
DOCSLA1:466082.1
40929-320 W W B 47
2004-112
(c) the proposed amendment or waiver either (i) is approved by the Owners in the
manner provided in the Indenture for amendments to the Indenture with the consent of Owners, or
(ii) does not, in the opinion of the nationally recognized bond counsel or counsel expert in federal
securities laws addressed to the Authority and the Trustee, materially impair the interests of Owners or
beneficial owners of the Bonds; and
(d) the Authority shall have delivered copies of such opinions and amendment to
each Repository.
SECTION 11.07. Additional Information. Nothing in this Disclosure Agreement
shall be deemed to prevent the Authority from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or notice of
occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. if the
Authority chooses to include any information in any notice of occurrence of a Listed Event in addition to
that which is specifically required by this Disclosure Agreement, the Authority shall have no obligation
hereunder to update such information or include it in any future notice of occurrence of a Listed Event.
SECTION 11.08. Default. In the event of a failure of the Authority or the Trustee
to comply with any provision of this Disclosure Agreement, the Trustee shall at the written request of
any Participating Underwriter or the Owners or beneficial owners of at least 25% aggregate principal
amount of Outstanding Bonds, but only to the extent indemnified to its satisfaction from any liability or
expenses, including without limitation fees and expenses of its attorneys, or any Owner or beneficial
owner of a Bond may take such motions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the Authority or Trustee, as the case may be,
to comply with its obligations under this Disclosure Agreement. A default under this Disclosure
Agreement shall not be deemed an "Event of Default" under Section 7.01 hereof, and the sole remedy
under this Disclosure Agreement in the event of any failure of the Authority or the Trustee to comply
with this Disclosure Agreement shall be an action to compel performance.
SECTION 11.09. Duties, Immunities and Liabilities of Trustee and
Dissemination Agent. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity
as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure
Agreement, and the Authority agrees to indemnify and save the Dissemination Agent and the Trustee,
their officers, directors, employees and agents, hamrless against any loss, expense and liabilities which it
may incur arising out of or in the exercise or performance of its powers and duties hereunder, including
the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding
liabilities due to the Dissemination Agent's or Trustee's negligence or willfiil misconduct. The
Dissemination Agent shall be paid compensation by the Authority for its services provided hereunder in
accordance with its schedule of fees as agreed to between the Dissemination Agent and the Authority
from time to time and all expenses, legal fees and advances made or incurred by the Dissemination
Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or
obligation to review any information provided to it by the Authority hereunder and shall not be deemed
to be acting in any fiduciary capacity for the Authority, Owners or any other party. The obligations of
DOCSLAI:466082.1
40929-320 W W B 48
2004-112
the Authority under this Section shall survive resignation or removal of the Dissemination Agent or
Trustee and payment of the Bonds.
SECTION 11.10. Beneficiaries. This Disclosure Agreement shall inure solely to
the benefit of the Authority, the Trustee, the Dissemination Agent, the Participating Underwriters and the
Owners and beneficial owners, from time to time of the Bonds, and shall create no rights in any other
person or entity.
DOCSLAI:466082.1
40929-320 W W B 49
2004-112
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Benefits of the Indenture Limited to Parties. Nothing
contained herein, expressed or implied, is intended to give to any person other than the Local Agencies,
the Trustee, the Authority, the Credit Provider and the Owners, any claim, remedy or right under or
pursuant hereto, and any agreement, condition, covenant or term contained herein required to be
observed or performed by or on behalf of the Authority shall be for the sole and exclusive benefit of the
Trustee, the Local Agencies, the Credit Provider, the Owners and their successors.
SECTION 12.02. Successor Deemed Included in All References to
Predecessor. Whenever the Authority or the Trustee or any officer thereof is named or referred to
herein, such reference shall be deemed to include the successor to the powers, duties and functions that
are presently vested in the Authority or the Trustee or such officer, and all agreements, conditions,
covenants and terms contained herein required to be observed or performed by or on behalf of the
Authority or the Trustee or any officer thereof shall bind and inure to the benefit of the respective
successors thereof whether so expressed or not.
SECTION 12.03. Execution of Documents by Owners. Any declaration,
request or other instrument which is permitted or required herein to be executed by Owners may be in
one or more instruments of similar tenor and may be executed by Owners in person or by their
attorneys appointed in writing. The fact and date of the execution by any Owner or such Owner's
attorney of any declaration, request or other instrument or of any writing appointing such attorney may
be proved by the certificate of any notary public or other officer authorized to take acknowledgments of
deeds to be recorded in the state or territory in which he purports to act that the person signing such
declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an
affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by
such other proof as the Trustee may accept which it may deem sufficient.
Any declaration, request or other instrument in writing of the Owner of any Bond shall
bind all future Owners of such Bond with respect to anything done or suffered to be done by the
Authority, the Local Agencies or the Trustee in good faith and in accordance therewith.
SECTION 12.04. Waiver of Personal Liability; No Liability of Authority
Members. No director, supervisor, councilmember, trustee, member, officer or employee of the Local
Agencies or the Authority shall be individually or personally liable for the payment of the interest on or
principal of the Bonds, but nothing contained herein shall relieve any director, supervisor,
councihmember, trustee, member, officer or employee of the Local Agencies or the Authority from the
performance of any official duty provided by any applicable provisions of law or by the Notes or the
Note Resolution or the Indenture.
DOCSLA1:466082.1
40929-320 WWB 50
2004-112
Notwithstanding anything to the contrary herein or in any other document, no entity that
is a program participant of the Authority, its supervisors, councilmembers, trustees, officers, directors,
employees, and agents, shall have any liability of any kind hereunder or by reason of or in connection
with any of the transactions contemplated hereby, other than with respect to a program participant of
the Authority in its capacity as a Local Agency hereunder.
SECTION 12.05. Content of Certificates; Post -Issuance Legal Opinions.
Every Certificate of the Authority or any Local Agency with respect to compliance with any agreement,
condition, covenant or term contained herein shall include: (a) a statement that the person or persons
executing such Certificate have read such agreement, condition, covenant or term and the definitions
herein relating thereto; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such Certificate are based; (c) a statement that, in
the opinion of the signers, they have made or caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not such agreement,
condition, covenant or term has been complied with; and (d) a statement as to whether, ut the opinion of
the signers, such agreement, condition, covenant or term has been complied with.
Any Certificate of the Authority or any Local Agency may be based, insofar as it relates
to legal matters, upon an Opinion of Counsel unless the person or persons executing such certificate
know that the Opinion of Counsel with respect to the matters upon which his or their certificate may be
based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the
same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters and
information with respect to which is in the possession of the Local Agency or the Authority, upon a
representation by an officer or officers of the Local Agency or the Authority unless the counsel
executing such Opinion of Counsel knows that the representation with respect to the matters upon
which his opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should
have known that the same was erroneous.
Should any of the post -issuance Opinions of Counsel referred to in this Indenture, the
Note Resolutions or in any Local Agency Certificate be delivered by bond counsel other than Orrick,
Herrington & Sutcliffe LLP, or if the Bonds are prepaid or remain Outstanding in connection with a
transaction which is approved by counsel other than Orrick, Herrington & Sutcliffe LLP, the Trustee,
promptly after such opinion is delivered, will mail, first-class, postage prepaid, (1) a copy of each said
opinion to each Owner at said Owner's address as it appears in the registration book kept by the
Trustee and (2) a notice indicating that the opinion of Orrick, Herrington & Sutcliffe LLP delivered in
connection with the delivery of the Bonds may no longer be relied upon. The Authority and the Local
Agencies shall cooperate with the Trustee in order to effectuate the provisions of this paragraph.
SECTION 12.06. Notice by Mail. Any notice required to be given hereunder by
mail to any Owner shall be given by mailing a copy of such notice, fast class postage prepaid, to each
such Owner at such Owner's address appearing in the books required to be kept by the Trustee
pursuant to the provisions of Section 2.07 hereof; provide d, that receipt of any such notice shall not be
a condition precedent to the effectiveness of such notice and failure to receive any such notice shall not
DOCSLAL466082.1
40929-320 W W B 51
2004-112
affect the validity of the proceedings taken in connection with the action or the event concerning which
such notice was given.
SECTION 12.07. Funds. Any fiord or account required to be established and
maintained herein by the Trustee may be established and maintained in the accounting records of the
Trustee either as an account or a fund, and may, for the purpose of such accounting records, any audits
thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but
all such records with respect to all such funds shall at all times be maintained in accordance with trust
accounting practice and with due regard for the instructions, if any, delivered to the Trustee pursuant to
Section 6.04(b) and for the protection of the security of the Bonds and the rights of the Owners and the
Credit Provider.
SECTION 12.08. Article and Section Headings, Gender and References.
The headings or titles of the several articles and sections hereof and the table of contents appended
hereto shall be solely for convenience of reference and shall not affect the meaning, construction or
effect hereof, and words of any gender shall be deemed and construed to include all genders. All
references herein to "Articles," "Sections" and other subdivisions or clauses are to the corresponding
articles, sections, subdivisions or clauses hereof; and the words "hereby," "herein," "hereof," "hereto,"
"herewith," "hereunder" and other words of similar import refer to the Indenture as a whole and not to
any particular article, section, subdivision or clause thereof.
SECTION 12.09. Partial Invalidity. If any one or more of the agreements,
conditions, covenants or terms contained herein required to be observed or performed by or on the part
of the Authority or the Trustee shall be contrary to law, then such agreement or agreements, such
condition or conditions, such covenant or covenants or such terra or terms shall be null and void and
shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and
shall in no way affect the validity hereof or of the Bonds, and the Owners and the Credit Provider shall
retain all the benefit, protection and security afforded to them hereunder and under all provisions of
applicable law. The Authority and the Trustee hereby declare that they would have executed and
entered into the Indenture and each and every other article, section, paragraph, subdivision, sentence,
clause and phrase hereof and would have authorized the execution and delivery of the Bonds pursuant
hereto irrespective of the fact that any one or more of the articles, sections, paragraphs, subdivisions,
sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be
held to be unconstitutional, unenforceable or invalid.
SECTION 12.10. California Law. The Indenture shall be construed and
governed in accordance with the laws of the State of California.
SECTION 12.11. Notices. All written notices to be given hereunder shall be
given by mail to the party entitled thereto at its address set forth below, or at such other address as such
party may provide to the other parties in writing from time to time, namely:
DOCSLAI:466082.1
40929-320 WWB 52
2004-112
If to the Trustee: Wells Fargo Bank, National Association
707 Wilshire Boulevard, 17th Floor
Los Angeles, California 90017
Attention: Corporate Trust Department
If to the Credit Provider: Financial Security Assurance Inc.
350 Park Avenue
New York, New York 10022-6022
Attention: Managing Director— Surveillance
Re: Policy No.
If to the Authority: California Statewide Communities Development
Authority
1100 K Street, Suite 101
Sacramento, California 95814
Attention: Secretary
If to the Local Agencies: To the individual addressees as set forth in Exhibit
A to each of the Purchase Agreements
If to the Purchaser: Lehman Brothers Inc.
1100 Glendon Avenue, Suite 1101
Los Angeles, CA 90024
Attention: Kevin O'brien
SECTION 12.12. Effective Date. The Indenture shall become effective upon its
execution and delivery.
SECTION 12.13. Execution in Counterparts. The Indenture may be executed
and entered into in several counterparts, each of which shall be deemed an original, and all of which
shall constitute but one and the same instrument.
DOCSLA1:466082.1
40929-320 WWB 53
2004-112
IN WITNESS WHEREOF, the Authority has caused this Indenture to be signed in its
name by a member of the Commission of the Authority, and Wells Fargo Bank, National Association,
as trustee, to evidence its acceptance of the trust hereby created, has caused the Indenture to be signed
in the name of the Trustee by an authorized officer of the Trustee, all as of the day and year first above
written.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
0
Member of the Commission
of the Authority
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
as
Authorized Officer
DOCSLAI:466082.1
40929-320 WWB 54
2004-112
SCHEDULEI
PARTICIPATING LOCAL AGENCIES
12 month Notes
Issuer
S-I-1
DOCSLA1:466082.1
40929-320 W W B
Principal
Amount
2004-112
Issuer
Principal
Amount
Total Paz Amount $
S-I-2
DOCSLA1:466082.1
40929-320 W W B
2004-112
SCHEDULEII
INITIAL DEPOSIT TO PROCEEDS FUND
ATTRIBUTABLE TO EACH LOCAL AGENCY
Amount
Deposited in the
Issuer Proceeds Fund
S-II-1
DOCSLAL466082.1
40929-320 W W B
2004-112
Issuer
Total
S-II-2
DOCSLA1:466082.1
40929-320 WWB
Amount
Deposited in the
Proceeds Fund
2004-112
SCHEDULE III
Credit Instrument
The Municipal Bond Insurance Policy No. , issued by the Credit Provider guaranteeing the
scheduled payment of a portion of the principal of and interest on the Bonds.
Credit Agreement
None
Credit Provider
Financial Security Assurance Inc.
S-III-1
DOCSLA1:466082.1
40929-320 WWB
2004-112
No. R-1
[FORM OF BOND]
[FORM OF FRONT OF BOND]
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
2004 Tax and Revenue Anticipation BOND, SERIES A-1
Interest Maturity
Rate Date Dated Date CUSIP
% , 2005 July 1, 2004
REGISTERED OWNER: Cede & Co.
PRINCIPAL SUM:
THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY (the "Authority") promises to pay the registered owner set forth above of this California
Statewide Communities Development Authority 2004 Tax and Revenue Anticipation Bond, Series A-1
(the `Bond'), on the Maturity Date set forth above (the "Maturity Date"), the principal sum specified
above in lawful money of the United States of America, and to pay interest on [ and] the
Maturity Date at the rate of interest specified above. Principal and interest at maturity shall be paid
upon surrender of this Bond on the Maturity Date at Wells Fargo Bank, National Association, a national
banking association duly organized and existing under and by virtue of the laws of the United States of
America, at its principal corporate trust office in Los Angeles, California (or such other place as the
Trustee shall designate in writing to the Authority), as trustee (together with any successor thereto in
accordance with the Indenture, the "Trustee"). Such interest shall be calculated on the basis of a 360-
day year consisting of twelve 30-day months.
[If printed bond certificates used, add the following sentence:]
THE TERMS AND PROVISIONS OF THIS BOND ARE CONTINUED ON THE
REVERSE SIDE HEREOF AND SUCH CONTINUED TERMS AND PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HERE.
DOCSLA1:466082.1
40929-320 W W B A- I
2004-112
IN WITNESS WHEREOF, this Bond has been dated as of the Dated Date, and has
been executed and attested by the manual or facsimile signature of the Chair or Vice Chair of the
Authority and attested to by the manual or facsimile signature of the Secretary of the Authority.
Attest:
Secretary
Chair
Authenticated by the manual signature of an authorized
officer of the Trustee on the following date:
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
Authorized Officer
DOCSLAI :466082.1
40929-320 WWB A-2
2004-112
[FORM OF BACK OF BOND]
This Bond is one of the duly authorized bonds entitled "California Statewide
Communities Development Authority 2004 Tax and Revenue Anticipation Bonds, Series A-l"
aggregating $ (the "Bonds") which have been issued by the Authority under and
pursuant to the terms of an Indenture (together with any supplements or amendments, the "Indenture")
dated as of July 1, 2004 by and between the Trustee and the Authority. Copies of the Indenture are on
file at said office of the Trustee, and reference is hereby made to the Indenture for a description of the
agreements, conditions, covenants and terms securing the Bonds, for the nature, extent and manner of
enforcement of such agreements, conditions, covenants and terms, for the rights and remedies of the
registered owners of the Bonds with respect thereto, for the terms under which the Indenture can be
amended, and for the other agreements, conditions, covenants and terms upon which the Bonds are
issued thereunder, to all of which the owner hereof assents and agrees by acceptance hereof.
The Bonds are authorized to be issued in the form of fully registered Bonds in
denominations of five thousand dollars ($5,000) or any integral multiple thereof.
This Bond is transferable or exchangeable by the registered owner hereof, in person or
by his attorney duly authorized in writing, at said office of the Trustee, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and upon surrender of this
Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer or
exchange, a new Bond or Bonds of authorized denominations equal to the principal amount hereof will
be delivered by the Trustee to the registered owner hereof in exchange or transfer herefor.
The Trustee may treat the registered owner hereof as the absolute owner hereof for all
purposes, whether or not this Bond shall be overdue, and the Trustee shall not be affected by any
knowledge or notice to the contrary; and payment of the interest on and principal of this Bond shall be
made only to such registered owner as above provided, which payments shall be valid and effectual to
satisfy and discharge the liability evidenced and represented by this Bond to the extent of the sum or
sums so paid.
The Bonds are secured by a pledge and assignment of the tax and revenue anticipation
notes issued by certain California local agencies (as more particularly described in the Indenture) and
payments with respect thereto, to the extent provided in the Indenture, subject to the provisions of the
Indenture permitting the disbursement thereof for or to the purposes and on the conditions and terms set
forth therein.
The Bonds are not a lien or charge upon any funds or property of the Authority (except
to the extent of the aforementioned pledge and assignment). The Bonds are not a debt of any Local
Agency (as defined in the Indenture) or any member of the Authority and no such Local Agency or
member is liable in any manner for the payment thereof.
DOCSLAI :466082.1
40929-320 W W B A-3
2004-112
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York corporation ('DTC'), to Trustee or its agent for the registration of transfer,
exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein
DOCSLA1:466082.1
40929-320 W W B A-4
2004-112
STATEMENT OF INSURANCE
Financial Security Assurance Inc. ("Financial Security"), New York, New York, has
delivered its municipal bond insurance policy with respect to a portion of the total scheduled payments
of principal of and interest due on this Bond to WELLS FARGO BANK, NATIONAL
ASSOCIATION, or its successor, as trustee for the Bonds (the "Trustee"). Said Policy is on file and
available for inspection at the principal office of the Trustee and a copy thereof may be obtained from
Financial Security or the Trustee.
DOCSLAI :466082.1
40929-320 WWB A-5
2004-112
[FORM OF ASSIGNMENT]
For value received, the undersigned do(es) hereby sell, assign and transfer unto whose
tax identification number is the within Bond and do(es) hereby irrevocably
constitute(s) and appoint(s) attorney to transfer such Bond on the register of the Trustee,
with full power of substitution in the premises.
Dated:
SIGNATURE GUARANTEED BY:
Note: The signature(s) to this Assignment must correspond with the name(s) as written on the
face of the within Bond in every particular, without alteration or enlargement or any
change whatsoever, and the signature(s) must be guaranteed by a member fum of the
New York Stock Exchange or a commercial bank or trust company.
DOCSLAI :466082.I
40929-320 W W B A-6
2004-112
EXHIBIT B
FORM OF REQUISITION FROM PROCEEDS FUND
To: Wells Fargo Bank, National Association, as Trustee
From:
Re: California Statewide Communities Development Authority 2004 Tax and Revenue Anticipation
Bonds, Series A-1
Requisition No. _
The undersigned, on behalf of the (the "Local
Agency"), hereby requests payment, from amounts held for the benefit of the Local Agency in the
Proceeds Fund established pursuant to the Indenture, dated as of July 1, 2004, by and between the
California Statewide Communities Development Authority and Wells Fargo Bank, National
Association, as trustee, the amount of by wire/check/ACH (circle
one). If the payment is by wire, please fill in the following information:
Name, Address and Phone Number of Bank:
Name of Contact Person at Bank:
ABA Routing
Account No.
The undersigned hereby certifies as follows:
I. The amount requisitioned hereby will be applied to a purpose for which the
Local Agency is authorized to use and expend funds from the general fund of the Local Agency and
pending such application will be invested in investments which are legal for the investment of funds of the
Local Agency.
2. The representations of the Local Agency set forth in Section 11 of the
Resolution of the Local Agency, providing for the borrowing of funds for Fiscal Year 2004-2005 and
the issuance and sale of its 2004 Tax and Revenue Anticipation Note therefor and authorizing
DOCSLAI :466082.1
40929-320 W W B B-1
2004-112
participation in the California Communities Cash Flow Financing Program (the "Resolution") are true
and correct in all material respects as though made on and as of this date except to the extent that such
representations relate to an earlier date.
3. As of the date hereof, no event has occurred and is continuing which constitutes
an Event of Default under the Resolution or would constitute an Event of Default but for the requirement
that notice be given, or time elapse, or both.
Requisition.
4. The information contained herein is true and correct as of the date of this
Dated: 200_
Authorized Local Agency Representative
DOCSLA1:466082.1
40929.320 WWB $-2
2004-112
EXHIBIT C
[FORMS OF REQUEST FOR AND PAYMENT ACCOUNT DEPOSIT CERTIFICATION]
To: [Name and address of Local Agency]
From: Wells Fargo Bank, National Association
Date: [Date Request is mailed]
Re: California Statewide Communities Development Authority 2004 Tax and Revenue Anticipation
Bonds, Series A-1 (the "Program")
Wells Fargo Bank, National Association, as trustee (the "Trustee"), pursuant to that
certain Indenture, dated as of July 1, 2004 (the "Indenture"), by and between the California Statewide
Communities Development Authority and the Trustee, hereby requests, pursuant to Section 5.07 of the
Indenture, that you provide within ten Business Days of the date hereof (i.e., by , 2004) the
certification set forth below with respect to the deposit required to be made to the Payment Account
established in your general fund pursuant to your Note Resolution. Failure to make the required deposit
into the Payment Account constitutes an Event of Default under the Note Resolution and the Indenture.
Furthermore, failure to properly submit the Payment Account Deposit Certification by the date required
also constitutes an Event of Default under the Indenture. Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Indenture.
DOCSLA1:466082.1
40929-320 W W B C-1
Payment Account Deposit Certification
We, , the treasurer of the
_ [Name
of Local Agency] (the "Local Agency"), and [Name of additional
Authorized Local Agency Representative] of the Local Agency, hereby confirm and certify that the
amount of $ has been segregated from other General Fund moneys of the Local Agency
and deposited into the Payment Account established by the Local Agency on
as required by the Note Resolution.
Treasurer
Authorized Local Agency Representative
DOCSLA1:466082.1
40929-320 WWB C-2
2004-112
10,06111f1�
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
2004 Tax and Revenue Anticipation Note
DEPOSIT NOTICE
Name of Local Agency: [name of local agency]
Today's Date:
Please indicate form of repayment below. PLEASE CONFIRM RECEIPT OF FAX BY CALLING
CORPORATE TRUST
(888) 200-1269 ext. 3414 — voice
(515) 245-8532 —fax
ES 1. CHECK: Please make Check Payable to Wells Fargo Bank Iowa, N.A.
Reference: CSCDA [series name]
[name of Local Agency]
Send Check via overnight courier to:
WELLS FARGO BANK IOWA, N.A.
E2818-176 MAC
707 Wilshire Blvd.,17th Floor
Los Angeles, CA 90017
Amount of Check: $ Date Mailed:
Via (type of deliver):
.@S 2. WIRE TRANSFER
Please provide the following information no later than one day before the wire
Amount of Wire: $
Date wire will be sent:
Name of Sending Bank:
DOCSLA1:466082.1
40929-320 WWB
D-1
2004-112
Wells Fargo Bank Iowa, N.A. Wiring Instruction are as follows:
Bank: Wells Fargo Bank Iowa, N.A.
ABA: 073000228
ACCOUNT: 0000405200
Ref: CSCDA2004 [series name] [name of Local Agency]
ATTN: Nancy or Anita— 1-888-200-1269 ext. 3414
Z 3. ACH TRANSFER:* Automatic Clearing House Transfer Instruction
Dated:
DOCSLA1:466082.1
40929-320 W W B
Date of Transfer
District's Bank Name:
ABA:
Account Number:
Account Type (check one)
Account Name:
Amount to Transfer:
Transfer Date:
ill
es Checking es Savings
[name of Local Agency]
[Local Agency]
By:
Title:
Authorized Representative
III]YONN
*This type of repayment authorizes Wells Fargo Bank to automatically debit the Local Agency's
account via ACH and requires the Local Agency's authorized representative signature. The transfer will
be initiated by Wells Fargo Bank Public Funds Department and the Transfer amount will be shown on
the Local Agency's account on the following business day.
DOCSLAI:466082.1
40929-320 WWB
031ULofi9
INDENTURE
by and between
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
Dated as of July 1, 2004
relating to
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
2004 Tax and Revenue Anticipation BONDS, SERIES A-1
Copyright 2004, Orrick, Herrington & Sutcliffe LLP. All rights reserved.
DOCSLAI:466082.1
40929-320 WWB
alismarA
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; EQUAL SECURITY...............................................................2
SECTION 1.01.
Definitions.........................................................................................2
SECTION 1.02.
Equal Security .................................................................................12
ARTICLE II CONDITIONS
AND TERMS OF BONDS....................................................13
SECTION 2.01.
Initial Issuance of Bonds..................................................................13
SECTION 2.02.
Denominations, Medium, Method and Place of Payment and
Datingof Bonds..............................................................................13
SECTION 2.03.
Terms of the Bonds.........................................................................13
SECTION 2.04.
Form of Bonds...............................................................................14
SECTION 2.05.
Execution of Bonds.........................................................................14
SECTION 2.06.
Transfer and Exchange of Bonds.....................................................14
SECTION 2.07.
Bond Registration Books................................................................14
SECTION 2.08.
Temporary Bonds...........................................................................14
SECTION 2.09.
Bonds Mutilated, Destroyed, Lost or Stolen....................................15
SECTION 2.10.
Special Covenants as to Book -Entry Only System ...........................15
ARTICLE III PROCEEDS OF BONDS................................................................................18
SECTION 3.01.
Delivery of Bonds...........................................................................18
SECTION 3.02.
Establishment of Funds and Deposit of Proceeds of Bonds ..............18
SECTION 3.03.
Use of Money in the Costs of Issuance Fund and the Proceeds
Fund...............................................................................................18
ARTICLE IV TRUSTEE'S
DUTIES REGARDING NOTES.................................................20
SECTION 4.01.
Authenticating Agent.......................................................................20
SECTION 4.02.
Registrar and Paying Agent.............................................................20
SECTION 4.03.
Return of Paid Notes......................................................................20
ARTICLE V NOTE PAYMENTS........................................................................................21
SECTION 5.01.
Assignment of Notes.......................................................................21
SECTION 5.02.
Use of Money in the Bond Payment Fund and Amounts
Received from Swap Provider, if any...............................................21
SECTION 5.03.
Draws under or Payments Pursuant to or in Connection With
Credit Instrument; Payment of Principal and Interest ........................22
SECTION 5.04.
Credit Instrument ............................................................................24
DOCSLA1:466082.1
-i-
40929-320 WWB
KIIIIJOBi]
TABLE OF CONTENTS
(continued)
Page
SECTION 5.05. Provisions Relating to Swap; Right to Enforce Swap Agreement
Limited...........................................................................................2
5
SECTION 5.06.
Investments.....................................................................................25
SECTION 5.07.
Confirmation of Deposits to Payment Accounts...............................25
SECTION 5.08.
Rebate Fund...................................................................................26
SECTION 5.09.
Credit Provider Requirements; Subrogation.....................................27
ARTICLEVI COVENANTS................................................................................................30
SECTION 6.01.
Compliance with Indenture ..............................................................30
SECTION 6.02.
Amendment of Notes......................................................................30
SECTION 6.03.
Observance of Laws and Regulations..............................................30
SECTION 6.04.
Tax Covenants................................................................................30
SECTION6.05.
Liens..............................................................................................31
SECTION 6.06.
Accounting Records and Statements................................................31
SECTION 6.07.
Recordation and Filing....................................................................31
SECTION 6.08.
Further Assurances.........................................................................31
SECTION 6.09.
Satisfaction of Predefault Obligations...............................................31
ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY..........................................33
SECTION 7.01.
Action on Default............................................................................33
SECTION 7.02.
Other Remedies of the Trustee........................................................33
SECTION 7.03.
Non-Waiver...................................................................................33
SECTION 7.04.
Application of Funds.......................................................................34
SECTION 7.05.
Remedies Not Exclusive; Credit Providers' Control of
Remedies........................................................................................35
SECTION 7.06.
Exercise of Remedies; Relative Rights of Credit Provider and
BondOwners.................................................................................35
SECTION 7.07.
Limited Liability of the Authority ......................................................35
SECTION 7.08.
Limited Liability of the Local Agencies.............................................36
SECTION 7.09.
Limited Liability of the Trustee.........................................................36
ARTICLE VIII THE TRUSTEE................................................................................................37
SECTION 8.01.
Employment and Duties of the Trustee.............................................37
DOCSLAI :466082.1 -ii-
40929-320 WWB
2004-112
TABLE OF CONTENTS
(continued)
Page
SECTION 8.02.
Removal and Resignation of the Trustee...........................................37
SECTION 8.03.
Compensation of the Trustee...........................................................38
SECTION 8.04.
Protection of the Trustee.................................................................38
SECTION 8.05.
Notices to Rating Agencies.............................................................39
SECTION 8.06.
Relation to Series A-2 Trustee........................................................39
ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO THE INDENTURE...................40
SECTION 9.01.
Amendment or Supplement of Indenture ..........................................40
SECTION 9.02.
Disqualified Bonds..........................................................................41
SECTION 9.03.
Procedure for Amendment with Written Consent of the Owners
and the Credit Provider...................................................................41
SECTION 9.04.
Endorsement or Replacement of Bonds after Amendment or
Supplement.....................................................................................41
SECTION 9.05.
Amendment or Supplement by Mutual Consent...............................42
ARTICLEX DEFEASANCE...............................................................................................43
SECTION 10.01.
Discharge of Bonds and Indenture...................................................43
SECTION 10.02.
Unclaimed Money...........................................................................44
ARTICLE XI CONTINUING DISCLOSURE AGREEMENT..............................................45
SECTION 11.01.
Continuing Disclosure Agreement....................................................45
SECTION 11.02.
Definitions.......................................................................................45
SECTION 11.03.
Reporting of Significant Events........................................................46
SECTION 11.04.
Termination of Reporting Obligation................................................47
SECTION 11.05.
Dissemination Agent........................................................................47
SECTION 11.06.
Amendment; Waiver.......................................................................47
SECTION 11.07.
Additional Information....................................................................48
SECTION 11.08.
Default............................................................................................48
SECTION 11.09.
Duties, Immunities and Liabilities of Trustee and Dissemination
Agent.............................................................................................48
SECTION 11.10.
Beneficiaries...................................................................................49
ARTICLEXII MISCELLANEOUS
........................................................................................50
SECTION 12.01.
Benefits of the Indenture Limited to Parties......................................50
DOCSLAI:466082.1 -iii-
40929-320 W W B
2004-112
TABLE OF CONTENTS
(continued)
Page
SECTION 12.02.
Successor Deemed Included in All References to Predecessor .........
50
SECTION 12.03.
Execution of Documents by Owners................................................50
SECTION 12.04.
Waiver of Personal Liability; No Liability of Authority Members
......................................................................................................50
SECTION 12.05.
Content of Certificates; Post -Issuance Legal Opinions .....................51
SECTION 12.06.
Notice by Mail................................................................................51
SECTION12.07.
Funds.............................................................................................52
SECTION 12.08.
Article and Section Headings, Gender and References .....................52
SECTION 12.09.
Partial Invalidity ..............................................................................52
SECTION 12.10.
California Law................................................................................52
SECTION 12.11.
Notices...........................................................................................52
SECTION 12.12.
Effective Date.................................................................................53
SECTION 12.13.
Execution in Counterparts...............................................................53
SCHEDULE I - PARTICIPATING LOCAL AGENCIES ............................................
S-I-1
SCHEDULE II - INITIAL
DEPOSIT TO PROCEEDS FUND ATTRIBUTABLE
TO EACH LOCAL AGENCY.......................................................S-II-I
SCHEDULE III -
CREDIT INSTRUMENT; CREDIT AGREEMENT; CREDIT
PROVIDER..................................................................................S-III-1
EXHIBIT- FORM OF BOND.......................................................................................A
EXHIBIT B - FORM OF REQUISITION FROM PROCEEDS FUND ..........................B-1
EXHIBIT C - FORMS OF REQUEST FOR AND PAYMENT ACCOUNT
DEPOSIT CERTIFICATION........................................................... C-1
EXHIBIT D - FORM OF DEPOSIT NOTICE............................................................... D-1
DOCSLAI :466082.1 -iv-
40929-320 WWB
2004-112
AN EXTRA SECTION BREAK HAS BEEN INSERTED ABOVE THIS PARAGRAPH.
DO NOT DELETE THIS SECTION BREAK IF YOU PLAN TO ADD TEXT AFTER THE
TABLE OF CONTENTS/AUTHORITIES. DELETING THIS BREAK WILL CAUSE
TABLE OF CONTENTS/AUTHORITIES HEADERS AND FOOTERS TO APPEAR ON
ANY PAGES FOLLOWING THE TABLE OF CONTENTS/AUTHORITIES.
DOCSLAI :466082.I
40929-320 W W B