HomeMy WebLinkAboutCC RES 96-11RESOLUTION N0.96-11
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $51,000,000 AGGREGATE PRINCIPAL AMOUNT
OF CITY OF TUSTIN LIMITED OBLIGATION
IMPROVEMENT BONDS, REASSESSMENT DISTRICT
NO. 95-2 (TUSTIN RANCH), APPROVING THE
EXECUTION AND DELIVERY OF A FISCAL AGENT
AGREEMENT, A REIMBURSEMENT AGREEMENT, AN
ESCROW AGREEMENT, A PURCHASE CONTRACT AND
A REMARKETING AGREEMENT AND THE
PREPARATION OF AN OFFICIAL STATEMENT AND
OTHER MATTERS RELATED THERETO AND
RESCINDING RESOLUTION N0.95-120
Reassessment District No. 95-2 (Tustin Ranch)
WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City"), by
Resolution No. 86-81, adopted on June 16, 1986, resolved its intention to form City of Tustin
Assessment District No. 85-1 ("District 85-1") and to issue bonds to represent unpaid
assessments therein;
WHEREAS, the City Council, by Resolution No. 86-81, adopted on June 16, 1986,
confirmed said assessments;
WHEREAS, pursuant to Resolution No. 86-102 of the City Council, adopted on August
18, 1986, an Indenture of Trust, dated as of August 1, 1986 (the "85-1 Indenture"), by and
between the City and Citibank, N. A., as trustee, and the Improvement Bond Act of 1915, being
Division 10 of the California Streets and Highways Code (the "Bond Law"), the City issued City
of Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount of $50,650,000;
WHEREAS, the City Council, by Resolution No. 88-61, adopted on June 13, 1988,
resolved its intention to form City of Tustin Assessment District No. 86-2 ("District 86-2") and
to issue bonds to represent unpaid assessments therein;
WHEREAS, the City Council, by Resolution No. 88-81, adopted on July 18, 1988,
confirmed said assessments;
WHEREAS, pursuant to Resolution No. 88-97 of the City Council, adopted on
September 6, 1988, an Indenture of Trust, dated as of September 1, 1988 (the "86-2 Indenture"),
by and between the City and Citibank, N. A., as trustee, and the Bond Law, the City issued City
of Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2
Bonds") in the original principal amount of $81,400,000;
WHEREAS, certain savings and efficiencies may be obtained by refunding the
$23,969,000 aggregate principal amount of 85-1 Bonds that have not been converted to fixed
interest rates pursuant to the 85-1 Indenture and the $41,362,000 aggregate principal amount of
86-2 Bonds that have not been converted to fixed interest rates pursuant to the 86-2 Indenture
(said portion of the 85-1 Bonds and said portion of the 86-2 Bonds being collectively referred to
as the "Prior Bonds");
WHEREAS, the City Council, by a Resolution entitled "A Resolution of the City
Council of the City of Tustin of Intention to Levy Reassessments and to Issue Refunding Bonds
Upon Security Thereof ', adopted on November 20, 1995 (the "Resolution of Intention"), has
conducted reassessment and refunding proceedings under the Refunding Act of 1984 for 1915
Improvement Act Bonds, Division 11.5 (commencing with Section 9500) of the California
Streets and Highways Code for the City's Reassessment District 95-2 (Tustin Ranch) (the
"District") to which proceedings reference is hereby made for further particulars;
WHEREA5, there is on file with the Treasurer of the City a list of all reassessments
within the District which remain unpaid (the "List of Unpaid Reassessments"), to which list
reference is made for further particulars;
WHEREA5, the City desires to refund the Prior Bonds;
WHEREAS, in order to provide the moneys required to refund the Prior Bonds, the City
desires to authorize the issuance of the City of Tustin Limited Obligation Improvement Bonds,
Reassessment District No. 95-2 (Tustin Ranch), Series A (the "Bonds"), in an aggregate principal
amount of not to exceed $51,000,000;
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued and
secured and to secure the payment of the principal thereof, premium, if any, and interest thereon,
the City proposes to enter into a Fiscal Agent Agreement with State Street Bank and Trust
Company of California, N.A., as fiscal agent (such Fiscal Agent Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made pursuant to
this Resolution, being referred to herein as the "Fiscal Agent Agreement");
WHEREAS, in order to provide a letter of credit to secure the payment of the principal
of and interest on the Bonds, the City proposes to enter into a Reimbursement, Credit and
Security Agreement with Kredietbank N.V. (such Reimbursement, Credit and Security
Agreement, in the form presented to this meeting, with such changes, insertions and omissions as
are made pursuant to this Resolution, being referred to herein as the "Reimbursement
Agreement");
WHEREAS, in order to provide for the defeasance and redemption of the Prior Bonds,
the City proposes to enter into an Escrow Agreement (95-2) with State Street Bank and Trust
Company, N.A., as escrow bank (such Escrow Agreement in the form presented to this meeting,
with such changes, insertions and omissions as are made pursuant to this Resolution being
referred to herein as the "Escrow Agreement"); and
WHEREAS, PaineWebber Incorporated (the "Underwriter") has presented the City with
a proposal, in the form of a Bond Purchase Agreement to purchase the Bonds from the City (such
Purchase Contract, in the form presented to this meeting, with such changes, insertions and
omissions as are made pursuant to this Resolution, being referred to herein as the "Bond
Purchase Agreement");
WHEREAS, in order to provide for the remarketing of Bonds tendered pursuant to the
terms of the Fiscal Agent Agreement, the City proposes to enter into a Remarketing Agreement
with PaineWebber Incorporated (such Remarketing Agreement, in the form presented to this
meeting, with such changes, insertions and omissions as are made pursuant to this Resolution,
being referred to herein as the "Remarketing Agreement");
WHEREAS, there have been prepared and submitted to this meeting forms of:
2
(a) the Fiscal Agent Agreement;
(b) the Reimbursement Agreement;
(c) the Escrow Agreement;
(d) the Bond Purchase Agreement;
(e) the Remarketing Agreement;
(f) the Preliminary Official Statement to be used in connection with the offering and sale
of the Bonds (such Preliminary Official Statement in the form presented to this meeting, with
such changes, insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Preliminary Official Statement"); and
(g) the Protocol Agreement between the City and The Irvine Company, which provides
for certain rights and obligations of the City and The Irvine Company with respect to the District
and the Bonds (such Protocol Agreement in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution being referred to
herein as the "Protocol Agreement"); and
WHEREAS, the City desires to proceed to issue and sell the Bonds and to authorize the
execution of such documents and the performance of such acts as may be necessary or desirable
to effect the offering, sale and issuance of the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the City Council the City of Tustin as
follows:
Section 1. The reassessments now remaining unpaid are as shown on the List of Unpaid
Reassessments, which list is hereby approved and incorporated herein by this reference. The
total amount of the unpaid reassessments is not to exceed $58,000,000. For a particular
description of the lots, pieces and parcels of land bearing the respective reassessment numbers
set forth in the List of Unpaid Reassessments, reference is hereby made to the reassessment and
to the reassessment diagram, and any amendments thereto approved by the City Council, all as
recorded in the office of the Director of Public Works of the City as the Superintendent of Streets
of the City, after confirmation thereof by the City Council.
Section 2. Subject to the provisions of Section 3 hereof, the issuance of the Bonds, in the
aggregate principal amount of not to exceed $51,000,000, on the terms and conditions set forth
in, and subject to the limitations specified in, the Fiscal Agent Agreement, is hereby authorized
and approved. The Bonds shall be dated, shall bear interest at the rates, shall mature on the
dates, shall be issued in the form, and shall be as otherwise provided in the Fiscal Agent
Agreement, as the same shall be completed as provided in this Resolution.
Section 3. The Fiscal Agent Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth herein, be and the same is hereby approved.
The Mayor of the City, or such other member of the City Council as the Mayor may designate,
the City Manager of the City and the Director of Finance/Treasurer of the City (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name of the
City, to execute and deliver the Fiscal Agent Agreement in the form submitted to this meeting,
with such changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the execution
of the Fiscal Agent Agreement by such Authorized Officer; provided, however, that such
changes, insertions and omissions shall not authorize an aggregate principal amount of Bonds in
excess of $51,000,000, shall not result in a final maturity date of the Bonds later than September
2, 2013 and shall not result in a true interest cost on the Bonds for the initial interest period or
periods in excess of 7.0°Io.
Section 4. The Reimbursement Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the City, to execute and deliver the Reimbursement Agreement in the form
presented to this meeting, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Reimbursement Agreement by such Authorized Officer.
Section 5. The Escrow Agreement, in substantially the form submitted to this meeting
and made a part hereof as though set forth in full herein, be and the same is hereby approved.
The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the
name of the City, to execute and deliver the Escrow Agreement in the form presented to this
meeting, with such changes, insertions and omissions as the Authorized Officer executing the
same may require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Escrow Agreement by such Authorized Officer.
Section 6. The Bond Purchase Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the City, to execute and deliver the Bond Purchase Agreement in the form
presented to this meeting, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer;
provided, however, that such changes, insertions and omissions shall not result in an aggregate
underwriter's discount (not including any original issue discount) from the principal amount of
the Bonds in excess of .07°Io of the aggregate principal amount of the Bonds, plus expenses of
not to exceed $40,000.
Section 7. The Remarketing Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the City, to execute and deliver the Remarketing Agreement in the form
presented to this meeting, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Remarketing Agreement by such Authorized Officer.
Section 8. The Preliminary Official Statement, in substantially the form presented to this
meeting and made a part hereof as though set forth in full herein, with such changes therein as
may be approved by an Authorized Officer, be and the same is hereby approved, and the use of
the Preliminary Official Statement in connection with the offering and sale of the Bonds is
hereby authorized and approved. The Authorized Officers are, and each of them is, hereby
authorized and directed, for and in the name of the City, to certify to the Underwriter that the
Preliminary Official Statement has been "deemed final" for purposes of Rule 15c2-12
promulgated by the Securities and Exchange Commission.
Section 9. The preparation and delivery of a final Official Statement (the "Official
Statement"), and its use in connection with the offering and sale of the Bonds, be and the same is
hereby authorized and approved. The Official Statement shall be in substantially the form of the
Preliminary Official Statement with such changes, insertions and omissions as may be approved
4
by an Authorized Officer, such approval to be conclusively evidenced by the execution and
delivery thereof. The Authorized Officers are, and each of them is, hereby authorized and
directed to execute the final Official Statement and any amendment or supplement thereto, for
and in the name of the City.
Section 10. The Protocol Agreement, in substantially the form submitted to this meeting
and made a part hereof as though set forth in full herein, be and the same is hereby approved.
The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the
name of the City, to execute and deliver the Protocol Agreement in the form presented to this
meeting, with such changes, insertions and omissions as the Authorized Officer executing the
same may require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Protocol Agreement by such Authorized Officer.
Section 11. The Authorized Officers are, and each of them hereby is, authorized and
directed to execute and deliver any and all documents and instruments and to do and cause to be
done any and all acts and things necessary or proper for carrying out the issuance of the Bonds
and the transactions contemplated by the Fiscal Agent Agreement, the Reimbursement
Agreement, the Escrow Agreement, the Bond Purchase Agreement, the Remarketing Agreement,
the Official Statement, the Protocol Agreement and this Resolution.
Section 12. All actions heretofore taken by the officers and employees of the City with
respect to the District, the reassessments, the refunding of the Prior Bonds or the issuance and
sale of the Bonds, or in connection with or related to any of the agreements or documents
referenced herein, are hereby approved, confirmed and ratified.
Section 13. Resolution No. 95-120, adopted by the City Council on November 20, 1995,
is hereby rescinded, repealed and annulled and shall be of no further force and effect.
Section 114. This Resolution shall take effect immediately upon its adoption.
APPROVED and ADOPTED by the City Council of the City of Tustin on January 15,
1996.
Potts, Mayor
ATTEST:
amela Stoker, C Jerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
I, Pamela Stoker, City Clerk of the City of Tustin, California hereby certify that the
foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meeting of the
City Council of said City duly and regularly held at the regular meeting place thereof on January
15, 1996, of which meeting all of the members of said City Council had due notice and at which
a majority thereof were present; and that at said meeting said Resolution was adopted by the
following vote:
AYES: COUNCIL MEMBERS: POTTS, WORLEY, DOYLE, SALTARELLI, THOMAS
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
An agenda of said meeting was posted at least 72 hours before said meeting at 300
Centennial Way, Tustin, California, a location freely accessible to members of the public, and a
brief general description of said Resolution appeared on said agenda.
I further certify that I have carefully compared the same with the original minutes of said
meeting on file and of record in my office; that the foregoing Resolution is a full, true and correct
copy of the original Resolution adopted at said meeting and entered in said minutes; and that said
Resolution has not been amended, modified or rescinded since the date of its adoption, and the
same is now in full force and effect.
Dated: January 15 , 1996
Pamela Stoker, C ty Clerk
FISCAL AGENT AGREEMENT
by and between the
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.,
as Fiscal Agent
Dated as of 1,1995
RELATING TO
CITY OF TUSTIN
LIIVIITED OBLIGATION IlVIPROVEMENT BONDS
REASSESSMENT DISTRICT N0.95-2
(TUSTIN RANCH), SERIES A
TABLE OF CONTENTS
ARTICLE I
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
STATUTORY AUTHORITY AND DEFINITIONS
Authority for this Agreement ........................................................................ 2
Definitions .................................................................................................... 2
Interpretation . .. ............................................................................................ 14
Agreement Constitutes Contract .................................................................14
ARTICLE II
THE BONDS
Section 2.01. Authorization of Bonds ............................................................................... 16
Section 2.02. Terms of Series A Bonds ............................................................................ 16
Section 2.03. Determination of Adjusted Interest Rates and Adjustment Periods for
VIP Bonds ................................................................................................ 17
Section 2.04. Determination of Adjusted Interest Rate During Daily, Weekly,
Monthly, Semi-Annual, Extended Rate or Fixed Rate Mode .................. 18
Section 2.05. Alternate Rate for Interest Calculation ....................................................... 19
Section 2.06. Interest on Bank Bonds ............................................................................... 19
Section 2.07. Changes in Mode ........................................................................................ 19
Section 2.08. Change In Mode to a Fixed Rate Mode ...................................................... 20
Section 2.09. Transfer and Exchange of Bonds ................................................................ 22
Section 2.10. Registration Books ...................................................................................... 23
Section 2.11. Execution of Bonds ..................................................................................... 23
Section 2.12. Authentication of Bonds ............................................................................. 23
Section 2.13. Temporary Bonds ....................................................................................... 23
Section 2.14. Bonds Mutilated, Lost, Destroyed or Stolen .............................................. 23
Section 2.15. Book-Entry System ..................................................................................... 24
Section 2.16. Limited Obligation ...................................................................................... 26
Section 2.17. No Acceleration .......................................................................................... 26
Section 2.18. Refunding of Bonds .................................................................................... 26
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
~'Psction 3.01. Issuance of Series A Bonds ........................................................................ 27
Section 3.02. Application of Proceeds of the Series A Bonds .......................................... 27
.Section 3.03. Costs of Issuance Fund ............................................................................... 27
Section 3.04. Issuance of Additional Series of Bonds ...................................................... 27
Section 3.05. Proceedings for the Issuance of Additional Series of Bonds ...................... 28
Section 3.06. Limitations on Additional Bonds ................................................................ 29
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ARTICLE IV
REDEMPTION OF BOND5
Section 4.01. Optional Redemption .................................................................................. 30
Section 4.02. Mandatory Redemption from Reassessment Prepayments ......................... 30
Section 4.04. Notice of Redemption ................................................................................. 32
Section 4.05. Selection of Bonds for Redemption ............................................................ 32
Section 4.06. Partial Redemption of Bonds ...................................................................... 32
Section 4.07. Effect of Notice of Redemption .................................................................. 32
ARTICLE V
PURCHASE OF ADJUSTABLE RATE BONDS
Section 5.01. Tender for Purchase upon Election of Owner ............................................ 34
Section 5.02. Mandatory Purchase on Mandatory Purchase Dates .................................. 34
Section 5.03. Tender and Purchase of Adjustable Rate Bonds ......................................... 35
Section 5.04. Letter of Credit ........................................................................................... 36
Section 5.05. No Sales After Certain Defaults ................................................................. 37
Section 5.06. Purchase Fund ............................................................................................. 37
ARTICLE VI
SECURITY FOR BONDS; FLOW OF FUNDS;
INVESTMENTS
Section 6.01. Pledge and Assignment ...................................................
............................
39
Section 6.02. Redemption Fund ........................................................................................ 39
Section 6.03. Prepayment Account ...............................................................
....................
40
Section 6.04. Letter of Credit Account ............................................................................. 41
Section 6.05. Interest Reserve Fund ................................................................................. 41
Section 6.06. Reserve Fund .............................................................................................. 42
Section 6.07. Continuing Costs Account .......................................................................... 43
Section 6.08. Investment of Moneys ................................................................................ 43
ARTICLE VII
COLLECTION AND APPLICATION OF
REASSESSMENTS; PARTICULAR COVENANTS
Section 7.01. Collection and Application of Reassessments ............................................ 45
Section 7.02. Foreclosure ................................................................................................. 47
Section 7.03. No Advances from Available Surplus Funds ............................................. 47
Section 7.04. Punctual Payment ....................................................................................... 47
Section 7.05. Extension of Payment of Bonds ................................................................. 47
Section 7.06. Against Encumbrances ............................................................................... 47
Section 7.07. Power to Issue Bonds and Make Pledge ..................................................... 48
Section 7.08. Accounting Records and Financial Statements .......................................... 48
Section 7.09. Waiver of Laws ........................................................................................... 48
Section 7.10. Tax Covenants .......................................................................................... 48
Section 7. 11. Authority for Continuing Costs .................................................................. 49
Section 7.12. Further Assurances ..................................................................................... 49
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 8.01. Events of Default ........................................................................................ 50
Section 8.02. Foreclosure ................................................................................................. 50
Section 8.03. Other Remedies .......................................................................................... 50
Section 8.04. Bank's Right Regarding Remedies ............................................................. 51
Section 8.05. Application of Reassessments and Other Funds After Default .................. 51
Section 8.06. Bond Owners' Direction of Proceedings .................................................... 52
Section 8.07. Limitation on Bond Owners' Right to Sue ................................................. 52
Section 8.08. Absolute Obligation of City ........................................................................ 52
Section 8.09. Termination of Proceedings ........................................................................ 52
Section 8.10. Remedies Not Exclusive ............................................................................. 53
Section 8.11. No Waiver of Default ................................................................................. 53
ARTICLE IX
FISCAL AGENT; PAYING AGENT;
REMARKETING AGENT
Section 9.01. Duties and Liabilities of Fiscal Agent ........................................................ 54
Section 9.02. Merger or Consolidation ............................................................................. 55
Section 9.03. Liability of Fiscal Agent ............................................................................. 56
Section 9.04. Right to Rely on Documents ....................................................................... 56
Section 9.05. Preservation and Inspection of Documents ................................................ 57
Section 9.06. Compensation and Indemnification ............................................................ 57
Section 9.07. Appointment of Paying Agent .................................................................... 57
Section 9.08. Appointment of Remarketing Agent .......................................................... 57
ARTICLE X
MODIFICATION OR AMENDMENT
Section 10.01. Amendments Permitted .............................................................................. 59
Section 10.02. Effect of Supplemental Agreement ............................................................ 60
Section 10.03. Endorsement of Bonds ................................................................................ 60
Section 10.04. Amendment of Particular Bonds ................................................................ 60
ARTICLE XI
DEFEASANCE
Section 11.01. Discharge of Agreement ............................................................................. 61
Section 11.02. Discharge of Liability on Bonds ................................................................. 61
Section 11.03. Deposit of Money or Securities with Fiscal Agent ..................................... 62
Section 11.04. Payment of Bonds After Discharge of Agreement ..................................... 62
ARTICLE XII
MISCELLANEOUS
Section 12.01. Limited Obligation ...................................................................................... 63
Section 12.02. Successor Is Deemed Included in All References to Predecessor .............. 63
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Section 12.03. Limitation of Rights to Parties and Bond Owners ...................................... 63
Section 12.04. Waiver of Notice ......................................................................................... 63
Section 12.05. Destruction of Bonds ............................................................................... ... 63
Section 12.06. Severability of Invalid Provisions ........................................................... ... 63
Section 12.07. Bank Deemed Owner ............................................................................... ... 64
Section 12.08. Notices ..................................................................................................... ... 64
Section 12.09. Additional Notices to Moody's and S&P ................................................ ... 65
Section 12.10. Evidence of Rights of Bond Owners .......................................................... 65
Section 12.11. Disqualified Bonds ..................................................................................... 65
Section 12.12. Money Held for Particular Bonds ............................................................... 66
Section 12.13. Funds and Accounts .................................................................................... 66
Section 12.14. Payment on Non-Business Days ................................................................. 66
Section 12.15. Waiver of Personal Liability ....................................................................... 66
Section 12.16. Conflict with Act or Bond Law .................................................................. 66
Section 12.17. Conclusive Evidence of Regularity .......................................................... .. 66
Section 12.18. Execution in Several Counterparts ........................................................... .. 66
Section 12.19. New York Time ........................................................................................ .. 66
Section 12.20. Governing Law ......................................................................................... .. 66
EXHIBIT A -Form of Series A Bond A
1
.................................................................................. -
-iv-
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (this "Agreement") is made and entered into as
of 1, 1995 by and between the CITY OF TUSTIN, a general law city and municipal
corporation organized and existing under and by virtue of the laws of the State of California (the
"City"), and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a
national banking association organized and existing under and by virtue of the laws of the United
States of America, as fiscal agent (the "Fiscal Agent").
WITNESSETH:
WHEREAS, on , 1995, the City Council of the City passed and adopted
Resolution No. (the "Resolution of Intention") relating to the levy of reassessments and
issuance of refunding bonds pursuant to the Refunding Act of 1984 for 1915 Improvement
Bonds, Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of
California (the "Refunding Law") in and for a portion of the City's Assessment District No. 85-1
and a portion of the City's Assessment District No. 86-2 and, by the Resolution of Intention, the
City Council of the City provided that serial and/or term bonds would be issued thereunder
pursuant to the provisions of the Improvement Bond Act of 1915, Division 10 of the Streets and
Highways Code of California (the "Bond Law" and, together with the Refunding Law, the "Act")
and reference to the Resolution of Intention is hereby expressly made for further particulars;
WHEREAS, under the provisions of the Act, on .1995, the City Council of
the City adopted Resolution No. (the "Resolution of Issuance"), which, among other
matters, authorized the issuance of refunding improvement bonds of the City designated "City of
Tustin Limited Obligation Lnprovement Bonds, Reassessment District No. 95-2 ('Ilistin Ranch)
(the "Bonds"), upon the security of the unpaid reassessments and provided that said issuance
would be in accordance with the Act and this Agreement, and authorized the execution hereof;
WHEREAS, it is in the public interest and for the benefit of the City and the owners of
the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the
disbursement of proceeds of the Bonds, the disposition of the reassessments securing the Bonds
and the administration and payment of the Bonds; and
WHEREAS, the City has determined that all things necessary to cause the Bonds, when
authenticated by the Fiscal Agent and issued as provided in the Act, the Resolution of Issuance
and this Agreement, to be legal, valid and binding and limited obligations in accordance with
their terms, and all things necessary to cause the creation, authorization, execution and delivery
of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject
to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant
to the provisions of the Act and the Resolution of Issuance.
Section 1.02. Definitions. Unless the context otherwise requires, the terms defined in
this Section shall for all purposes of this Agreement, of any Supplemental Agreement and of any
certificate, opinion or other document herein or therein mentioned, have the meanings herein
specified.
"Act" means, collectively, the Improvement Bond Act of 1915, as amended, being
Division 10 of the California Streets and Highways Code, and the Refunding Act of 1984 for
1915 Improvement Act Bonds, as amended being Division 11.5 of the California Streets and
Highways Code.
"Additional Bonds" means Bonds other than Series A Bonds issued hereunder in
accordance with the provisions of Section 3.04 and 3.05.
"Adjustable Rate Bonds" means Series A Bonds in any Mode other than the Fixed Rate
Mode.
"Adjustable Rate Mode" means the Daily Mode, the Weekly Mode, the Monthly Mode,
the Semi-Annual Mode, the Extended Rate Mode and the VIP Mode.
"Adjusted Interest Rate" means, with respect to the interest rate to be borne by a Series
A Bond during any Adjustment Period, the interest rate per annum determined on the applicable
Rate Determination Date in accordance with Section 2.03 or 2.04.
"Adjustment Period" means the period of time that any Adjusted Interest Rate remains
in effect, which period:
(a) with respect to a Series A Bond in the Daily Mode, shall be the period consisting of
one day;
(b) with respect to a VIP Bond, shall be the period from and including the Rate
Determination Date for such Bond with respect to such Adjustment Period to and including the
day preceding the following Rate Determination Date for such Series A Bond as established by
the City pursuant to Section 2.03; provided, however, that the day after the last day of any such
Adjustment Period shall be a Business Day and each such Adjustrnent Period shall be at least one
day;
(c) with respect to a Series A Bond in a Weekly Mode, initially shall be the period from
and including the first day that such Series A Bond becomes subject to the Weekly Mode to and
including the following Tuesday and thereafter commencing on each Wednesday to and
including Tuesday of the following week;
(d) with respect to a Series A Bond in the Monthly Mode, initially shall be the period
from and including the fast day that such Series A Bond becomes subject to the Monthly Mode
to but not including the first day of the following calendar month and thereafter shall be the
period from and including the first day of each calendar month to but not including the first day
of the following calendar month;
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(e) with respect to a Series A Bond in the Semi-Annual Mode, initially shall be the
period from and including the first day that such Series A Bond becomes subject to the Semi-
Annual Mode to but not including the next March 2 or September 2, whichever first occurs, and
thereafter shall be the period from and including such March 2 or September 2, as applicable, to
but not including the next succeeding March 2 or September 2, whichever first occurs;
(f) with respect to a Series A Bond in the Extended Rate Mode, initially shall be a period
(which shall be at least one year in duration or integral multiples of six months in excess of one
year) from and including the first day that such Series A Bond becomes subject to the Extended
Rate Mode to but not including a subsequent March 2 or September 2 and thereafter may be the
period from and including such March 2 or September 2, as applicable, to but not including a
future March 2 or September 2, whichever last occurs and which is at least one year in duration;
(g) with respect to a Series A Bond in the Fixed Rate Mode, shall be the period from and
including the Conversion Date for such Series A Bond to but not including the Maturity Date.
No Adjustment Period shall extend beyond the day preceding the Maturity Date.
"Agreement" means this Fiscal Agent Agreement, as originally executed or as it may
from time to time be amended or supplemented by any Supplemental Agreement.
"Alternate Letter of Credit" means a letter of credit or other security or liquidity device
issued in accordance with Section 5.04 which shall have a term of not less than one year and
shall have the same material terms as the Letter of Credit.
"Alternate Rate" means, on any Rate Determination Date, the rate per annum specified
in the Index and in effect on such Rate Determination Date. If no Indexing Agent any longer
publishes an Index satisfying the requirements set forth in the definition thereof, the Alternate
Rate for an Adjustment Period shall be the rate per annum specified in the most recently
published Index for a comparable Adjustment Period.
"Assessment Consultant" means Muni Financial Services, Inc. or any other consultant
or fu-m of financial consultants appointed by the City and who or each of whom: (a) is judged by
the City to have experience with respect to the administration of assessment districts, (b) is in
fact independent and not under the domination of the City, (c) does not have any substantial
interest, direct or indirect, with the City, and (d) is not connected with the City as an officer or
employee of the City, but who may be regularly retained to make reports to the City.
"Auditor" means the auditor/controller of the County, or such other official of the
County who is responsible for preparing property tax bills.
"Authority" means the Tustin Public Financing Authority, a joint exercise of powers
authority organized and existing under Sections 6500 et seq. of the California Government Code.
"Authority Indenture" means the Indenture of Trust, dated as of .1995, by
and between the Authority and State Street Bank and Trust Company of California, N.A., as
trustee, as originally executed or as it may from time to time be amended or supplemented in
accordance with its terms.
"Authority Trustee" means State Street Bank and Trust Company of California, N.A.,
as trustee under the Authority Indenture, or any successor thereto as trustee thereunder.
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"Authorized Denominations" means (a) with respect to the VIP Mode, $100,000 and
any integral multiple of $5,000 in excess thereof, (b) with respect to the Fixed Rate Mode,
$5,000 and any integral multiple thereof, (c) with respect to the Daily Mode, the Weekly Mode,
the Monthly Mode, the Semi-Annual Mode and the Extended Rate Mode, $100,000 and any
integral multiple thereof, and (d) with respect to Additional Bonds, $5,000 and any integral
multiple thereof.
"Authorized Representative" means, with respect to the City, its City Manager,
Assistant City Manger or Treasurer, or any other Person designated as an Authorized
Representative of the City in a Written Certificate of City filed with the Fiscal Agent.
"Bank" means Kredietbank N.V., acting by and through its New York Branch, and its
successors and assigns, or the issuer of an Alternate Letter of Credit.
"Bank Bonds" means any Series A Bonds registered in the name of the Bank pursuant to
Section 5.03(c).
"Bank Rate" means 0%.
"Beneficial Owners" means those individuals, partnerships, corporations or other
entities for whom the Participants have caused the Depository to hold Book-Entry Bonds.
"Bond Counsel" means a firm of nationally recognized bond counsel selected by the
City and acceptable to the Fiscal Agent.
"Bond Year" means each twelve-month period beginning on September 3 in each year
and extending to the next succeeding September 2, both dates inclusive; except that the first
Bond Year shall begin on the Closing Date and end on September 2, 1996.
"Bonds" means the City of Tustin Limited Obligation Improvement Bonds,
Reassessment District No. 95-2 (Tustin Ranch) issued hereunder, and includes the Series A
Bonds and any Additional Bonds. ,
"Bonds (85-1)" means the City of Tustin Assessment District No. 85-1 Improvement
Bonds issued pursuant to the Indenture (85-1).
"Bonds (86-2)" means the City of Tustin Assessment District No. 86-2 Limited
Obligation Improvement Bonds issued pursuant to the Indenture (86-2).
"Book-Entry Bonds" means the Bonds registered in the name of the nominee of DTC,
or any successor securities depository for the Bonds, as the registered owner thereof pursuant to
the terms and provisions of Section 2.15.
"Business Day" means any day other than (a) a Saturday, Sunday or legal holiday, (b) a
day on which banking institutions in Los Angeles, California or New York, New York or in any
other city where either the principal corporate trust office of the Fiscal Agent, the corporate trust
office of the Paying Agent designated for payment and tender of the Bonds or the office of the
Bank at which drafts are required to be presented under the Letter of Credit, is located are
required or authorized by law (including executive order) to close, or (c) a day on which the New
York Stock Exchange is closed.
"Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of
DTC with respect to the Bonds.
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"Change in Mode" means any change pursuant to Section 2.07 or 2.08 from one Mode
to another Mode.
"City" means the City of Tustin, and any successor thereto.
"Clerk" means the Clerk or Deputy Clerk of the City.
"Closing Date" means the date upon which the Series A Bonds are delivered to the
Original Purchaser, being , 1995.
"Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the Series A Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Series A Bonds, together with applicable
proposed, temporary and final regulations promulgated, and applicable official public guidance
published, under the Code.
"Continuing Costs Account" means the account within the Redemption Fund by that
name established and held by the Fiscal Agent pursuant to Section 6.07.
"Continuing Costs of the )Eyed Rate Bonds" means the continuing costs of the Fixed
Rate Bonds and Related Additional Bonds, if any, including the fees, costs and indemnifications
due the Fiscal Agent, the Paying Agent or the City and allocable to the Fixed Rate Bonds and
Related Additional Bonds, if any.
"Continuing Costs of the Adjustable Rate Bonds" means the continuing costs of the
Adjustable Rate Bonds and the Reimbursement Agreement, including the fees, costs and
indemnifications due the Bank or the Remarketing Agent, and the fees, costs and
indemnifications due the Fiscal Agent, the Paying Agent or the City and allocable to the
Adjustable Rate Bonds.
"Conversion Date" means, with respect to an Adjustable Bond, the date on which such
Adjustable Bond begins to bear interest at a Fixed Interest Rate.
"Conversion Request" means a written notice delivered to the City pursuant to the
Protocol Agreement requesting the conversion of a specified principal amount of Adjustable Rate
Bonds to Fixed Rate Bonds.
"Cost of Issuance" means, with respect to a Series of Bonds, all items of expense
directly or indirectly payable by or reimbursable to the City relating to the authorization,
issuance, sale and delivery of such Bonds, including but not limited to printing expenses, rating
agency fees, filing and recording fees, initial fees, expenses and charges of the Fiscal Agent and
its counsel, including the Fiscal Agent's first annual administrative fee, fees, expenses and
charges of the Escrow Bank and its counsel, fees, charges and disbursements of attorneys,
financial advisors, accounting firms, consultants, and other professionals, fees and charges for
preparation, execution and safekeeping of such Bonds and any other cost, charge or fee in
connection with the original issuance of such Bonds.
"Cost of Issuance )Fund" means the fund by that name established and held by the Fiscal
Agent pursuant to Section 3.03.
"Council" means the City Council, as the legislative body of the City.
"County" means the County of Orange, State of California.
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"Daily Mode" means the Mode in which the duration of each Adjustment Period is
determined in accordance with clause (a) of the definition of Adjustment Period.
"Depository" means the securities depository acting as Depository pursuant to
Section 2.15.
"DTC" means The Depository Trust Company, New York, New York and its successors.
"Escrow Agreement" means the Escrow Agreement (95-2), dated as of , 1995,
by and between the City and State Street Bank and Trust Company, N.A., as escrow bank, as
originally executed or as it may from time to time be amended or supplemented in accordance
with its terms.
"Escrow Bank" means State Street Bank and Trust Company, N.A., as escrow bank
under the Escrow Agreement, or any successor thereto as Escrow Bank thereunder.
"Expiration Date" means the stated expiration date of the Letter of Credit, as it may be
extended from time to time as provided in the Letter of Credit, or any earlier date on which the
Letter of Credit shall terminate, expire or be canceled.
"Extended Rate Mode" means the Mode in which the duration of the Adjustment Period
is determined in accordance with clause (f) of the definition of Adjustment Period.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is traded
on an established securities market (within the meaning of section 1273 of the Code) and,
otherwise, the term "fair market value" means the acquisitions price in a bona fide arm's length
transaction (as referenced above) if (a) the investment is a certificate of deposit that is acquired in
accordance with applicable regulations under the Code, (b) the investment is an agreement with
specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated
interest rate (for example, a guaranteed investment contract, a forward supply contract or other
investment agreement) that is acquired in accordance with applicable regulations under the Code,
(c) the investment is a United States Treasury Security--State and Local Government Series that
is acquired in accordance with applicable regulations of the United States Bureau of Public Debt,
or (d) the investment is the Local Agency Investment Fund of the State of California but only if
at all times during which the investment is held its yield is reasonably expected to be equal to or
greater than the yield on a reasonably comparable direct obligation of the United States.
"Favorable Opinion of Bond Counsel" means, with respect to any action the
occurrence of which requires such an opinion, an unqualified opinion of Bond Counsel to the
effect that such action is permitted under the Act and this Agreement and will not impair the
exclusion of interest on the Bonds from gross income for purposes of Federal income taxation or
the exemption of interest on the Bonds from personal income taxation under the laws of the State
of California (subject to the inclusion of any exceptions contained in the opinion delivered upon
original issuance of the Series A Bonds).
"Federal Securities" means any of the following which at the time of investment are
legal investments under the laws of the State of California for the funds purported to be invested
therein: (a) direct general obligations of the United States of America (including obligations
issued or held in book entry form on the books of the Department of the Treasury of the United
States of America), and (b) obligations of any agency, department or instrumentality of the
United States of America the timely payment of principal of and interest on which are fully
guaranteed by the United States of America.
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"Fiscal Agent" means State Street Bank and Trust Company of California, N.A., a
national banking association organized and existing under the laws of the United States of
America, acting through the Office of the Fiscal Agent, or any successor thereto as Fiscal Agent
hereunder, appointed as provided herein.
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next
succeeding June 30, or any other twelve-month period hereafter selected and designated as the
official fiscal year period of the City designated in a Written Certificate of the City delivered to
the Fiscal Agent.
"Fixed Interest Rate" means, with respect to a Series A Bond, the rate to be borne by
such Series A Bond on and after the Conversion Date therefor, which rate shall be determined in
accordance with Section 2.08.
"Fixed Rate Bond" means a Series A Bond which bears interest at a Fixed Interest Rate.
"Fixed Rate Mode" means the Mode in which the duration of the Adjustment Period is
determined in accordance with clause (g) of the definition of Adjustment Period.
"Indenture (85-1)" means the Indenture of Trust, dated as of August 1, 1986, by and
between the City and Citibank, N.A., as trustee, as supplemented and amended, pursuant to
which the Bonds (85-1) were issued.
"Indenture (86-2)" means the Indenture of Trust, dated as of September 1, 1988, by and
between the City and Citibank, N.A., as supplemented and amended, pursuant to which the
Bonds (86-2) were issued.
"Index" means the index, published by the Indexing Agent, based upon yield evaluations
at par of bonds, the interest on which is excluded from gross income for purposes of federal
income taxation, of not less than five "high grade" component issuers selected by the Indexing
Agent which shall include, without limitation, issuers of general obligation bonds. The specific
issuers included among the component issuers may be changed from time to time by the
Indexing Agent in its discretion. The bonds on which the Index is based shall not include any
bonds the interest on which is subject to a "minimum tax" or similar tax under the Code, unless
all tax-exempt bonds are subject to such tax. With respect to Series A Bonds in the Daily Mode,
the Weekly Mode, the Monthly Mode or the VIP Mode with an Adjustment Period of 30 days or
less, the yield evaluation period for the Index shall be 30-day yield evaluations. With respect to
Series A Bonds in the Semi-Annual Mode or the VIP Mode with an Adjustment Period of greater
than 30 days but less than or equal to 180 days, the yield evaluation period for the Index shall be
180-day yield evaluations. With respect to Series A Bonds in the Extended Rate Mode or the
VIP Mode with an Adjustment Period greater than 180 days, the yield evaluation period for the
Index shall be one-year yield evaluations.
"Indexing Agent" means Kenny Information Systems, a corporation duly organized and
existing under and by virtue of the laws of the State of New York, and its successors and assigns,
except that if such corporation shall be dissolved or liquidated or shall no longer publish the
indices referred to in the definition of Index, then the term "Indexing Agent" shall be deemed to
refer to any other entity publishing similar indices selected by the City and approved by the Bank
and the Remarketing Agent (neither of whom shall be under any liability by reason of such
approval).
"Information Services" means Financial Information, Inc.'s "Daily Called Bond
Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor;
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Kenny Information Services' Called Bond Service, 55 Broad Street, 28th Floor, New York, New
York 10004; Moody's Investors Service Municipal and Government," 99 Church Street, New
York, New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation
"Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and, in
accordance with then current guidelines of the Securities and Exchange Commission, such other
addresses and/or such services providing information with respect to called bonds as the City
may designate in a Written Certificate of the City delivered to the Fiscal Agent.
"Interest Payment Date" means (a) with respect to each Series A Bond in the VIP
Mode, the first day of the next succeeding Adjustment Period for such Series A Bond, (b) with
respect to each Series A Bond in the Daily Mode, the Weekly Mode and the Monthly Mode, the
fifth Business Day of each calendar month, (c) with respect to each Series A Bond in the Semi-
Annual Mode, the Extended Rate Mode and the Fixed Rate Mode, each March 2 and September
2, and (d) with respect to each Additional Bond, each March 2 and September 2, commencing on
the March 2 or September 2 specified in the Supplemental Agreement pursuant to which such
Additional Bond is issued. "Interest Payment Date" shall also mean any Mandatory Purchase
Date.
"Interest Reserve Fund" means the fund by that name established and held by the Fiscal
Agent pursuant to Section 6.05.
"Interest Reserve Fund Requirement" means, on any date, an amount equal to the
interest that would have accrued at the Maximum Rate during a period of 35 days ending on such
date on the aggregate principal amount of Series A Bonds then in the VIP Mode.
"Letter of Credit" means the irrevocable, direct pay letter of credit issued by the Bank
contemporaneously with the original delivery of the Series A Bonds, except that upon the
issuance of an Alternate Letter of Credit in accordance with Section 5.04 such term shall mean
such Alternate Letter of Credit.
"Letter of Credit Account" means the account within the Redemption Fund by that
name established and held by the Fiscal Agent pursuant to Section 6.04.
"Letter of Credit Interest Amount" means the amount of the Letter of Credit which
may be drawn upon to pay interest on the Series A Bonds, which (a) during the VIP Mode, the
Daily Mode, the Weekly Mode and the Monthly Mode shall be an amount equal to the interest to
accrue on the Outstanding Series A Bonds in such respective Modes over a 50-day period
calculated at the Maximum Rate on the basis of a 365-day year for the actual number of days
elapsed, and (b) during the Semi-Annual Mode and the Extended Rate Mode shall be an amount
equal to the interest on the Outstanding Series A Bonds in such respective Modes over a 196-day
period in such Modes calculated at the Maximum Rate on the basis of a 360- day year composed
of twelve 30-day months.
"Letter of Representations" means the letter of the Fiscal Agent and the City delivered
to and accepted by the Depository on or prior to the delivery of the Bonds asBook-Entry Bonds
setting forth the basis on which the Depository serves as depository for such Book-Entry Bonds,
as originally executed or as it maybe supplemented or revised or replaced by a letter to a
substitute Depository.
"Mandatory Purchase Date" means (a) with respect to VIP Bonds, the next succeeding
Rate Determination Date for such VIP Bonds, (b) the date of any Change in Mode, (c) the fifth
Business Day prior to any Substitution Date, (d) the fifth Business Day prior to the Expiration
Date, and (e) the fifth Business Day following the Fiscal Agent's receipt of a written notice from
the Bank that either (i) an event of default (as defined in the Reimbursement Agreement) has
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occurred and directing the Fiscal Agent to give notice of the mandatory purchase of Adjustable
Bonds in accordance with Section 5.02 or, (ii) when the amount of the Letter of Credit has been
reduced by a drawing thereunder to pay interest on the Bonds, that the Bank will not reinstate the
amount of the Letter of Credit by an amount equal to the amount so drawn.
"Maturity Date" means September 2, 2013.
"Maximum Interest Rate" means 12% per annum.
"Mode" means the VIP Mode, the Daily Mode, the Weekly Mode, the Monthly Mode,
the Semi-Annual Mode, the Extended Rate Mode or the Fixed Rate Mode.
"Monthly Mode" means the Mode in which the duration of the Adjustment Period is
determined in accordance with clause (d) of the definition of Adjustment Period.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant to Section 2.15.
"Notice Parties" means the City, the Fiscal Agent, the Remarketing Agent, the Paying
Agent and the Bank.
"Notice of Change in Mode" means the notice required to be delivered by the City to
the other Notice Parties prior to any Change in Mode pursuant to Section 2.07.
"Office" means, (a) with respect to the Fiscal Agent, the principal corporate trust office
of the Fiscal Agent in Los Angeles, California, or such other office as may be specified to the
other Notice Parties by the Fiscal Agent in writing, and (b) with respect to the Paying Agent, the
principal corporate trust office of the Paying Agent in New York, New York, or such other office
as may be specified to other Notice Parties by the Paying Agent in writing.
"Original Purchaser" means PaineWebber Incorporated, as the original purchaser of the
Series A Bonds.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 12.11) all Bonds theretofore, or thereupon being,
authenticated and delivered by the Paying Agent under this Agreement except:
(a) Bonds theretofore canceled by the Paying Agent or surrendered to the Paying
Agent for cancellation;
(b) Bonds with respect to which all liability of the City shall have been
discharged in accordance with Section 11.02, including Bonds (or portions of Bonds)
disqualified under Section 12.11; and
(c) Bonds for the transfer or exchange of or in lieu of or in substitution for which
other Bonds shall have been authenticated and delivered by the Paying Agent pursuant to
this Agreement.
Notwithstanding the foregoing, Bank Bonds shall remain Outstanding until the Bank is
paid all amounts due on such Bonds.
"Owner" means, with respect to a Bond, the Person in whose name such Bond is
registered on the Registration Books.
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"Participants" means those broker-dealers, banks and other financial institutions from
time to time for which the Depository holds Book-Entry Bonds as securities depository.
"Paying Agent" means (a) with respect to Series A Bonds in an Adjustable Rate Mode,
State Street Bank and Trust Company of California, N.A., a national banking association
organized and existing under the laws of the United States, acting through the Office of the
Paying Agent, or any successor thereto as Paying Agent, appointed as provided herein, and (b)
with respect to all other Bonds, the Fiscal Agent.
"Permitted Investments" means the following, but only to the extent that the same aze
acquired at Fair Mazket Value:
(a) Federal Securities;
(b) any of the following direct or indirect obligations of the following agencies of the
United States of America: (i) direct obligations of the Export-import Bank; (ii) certificates of
beneficial ownership issued by the Farmers Home Administration; (iii) participation certificates
issued by the General Services Administration; (iv) mortgage-backed bonds or pass-through
obligations issued and guaranteed by the Government National Mortgage Association, the
Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Federal Housing Administration; (v) project notes issued by the United States Department of
Housing and Urban Development; and (vi) public housing notes and bonds guaranteed by the
United States of America;
(c) interest-bearing demand or time deposits (including certificates of deposit) or deposit
accounts in federal or state chartered savings and loan associations or in federal or State of
California banks (including the Fiscal Agent), provided that (i) the unsecured short-term
obligations of such commercial bank or savings and loan association shall be rated Al or better
by S&P, or (ii) such demand or time deposits shall be fully insured by the Federal Deposit
Insurance Corporation;
(d) commercial paper rated in the highest short-term rating category by S&P, issued by
corporations which are organized and operating within the United States of America, and which
matures not more than 180 days following the date of investment therein;
(e) bankers acceptances, consisting of bills of exchange or time drafts drawn on and
accepted by a commercial bank whose short-term obligations are rated in the highest short-term
rating category by S&P, which mature not more than 270 days following the date of investment
therein;
(f) obligations the interest on which is excludable from gross income pursuant to Section
103 of the Code and which aze rated A or better by S&P;
(g) obligations issued by any corporation organized and operating within the United
States of America having assets in excess of $500,000,000, which obligations are rated A or
better by S&P;
(h) money mazket funds which aze rated Am or better by S&P;
(i) any investment agreement which is approved in writing by S&P and, with respect to
any investment agreement in which amounts held in a fund or account securing Adjustable Rate
Bonds are invested, the Bank, prior to the time of initial investment; and
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(j) the Local Agency Investment Fund established pursuant to Section 16429.1 of the
Government Code of the State of California to the extent the Fiscal Agent may deposit and
withdraw funds directly, provided that the Fiscal Agent may restrict such inveswent if required
to keep moneys available for the purposes of this Agreement.
"Person" means an individual, corporation, firm, association, partnership, trust, or other
legal entity or group of entities, including a governmental entity or any agency or political
subdivision thereof.
"Prepayment Account" means the account within the Redemption Fund by that name
established and held by the Fiscal Agent pursuant to Section 6.03.
"Principal Payment Date" means, with respect to a Bond, the date on which the
principal thereof becomes due and payable in accordance with the terms thereof and hereof,
whether as a result of the maturity thereof or as a result of mandatory sinking fund redemption.
"Prior Bonds" means, collectively, the $23,969,000 aggregate principal amount of
Bonds (85-1) that have not been converted to a fixed interest rate pursuant to the Indenture (85-1)
and the $41,362,000 aggregate principal amount of Bonds (86-2) that have not been converted to
a fixed interest rate pursuant to the Indenture (86-2).
"Prior District 85-1" means City of Tustin Assessment District No. 85-1, the
assessments in which were confirmed by Resolution No. 86-81, adopted by the City Council of
the City on June 16, 1986.
"Prior District 86-2" means City of Tustin Assessment District No. 86-2, the
assessments in which were confirmed by Resolution No. 88-81, adopted by the City Council of
the City on July 18, 1988.
"Protocol Agreement" means the Protocol Agreement, dated as of , 1995, by
and between the City and The Irvine Company, as originally executed or as it may from time to
time be amended.
"Purchase Date" means (a) during the Daily Mode and the Weekly Mode, any Business
Day, and (b) during the Monthly Mode, the Semi-Annual Mode and the Extended Rate Mode,
the first day of the next succeeding Adjustment Period.
"Purchase Price" means (a) with respect to any Series A Bonds to be purchased on any
Purchase Date, an amount equal to 100% of the principal amount of such Series A Bonds, plus,
in the case of any purchase of Series A Bonds in the Daily Mode or the Weekly Mode, accrued
interest, if any, to such Purchase Date, and (b) with respect to any Series A Bonds purchased on a
Mandatory Purchase Date, an amount equal to 100% of the principal amount of such Series A
Bonds, plus, in the case of any VIP Bonds and any Series A Bonds purchased on a Mandatory
Purchase Date described in clause (c), (d) or (e) of the definition thereof, accrued interest, if any,
to such Mandatory Purchase Date.
"Rate Determination Date" means, with respect to any Adjusted Interest Rate for any
Adjustment Period, the date on which such Adjusted Interest Rate shall be determined, which,
(a) in the case of the VIP Mode, shall be the first day of such Adjustrnent Period, (b) in the case
of the Daily Mode shall be each Business Day, (c) in the case of the Weekly Mode, shall be each
Tuesday or, if Tuesday is not a Business Day, the next succeeding day, or if such day is not a
Business Day, then the Business Day next preceding such Tuesday, (d) in the case of the
Monthly Mode, the Semi-Annual Mode or the Extended Rate Mode, shall be the Business Day
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prior to the first day of such Adjustment Period and (e) in the case of the Fixed Rate Mode, shall
be a date determined by the Remarketing Agent which shall be at least one Business Day but no
more than ten Business Days prior to the first day of such Adjustment Period.
"Reassessment District" means the area designated "Reassessment District No. 95-2
(Tustin Ranch)", formed by the City under the Act.
"Reassessments" means the reassessments levied within the Reassessment District by
the Council under the proceedings taken pursuant to the Resolution of Intention.
"Record Date" means (a) with respect to VIP Bonds if the Interest Payment Date is a
Mandatory Purchase Date, at the close of business on the day prior to such Interest Payment
Date, (b) with respect to VIP Bonds if the Interest Payment Date is a March 2 or September 2
which is not a Mandatory Purchase Date, at the close of business on the 15th day of the calendar
month preceding such Interest Payment Date, (c) with respect to Series A Bonds in the Daily
Mode, the Weekly Mode or the Monthly Mode, at the close of business on the last day of the
calendar month preceding each Interest Payment Date, (d) with respect to Series A Bonds in the
Semi-Annual Mode, the Extended Rate Mode or the Fixed Rate Mode, at the close of business
on the 15th day of the calendar month preceding each Interest Payment Date, (e) with respect to
Additional Bonds, at the close of business on the 15th day of the calendar month preceding each
Interest Payment Date, and (f) any date established by the Fiscal Agent pursuant to Section
2.02(c) as a Record Date for the payment of defaulted interest on the Bonds, if any.
"Redemption Date" means the date fixed for redemption of Bonds subject to redemption
in any notice of redemption given in accordance with the terms hereof.
"Redemption Price" means the aggregate amount of principal of and premium, if any,
on the Bonds upon the redemption thereof pursuant hereto.
"Reimbursement Agreement" means the Reimbursement, Credit and Security
Agreement, dated as of 1995, by and between the Bank and the City or, if an
Alternate Letter of Credit has been issued, the reimbursement agreement, or corresponding
agreement, if any, pursuant to which such Alternate Letter of Credit is issued.
"Registration Books" means the records maintained by the Fiscal Agent for the
registration of ownership and registration of transfer of the Bonds pursuant to Section 2.10.
"Related Additional Bonds" means, with respect to a group of Fixed Rate Bonds, the
additional Series of Bonds which is being issued in connection with the conversion of such group
of Fixed Rate Bonds and which is designated by the City pursuant to Section 7.01(e) to represent
the same parcels as such additional Serves of Bonds.
"Related Fixed Rate Bonds" means, with respect to any additional Series of Bonds, the
group of Fixed Rate Bonds in connection with the conversion of which such additional Series of
Bonds is being issued and which is designated by the City pursuant to Section 7.01(e) to
represent the same parcels as such group of Fixed Rate Bonds.
"Remarketing Agent" means PaineWebber Incorporated, or any other investment
banking firm which may at any time be substituted in its place as provided in Section 9.08 or
Section 9.09.
"Remarketing Agreement" means the Remarketing Agreement, dated as of ,
1995, by and between the City and the Remarketing Agent, or any sunilar agreement between the
City and any successor Remarketing Agent.
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"Reserve Fund" means the fund by that name established and held by the Fiscal Agent
pursuant to Section 6.06.
"Reserve Requirement" means, as of the date of any calculation,
"Resolution of Intention" means Resolution No. ,adopted by the Council on
1995.
"Resolution of Issuance" means Resolution No. ,adopted by the Council on
1995, authorizing the issuance of the Series A Bonds.
"Seasoned Funds" means (a) moneys derived from drawings under the Letter of Credit,
(b) moneys received by the Fiscal Agent and held in funds and accounts created under this
Agreement for a period of at least 124 days and not commingled with any moneys so held for
less than said period and during and prior to which period no petition in bankruptcy was filed by
or against the City under the United States Bankruptcy Code, (c) moneys with respect to which
the Fiscal Agent shall have received an opinion of counsel experienced in matters pertaining to
the United States Bankruptcy Code acceptable to Moody's and S&P to the extent each such
rating agency is then rating the Series A Bonds, that the contemplated use of such moneys would
not constitute a transfer of property voidable under Section 544 or 547 of the United States
Bankruptcy Code, should the City become a debtor under such Code, or (d) investment income
derived from the investment of moneys described in clause (a), (b) or (c).
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax - (516) 227-4039 or 4190; Midwest Securities Trust
Company, Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois
60605, Fax - (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division,
1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex - (215)
496-5058; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other securities depositories as the City may
designate in a Written Certificate of the City delivered to the Fiscal Agent.
"Semi-Annual Mode" means the Mode in which the duration of each Adjustment Period
is determined in accordance with clause (e) of the definition of Adjustment Period.
"Series" means the initial series of Bonds executed, authenticated and delivered on the
date of initial issuance of the Bonds and identified pursuant to this Agreement as the Series A
Bonds, and any Additional Bonds issued pursuant to a Supplemental Agreement and identified as
a separate Series of Bonds.
"Series A Bonds" means the City of Tustin Limited Obligation Improvement Bonds,
Reassessment District No. 95-2 (Tustin Ranch), Series A, issued hereunder.
"Substitution Date" means the date upon which an Alternate Letter of Credit is
substituted for the Letter of Credit then in effect.
"Supplemental Agreement" means any agreement amendatory of or supplemental to
this Agreement, but only if and to the extent that such Supplemental Agreement is specifically
authorized hereunder.
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"Tender Deadline" means (a) during the Daily Mode, 10:30 A.M. on any Business Day,
(b) during the Weekly Mode, at the close of business on the Business Day seven days prior to the
Purchase Date stated in the Tender Notice, (c) during the Monthly Mode, , at the close of
business on the fifth Business Day preceding the applicable Purchase Date, and (d) during the
Semi-Annual Mode and the Extended Rate Mode, at the close of business on the Business Day at
least 15 calendar days preceding the applicable Purchase Date.
"Tender Notice" means a written notice or, with respect to Series A Bonds in the Daily
Mode, telephonic notice, immediately confirmed in writing, (a) that states the bond number, the
principal amount of such Series A Bond and the principal amount of such Series A Bond to be
purchased pursuant to Section 5.01, (b) that states the Purchase Date on which such Series A
Bond is to be purchased, and (c) that irrevocably demands such purchase.
"Treasurer" means the Treasurer of the City, or a designee thereof.
"VIP Bond" means any Series A Bond while in the VIP Mode.
"VIP Mode" means the Mode in which the duration of each Adjustment Period is
determined in accordance with clause (b) of the definition of Adjustment Period and each such
Adjustment Period is equal to or less than 270 days.
"VIP Rate" means the Adjusted Interest gate for a VIP Bond for the applicable
Adjustment Period determined pursuant to Section 2.03.
"Weekly Mode" means the Mode in which the duration of each Adjustment Period is
determined in accordance with clause (c) of the definition of Adjustment Period.
"Written Certificate" and "Written Request" of the City mean, respectively, a written
certificate or written request signed in the name of the City by its Authorized Representative.
Any such certificate or request may, but need not, be combined in a single instrument with any
other instrument, opinion or representation, and the two or more so combined shall be read and
construed as a single instrument.
Section 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include
the plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to include the neuter, masculine or feminine gender, as
appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely
for convenience of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; the words "herein,"
"hereof," "hereby," "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or subdivision hereof.
Section 1.04. Agreement Constitutes Contract. In consideration of the purchase and
acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from
time to time, this Agreement shall be deemed to be and shall constitute a contract among the
City, the Fiscal Agent and the Owners of the Bonds. Except as expressly provided in this
Agreement, the pledge made in this Agreement and the provisions, covenants and agreements
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herein set forth to be performed by or on behalf of the City shall be for the equal benefit,
protection and security of the Owners of any and all of the Bonds. All of the Bonds, without
regard to the time or times of their issuance or maturity, shall be of equal rank without
preference, priority or distinction of any of the Bonds over any other thereof, except as expressly
provided in or permitted by this Agreement.
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ARTICLE II
THE BONDS
Section 2.01. Authorization of Bonds. The City hereby authorizes the issuance of the
Bonds under and subject to the terms of this Agreement, the Act and other applicable laws of the
State of California for the purpose of providing a portion of the moneys to refund the Prior
Bonds. The Bonds may consist of one or more Series of varying denominations, dates
maturities, interest rates and other provisions, subject to the provisions and conditions contained
herein. The Bonds shall be designated generally as the "City of Tustin Limited Obligation
Improvement Bonds, Reassessment District No. 95-2 (Tustin Ranch)", each Series thereof to
bear such additional designation as may be necessary or appropriate to distinguish such Series
from every other Series of Bonds. The aggregate principal amount of Bonds that may be issued
and Outstanding under this Agreement shall not exceed $ ,except as may be otherwise
provided in Section 2.14.
Section 2.02. Terms of Series A Bonds. (a) The Series A Bonds shall be designated
"City of Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-2 (Tustin
Ranch), Series A", and shall be secured by and payable from the Reassessments and other assets
pledged hereunder, as provided herein. The aggregate principal amount of Series A Bonds that
may be issued and Outstanding under this Agreement shall not exceed $ ,except
as may be otherwise provided in Section 2.14.
(b) The Series A Bonds shall be issued in the form of fully registered Bonds in
Authorized Denominations. The principal of, premium, if any, and interest on the Series A
Bonds shall be payable in lawful money of the United States of America. Except as otherwise
provided in the Representation Letter, the interest on the Series A Bonds shall be payable on the
Interest Payment Dates by check mailed by the Paying Agent to the respective Owners thereof at
their addresses as they appear on the applicable Record Date in the Registration Books, except
that in the case of an Owner of $1,000,000 or more in aggregate principal amount of Series A
Bonds, upon the written request of such Owner to the Paying Agent, received at least ten days
prior to a Record Date, specifying the account or accounts to which such payment shall be made,
payment of interest shall be made by wire transfer of immediately available funds on the
following Interest Payment Date. Any such request shall remain in effect until revoked or
revised by such Owner by an instrument in writing delivered to the Paying Agent.
Notwithstanding the foregoing, except as otherwise provided in a Representation Letter, with
respect to Series A Bonds in the VIP Mode, interest on the Series A Bonds shall be payable only
upon surrender thereof at the Office of the Paying Agent. The principal of and premium, if any,
on each Series A Bond shall be payable on each Principal Payment Date, or on redemption prior
thereto, upon surrender thereof at the Office of the Paying Agent.
(c) Each Series A Bond shall bear interest from the Interest Payment Date immediately
preceding the date of authentication thereof, unless such date of authentication is, with respect to
Fixed Rate Bonds, after a Record Date and on or before the next succeeding Interest Payment
Date, in which event any such Fixed Rate Bond shall bear interest from and including such
Interest Payment Date, or unless such date of authentication is prior to the initial Record Date for
the Series A Bonds, in which event any such Series A Bond shall bear interest from the date of
original authentication and delivery of the Series A Bonds, until the entire principal amount of
such Series A Bond is paid. Interest on any Series A Bond which is not punctually paid or duly
provided for on any Interest Payment Date shall be payable to the Person in whose name the
ownership of such Bond is registered on the Registration Books at the close of business on a
special Record Date to be established by the Paying Agent for the payment of such defaulted
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interest to be fixed by the Paying Agent, notice of which shall be given to such Owner not less
than ten days prior to such special Record Date.
(d) The interest on the Series A Bonds shall become due and payable on the Interest
Payment Dates in each year to and including the Maturity Date, or on redemption prior thereto.
The principal of the Series A Bonds shall become due and payable on the Maturity Date, or on
redemption prior thereto.
(e) Notwithstanding the foregoing, so long as the ownership of a Series A Bond is
registered in the name of the Authority Trustee, payment of the principal of, premium, if any, and
interest on such Series A Bond shall be made to the Authority Trustee in immediately available
funds on each applicable payment date, in an amount equal to the principal, interest and any
premium due on such Series A Bond on the applicable payment date.
(f) Interest on Series A Bonds in the Daily Mode, the Weekly Mode, the Monthly Mode
or the VIP Mode shall be calculated on the basis of a 365/366-day year for the actual number of
days elapsed. Interest on Series A Bonds in the Semi-Annual Mode, the Extended Rate Mode or
the Fixed Rate Mode shall be calculated on the basis of a 360-day year composed of twelve 30-
day months. For Series A Bonds in the Daily Mode, the Weekly Mode, or the Monthly Mode,
payment shall be made on each Interest Payment Date for unpaid interest accrued from and
including the first day of the preceding calendar month, through and including the last day of the
preceding calendar month, except that payment shall be made on the initial Interest Payment
Date for the Series A Bonds for unpaid interest accrued from and including the date of initial
delivery of the Series A Bonds. For Series A Bonds in the VIP Mode, the Semi-Annual Mode,
the Extended Rate Mode or the Fixed Rate Mode, payment will be made on each Interest
Payment Date for unpaid interest accrued to but not including such Interest Payment Date.
Notwithstanding any provision of this Agreement to the contrary, at no time may the rate of
interest on any Series A Bond exceed the Maximum Rate.
(g) All Series A Bonds shall initially be in the Daily Mode. Any of the Adjustable Rate
Bonds may be changed to any other Mode at the times and in the manner hereinafter provided.
Upon such Change in Mode, such Series A Bonds shall cease to bear interest at the rate then in
effect and shall bear interest at the rate as provided in the Notice of Change in Mode.
Subsequent to such Change in Mode (unless such Change in Mode was to a Fixed Rate Mode),
such Series A Bonds may again be changed to a different Mode at the times and in the manner
hereinafter provided. A Fixed Rate Mode shall be in effect until the Maturity Date, or
redemption prior to the Maturity Date, and Series A Bonds in a Fixed Rate Mode may not be
changed to any other Mode. Prior to a Change in Mode, the City must deliver to the Fiscal Agent
a Favorable Opinion of Bond Counsel with respect to such Change in Mode. Notwithstanding
the foregoing, Bank Bonds shall bear interest at the Bank Rate. The determination by the
Remarketing Agent of each Adjusted Interest Rate, if in accordance with the provisions hereof,
shall be conclusive and binding upon the City, the Remarketing Agent, the Paying Agent, the
Fiscal Agent, the Bank and the Owners.
(h) The Series A Bonds shall be subject to redemption as provided in Article IV.
(i) The Series A Bonds shall initially be in substantially the, form set forth in Exhibit A
hereto, with appropriate or necessary insertions, omissions and variations as permitted or
required hereby. Upon any change in Mode, a new form of Series A Bonds shall be prepared
which contains the terms of the Series A Bonds applicable in the new Mode.
Section 2.03. Determination of Adjusted Interest Rates and Adjustment Periods for
VIP Bonds. The VIP Rate for the VIP Bonds shall be determined in accordance with the
following procedure.
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(a) The City, in consultation with the Remarketing Agent, shall, prior to the effective
date of a Change in Mode to the VIP Mode, specify the Adjustment Period or Periods and the
principal amount of Series A Bonds to become subject to each such Adjustment Period. The
City may, subject to clause (b) of the definition of Adjustment Period and subject to subsection
(b) of this Section at or about 9:00 A.M. on the Rate Determination Date for each Adjustment
Period for a VIP Bond specify a different Adjustment Period or a different principal amount of
VIP Bonds for such Adjustment Period than that in existence on the date preceding such Rate
Determination Date. The City, prior to the effective date of a Change in Mode to the VIP Mode,
and on each Rate Determination Date for a VIP Bond, shall notify the Fiscal Agent, the
Remarketing Agent, the Paying Agent and the Bank of the Adjustment Periods and principal
amount of VIP Bonds for each Adjustment Period by telephone, telecopier, telex, telegram or
other telecommunications device and shall confirm such notice in writing as soon as practicable
thereafter.
The VIP Rate for each Adjustment Period for VIP Bonds shall be the rate of interest per
annum determined by the Remarketing Agent on and as of the Rate Determination Date for such
Adjustment Period as the minimum rate of interest which, in the opinion of the Remarketing
Agent, would, under then existing market conditions, result in the sale of the VIP Bonds on the
applicable Rate Determination Date at a price equal to the principal amount thereof, plus accrued
interest, if any.
During any VIP Mode, the Remarketing Agent shall establish the VIP Rate for each
Adjustment Period by 9:00 A.M. on the Rate Determination Date for such Adjustment Period.
The Remarketing Agent shall make the VIP Rate for any Adjustment Period available by
telephone to any Owner, Notice Party or prospective purchaser requesting such information.
(b) In the case of each VIP Bond which has been remarketed by the Remarketing Agent
pursuant to Section 5.03, such VIP Bond shall, commencing with the applicable Rate
Determination Date, have the Adjustment Period established by the City and bear interest at the
VIP Rate established for such Adjustment Period by the Remarketing Agent.
(c) Upon notice of a Mandatory Purchase Date, no Adjustment Period shall be
established by the City which would, with respect to VIP Bonds subject to purchase in
connection therewith, extend beyond the Mandatory Purchase Date so established.
(d) The determination of each VIP Rate and Adjustment Period for VIP Bonds in
accordance with this Section shall be conclusive and binding upon the Remarketing Agent, the
Fiscal Agent, the Paying Agent, the Bank, the City and the Owners.
Section 2.04. Determination of Adjusted Interest Rate During Daily. WeeklX,
Monthly. Semi-Annual. Extended Rate or Fixed Rate Mode. The Adjusted Interest Rate for
any Series A Bond in the Daily Mode, the Weekly Mode, the Monthly Mode, the Semi-Annual
Mode, the Extended Rate Mode or the Fixed Rate Mode shall be the rate of interest per annum
determined by the Remarketing Agent on and as of the Rate Determination Date for such
Adjustment Period as the minimum rate of interest which, in the opinion of the Remarketing
Agent, would, under then existing market conditions, result in the sale of such Series A Bond on
the applicable Rate Determination Date at a price equal to the principal amount thereof, plus
accrued interest, if any. On each Rate Determination Date, the Remarketing Agent shall notify
the Fiscal Agent, the Paying Agent and the City of the Adjusted Interest Rate by telephone,
telecopier, telex, telegram or other telecommunications device and shall confirm such notice in
writing to the Fiscal Agent, the Paying Agent and the City as soon as practicable thereafter.
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During the Daily Mode, the Remarketing Agent shall establish the Adjusted Interest Rate
by 9:45 A.M. on each Rate Determination Date. The Adjusted Interest Rate for any day during
the Daily Mode which is not a Business Day shall be the Adjusted Interest Rate established on
the immediately preceding Rate Determination Date. The Remarketing Agent shall make the
Adjusted Interest Rate for any Daily Mode Adjustment Period available by telephone to any
Owner, Notice Party or prospective purchaser requesting such information.
During the Weekly Mode, the Remarketing Agent shall establish the Adjusted Interest
Rate by 5:00 P.M. on each Rate Determination Date. The Remarketing Agent shall make the
Adjusted Interest Rate for any Weekly Mode Adjustment Period available by telephone to any
Owner, Notice Party or prospective purchaser requesting such information.
No later than 5:00 P.M. on each Rate Determination Date for the Monthly Mode, Semi-
Annual Mode, Extended Rate Mode or Fixed Rate Mode, the Remarketing Agent shall establish
the Adjusted Interest Rate for the Series A Bonds, if any, in each such Mode. The Remarketing
Agent shall make the Adjusted Interest Rate available by telephone to any Owner, Notice Party
or prospective purchaser requesting such information.
Section 2.05. Alternate Rate for Interest Calculation. In the event (a) the
Remarketing Agent fails to determine the Adjusted Interest Rate for a Mode, or (b) the method of
determining the Adjusted Interest Rate for such Mode shall be held to be unenforceable by a
court of law of competent jurisdiction, the Series A Bonds subject to such Mode shall thereupon,
until such time as the Remarketing Agent again makes such determination or until there is
delivered a written opinion of Bond Counsel to the effect that the method of determining such
rate is enforceable, bear interest from the last date on which interest was legally paid, at the
Alternate Rate for the Mode in effect.
Section 2.06. Interest on Bank Bonds. Notwithstanding anything to the contrary
contained herein, each Bank Bond shall bear interest on the outstanding principal amount thereof
at the Bank Rate for each day from and including the date such Bond becomes a Bank Bond to,
but not including, the date such Bond is paid in full or is remarketed. Bank Bonds shall not bear
interest at the Bank Rate after such Bonds have been remarketed unless such Bonds shall again
become Bank Bonds. No Bonds other than Bank Bonds shall bear interest at the Bank Rate.
Section 2.07. ChanEes in Mode. Subject to the provisions of this Section, the City may
effect a Change in Mode (other than a Change in Mode to a Fixed Rate Mode, which Change in
Mode is governed by the provisions of Section 2.08) with respect to all or a portion of the
Adjustable Bonds by delivering to the Fiscal Agent, with copies to the other Notice Parties, not
less than 40 days prior to the proposed Change in Mode, a Notice of Change in Mode stating
(a) the election to change the Mode to which such Adjustable Rate Bonds are then subject (for
purposes of this Section, the "Current Mode") to a different Mode (for purposes of this Section,
the "New Mode"), the type of which shall be specified, (b) the date as of which the New Mode
shall take effect which, in any case where the Current Mode is the VIP Mode, the Daily Mode or
the Weekly Mode, shall be the first day of a calendar month and, in any case where the Current
Mode is the Monthly Mode, Semi-Annual Mode or Extended Rate Mode, shall be the day
following the current Adjustment Period, (c) the date on which such Adjustable Rate Bonds are
required to be purchased pursuant to Section 5.02, which shall be the date as of which the New
Mode shall take effect, and (d) a form of notice of mandatory purchase satisfying the
requirements of Section 5.02. Such notice shall be accompanied by a letter of Bond Counsel that
it expects to be able to deliver a Favorable Opinion of Bond Counsel with respect to the Change
in Mode on the date the New Mode shall take effect.
Not less than 15 days prior to a proposed Change in Mode, and in reliance upon a Notice
of Change in Mode, the Fiscal Agent shall give written notice, the form of which shall be
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prepared by the City and approved by the Fiscal Agent, to the Owners of the Adjustable Bonds
proposed to be subject to such Change in Mode and the Bank of the Change in Mode and the
mandatory purchase of all such Adjustable Rate Bonds as provided in Section 5.02. In addition
to the information required to be included therein pursuant to Section 5.02(b), such notice shall
state (a) the New Mode to which such Adjustable Rate Bonds are to be subject, (b) the effective
date of the New Mode, (c) the rights of the Owners to tender such Adjustable Rate Bonds for
purchase prior to the effectiveness of the New Mode, and (d) the procedures for such a tender.
The New Mode shall take effect only if the following conditions are satisfied by 9:00
A.M. on the date of the proposed Change in Mode: (a) the Fiscal Agent has received a Favorable
Opinion of Bond Counsel, dated the date the New Mode is to take effect, with respect to the
Change in Mode, (b) the interest portion of the Letter of Credit is in an amount equal to or
greater than the Letter of Credit Interest Amount for the applicable Mode, and (c) if the New
Mode is the VIP Mode, the Interest Reserve Fund has been funded with Seasoned Funds in an
amount equal to or greater than the Interest Reserve Fund Requirement. If such conditions are
satisfied, then the New Mode shall take effect on the date of the proposed Change in Mode. If
such conditions are not satisfied, then (a) all Adjustable Rate Bonds proposed to be subject to
such Change in Mode shall be purchased on such date in accordance with Section 5.02, (b) all
Adjustable Rate Bonds proposed to be subject to such Change in Mode shall continue to be
subject to the Current Mode for such Adjustable Rate Bonds and, if the Current Mode is the V1P
Mode, the initial Adjustment Period for all such Adjustable Rate Bonds shall extend from and
including the date on which the New Mode was to have taken effect to but not including the next
succeeding Business Day and, if the Current Mode is the Extended Rate Mode, the initial
Adjustment Period for such Adjustable Rate Bonds shall extend from and including the date on
which the New Mode was to take effect to but not including the March 2 or September 2
immediately following the second anniversary of such date, and (c) the Fiscal Agent shall, within
five Business Days after the date of the proposed Change in Mode, send notice to the Notice
Parties stating that the conditions to such Change in Mode have not all been satisfied and
informing them of the consequences thereof, as described in this paragraph.
Notwithstanding any other provision hereof, no Change in Mode shall be permitted at any
time if the Adjustment Period then applicable to the Adjustable Rate Bonds proposed to be
subject to such Change in Mode extends through the day preceding the Maturity Date.
Section 2.08. Change In Mode to a Fixed Rate Mode. (a) Subject to the provisions of
this Section (unless the City shall have given the notice accompanied by the items specified in
subsection (b) of this Section), a portion of the Adjustable Rate Bonds shall become Fixed Rate
Bonds in accordance with, and if and to the extent required by, the following procedure. Upon
receipt by the City of a Conversion Request, the City shall immediately notify the Remarketing
Agent, the Fiscal Agent and the Bank of the aggregate principal amount of Adjustable Rate
Bonds to be converted to Fixed Rate Bonds. The City, in consultation with the Remarketing
Agent, shall thereupon select the Conversion Date, provided that the date so selected shall be a
Business Day and, in the case of a conversion of any VIP Bonds, a day which is a Mandatory
Purchase Date for such VIP Bonds, taking into account the process necessary to remarket such
Adjustable Rate Bonds as Fixed Rate Bonds. The Remarketing Agent shall promptly give
written notice of the date so selected to the Fiscal Agent and the Bank.
On the Conversion Date so selected, such Adjustable Rate Bonds shall be remarketed by
the Remarketing Agent as Fixed Rate Bonds. The Remarketing Agent, in consultation with the
City, shall establish the types (serial or term) and a schedule of mandatory redemptions for such
serial and term Fixed Rate Bonds designated by the City, pursuant to Section 7.01(e), to
constitute a group, and for the Related Additional Bonds, if any, so as to achieve, as nearly as
practicable, equal annual debt service for such group of Fixed Rate Bonds, and for the Related
Additional Bonds, if any; provided, however, that (i) each Principal Payment Date shall be a
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September 2 and the first occurring Principal Payment Date shall be no earlier than the first
September 2 following the Fiscal Year in which the Reassessments for such group of Fixed Rate
Bonds are first included in the County assessment roll, (ii) if the parcels of real property
represented by such group of Fixed Rate Bonds were included in Prior District 85-1, the final
Principal Payment Date therefor shall be September 2, 2011 and, if the parcels of real property
represented by such group of Fixed Rate Bonds were included in Prior District 86-2, the final
Principal Payment Date therefor shall be September 2, 2013, and (iii) if such Fixed Rate Bonds
are to be purchased by the Authority Trustee, such Fixed Rate Bonds shall include no serial
Bonds and shall consist of a single term Bond with a maturity date of September 2, 2011 or
September 2, 2013, as applicable. The Fixed Interest Rates for such Fixed Rate Bonds shall be
determined in accordance with Section 2.04, taking into account the mandatory redemption dates
or final maturity date therefor; provided, however, that, if such Fixed Rate Bonds are to be
purchased by the Authority Trustee, the Fixed Interest Rate therefor shall be a nominal rate and
the actual rate of interest to be borne by such Fixed Rate Bonds shall be adjusted as of each
September 1 to be a rate per annum such that the sum of (A) the product of such rate (expressed
as a decimal) times the principal amount of such Fixed Rate Bonds and the Related Additional
Bonds, if any, as of the close of business on such September 1, plus (B) the amount to be
deposited on the following September 3 in the Redemption Account for such group of Fixed Rate
Bonds and Related Additional Bonds, if any, pursuant to Section 6.02(a), from amounts
transferred by the Authority Trustee from the Surplus Fund established under the Authority
Indenture, is equal to the product of such nominal rate (expressed as a decimal) times the
principal amount of such Fixed Rate Bonds and the Related Additional Bonds, if any,
Outstanding as of the close of business on such September 1.
(b) On the Conversion Date selected by the City pursuant to subsection (a) of this
Section, the interest rate on the Adjustable Rate Bonds to become Fixed Rate Bonds will, without
any further action by the City, the Fiscal Agent, the Paying Agent or any other Person, be fixed
to maturity so long as each of the following conditions is satisfied: (i) either (1) the Remarketing
Agent shall have received binding commitments (other than as may be funded by draws under
the Letter of Credit) on or before the Business Day preceding such Conversion Date to purchase
all such Fixed Rate Bonds on such Conversion Date at a price at least equal to the purchase price
required to be paid in respect of such Fixed Rate Bonds, or (2) on or before the Business Day
preceding such Conversion Date, the Remarketing Agent and the City shall have entered into a
written agreement acceptable to them for a firm commitment to purchase such Fixed Rate Bonds
on such Conversion Date, (ii) the City shall have followed the procedures required to be followed
by the City in connection with the fixing of the interest rates on the Adjustable Rate Bonds, as
described in this Section, (iii) the credit enhancement, if any, for such Fixed Rate Bonds shall
have been obtained on or prior to the Conversion Date, (iv) provision shall have been made on or
prior to the Business Day preceding such Conversion Date for the timely payment in full of all
amounts due or to become due under the Reimbursement Agreement with respect to the
Adjustable Rate Bonds being converted, (v) the City shall have designated the parcels of real
property which are to be represented by such Fixed Rate Bonds pursuant to Section 7.01(e), (vi)
the Fiscal Agent shall be in possession of sufficient moneys to pay the expenses of remarketing
the Fixed Rate Bonds and to deposit an amount equal to the Reserve Requirement for such Fixed
Rate Bonds into the Reserve Account established for such Fixed Rate Bonds pursuant to Section
6.06, and (vii) a Favorable Opinion of Bond Counsel, dated the Conversion Date, addressed to
the Fiscal Agent and the Remarketing Agent shall be delivered to the Fiscal Agent. Said
expenses shall be paid from the following sources in the following order of priority: first, from
moneys, if any, transferred from the Interest Reserve Fund pursuant to Section 6.05, second,
from proceeds of the sale of Additional Bonds, and, third, from moneys paid to the City pursuant
to the Protocol Agreement.
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The Remarketing Agent shall give written notice to the City not later than one Business
Day prior to the Conversion Date of the interest rates to be borne by the Fixed Rate Bonds
proposed to be remarketed on said date.
Notwithstanding satisfaction of the foregoing conditions, if the City shall have given
notice to the Fiscal Agent, the Remarketing Agent, and the Bank on or before the Business Day
preceding such Conversion Date, that the City is dissatisfied with the Fixed Interest Rate or the
creditworthiness or value of the parcels of real property to be represented by such Fixed Rate
Bonds, accompanied by an written opinion of Bond Counsel addressed to said parties that the
failure of such Adjustable Rate Bonds to become Fixed Rate Bonds will not adversely affect the
exclusion from gross income of interest on the Bonds for purposes of Federal income taxation,
then such Adjustable Rate Bonds will not become Fixed Rate Bonds. In such event, or if any of
the foregoing conditions are not met, the Remarketing Agent shall continue its efforts to convert
such Adjustable Rate Bonds to Fixed Rate Bonds in accordance herewith until such Adjustable
Rate Bonds are successfully converted. Pending successful completion of the conversion, all
such Adjustable Rate Bonds shall be changed to a VIP Mode with Adjustment Period(s) to be
determined by the Remarketing Agent on the Conversion Date and such VIP Bonds shall be
remarketed by the Remarketing Agent; provided, that the Remarketing Agent may not set
Adjustment Periods greater than 30 days in length.
(c) From and after the date on which Adjustable Rate Bonds become Fixed Rate Bonds,
the following events shall occur: (i) the stated amount of the Letter of Credit shall be reduced in
accordance with the Reimbursement Agreement and shall no longer constitute a source of
payment of the principal of and interest on such Fixed Rate Bonds, (ii) payment of the Fixed
Rate Bonds shall only be secured by the Reassessments on the parcels of real property designated
by the City, pursuant to Section 7.01(e), to be represented by such Fixed Rate Bonds and by any
credit enhancement obtained with respect to such Fixed Rate Bonds, (iii) the payment of
Adjustable Rate Bonds shall no longer be secured by the Reassessments on the parcels of real
property so designated, (iv) the Fiscal Agent shall establish a Redemption Account, a
Prepayment Subaccount and a Reserve Account for each group of Fixed Rate Bonds as required
by Article VI, (v) the Interest Reserve Fund Requirement shall be reduced in accordance with
Section 6.05, if applicable, (vi) the Fixed Rate Bonds of each group shall be of the types (serial
or term) and subject to mandatory redemption as established by the Remarketing Agent pursuant
to subsection (a) of this Section, (vii) the Fixed Rate Bonds shall not be convertible to any other
Mode, and (viii) a pro rata amount of the remaining capitalized interest for the Variable Bonds,
if any, shall be allocated and deposited in the Redemption Account established for such group of
Fixed Rate Bonds.
Section 2.09. Transfer and Exchange of Bonds. Any Bond may, in accordance with its
terms, be transferred upon the Registration Books by the Person in whose name it is registered,
in person or by his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable
to the Paying Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the City
shall execute and the Paying Agent shall authenticate and shall deliver a new Bond or Bonds for
a like aggregate principal amount, in any Authorized Denomination. The Paying Agent shall
require the Bond Owner requesting such transfer to pay any tax or other goverrunental charge
required to be paid with respect to such transfer.
The Bonds may be exchanged at the Office of the Paying Agent for a like aggregate
principal amount of Bonds of the same maturity, Series and, if applicable, Mode, of other
Authorized Denominations. The Paying Agent shall require the payment by the Bond Owner
requesting such exchange of any tax or other governmental charge required to be paid with
respect to such exchange.
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The Paying Agent shall not be obligated to make any transfer or exchange of Bonds
pursuant to this Section during the period established by the Paying Agent for the selection of
Bonds of the same Series and, if applicable, Mode for redemption, or with respect to any Bonds
selected for redemption.
Section 2.10. Registration Books. The Paying Agent will keep or cause to be kept, at
the Office of the Paying Agent, sufficient records for the registration and transfer of ownership of
the Bonds, which shall be open to inspection during regular business hours and upon 24 hours
notice by the City; and, upon presentation for such purpose, the Paying Agent shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on such records, the ownership of the Bonds as hereinbefore provided.
Section 2.11. Execution of Bonds. The Bonds shall be executed in the name and on
behalf of the City with the facsimile signature of the Treasurer attested by the manual or
facsimile signature of the City Clerk. The City's seal or a facsimile thereof, may be reproduced,
imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Paying Agent for
authentication by it; provided, however, that only the Fiscal Agent shall authenticate Bonds upon
original issuance and pursuant to Section 2.13 and Section 2.14. In case any of the officers who
shall have signed or attested any of the Bonds shall cease to be such officer or officers of the City
before the Bonds so signed or attested shall have been authenticated or delivered by the Paying
Agent, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued
and, upon such authentication, delivery and issue, shall be as binding upon the City as though
those who signed and attested the same had continued to be such officers of the City, and also
any Bonds may be signed and attested on behalf of the City by such Persons as at the actual date
of execution of such Bonds shall be the proper officers of the City although at the nominal date
of such Bonds any such Person shall not have been such officer of the City.
Section 2.12. Authentication of Bonds. Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in the form set forth in Exhibit A hereto, manually
executed by the Paying Agent, shall be valid or obligatory for any purpose or entitled to the
benefits of this Agreement, and such certificate of or on behalf of the Paying Agent shall be
conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this Agreement.
Section 2.13. Temnorary Bonds. The Bonds may be issued in temporary form
exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be
printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the City, shall be in fully registered form without coupons and may contain such
reference to any of the provisions of this Agreement as may be appropriate. Every temporary
Bond shall be executed by the City and authenticated by the Fiscal Agent upon the same
conditions and in substantially the same manner as the definitive Bonds. If the City issues
temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as
practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the
Office of the Fiscal Agent and the Fiscal Agent shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits
under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.14. Bonds Mutilated. Lost. Destroyed or Stolen. If any Bond shall become
mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Paying
Agent shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Paying Agent of the Bond
so mutilated. Every mutilated Bond so surrendered to the Paying Agent shall be canceled by it
and delivered to, or upon the order of, the City. If any Bond shall be lost, destroyed or stolen,
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evidence of such loss, destruction or theft may be submitted to the Paying Agent and, if such
evidence and indemnity satisfactory to the Paying Agent shall be given, the City, at the expense
of the Owner, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a
new Bond of like tenor in lieu of and in replacement for the Bond so lost, destroyed or stolen (or
if any such Bond shall have matured or shall be about to mature, instead of issuing a replacement
Bond, the Paying Agent may pay the same without surrender thereof). The City may require
payment by the Owner of a sum not exceeding the actual cost of preparing each replacement
Bond issued under this Section and of the expenses which may be incurred by the City and the
Paying Agent. Any Bond issued under the provisions of this Section in lieu of any Bond alleged
to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the
part of the City whether or not the Bond so alleged to be lost, destroyed or stolen be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement with all other
Bonds secured by this Agreement.
Section 2.15. Book-Entry System (a) Prior to the execution and delivery of the Bonds,
the City may provide that such Bonds shall be initially executed and delivered as Book-Entry
Bonds, and in such event, the Bonds for each maturity shall be in the form of a separate single
fully registered Bond (which may be typewritten). Upon initial execution and delivery, the
ownership of each such Bond shall be registered in the bond register in the name of the Nominee,
as nominee of the Depository. Payment of principal of, premium, if any, or interest on any
Book-Entry Bonds registered in the name of the Nominee shall be made on the payment date by
wire transfer of New York clearing house or equivalent next day funds or by wire transfer of
same day funds to the account of the Nominee. Such payments shall be made to the Nominee at
the address which is, on the regular Record Date or special record date, as the case may be,
shown for the Nominee in the Registration Books.
(b) With respect to Book-Entry Bonds, the City, the Fiscal Agent and the Paying Agent
shall have no responsibility or obligation to any Participant or to any person on behalf of which
such a Participant holds an interest in such Book-Entry Bonds. Without limiting the immediately
preceding sentence, the City, the Fiscal Agent and the Paying Agent shall have no responsibility
or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or
any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to
any Participant or any other person, other than an Owner as shown in the Registration Books, of
any notice with respect to Book-Entry Bonds, including any notice of prepayment, (iii) the
selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds to
be redeemed in the event Bonds are redeemed in part, (iv) the payment to any Participant or any
other person, other than an Owner as shown in the Registration Books, of any amount with
respect to principal of, premium, if any, or interest on Book-Entry Bonds, or (v) any consent
given or other action taken by the Depository as Owner.
(c) The City, the Fiscal Agent and the Paying Agent may treat and consider the person in
whose name each Book-Entry Bond is registered in the Registration Books as the absolute
Owner of such Book-Entry Bond for the purpose of payment of principal of, premium, if any,
and interest on such Bond, for the purpose of selecting any Bonds, or portions thereof to be
redeemed, for the purpose of giving notices of redemption and other matters with respect to such
Bond, for the purpose of registering transfers with respect to such Bond, for the purpose of
obtaining any consent or other action to be taken by Owners and for all other purposes
whatsoever and the City, the Fiscal Agent and the Paying Agent shall not be affected by any
notice to the contrary.
(d) In the event of a redemption necessitating a reduction in aggregate principal amount
of Bonds Outstanding, or a redemption of part of the Bonds Outstanding, the Depository, in its
discretion, (i) may request the Paying Agent to execute and deliver a new Bond, or (ii) if DTC is
the sole owner of the Bonds, shall make an appropriate notation on the Bond indicating the date
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and amounts of such reduction in principal except in the case of final maturity, in which case the
Bond must be presented to the Paying Agent prior to payment.
(e) The Paying Agent shall pay all principal of, premium, if any, and interest on the
Bonds only to or "upon the order of (as that term is used in the Uniform Commercial Code as
adopted in the State) the respective Owner, as shown in the Registration Books, or his respective
attorney duly authorized in writing, and all such payments shall be valid and effective to fully
satisfy and discharge the City's obligations with respect to payment of principal of, premium, if
any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an
Owner, as shown in the Registration Books, shall receive a Bond evidencing the obligation to
make payments of principal of, premium, if any, and interest on the Bonds. Upon delivery by the
Depository to the Owners, the City, the Fiscal Agent and the Paying Agent of written notice to
the effect that the Depository has determined to substitute a new nominee in place of the
Nominee, and subject to the provisions herein with respect to record dates, the word Nominee in
this Indenture shall refer to such nominee of the Depository.
(f) In order to qualify the Book-Entry Bonds for the Depository's book-entry system, the
Fiscal Agent shall execute and deliver to the Depository a Letter of Representations. The
execution and delivery of a Letter of Representations shall not in any way impose upon the City,
the Fiscal Agent or the Paying Agent any obligation whatsoever with respect to persons having
interests in such Book-Entry Bonds other than the Owners, as shown on the Registration Books.
Such Letter of Representations may provide the time, form, content, and manner of transmission,
of notices to the Depository. In addition to the execution and delivery of a Letter of
Representations by the Fiscal Agent, the City, the Fiscal Agent and the Paying Agent shall take
such other actions, not inconsistent with this Agreement, as are reasonably necessary to qualify
Book-Entry Bonds for the Depository's book-entry program.
(g) In the event the City determines that it is in the best interest of the Beneficial Owners
that they be able to obtain certificated Bonds and that such Bonds should therefore be made
available and notifies the Depository, the Fiscal Agent and the Paying Agent of such
determination, the Depository will notify the Participants of the availability through the
Depository of certificated Bonds. In such event, the Paying Agent shall transfer and exchange
certificated Bonds as requested by the Depository and any other Owners in appropriate amounts.
In the event (i) the Depository determines not to continue to act as Securities Depository for
Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Fiscal
Agent and the Paying Agent of such determination, then the City will discontinue the
Book-Entry system with the Depository. If the City determines to replace the Depository with
another qualified Securities Depository, the City shall prepare or direct the preparation of a new
single, separate, fully registered Bond for each maturity date of such Book-Entry Bonds,
registered in the name of such successor or substitute qualified Securities Depository or its
nominee. If the City fails to identify another qualified Securities Depository to replace the
Depository, then the Bonds shall no longer be restricted to being registered in such bond register
in the name of the Nominee, but shall be registered in whatever name or names the Owners
transferring or exchanging such bonds shall designate, in accordance with the provisions of
Sections 2.09 and 2.14. Whenever the Depository requests the City to do so, the City will
cooperate with the Depository in taking appropriate action after reasonable notice (i) to make
available one or more separate Bonds evidencing the Book-Entry Bonds to any Participant
having Book-Entry Bonds credited to its account with the Depository, and (ii) to arrange for
another Securities Depository to maintain custody of bonds evidencing the Book-Entry Bonds.
(h) Notwithstanding any other provision of this Agreement to the contrary and if DTC is
the sole Owner of the Bonds, so long as any Book-Entry Bond is registered in the name of the
Nominee, all payments with respect to principal of, premium, if any, and interest on such Bond
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and all notices with respect to such Bond shall be made and given, respectively, as provided in
the Letter of Representations or as otherwise instructed in writing by the Depository.
(i) In connection with any notice or other communication to be provided to Owners
pursuant to this Agreement by the City, the Fiscal Agent or the Paying Agent, at the direction of
the City, with respect to any consent or other action to be taken by Owners, the City, the Fiscal
Agent or the Paying Agent, as the case may be, shall establish a record date for such consent or
other action and give the Depository notice of such record date not less than 15 calendar days in
advance of such record date to the extent possible. Notice to the Depository shall be given only
when DTC is the sole Owner of the Bonds.
(j) Notwithstanding the foregoing, in the event any Bond is tendered but not remarketed,
with the result that such Bond becomes a Bank Bond, the City, the Fiscal Agent and the Paying
Agent shall take all such actions as shall be necessary to remove the Bonds from the book-entry
system of DTC and to register such tendered but not remarketed Bond in the name of the Bank.
At such time as all Bank Bonds have been remarketed such that no Bank Bonds remain
outstanding and the Letter of Credit has been reinstated, the City, the Fiscal Agent and the
Paying Agent shall take all such actions as shall be .necessary to return the Bonds to the full
book-entry system of DTC.
Section 2.16. Limited Obligation. All obligations of the City under this Agreement and
the Bonds shall not be general obligations of the City, but shall be limited obligations, payable
solely from the Reassessments and the assets pledged therefor hereunder. Neither the faith and
credit of the City nor of the State of California or any political subdivision thereof is pledged to
the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds" as provided
in Section 12.01.
Section 2.17. No Acceleration. The principal of the Bonds shall not be subject to
acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or
redemption of Bonds under Article 1V, or the defeasance of the Bonds and discharge of this
Agreement under Article XI.
Section 2.18. Refunding of Bonds. The Bonds may be refunded by the City under
Divisions 11 or 11.5 of the California Streets and Highways Code upon the conditions set forth
in proceedings therefor, all as determined by the Council.
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ARTICLE III
LSSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL
BONDS
Section 3.01. Lssuance of Series A Bonds. Concurrent with the execution of this
Agreement, the City shall execute and the Fiscal Agent shall authenticate the Series A Bonds and
deliver the Series A Bonds to the Original Purchaser in the aggregate principal amount of
Section 3.02. AnDlication of Proceeds of the Series A Bonds. On the Closing Date,
the proceeds of the sale of the Series A Bonds shall be paid to the Fiscal Agent and transferred or
deposited by the Fiscal Agent as follows:
(a) The Fiscal Agent shall deposit the amount of $ in the Redemption
Fund, constituting capitalized interest with respect to the Series A Bonds through
(b) The Fiscal Agent shall deposit the amount of $ in the Cost of
Issuance Fund.
(c) The Fiscal Agent shall transfer to the Escrow Bank for deposit in the Escrow
Fund established under the Escrow Agreement the amount of $ ,
constituting the remainder of said proceeds.
Section 3.03. Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund", which shall be held by the Fiscal Agent in trust. On the
Closing Date there shall be deposited in the Costs of Issuance Fund the amount specified in
Section 3.02(b). Additionally, in connection with the issuance of a Series of Additional Bonds,
there shall be deposited in the Costs of Issuance Fund the amount, if any, specified in the
Supplemental Agreement pursuant to which such Additional Bonds are issued.
The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Fiscal
Agent from time to time to pay the Costs of Issuance upon submission of a Written Request of
the Ciry stating (a) the Person to whom payment is to be made, (b) the amount to be paid, (c) the
purpose for which the obligation was incurred, (d) that such payment is a proper charge against
the Costs of Issuance Fund, and (e) that such amounts have not been the subject of a prior
disbursement from the Costs of Issuance Fund; in each case together with a statement or invoice
for each amount requested thereunder. On 1996, and on such other date or dates
as may be specified in any Supplemental Agreement, all amounts remaining in the Costs of
Issuance Fund shall be withdrawn therefrom by the Fiscal Agent and transferred to the
Redemption Fund or to such other fund or account as is specified in such Supplemental
Agreement.
Section 3.04. Issuance of Additional Series of Bonds. In connection with the
conversion of each group of Series A Bonds to Fixed Rate Bonds pursuant to Section 2.08, the
City may, subject to the requirements of the Act, by Supplemental Agreement establish one or
more Series of Bonds, and the City may issue and the Fiscal Agent may authenticate and deliver
Bonds of any Series so established, in such principal amount as shall be determined by the City
in said Supplemental Agreement, but only upon compliance by the City with the provisions of
Section 3.05, and subject to the following specific conditions, which are hereby made conditions
precedent to the issuance of any such additional Series of Bonds:
(a) The City shall not be in default under this Agreement.
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(b) The Bonds of such additional Series shall have the same Interest Payment
Dates and Principal Payment Dates as the Related Fixed Rate Bonds .
(c) The Bonds of such additional Series of each maturity date shall bear interest
at the same rate as the Related Fixed Rate Bonds maturing on such date.
(d) The parcels of real property designated by the City, pursuant to Section
7.01(e), to be represented by such additional Series of Bonds shall be the same parcels of
real property designated by the City to be represented by the Related Fixed Rate Bonds.
(e) The sum of the aggregate principal amount of the Bonds of such Additional
Series, plus the aggregate principal amount of the Related Fixed Rate Bonds, shall not
exceed the unpaid principal amount of the Reassessments on the parcels of real property
designated by the City, pursuant to Section 7.01(e), to be represented by such additional
Series of Bonds and the Related Fixed Rate Bonds.
(f) The proceeds of the Bonds of such additional Series shall be applied only to
one or more of the following: (i) funding all or a portion of the Reserve Account
established, pursuant to Section 6.06, for the Related Fixed Rate Bonds and such
additional Series of Bonds, (ii) paying all or a portion of the Cost of Issuance of such
additional Series of Bonds, (iii) paying all or a portion of the costs of the conversion and
remarketing of the Related Fixed Rate Bonds, and (iv) funding interest payable on such
additional Series of Bonds and the Related Fixed Rate Bonds through the date on which it
is anticipated that collections of Reassessments on the parcels of real property designated
by the City, pursuant to Section 7.01(e), to be represented by such Bonds will be
available for payment of such interest.
(g) The Bonds of such additional Series shall be subject to redemption at the
same times, under the same circumstances and in the same manner as the Related Fixed
Rate Bonds.
(h) Such additional Series of Bonds and the Related Fixed Rate Bonds shall have,
as nearly as practicable, equal combined annual debt service.
(i) The aggregate principal amount of Bonds issued hereunder shall not exceed
any limitation imposed by law or by this Agreement.
Section 3.05. Proceedings for the Issuance of Additional Series of Bonds. Whenever
the City shall determine to issue an additional Series of Bonds, the City shall execute a
Supplemental Agreement providing for the issuance of such additional Series of Bonds,
specifying the maximum principal amount of Bonds of such Series and prescribing the terms and
conditions of such additional Series of Bonds.
Such Supplemental Agreement shall prescribe the form or forms of Bonds of such
additional Series and, subject to the provisions of Section 3.04, shall provide for the distinctive
designation, dating, maturity dates, interest rates, interest payment dates, principal payment
dates, mandatory sinking fund redemption dates and methods and places of payment of principal
and interest. The City may by such Supplemental Agreement prescribe any other provisions
respecting the Bonds of such Series not inconsistent with the terms of this Agreement.
Before such additional Series of Bonds shall be issued and delivered, the City shall file
the following documents with the Fiscal Agent:
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(a) A written opinion of Bond Counsel setting forth (i) that such Bond Counsel
has examined the Supplemental Agreement and found it to be in compliance with the
requirements of this Agreement, (ii) that the execution and delivery of the additional
Series of Bonds has been duly authorized by the City, and (iii) that said additional Series
of Bonds, when duly executed by the City and authenticated and delivered by the Fiscal
Agent, will be valid and binding limited obligations of the City, payable from
Reassessments as provided herein.
(b) A Certificate of the City that the requirement of Section 3.05(a) has been met.
(c) A certification of the City that the requirement of Section 3.05(e) has been
met.
(d) Said Supplemental Agreement, duly executed.
Upon the delivery to the Fiscal Agent of the foregoing instruments, the Fiscal Agent shall
authenticate and deliver said additional Series of Bonds, in the aggregate principal amount
specified in such Supplemental Agreement, to, or upon the Written Request of, the City, when
such additional Series of Bonds shall have been presented to it for that purpose.
Section 3.06. Limitations on Additional Bonds. So long as any of the Bonds remain
Outstanding, the City will not issue any Additional Bonds or obligations payable from
Reassessments, except pursuant to Sections 3.04 and 3.05.
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ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Q~honal Redemption. (a) Bonds in the VIP Mode are not subject to
optional redemption.
(b) The Adjustable Rate Bonds, other than VIP Bonds, are subject to optional redemption
by the City, in whole, or in part in Authorized Denominations, (i) with respect to Bonds in the
Daily Mode, the Weekly Mode, or the Monthly Mode, on the first day of any calendar month,
and (ii) with respect to Bonds in the Semi-Annual Mode or the Extended Rate Mode, on any
Interest Payment Date, at a Redemption Price equal to 100% of the principal amount thereof to
be redeemed plus accrued and unpaid interest to such Redemption Date, if any, without
premium. If such redemption is in part, Bank Bonds shall be redeemed first, and all other
Adjustable Rate Bonds shall be redeemed by lot in such manner as shall be determined by the
Fiscal Agent.
(c) The Fixed Rate Bonds are subject to optional redemption by the City, in whole, or in
part in Authorized Denominations, on any Business Day, upon expiration of the applicable call
protection period described below, at the Redemption Prices (expressed as percentages of the
principal amount of the Fixed Rate Bonds to be redeemed) set forth below, declining by 1/2% on
every second Interest Payment Date after the initial redemption date until the redemption price
equals 100%, plus accrued interest to the Redemption Date:
Years Remaining to
Maturity as of
Conversion Date
Equal to or greater than 17
Equal to or greater than 14
but less than 17
Equal to or greater than 11
but less than 14
Equal to or greater than 7
but less than 11
Less than 7 years
Initial Redemption Dates Initial
(anniversary of Redemption
Conversion Datel Prices
8th anniversary 102%
6th anniversary 101.5%
4th anniversary 101%
2nd anniversary 100.5%
1st anniversary 100%
Section 4.02. Mandatorv Redemption from Reassessment Prepagents. (a) Bonds
in the VIP Mode are subject to mandatory redemption from prepaid Reassessments in whole, or
in part in Authorized Denominations, on any Mandatory Purchase Date, at a Redemption Price
equal to 100% of the principal amount thereof to be redeemed plus accrued and unpaid interest to
such Redemption Date, if any, without premium. If such redemption is in part, Bank Bonds shall
be selected for redemption by the Fiscal Agent prior to selecting any other Bonds, and thereafter
Bonds in the VIP Mode shall be selected for redemption based on the termination dates of the
then current Adjustment Periods for such VIP Bonds, with the VIP Bonds with the earliest such
termination dates being called first and by lot among VIP Bonds with the same Adjustment
Period termination date; provided that the VIP Bonds with an Adjustment Period terminating less
than 30 days after the date the Fiscal Agent is to mail notice of such redemption shall not be
called for redemption.
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(b) The Adjustable Rate Bonds, other than VIP Bonds, are subject to mandatory
redemption from prepaid Reassessments in whole, or in part in Authorized Denominations, (i)
when such Bonds are in the Daily Mode, the Weekly Mode or the Monthly Mode, on the first
day of any calendar month, and (ii) when such Bonds are in the Semi-Annual Mode or the
Extended Rate Mode, on any Interest Payment date, at a Redemption Price equal to 100% of the
principal amount thereof to be redeemed plus accrued and unpaid interest to such Redemption
Date, if any, without premium. If such redemption is in part, Bank Bonds shall be redeemed first,
and other Adjustable Rate Bonds shall be redeemed by lot in such manner as shall be determined
by the Fiscal Agent.
(c) Each group of Fixed Rate Bonds is subject to mandatory redemption from prepaid
Reassessments attributable to the parcels of real property designated by the City, pursuant to
Section 7.01(e), to be represented by such group of Fixed Rate Bonds, in whole, or in part in
Authorized Denominations, on any Interest Payment Date, at a Redemption Price equal to [static
premium? declining premium?] plus accrued and unpaid interest to such Redemption Date.
(d) In the event that Adjustable Rate Bonds are to be redeemed pursuant to this Section
4.02, the prepaid Reassessments or proceeds derived from foreclosure, as applicable, shall be
applied to Bonds in the following Modes in the following order of priority until such
prepayments or proceeds are depleted: first, Bonds in the Daily Mode, second, Bonds in the
Weekly Mode, third, Bonds in the Monthly Mode, fourth, Bonds in the Semi-Annual Mode,
fifth, Bonds in the Extended Rate Mode, and sixth, Bonds in the VIP Mode.
Section 4.03 Mandatory Sinking Fund Redemption. The Adjustable Rate Bonds
(other than Bank Bonds) are not subject to mandatory sinking fund redemption. Except as
otherwise provided in the Reimbursement Agreement, if any Bank Bonds are purchased and held
by the Bank more than 60 days, then the Outstanding Bank Bonds shall be subject to mandatory
sinking fund redemption over a term of approximately seven years in 82 approximately equal
monthly mandatory sinking fund redemptions commencing on the first Business Day of the third
calendar month after the calendar month in which the Bank purchased such Bank Bonds, and on
the first Business Day of each calendar month thereafter until the principal of such Bank Bonds
has been paid in full, and on the 82nd such monthly mandatory sinking fund redemption date, the
entire Outstanding principal amount of such Bank Bonds shall be due and payable in full;
provided, however, that (a) each mandatory sinking fund redemption of Bank Bonds shall be
adjusted to an integral multiple of $5,000, (b) the final mandatory sinking fund redemption shall
be in the principal amount of $100,000 or an integral multiple of $5,000 in excess of $100,000,
and (c) such mandatory sinking fund redemptions shall otherwise be scheduled in the Bank's
discretion to provide approximately level aggregate monthly principal payments during the
course of such seven-year term.
Each group of Fixed Rate Bonds shall be subject to mandatory sinking fund redemption
in accordance with the schedule of mandatory redemptions established pursuant to Section 2.08
(a) in connection with the conversion of such Series A Bonds to Fixed Interest Rates. If some but
not all of the Fixed Rate Bonds of a group are redeemed pursuant to Section 4.01(c), the
principal amount of such Fixed Rate Bonds to be redeemed pursuant to this Section on any
subsequent September 2 shall be reduced by $5,000 or an integral multiple thereof, as designated
by the City in a Written Certificate of the City filed with the Fiscal Agent; provided, however,
that the aggregate amount of such reductions shall not exceed the aggregate amount of such
Fixed Rate Bonds redeemed pursuant to Section 4.01(c). If some but not all of the Fixed Rate
Bonds of a group are redeemed pursuant to Section 4.02(c), the principal amount of Bonds to be
subsequently redeemed pursuant to this Section shall be reduced by the aggregate principal
amount of such Fixed Rate Bonds so redeemed pursuant to Section 4.02(c), among redemption
dates as nearly as practicable on a pro rata basis in amounts of $5,000 or integral multiples
thereof.
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Section 4.04. ~lotice of Redemption. The Fiscal Agent on behalf and at the expense of
the City shall mail (by first class mail) notice of any redemption to the respective Owners of any
Bonds designated for redemption at their respective addresses appearing on the Registration
Books, and (if the Authority Trustee is not the Owner of all of the Bonds) to the Securities
Depositories and to one or more Information Services, at least 30 but not more than sixty 60 days
prior to the date fixed for redemption. Additionally, if Adjustable Rate Bonds are to be
redeemed, the Fiscal Agent on behalf and at the expense of the City shall mail (by first class
mail) notice of such redemption to the Remarketing Agent, the Paying Agent and the Bank at
least 30 but not more than 60 days prior to the date fixed for redemption. Such notice shall state
the date of the notice, the redemption date, the redemption place and the Redemption Price and
shall designate the CUSIP numbers, the Bond numbers (except in the event of redemption of all
of the Bonds of a maturity or maturities in whole) and the maturity or maturities of the Bonds to
be redeemed, and shall require that such Bonds be then surrendered at the Office of the Paying
Agent for redemption at the Redemption Price, giving notice also that further interest on such
Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive
any notice so mailed, nor any defect in such notice, shall affect the sufficiency of the proceedings
for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the
date fixed for redemption.
The Fiscal Agent shall give notice of redemption of any Bonds to be redeemed as
provided herein, upon receipt of notice from the City, which notice shall be given to the Fiscal
Agent at least 45 days prior to the Redemption Date (unless the Fiscal Agent shall agree to a
shorter period).
Section 4.05. Selection of Bonds for Redemption. Whenever provision is made in this
Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the
Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to
any redemption pursuant to Section 4.01(c), among maturities as directed in a Written Request of
the City, (b) with respect to any redemption pursuant to Section 4.02(c), among maturities on a
pro rata basis as nearly as practicable, (c) with respect to any redemption of Additional Bonds,
among maturities as provided in the Supplemental Agreement pursuant to which such Additional
Bonds are issued, and by lot among Bonds with the same maturity in any manner which the
Fiscal Agent in its sole discretion shall deem appropriate and fair. For purposes of such selection
each Bond shall be deemed to be comprised of separate denominations equal to the minimum
Authorized Denomination for such Bond and such separate denominations shall be treated as
separate Bonds which may be separately redeemed.
Section 4.06. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in
part only, the City shall execute and the Paying Agent shall authenticate and deliver to the Owner
thereof, at the expense of the City, a new Bond or Bonds of Authorized Denominations equal in
aggregate principal amount representing the unredeemed portion of the Bonds surrendered.
Section 4.07. Effect of Notice of Redemption. Notice having been mailed as aforesaid,
and moneys for the redemption (including the interest to the applicable date fixed for redemption
and including any applicable premium), having been deposited in the Prepayment Account, the
Bonds shall become due and payable on said date, and, upon presentation and surrender thereof
at the Office of the Paying Agent, said Bonds shall be paid at the Redemption Price thereof,
together with interest accrued and unpaid to said date.
If, on said date fixed for redemption, moneys for the redemption of all the Bonds to be
redeemed, together with interest to said date, shall be held by the Paying Agent so as to be
available therefor on such date, and, if notice of redemption thereof shall have been mailed as
aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to
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accrue and become payable. All moneys held by or on behalf of the Paying Agent for the
redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be
redeemed.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions
hereof shall be canceled upon surrender thereof and the Fiscal Agent shall deliver a certificate of
destruction to the City.
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ARTICLE V
PURCHASE OF ADJUSTABLE RATE BONDS
Section 5.01. Tender for Purchase upon Election of Owner. (a) Any Owner of an
Adjustable Bond in the Daily Mode, the Weekly Mode, the Monthly Mode, the Semi-Annual
Mode or the Extended Rate Mode may demand that such Adjustable Bond, or any portion
thereof (so long as the principal amount purchased, and the principal amount not purchased, are
each in an Authorized Denomination), be purchased on any Purchase Date at a price equal to the
principal amount thereof plus accrued but unpaid interest, if any, to the Purchase Date. Unless
otherwise provided in a Representation Letter, such demand for purchase shall be made as
follows: (i) delivery to the Remarketing Agent at its principal office in New York, New York,
and to the Paying Agent at its Office, no later than the applicable Tender Deadline of an
applicable Tender Notice, and (ii) subject to the provisions of subsection (c) of this Section,
delivery of such Adjustable Bond duly endorsed in blank for transfer at the Office of the Paying
Agent at or prior to 12:00 P.M. (Noon) on the Purchase Date specified in the Tender Notice.
Notwithstanding the foregoing paragraph, the Owners shall have no right to demand
purchase of Adjustable Rate Bonds pursuant to this Section from the third Business Day prior to
any Mandatory Purchase Date until after such Mandatory Purchase Date.
If for any reason a vacancy exists in the office of Remarketing Agent, a Tender Notice
delivered to the Paying Agent only shall be sufficient for purposes of this Section and the Paying
Agent shall give the notice required by subsection (b) of this Section.
(b) Immediately upon receipt by the Remarketing Agent of a Tender Notice delivered
pursuant to paragraph (a) of this Section or such notice of demand for purchase as is required by
a Representation Letter, the Remarketing Agent shall notify the other Notice Parties of such
receipt and the contents thereof by telephone, immediately confirmed in writing. Upon delivery
pursuant to the terms of subsection (a) of this Section of the Adjustable Bond which is the
subject of such purchase, the Paying Agent shall hold such Adjustable Bond pending delivery in
accordance with the terms of this Agreement.
(c) Any Tender Notice by any Owner shall be irrevocable. If such Owner is required but
fails to deliver the Adjustable Bond referred to in such notice to the Paying Agent, such
Adjustable Bond shall nonetheless be deemed to have been tendered and, upon provision for
payment of the Purchase Price therefor from the funds specified in Section 5.03, no interest shall
accrue on such Adjustable Bond for the benefit of such Owner from and after the Purchase Date
and such Owner shall have no rights hereunder as the Owner of such Adjustable Bond except the
right to receive the Purchase Price of such Adjustable Bond.
Section 5.02. Mandatory Purchase on Mandatory Purchase Dates. (a) Each
Adjustable Bond shall be subject to mandatory purchase on each Mandatory Purchase Date at the
applicable Purchase Price. Subject to the provisions of subsection (c) of this Section and unless
otherwise provided in a Representation Letter, all Adjustable Rate Bonds required to be
purchased in accordance with this Section shall be tendered for purchase by delivery to the
Paying Agent at its Office on or prior to the Mandatory Purchase Date and shall be purchased
with the funds described in Section 5.03.
(b) Notice of each mandatory purchase required by subsection (a) of this Section, other
than a purchase of a VIP Bond pursuant to clause (i) of the definition of Mandatory Purchase
Date (as to which no notice is required), shall be given by the Paying Agent by fast-class mail,
postage prepaid to the Owners not less than 15 days prior to the Mandatory Purchase Date (with
copies thereof to be given to the other Notice Parties). Each such notice shall state (i) the
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Mandatory Purchase Date, (ii) if such Adjustable Bond is required to be tendered pursuant to this
Section, that each Adjustable Bond shall be tendered for purchase by delivery of such Adjustable
Bond to the Paying Agent at its Office on or prior to the Mandatory Purchase Date and that any
Adjustable Bond not so tendered for purchase as required shall be deemed to have been so
tendered and, upon provision for payment of the Purchase Price therefor from the funds specified
in Section 5.03, shall be deemed to have been purchased on the Mandatory Purchase Date after
which no interest shall accrue thereon for the benefit of the Owner required to so tender such
Adjustable Bond and such Owner shall have no rights under this Agreement as the Owner of
such Adjustable Bond except the right to receive the Purchase Price thereof, and (iii) that all
Adjustable Rate Bonds subject to such mandatory purchase shall be purchased on the applicable
Mandatory Purchase Date at the applicable Purchase Price.
(c) Any Adjustable Bond subject to mandatory purchase in accordance with this Section
which is not tendered for purchase as required by subsection (a) of this Section shall nonetheless
be deemed to have been so tendered and, upon provision for payment of the Purchase Price
therefor from the funds specified in Section 5.03, shall be deemed to have been purchased on the
Mandatory Purchase Date after which no interest shall accrue on such Adjustable Bond for the
benefit of the Owner required to tender such Adjustable Bond from and after such Mandatory
Purchase Date and such Owner shall have no rights hereunder as the Owner of such Adjustable
Bond except the right to receive the Purchase Price thereof.
Section 5.03. Tender and Purchase of Adjustable Rate Bonds. (a) The Remarketing
Agent shall use its best efforts to remarket Adjustable Rate Bonds to be purchased pursuant to
Section 5.01 or Section 5.02 at a price of par plus accrued and unpaid interest, if any. The City
shall not directly or indirectly purchase any Adjustable Rate Bonds from the Remarketing Agent
pursuant to a remarketing so long as the Letter of Credit is in effect and the Bank is not in default
on the Letter of Credit.
Adjustable Rate Bonds subject to purchase pursuant to Section 5.01 or Section 5.02 shall
be purchased from the Owners thereof at the Purchase Price which shall be payable solely from
the following sources in the following order: (i) immediately available funds on deposit in the
Remarketing Proceeds Account, and (ii) immediately available funds on deposit in the Letter of
Credit Purchase Account.
(b) On each Purchase Date and each Mandatory Purchase Date, the Remarketing Agent
(i) unless otherwise provided in a Representation Letter, at or prior to 11:30 A.M., will deliver to
the Paying Agent instructions for registration of the Adjustable Rate Bonds remarketed in
accordance with subsection (c) of this Section, (ii) at or prior to 11:30 A.M., will give telephonic
notice, immediately confirmed in writing, to the Paying Agent, the Fiscal Agent and the Bank,
specifying the aggregate principal amount of Adjustable Rate Bonds not remarketed which must
be purchased by the Bank on such date, if any, and the amount of proceeds from the remarketing
that will be delivered by the Remarketing Agent to the Paying Agent on such date, if any, and
(iii) at or prior to 1:00 P.M., will cause to be delivered to the Paying Agent in immediately
available funds the proceeds of the remarketing, if any; provided, however, that if the Adjustable
Rate Bonds are registered in the name of the Depository or its nominee, the Remarketing Agent
may apply such remarketing proceeds to the appropriate accounts of the Depository to effect
payment of the Purchase Price of Adjustable Rate Bonds in accordance with the procedures
established by the Depository. If such notice from the Remarketing Agent indicates that
Adjustable Rate Bonds are required to be purchased from the proceeds of a drawing under the
Letter of Credit, the Paying Agent shall give telephonic notice to the City at or prior to 12:30
P.M. on such date specifying the information set forth in the preceding sentence. The aggregate
amount of Adjustable Rate Bonds specified in such direction to be purchased from the proceeds
of a drawing under the Letter of Credit shall not be reduced.
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(c) Unless otherwise provided in a Representation Letter, on each Purchase Date and
Mandatory Purchase Date, all Adjustable Rate Bonds which (i) have been remarketed shall be
registered as directed by the Remazketing Agent, or (ii) are required to be purchased by the Bank
shall be immediately registered in the name of the Bank. The Paying Agent shall make such
Adjustable Rate Bonds available at its Office. In the absence of any instructions from the Bank,
Bank Bonds will be held by the Paying Agent. The Paying Agent shall not release remarketed
Bank Bonds held by it until the Letter of Credit has been reinstated as a result of such
remarketing and the Paying Agent receives, and holds for the Bank, the remarketing proceeds
thereof.
(d) The Paying Agent shall pay from the funds specified in subsection (a) of this Section,
the Purchase Price for each Adjustable Bond at or prior to 4:30 P.M. on the Purchase Date or
Mandatory Purchase Date, as the case may be, and, if such Adjustable Bond is not registered in
the name of the Depository or its nominee, only after receipt of such Adjustable Bond, properly
endorsed either in blank or to the Paying Agent. Payment of the Purchase Price of any
Adjustable Bond tendered for purchase or otherwise purchased pursuant to a Representation
Letter shall be made in immediately available funds or in such manner as such Owner and the
Paying Agent shall agree.
(e) Notwithstanding any provision contained in this Article, all Bank Bonds, except
Adjustable Rate Bonds being registered on such date in the name of, or on behalf of, the Bank
pursuant to Section 5.03(c), shall be deemed tendered to the Remarketing Agent on each
Business Day without the need for any Tender Notice or delivery of such Adjustable Rate Bonds.
The Remarketing Agent shall remazket such Bank Bonds on each Business Day in accordance
with this Agreement and the Remarketing Agreement. The Remarketing Agent shall
immediately notify the Bank by telephone when Bank Bonds have been remarketed in
accordance with this Agreement and the Remarketing Agreement.
Section 5.04. Letter of Credit: Alternate Letter of Credit. (a) During the Daily
Mode, the Weekly Mode, the Monthly Mode, the Semi-Annual Mode and the Extended Rate
Mode, the Fiscal Agent shall, by 4:00 P.M. on the Business Day preceding each Interest Payment
Date, Redemption Date and the Maturity Date, by telex, telecopy or telegraphic demand, draw on
the Letter of Credit in accordance with the terms thereof so as to receive thereunder by 4:00 P.M.
on said Interest Payment Date, Redemption Date and the Maturity Date, as the case may be, an
amount, in immediately available funds, equal to the amount of interest payable on the
Adjustable Rate Bonds in such Modes on such Interest Payment Date, Redemption Date or the
Maturity Date. The proceeds of such draws under this subsection (a) shall be deposited in the
Letter of Credit Account.
(b) While the Letter of Credit is in effect, during the VII' Mode, the Fiscal Agent shall,
by 4:00 P.M. on the last Business Day of each calendar month and on the Business Day
preceding each Redemption Date and the Maturity Date, by telex, telecopy or telegraphic
demand, draw on the Letter of Credit in accordance with the terms thereof so as to receive
thereunder by 4:00 P.M. on the first Business Day of the next calendar month or on said
Redemption Date, or the Maturity Date, as the case may be, an amount equal to the amount of
interest accrued on such VIP Bonds during the previous calendar month, whether or not paid or
due and payable, or the amount of interest payable on such VIP Bonds on such Redemption Date
or the Maturity Date. The proceeds of such draw shall be deposited in the Interest Reserve Fund.
(c) While the Letter of Credit is in effect, by 4:00 P.M. on the Business Day preceding
each Redemption Date and the Maturity Date, the Fiscal Agent shall by telex, telecopy or
telegraphic demand, draw on the Letter of Credit in accordance with the terms thereof so as to
receive thereunder by 4:00 P.M. on such Redemption Date and the Maturity Date, an amount, in
immediately available funds, sufficient to enable the Fiscal Agent to pay principal then payable
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on the Adjustable Rate Bonds, whether at maturity, redemption or purchase thereof, in
connection therewith. The proceeds of such draw shall be deposited in the Letter of Credit
Account.
(d) While the Letter of Credit is in effect, on each Purchase Date and Mandatory
Purchase Date the Fiscal Agent shall by telex, telecopy or telegraphic demand given before 12:30
P.M., draw on the Letter of Credit in accordance with the terms thereof so as to receive
thereunder by 4:00 P.M. on such date an amount, in immediately available funds, sufficient,
together with the proceeds of the remarketing of Adjustable Rate Bonds on such date and
amounts withdrawn from the Interest Reserve Fund pursuant to Section 6.05, to enable the
Paying Agent to pay the Purchase Price in connection therewith. The proceeds of such draw
shall immediately be transferred to the Paying Agent, who shall deposit said proceeds in the
Letter of Credit Purchase Account.
(e) Notwithstanding the foregoing, the Fiscal Agent shall not draw on the Letter of
Credit with respect to any payments due or made in connection with Bank Bonds.
(f) If at any time there shall have been delivered to the Fiscal Agent (i) an Alternate
Letter of Credit in substitution for the Letter of Credit then in effect, (ii) a Favorable Opinion of
Bond Counsel, and (iii) written evidence satisfactory to the Bank of the provision for purchase
from the Bank of all Bank Bonds, at a price equal to the principal amount thereof plus accrued
and unpaid interest, and payment of all amounts due it under the Reimbursement Agreement on
or before the effective date of such Alternate Letter of Credit, then the Fiscal Agent shall accept
such Alternate Letter of Credit on the Substitution Date and shall surrender the Letter of Credit
then in effect to the Bank. The City shall give the Fiscal Agent and the Bank written notice of
the proposed substitution of an Alternate Letter of Credit for the Letter of Credit then in effect no
less than 40 days prior to the proposed Substitution Date.
(g) The Fiscal Agent shall not sell, assign or otherwise transfer the Letter of Credit,
except to a successor Fiscal Agent hereunder and in accordance with the terms of the Letter of
Credit and this Agreement.
Section 5.05. No Sales After Certain Defaults. The Remarketing Agent shall not
remarket Adjustable Rate Bonds pursuant to Sections 5.01, 5.02 or 5.03 if there shall have
occurred and be continuing an Event of Default.
Section 5.06. Purchase Fund. (a) The Paying Agent, as agent of the Fiscal Agent, shall
establish and maintain a special fund designated the "Purchase Fund". The Paying Agent shall
further establish a separate account within the Purchase Fund designated the "Letter of Credit
Purchase Account" and a separate account within the Purchase Fund designated the
"Remarketing Proceeds Account".
(b) Upon receipt of the proceeds of a remarketing of Adjustable Rate Bonds on a
Purchase Date or Mandatory Purchase Date, the Paying Agent shall deposit such proceeds in the
Remarketing Proceeds Account for application to the Purchase Price of the Bonds in accordance
with Section 5.03. Notwithstanding the foregoing, upon the receipt of the proceeds of a
remarketing of Bank Bonds, the Paying Agent shall unmediately pay such proceeds to the Bank
to the extent of any amount owing to the Bank.
(c) Upon receipt from the Fiscal Agent of the irmediately available funds transferred to
the Paying Agent pursuant to subsection (d) of Section 5.04, the Paying Agent shall deposit such
money in the Letter of Credit Purchase Account for application to the Purchase Price of the
Bonds to the extent that the monies on deposit in the Remarketing Proceeds Account shall not be
sufficient. Any amounts deposited in the Letter of Credit Purchase Account and not needed with
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respect to any Purchase Date or Mandatory Purchase Date for the payment of the Purchase Price
for any Bonds shall be immediately returned to the Bank.
(d) Amounts held in the Letter of Credit Purchase Account and the Remarketing
Proceeds Account by the Paying Agent shall be held uninvested.
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ARTICLE VI
SECURITY FOR BONDS; FLOW OF FUNDS;
INVESTMENTS
Section 6.01. Pledge and Assignment. Subject only to the provisions of this Agreement
permitting the application thereof for the purposes and on the terms and conditions set forth
herein, all of the Reassessments (including prepayments thereof), together with interest and any
penalties thereon, all amounts for the Continuing Costs of the Adjustable Rate Bonds and any
and all other amounts (including proceeds of the sale of the Bonds) held in any fund or account
established pursuant to this Agreement are hereby pledged by the City to secure the payment of
the principal of, premium, if any, and interest on the Bonds and the City's obligations to the
Bank under the Reimbursement Agreement, in accordance with the terms of the Bonds and the
provisions of this Agreement, the Reimbursement Agreement and the Act. Said pledge shall
constitute a first lien on and security interest in such assets. Notwithstanding the foregoing, each
group of Fixed Rate Bonds and the Related Additional Bonds, if any, shall be payable solely
from and secured solely by the Reassessments (including prepayments thereof) on the parcels of
real property designated by the City, pursuant to Section 7.01(e), to be represented by such group
of Fixed Rate Bonds and Related Additional Bonds, if any, together with interest and any
penalties on such Reassessments, and any other amounts (including proceeds of the sale of the
Bonds) held in any account established pursuant to this Agreement for such Fixed Rate Bonds
and Related Additional Bonds, if any. Adjustable Rate Bonds and the City's obligations to the
Bank under the Reimbursement Agreement shall be payable solely from and secured solely by
the Reassessments (including prepayments thereof) on the parcels of property not so designated,
together with interest and any penalties on such Reassessments, amounts for the Continuing
Costs of the Adjustable Rate Bonds and the amounts (including proceeds of the sale of the
Bonds) held in any fund or account not established pursuant to this Agreement for Fixed Rate
Bonds.
Section 6.02. Redemption Fund. (a) The Fiscal Agent shall establish, maintain and
hold in trust a special fund designated the "Redemption Fund". Within the Redemption Fund,
the Fiscal Agent shall establish and maintain a special account designated the "Redemption
Account" for each group of Fixed Rate Bonds and the Related Additional Bonds, if any. The
Fiscal Agent shall deposit in the Redemption Fund the amount specified in Section 3.02(a).
Additionally, except as otherwise provided herein, the Fiscal Agent shall deposit in the
Redemption Fund all Reassessments (including prepayments thereof), together with interest and
any penalties on such Reassessments, and any other amounts required to be deposited therein by
this Agreement or the Act; provided, however, that the Fiscal Agent shall deposit in the
Redemption Account established for each group of Fixed Rate Bonds and the Related Additional
Bonds, if any, all Reassessments (including prepayments thereof) on the parcels of real property
designated by the City, pursuant to Section 7.01(e), to be represented by such group of Fixed
Rate Bonds and Related Additional Bonds, if any, together with interest and any penalties on
such Reassessments, and any other amounts required to be deposited therein by this Agreement
or the Act. Amounts transferred, on or about September 3 of each year, to the Fiscal Agent by
the Authority Trustee from the Surplus Fund established under the Authority Indenture shall be
allocated among the groups of Fixed Rate Bonds and the Related Additional Bonds, if any, in
accordance with the respective percentage allocations therefor specified in the written
notification from the Authority Trustee described in Section 6.02(d). Amounts allocated to each
group of Fixed Rate Bonds and the Related Additional Bonds, if any, shall be deposited[, first in
the Reserve Account established for such group of Fixed Rate Bonds and the Related Additional
Bonds, if any, if and to the extent that the amount on deposit therein is less than the Reserve
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Requirement therefor and, second,] in the Redemption Account established for such group of
Fixed Rate Bonds and the Related Additional Bonds, if any.
(b) When a Letter of Credit is in effect, the Fiscal Agent, on each Interest Payment Date
(except during the VIP Mode), each Principal Payment Date and each Redemption Date for
Adjustable Rate Bonds, shall withdraw and apply amounts in the Redemption Fund (not
including any amounts in any Redemption Account established therein), if any, to reimburse the
Bank for draws on the Letter of Credit pursuant to Section 5.04.
(c) On or before each Interest Payment Date, the Fiscal Agent shall withdraw from the
Redemption Account established for each group of Fixed Rate Bonds and the Related Additional
Bonds, if any, for payment to the Owners of such Fixed Rate Bonds and Related Additional
Bonds, if any, the principal of and interest then due and payable on such Fixed Rate Bonds and
Related Additional Bonds, if any. Five Business Days prior to each Interest Payment Date, the
Fiscal Agent shall deterruine if the amounts then on deposit in such Redemption Account are
sufficient to pay the principal, if any, of and interest due on such Fixed Rate Bonds and Related
Additional Bonds, if any, on such Interest Payment Date. In the event that amounts in the
Redemption Account established for a group of Fixed Rate Bonds and the Related Additional
Bonds, if any, are insufficient for such purpose, the Fiscal Agent, on or before such Interest
Payment Date, shall withdraw from the Reserve Account established for such Fixed Rate Bonds
and Related Additional Bonds, if any, to the extent of any funds therein the amount of such
insufficiency, and shall transfer any amounts so withdrawn to such Redemption Account.
Amounts so withdrawn from the Reserve Account established for a group of Fixed Rate Bonds
and Related Additional Bonds, if any, and deposited in the Redemption Account established for
such Fixed Rate Bonds and Related Additional Bonds, if any, shall be applied to the payment of
such Fixed Rate Bonds and Related Additional Bonds, if any. If, after the foregoing transfer,
there are insufficient funds in such Redemption Account to pay principal, if any, and interest on
such Fixed Rate Bonds and Related Additional Bonds, if any, the Fiscal Agent shall apply the
available funds first to the payment of interest on such Fixed Rate Bonds and Related Additional
Bonds, if any, then to the payment of principal of such Fixed Rate Bonds and Related Additional
Bonds, if any.
(d) The Fiscal Agent shall deliver to the Authority Trustee, on July 1 of each year, a
written notification stating, with respect to each group of Fixed Rate Bonds and the Related
Additional Bonds, if any, registered in the name of the Authority Trustee, (i) the amount of debt
service payable on such group of Fixed Rate Bonds and the Related Additional Bonds, if any, on
the following September 2, (ii) the amount on deposit in the Redemption Account established for
such group of Fixed Rate Bonds and the Related Additional Bonds, if any, as of such July 1, and
(iii) the amount, if any, by which the amount on deposit in the Reserve Account established for
such group of Fixed Rate Bonds and the Related Additional Bonds, if any, on such July 1 is less
than the Reserve Requirement therefor. The City shall cause the Authority Trustee to deliver to
the Fiscal Agent, no later than July 15 of each year, a written notification stating the amount that
the Authority Trustee expects to transfer to the Fiscal Agent on the following September 3 from
the Surplus Fund established under the Authority Indenture and the portion (as a percentage)
thereof allocable to each group of Fixed Rate Bonds and the Related Additional Bonds, if any,
registered in the name of the Authority Trustee. The City shall cause the Assessment Consultant
to calculate the portion of such amount allocable to parcels designated by the City to be
represented by each group of Fixed Rate Bonds and the Related Additional Bonds, if any, that
were included in Prior District 85-1 and the portion of such amount allocable to parcels
designated by the City to be represented by each group of Fixed Rate Bonds and the Related
additional Bonds, if any, that were included in Prior District 86-2.
Section 6.03. Prepayment Account. The Fiscal Agent shall establish and maintain a
special account within the Redemption Fund designated the "Prepayment Account". Within the
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Prepayment Account, the Fiscal Agent shall establish and maintain a special account designated
the "Prepayment Subaccount" for each group of Fixed Rate Bonds and the Related Additional
Bonds, if any. The Fiscal Agent shall deposit in the Prepayment Account the proceeds of the
prepayment of any Reassessment; provided, however, that the Fiscal Agent shall deposit in the
Prepayment Subaccount established for each group of Fixed Rate Bonds and the Related
Additional Bonds, if any, the proceeds of the prepayment of any Reassessment on the parcels of
real property designated by the City, pursuant to Section 7.01(e), to be represented by such group
of Fixed Rate Bonds and Related Additional Bonds, if any. Additionally, the Fiscal Agent shall
deposit in the Prepayment Account amounts received from the City in connection with the City's
exercise of its rights to optionally redeem Bonds pursuant to Section 4.01; provided, however,
that the Fiscal Agent shall deposit in the Prepayment Subaccount established for each group of
Fixed Rate Bonds and the Related Additional Bonds, if any, amounts received from the City in
connection with the City's exercise of its rights to optionally redeem such Fixed Rate Bonds
pursuant to Section 4.01(c) and to optionally redeem such Related Additional Bonds pursuant to
the corresponding provisions in the Supplemental Agreement pursuant to which such Related
Additional Bonds are issued.
While a Letter of Credit is in effect, amounts in the Prepayment Account (other than
amounts in any Prepayment Subaccount established therein) shall be disbursed therefrom to
reimburse the Bank for draws in the Letter of Credit used to pay the principal of Adjustable Rate
Bonds redeemed pursuant to Section 4.01(b), 4.02(a) or 4.02(b).
Amounts in the Prepayment Subaccount established for a group of Fixed Rate Bonds, and
the Related Additional Bonds, if any, shall be disbursed therefrom for the payment of the
Redemption Price of such Fixed Rate Bonds and Related Additional Bonds, if any, redeemed
pursuant to Section 4.01(c) or Section 4.02(c) and the corresponding provisions of the
Supplemental Agreement pursuant to which Related Additional Bonds are issued.
Section 6.04. Letter of Credit Account. The Fiscal Agent shall establish and maintain
a special account within the Redemption Fund designated the Letter of Credit Account. The
Fiscal Agent shall deposit the proceeds of draws on the Letter of Credit made pursuant to 5.04
(a) and (c) in the Letter of Credit Account. When the Letter of Credit is in effect, money in the
Letter of Credit Account shall be withdrawn by the Fiscal Agent on each Interest Payment Date
(except during the VIP Mode), each Principal Payment Date and each Redemption Date and used
to pay the interest on and principal of the Adjustable Rate Bonds, whether at maturity,
redemption or purchase.
Section 6.05. Interest Reserve Fund. The Fiscal Agent shall establish, maintain and
hold in trust a special fund designated the "Interest Reserve Fund". The Fiscal Agent shall
deposit in the Interest Reserve Fund amounts received from the City which, on the date of a
Change in Mode to the VIP Mode, will constitute Seasoned Funds in an amount equal to the
Interest Reserve Fund Requirement. Additionally, the Fiscal Agent shall deposit in the Interest
Reserve Fund the proceeds of all draws made on the Letter of Credit pursuant to subsection (b)
of Section 5.04(b). When Bonds are in the VIP Mode, the Fiscal Agent shall apply amounts on
deposit in the Interest Reserve Fund on each Interest Payment Date to the payment of interest due
and payable on such VIP Bonds.
Amounts on deposit in the Interest Reserve Fund shall be reduced on the first Business
Day of each calendar month following the redemption of Bonds in the VIP Mode, so that the
amount on deposit in the Interest Reserve Fund shall always be equal to the Interest Reserve
Fund Requirement; provided, however, that such calculation shall not take into account monies
on deposit in the Interest Reserve Fund which represent interest actually accrued but not yet
payable to Owners of Bonds in the VIP Mode and such moneys shall not be transferred out upon
such redemptions.
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When there are no longer any Bonds in the VIP Mode, monies on deposit in the Interest
Reserve Fund shall be transferred from the Interest Reserve Fund to the Redemption Fund;
provided, however, that there shall not be transferred monies on deposit in the Interest Reserve
Fund which represent interest actually accrued but not yet payable.
Section 6.06. Reserve Fund. (a) The Fiscal Agent shall establish, maintain and hold in
trust a special fund designated the "Reserve Fund". Within the Reserve Fund, the Fiscal Agent
shall establish and maintain a special account designated the "Reserve Account" for each group
of Fixed Rate Bonds and the Related Additional Bonds, if any. Upon the conversion of
Adjustable Rate Bonds to Fixed Rate Bonds, and the issuance of any Related Additional Bonds,
there shall be deposited in the Reserve Account established for the group of Fixed Rate Bonds so
converted and the Related Additional Bonds, if any, an amount equal to the Reserve
Requirement for such group of Fixed Rate Bonds and Related Additional Bonds, if any.
Additional deposits shall be made as provided in the Act.
The City shall cause each Reserve Account to be administered in accordance with Part 16
of the Act; provided that proceeds from redemption or sale of parcels of real property designated
by the City, pursuant to Section 7.01(e), to represent the group of Fixed Rate Bonds and the
Related Additional Bonds, if any, for which such Reserve Account was established, with respect
to which payment of delinquent Reassessments and interest thereon was made from such Reserve
Account, shall be credited to such Reserve Account.
(b) Except as otherwise provided in this Section, all amounts deposited in the Reserve
Account established for a group of Fixed Rate Bonds and the Related Additional Bonds, if any,
shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the
Redemption Account established for such group of Fixed Rate Bonds and Related Additional
Bonds, if any, in the event of any deficiency at any time in such Redemption Account of the
amount then required for payment of the principal of, premium, if any, and interest on such Fixed
Rate Bonds and Related Additional Bonds, if any, or, in accordance with the provisions of this
Section, for the purpose of redeeming such Fixed Rate Bonds and Related Additional Bonds, if
any, from such Redemption Account.
(c) Transfers shall be made from the Reserve Account established for a group of Fixed
Rate Bonds and the Related Additional Bonds, if any, to the Redemption Account established for
such group of Fixed Rate Bonds and Related Additional Bonds, if any, in the event of a
deficiency in such Redemption Account established for a group of Fixed Rate Bonds and the
Related Additional Bonds, if any, in accordance with Section 6.02(c).
(d) Whenever, after the conversion of a group of Fixed Rate Bonds and the issuance of
the Related Additional Bonds, if any, a Reassessment on any parcel of real property designated
by the City, pursuant to Section 7.01(e) to be represented by such group of Fixed Rate Bonds and
Related Additional Bonds, if any, is prepaid, in whole or in part, as provided in the Act, the
Fiscal Agent, pursuant to a Written Request of the City, shall transfer from the Reserve Account
established for such group of Fixed Rate Bonds and Related Additional Bonds, if any, to the
Prepayment Subaccount established for such group of Fixed Rate Bonds and Related Additional
Bonds, if any, an amount, specified in such Written Request, equal to the product of the ratio of
the amount, at the tune of such conversion, of the Reassessment, or portion thereof, so prepaid to
the amount, at the time of such conversion, of all such unpaid Reassessments, tunes the initial
Reserve Requirement for such group of Fixed Rate Bonds and Related Additional Bonds, if any.
(e) So long as no Event of Default shall have occurred and be continuing, any amount in
the Reserve Account established for a group of Fixed Rate Bonds and the Related Additional
Bonds, if any, in excess of the Reserve Requirement for such group of Fixed Rate Bonds and
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Related Additional Bonds, if any, on February 15 and March 15 of each year shall be withdrawn
from such Reserve Account by the Fiscal Agent and deposited in the Redemption Account
established for such group of Fixed Rate Bonds and Related Additional Bonds, if any.
(fJ Whenever the balance in the Reserve Account established for a group of Fixed Rate
Fixed Rate Bonds and the Related Additional Bonds, if any, is sufficient to retire all the
Outstanding Fixed Rate Bonds and Related Additional Bonds, if any, for which such Reserve
Account was established, whether by advance retirement or otherwise, collection of the principal
and interest on the Reassessments on the parcels of real property designated by the City, pursuant
to Section 7.01(e), to be represented by such group of Fixed Rate Bonds and Related Additional
Bonds, if any, shall be discontinued and such Reserve Account liquidated by the Fiscal Agent in
retirement of such Outstanding Bonds, as directed by a Written Request of the City. In the event
that the balance in such Reserve Account at the time of liquidation exceeds the amount required
to retire all such Outstanding Bonds, the excess shall, after payment of amounts due to the Fiscal
Agent, be transferred to the City to be used in accordance with the Act.
Section 6.07. ('nntinuing Costs Account. The Fiscal Agent shall establish and
maintain a special account within the Redemption Fund designated the "Continuing Costs
Account". Within the Continuing Costs Account, the Fiscal Agent shall establish and maintain a
special account designated the "Adjustable Rate Bonds Continuing Costs Subaccount" and a
special account designated the "Fixed Rate Bonds Continuing Costs Subaccount". The Fiscal
Agent shall deposit in the Adjustable Rate Bonds Continuing Costs Subaccount amounts
collected for payment of Continuing Costs of the Adjustable Rate Bonds. The Fiscal Agent shall
deposit in the Fixed Rate Bonds Continuing Costs Subaccount amounts collected for payment of
Continuing Costs of the Fixed Rate Bonds.
The moneys in the Continuing Costs Account shall be used and withdrawn by the Fiscal
Agent from time to time to pay the Continuing Costs of the Adjustable Rate Bonds and the
Continuing Costs of the Fixed Rate Bonds upon submission of a Written Request of the City
stating (a) the Person to whom payment is to be made, (b) the amount to be paid, (c) the purpose
for which the obligation was incurred, (d) that such payment constitutes a Continuing Cost of the
Adjustable Rate Bonds or a Continuing Cost of the Fixed Rate Bonds, or both, as appropriate,
and is a proper charge against the Continuing Costs Account, (e) the portion if any, of such
amount to be paid from the Adjustable Rate Bonds Continuing Costs Subaccount and the portion,
if any, of such amount to be paid from the Fixed Rate Bonds Continuing Costs Subaccount, and
(f) that such amounts have not been the subject of a prior disbursement from the Continuing
Costs Account; in each case together with a statement or invoice for each amount requested
thereunder.
Section 6.08. Investment of Monevs. Except as otherwise provided herein, all moneys
in any of the funds or accounts (other than the Letter of Credit Account, the Letter of Credit
Purchase Account, the Remarketing Proceeds Account and the Interest Reserve Fund)
established pursuant to this Agreement shall be invested by the Fiscal Agent solely in Permitted
Investments, as directed in writing by the City two Business Days prior to the making of such
investment; provided, however, that any Seasoned Funds which are required to pay the
Redemption Price of any Bonds for which notice of redemption has been given hereof may be
invested only in Federal Securities described in clause (a) of the definition thereof which mature
not later than 30 days from the date of purchase or on the applicable Redemption Date,
whichever fast occurs. Moneys in the Letter of Credit Account, the Letter of Credit Purchase
Account, the Remarketing Proceeds Account the shall be held uninvested. Moneys in the Interest
Reserve Fund shall be held uninvested unless directed in writing by the City to be invested in
Federal Securities with maturity periods not exceeding one day. All Permitted Investments shall
be acquired subject to any restrictive instructions given to the Fiscal Agent pursuant to Section
7.10 and such additional limitations or requirements consistent with the foregoing as may be
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established by the Written Request of the City. Moneys in all funds and accounts (other than the
Letter of Credit Account, the Letter of Credit Purchase Account, the Remarketing Proceeds
Account and the Interest Reserve Fund) shall be invested in Permitted Investments maturing not
later than the date on which it is estimated that such moneys will be required for the purposes
specified in this Agreement. Absent timely written direction from the City, the Fiscal Agent
shall invest such moneys in Permitted Investments described in clause (h) of the definition
thereof.
Subject to the provisions of Section 7.10, all interest, profits and other income received
from the investment of moneys in any fund or account established pursuant to this Agreement
shall be retained therein; provided however, that any such interest, profits and other income shall
be available for the payment of any rebate that may be owed under the Code, as specified in a
Written Request of the City delivered to the Fiscal Agent.
Permitted Investments acquired as an investment of moneys in any fund established
under this Agreement shall be credited to such fund. Except as otherwise provided in the
following sentence, all investments of amounts deposited in any fund or account created by or
pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the
meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date
that valuation is required by this Agreement or the Code) at Fair Market Value. Investment in
funds or accounts (or portions thereof) that are subject to a yield restriction under applicable
provisions of the Code shall be valued at their present value (within the meaning of section 148
of the Code).
The Fiscal Agent may act as principal or agent in the making or disposing of any
investment. Upon the Written Request of the City, the Fiscal Agent shall sell or present for
redemption any Permitted Investments so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or
account to which such Permitted Investments is credited, and the Fiscal Agent shall not be liable
or responsible for any loss resulting from any investment made or sold pursuant to this Section.
For purposes of investment, the Fiscal Agent may commingle any of the moneys held by it
hereunder, except money derived from draws under the Letter of Credit or Seasoned Funds,
which shall not be commingled with any other funds under any circumstances.
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ARTICLE VII
COLLECTION AND APPLICATION OF
REASSESSMENTS; PARTICULAR COVENANTS
Section 7.01. Collection and A~p~ication of Reassessments. (a) The City shall
comply with all requirements of the Act, the Resolution of Issuance and this Agreement to assure
the timely collection of the Reassessments, and interest thereon, including, without limitation,
the enforcement of delinquent Reassessments. Any funds received by the City in and for the
Reassessment District, including, but not limited to, collections of Reassessments (including
prepayments thereof), and interest thereon, collections of delinquent Reassessments, and interest
and penalties thereon, through foreclosure proceedings or otherwise, and collections of amounts
for the Continuing Costs of the Adjustable Rate Bonds and the Continuing Costs of the Fixed
Rate Bonds, shall be immediately transmitted directly to the Fiscal Agent, without deduction, to
be deposited into the funds and accounts herein specified.
(b) The Fiscal Agent, as agent of the City, shall collect Reassessments on all parcels of
real property represented by Adjustable Rate Bonds, together with interest thereon, through
direct billing of the owners of such parcels, and such Reassessments, and interest thereon, shall
be payable at the end of the pay period and are delinquent thereafter. Any such delinquent
Reassessments shall have the same priority and shall bear the same proportionate penalties after
delinquency as do general taxes on real property and shall bear interest at the rate or rates
provided in the Reimbursement Agreement .Interest on Reassessments on parcels of real
property represented by Adjustable Rate Bonds shall be in an amount sufficient to pay interest on
Series A Bonds, other than Fixed Rate Bonds, or to pay interest at the rate or rates provided in
the Reimbursement Agreement, as and when due. In addition, the Fiscal Agent, as agent of the
City and subject to limitations contained in Section 8663 of the Act, shall collect amounts
sufficient to pay the Continuing Costs of the Adjustable Rate Bonds through direct billing of the
owners of the real property represented by Adjustable Rate Bonds.
Not later than one Business Day prior to each date on which Reassessments on parcels of
real property represented by Adjustable Rate Bonds, or interest thereon, or Continuing Costs of
the Adjustable Rate Bonds are due, the Fiscal Agent shall notify the owners of such parcels of
the amounts becoming due and receive the same from such owners on or before such due date.
(c) The Reassessments on parcels of real property designated by the City, pursuant to
Section 7.01(e), to represent Fixed Rate Bonds and Related Additional Bonds, if any, and interest
thereon, shall be payable and be collected in the same manner at the same time and in the same
installments as the general taxes on real property are payable, and have the same priority,
become delinquent at the same time and in the same proportionate amounts and bear the same
proportionate penalties and interest after delinquency as do the general taxes on real property.
The Reassessments on parcels of real property designated by the City, pursuant to Section
7.01(e), to represent a group of Fixed Rate Bonds and the Related Additional Bonds, if any,
together with the interest thereon, shall be payable in annual series corresponding in number to
the number of series of such Fixed Rate Bonds and Related Additional Bonds, if any. An annual
proportion of each Reassessment on parcels of real property designated by the City, pursuant to
Section 7.01(e), to represent a group of Fixed Rate Bonds and the Related Additional Bonds, if
any, together with interest thereon, shall be payable in each year preceding the date of maturity
of each of the several series of Fixed Rate Bonds and Related Additional Bonds, if any,
representing such parcels in an amount sufficient to pay such Fixed Rate Bonds and Related
Additional Bonds, if any, and interest thereon, when due. In addition, the City shall, in
accordance with and subject to the limitations contained in Section 8682 and Section 8682.1
of the Act, cause to be included in the annual assessment roll of the parcels of real property
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designated by the City, pursuant to Section 7.01(e), to represent Fixed Rate Bonds and Related
Additional Bonds, if any, an amount estimated to be sufficient to pay the Continuing Costs of the
Fixed Rate Bonds for the following annual period.
The Treasurer shall, before the final date on which the Auditor will accept the
transmission of the Reassessments for the parcels of real property designed by the City, pursuant
to Section 7.01(e), to represent Fixed Rate Bonds and Related Additional Bonds, if any, for
inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor,
such data as the Auditor requires to include the installments of such Reassessments, together
with interest thereon, and the Continuing Costs of the Fixed Rate Bonds on the next secured tax
roll of the County. Such data shall take into account the amount expected to be transferred, on
the following September 3, to the Fiscal Agent by the Authority Trustee from the Surplus Fund
established under the Authority Indenture and the allocation thereof determined by the
Assessment Consultant as provided in Section 6.02(d). The Treasurer is hereby authorized to
employ consultants to assist in computing the installments of the Reassessments hereunder and in
reconciling Reassessments billed to amounts received.
Upon receipt of any Reassessments for the parcels of real property designated by the
City, pursuant to Section 7.01(e), to represent a group of Fixed Rate Bonds and Related
Additional Bonds, if any, or interest or penalties thereon, or prepayments of such Reassessments
or amounts collected with respect to such parcels for the Continuing Costs of the Fixed Rate
Bonds, the City shall, as soon as practicable, transfer the same to the Fiscal Agent, together with
a Written Certificate of the City that identifies the group of Fixed Rate Bonds and Related
Additional Bonds, if any, to which such amounts relate and identifies which portion, if any, of
the amounts so transferred constitute Reassessments, or interest or penalties thereon, or
prepayments of Reassessments or amounts collected of the Continuing Costs of the Fixed Rate
Bonds.
(d) Any Reassessment on any parcel of property may be prepaid at any time by paying,
in whole or part, the unpaid amount thereof less, if available, the amount transferred to the
Redemption Account established for the Fixed Rate Bonds and the Related Additional Bonds, if
any, representing such parcel, from the Reserve Account established for such Fixed Rate Bonds
and the Related Additional Bonds, if any, pursuant to Section 6.02(c), if any, together with the
redemption premium, if any, set forth in Section 4.02(a) or 4.02(c), as applicable, and interest on
such prepaid Reassessment (if not collected in a Reassessment installment) to the earliest
Redemption Date for which notice of redemption may be given in accordance herewith.
(e) Upon the conversion of Adjustable Rate Bonds to Fixed Rate Bonds, and the issuance
of any Additional Bonds in connection therewith, the City shall in a Written Certificate of the
City delivered to the Fiscal Agent, designate (i) by CUSIP numbers, what portion (which may be
all) of such Fixed Rate Bonds constitutes a group for purposes hereof, (ii) by Series
identification, what portion (which may be all) of such Additional Bonds constitutes Related
Additional Bonds for such group of Fixed Rate Bonds, and (iii) by assessor's parcel numbers the
parcels of real property within the Reassessment District which shall be represented by such
group of Fixed Rate Bonds and Related Additional Bonds, if any. From and after such
designation, said group of Fixed Rate Bonds and said Related Additional Bonds, if any, shall be
payable solely from and secured solely by the Reassessments (including prepayments thereof) on
said designated parcels, together with interest and any penalties thereon, and any other amounts
held in any fund or account established for such group of Fixed Rate Bonds and Related
Additional Bonds, as provided herein.
The Adjustable Rate Bonds shall represent the parcels of real property within the
Reassessment District that have not been designated pursuant to this subsection to be represented
by any group of Fixed Rate Bonds and the Related Additional Bonds, if any. The Adjustable
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Rate Bonds shall be payable solely from and secured solely by the Reassessments (including
prepayments thereof) on such pazcels that have not been so designated, together with interest and
any penalties thereon, amounts collected for the Continuing Costs of the Adjustable Bonds and
any other amounts held in any fund or account established hereunder and available for payment
of the Adjustable Rate Bonds, as provided herein.
Section 7.02. Foreclosure. The City hereby covenants that it will within 60 days of a
delinquency in the payment of Reassessments on parcels represented by Adjustable Rate Bonds,
or interest thereon, or amounts to pay the Continuing Costs of the Adjustable Rate Bonds, or
within 150 days of a delinquency in the payment of Reassessments on parcels represented by
Fixed Rate Bonds or Additional Bonds, or interest thereon, or amounts to pay the Continuing
Costs of the Fixed Rate Bonds, forthwith undertake and diligently prosecute foreclosure
proceedings in the manner prescribed in Section 8830 et seq. of the Act to collect such
delinquent amounts; provided, however, with respect to parcels represented by a group of Fixed
Rate Bonds and the Related Additional Bonds, if any, if the amount collected is greater than
92.5% of the installment of the Reassessment on parcels represented by such group of Fixed Rate
Bonds and Related Additional Bonds, if any, and interest thereon, and amounts to pay the
Continuing Costs of the Fixed Rate Bonds, to be collected, the City shall not be required to
undertake such foreclosure proceedings, unless it is determined that any single property owner is
delinquent in excess of $25,000 in the payment of such amounts, in which case it shall diligently
institute, prosecute and pursue such foreclosure proceedings against such property owner as set
forth herein. Upon the redemption or sale of the real property responsible for such
delinquencies, the City shall apply the net proceeds thereof to: (a) deposit to the appropriate
Reserve Account the amount of any delinquency advanced therefrom pursuant to Section 6.02(c),
(b) with respect to parcels represented by Adjustable Rate Bonds, forthwith remit to the Bank
any moneys received on account thereof, up to the amount due to the Bank as an Owner of Bank
Bonds or pursuant to the Reimbursement Agreement, and (c) the balance, if any, shall be
disbursed as set forth in the judgment of foreclosure or as required by law.
Section 7.03. No Advances from Available Surplus Funds. The City shall not be
obligated to advance available surplus funds of the City to cure any deficiency which may occur
in the Redemption Fund or any Redemption Account; provided, however, that said determination
shall not prevent the City, in its sole discretion, from so advancing funds.
Section 7.04. Punctual Payment. The City shall punctually pay or cause to be paid the
principal, premium, if any, and interest to become due in respect of all the Bonds, in strict
conformity with the teens of the Bonds and of this Agreement, according to the true intent and
meaning thereof, but only out of Reassessments and other assets pledged for such payment as
provided in this Agreement and received by the City or the Fiscal Agent.
Section 7.05. Extension of Payment of Bonds. The City shall not directly or indirectly
extend or assent to the extension of the maturity of any of the Bonds or the time of payment of
any claims for interest by the purchase of such Bonds or by any other arrangement, and in case
the maturity of any of the Bonds or the time of payment of any such claims for interest shall be
extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder,
to the benefits of this Agreement, except subject to the prior payment in full of the principal of
all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been
so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds
for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to
constitute an extension of maturity of the Bonds.
Section 7.06. Against Encumbrances. Except as provided in the Reimbursement
Agreement, the City shall not create, or permit the creation of, any pledge, lien, charge or other
-47-
encumbrance upon the Reassessments and other assets pledged or assigned under this Agreement
while any of the Bonds are Outstanding.
Section 7.07. Power to Issue Bonds and Make Pledge. The City is duly authorized
pursuant to the Act to issue the Bonds and to enter into this Agreement and to pledge the
Reassessments and other assets purported to be pledged under this Agreement in the manner and
to the extent provided in this Agreement. The Bonds and the provisions of this Agreement are
and will be the legal, valid and binding obligations of the City in accordance with their terms,
and the City and the Fiscal Agent (subject to the provisions of Articles VIII and lX) shall at all
times, to the extent permitted by law, defend, preserve and protect said pledge of Reassessments
and other assets and all the rights of the Bond Owners and the Bank under this Agreement
against all claims and demands of all Persons whomsoever.
Section 7.08. Accounting Records and Financial Statements. The Fiscal Agent shall
at all times keep, or cause to be kept, proper books of record and account, prepared in accordance
with trust industry standards, in which complete and accurate entries shall be made of all
transactions relating to the proceeds of the Bonds, the Reassessments and all funds and accounts
established pursuant to this Agreement. Such books of record and account shall be available for
inspection by the City and the Bank, during regular business hours and upon 24 hours' notice and
under reasonable circumstances as agreed to by the Fiscal Agent. The Fiscal Agent shall deliver
to the City a monthly accounting of the funds and accounts it holds under this Fiscal Agent
Agreement; provided, however, that the Fiscal Agent shall not be obligated to deliver such
accounting for any fund or account that has a balance of zero.
Section 7.09. Waiver of Laws. The City shall not at any time insist upon or plead in
any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law
now or at any time hereafter in force that may affect the covenants and agreements contained in
this Agreement or in the Bonds, and all benefit or advantage of any such law or laws is hereby
expressly waived by the City to the extent permitted bylaw.
Section 7.10. Tax Covenants. (a) Private Activity Bond Limitation. The City shall
assure that the proceeds of the Series A Bonds are not so used as to cause the Series A Bonds to
satisfy the private business tests of Section 141(b) of the Code or the private loan financing test
of Section 141(c) of the Code.
(b) Rebate Requirement. The City shall take any and all actions necessary to assure
compliance with section 148(fJ of the Code, relating to the rebate of excess investment earnings,
if any, to the federal government, to the extent that such section is applicable to the Series A
Bonds.
(c) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer
any action to be taken if the result of the same would be to cause any of the Series A Bonds to be
"Federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Maintenance of Tax-Exemption. The City shall take all actions necessary to assure
the exclusion of interest on the Series A Bonds from gross income of the Owners of the Series A
Bonds to the same extent as such interest is permitted to be excluded from gross income under
the Code as in effect on the date of issuance of the Series A Bonds.
(e) No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal
Agent or otherwise, any action with respect to the proceeds of the Series A Bonds which, if such
action had been reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the date of issuance of the Series A Bonds would have caused the Series
A Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code.
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Section 7. 11. Authority for Continuing Costs. The City represents that, pursuant to
the Act, it has authority to levy an additional assessment to pay the Continuing Costs of the
Adjustable Rate Bonds and that, if any such additional assessment is not paid when due, the
Council may order that the same be collected by an action brought in the superior court to
foreclose the lien thereof as provided in the Act.
Section 7.12. Further Assurances. The City will make, execute and deliver any and all
such further agreements, instruments and assurances as may be reasonably necessary or proper to
carry out the intention or to facilitate the performance of this Agreement and for the better
assuring and confirming unto the Owners of the Bonds and the Bank of the rights and benefits
provided in this Agreement.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 8.01. Events of Default. The following events shall be Events of Default:
(a) Failure to pay any installment of principal of any Bonds when and as
the same shall become due and payable, whether at maturity as therein expressed,
by proceedings for redemption or otherwise.
(b) Failure to pay any installment of interest on any Bonds when and as
the same shall become due and payable.
(c) Failure by the City to observe and perform any of the other covenants,
agreements or conditions on its part in this Agreement or in the Bonds contained,
if such failure shall have continued for a period of 60 days after written notice
thereof, specifying such failure and requiring the same to be remedied, shall have
been given to the City by the Fiscal Agent or the Owners of not less than 25% in
aggregate principal amount of the Bonds at the time Outstanding; provided,
however, if in the reasonable opinion of the City the failure stated in the notice
can be corrected, but not within such 60 day period, such failure shall not
constitute an Event of Default if corrective action is instituted by the City within
such 60 day period and the City shall thereafter diligently and in good faith cure
such failure in a reasonable period of time.
(d) With respect only to Adjustable Rate Bonds, receipt by the Fiscal
Agent of notice from the Bank that an event of default under the Reimbursement
Agreement shall have occurred and be continuing.
(e) The City shall commence a voluntary case under Title 11 of the
United States Code or any substitute or successor statute.
Section 8.02. Foreclosure. If any Event of Default shall occur under Section 8.01, then,
and in each and every such case during the continuance of such Event of Default, the Fiscal
Agent may or, at the direction of the Owners of not less than a majority in aggregate principal
amount of the Bonds at the tune Outstanding shall, commence foreclosure against any parcels of
real property in the Reassessment District with delinquent Reassessments, or delinquent
payments of interest thereon, or delinquent payments of amounts for the Continuing Costs of the
Adjustable Rate Bonds or the Continuing Costs of the Fixed Rate Bonds, as provided in Section
8830 et. seq. of the Act.
Section 8.03. Other Remedies. The Fiscal Agent shall have the following rights:
(a) by mandamus, suit, action or proceeding, to compel the City and its
members, officers, agents or employees to perform each and every term, provision
and covenant contained in this Agreement and in the Bonds, and to require the
carrying out of any or all such covenants and agreements of the City and the
fulfillment of all duties imposed upon it by the Act;
(b) by suit, action or proceeding in equity, to enjoin any acts or things
which are unlawful, or the violation of any rights of the Bond Owners or the
Fiscal Agent; or
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(c) upon the happening of any Event of Default, by suit, action or
proceeding in any court of competent jurisdiction, to require the City and its
members and employees to account as if it and they were the trustees of an
express trust.
Section 8.04. Bank's Right Regarding Remedies. Anything to the contrary contained
herein notwithstanding, so long as the Bank is not in default under the Letter of Credit, the Fiscal
Agent shall not exercise any of the foregoing remedies with respect to Adjustable Rate Bonds
without the prior written consent of the Bank, and shall, upon the Bank's offer to the Fiscal
Agent of reasonable security and indemnity against costs, expenses and liabilities to be incurred
by it, exercise such rights in accordance with and at the direction of the Bank.
Section 8.05. A~nlication of Reassessments and Other Funds After Default. If an
Event of Default shall occur and be continuing, all Reassessments, including any penalties, costs,
fees and other charges accruing under the Act, and any moneys in the funds and accounts
established hereunder for the Bonds representing the parcels on which such Reassessments are
levied shall be applied by the Fiscal Agent as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Fiscal
Agent to protect the interests of the Owners of the Bonds representing the parcels
on which such Reassessments are levied and payment of reasonable fees, charges
and expenses of the Fiscal Agent (including reasonable fees and disbursements of
its counsel) incurred in and about the performance of its powers and duties under
this Agreement.
(b) To the payment of the principal of and interest then due with respect
to the Bonds representing the parcels on which such Reassessments are levied
(upon presentation of the Bonds to be paid, and stamping thereon of the payment
if only partially paid, or surrender thereof if fully paid) subject to the provisions of
this Agreement, as follows:
Fir To the payment to the Persons entitled thereto of all
installments of interest then due in the order of the maturity of such
installments, and, if the amount available shall not be sufficient to pay in
full any installment or installments maturing 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; and
Second: To the payment to the Persons entitled thereto of the
unpaid principal of any Bonds representing the parcels on which such
Reassessments are levied which shall have become due, whether at
maturity or by call for redemption, with interest on the overdue principal
at the rate borne by the respective Bonds representing the parcels on which
such Reassessments are levied on the date of maturity or redemption, and,
if the amount available shall not be sufficient to pay in full all the Bonds
representing the parcels on which such Reassessments are levied, 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.
(c) If such Reassessments are levied on parcels represented by Adjustable Rate
Bonds, to the Bank to the extent that amounts are owed to the Bank on account of draws
under the Letter of Credit or otherwise under the Reimbursement Agreement.
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(d) Any remaining funds shall be transferred by the Fiscal Agent to the
Redemption Fund or the Redemption Account, as applicable, established for the
Bonds representing the parcels on which such Reassessments are levied.
Section 8.06. Bond Owners' Direction of Proceeding. Anything in this Agreement to
the contrary notwithstanding, but subject to the provisions of Section 8.04, the Owners of a
majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an
instrument or concurrent instruments in writing executed and delivered to the Fiscal Agent, and
upon indemnification of the Fiscal Agent to its reasonable satisfaction, to direct the method of
conducting all remedial proceedings taken by the Fiscal Agent hereunder, provided that such
direction shall not be otherwise than in accordance with law and the provisions of this
Agreement, and that the Fiscal Agent shall have the right to decline to follow any such direction
which in the opinion of the Fiscal Agent would be unjustly prejudicial to Bond Owners not
parties to such direction.
Section 8.07. Limitation on Bond Owners' Right to Sue. No Owner of any Bonds
shall have the right to institute any suit, action or proceeding at law or in equity, for the
protection or enforcement of any right or remedy under this Agreement, the Bond Law or any
other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the
Fiscal Agent written notice of the occurrence of an Event of Default, (b) the Owners of a
majority in aggregate principal amount of the Bonds then Outstanding, shall have made written
request upon the Fiscal Agent to exercise the powers hereinbefore granted or to institute such
suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to
the Fiscal Agent indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request, and (d) the Fiscal Agent shall have refused or omitted to comply
with such request for a period of 60 days after such written request shall have been received by,
and said tender of indemnity shall have been made to, the Fiscal Agent.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any
remedy hereunder or under law; it being understood and intended that no one or more Owners of
Bonds shall have any right in any manner whatever by his or their action to affect, disturb or
prejudice the security of this Agreement or the rights of any other Owners of Bonds, or to
enforce any right under the Bonds, this Agreement, the Bond Law or other applicable law with
respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in
equity to enforce any such right shall be instituted, had and maintained in the manner herein
provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to
the provisions of this Agreement.
Section 8.08. Absolute Obligation of Citv. Nothing in Section 8.07 or in any other
provision of this Agreement or in the Bonds contained shall affect or impair the obligation of the
City, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the
respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption,
as herein provided, but only out of the Reassessments and other assets herein pledged therefor
and received by the City or the Fiscal Agent, or affect or impair the right of such Owners, which
is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in
the Bonds.
Section 8.09. Termination of Proceedings. In case any proceedings taken by the Fiscal
Agent or any one or more Bond Owners on account of any Event of Default shall have been
discontinued or abandoned for any reason or shall have been determined adversely to the Fiscal
Agent or the Bond Owners, then in every such case the City, the Fiscal Agent and the Bond
Owners, subject to any determination in such proceedings, shall be restored to their former
positions and rights hereunder, severally and respectively, and all rights, remedies, powers and
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duties of the City, the Fiscal Agent and the Bond Owners shall continue as though no such
proceedings had been taken.
Section 8.10. Remedies Not Exclusive. No remedy herein conferred upon or reserved
to the Fiscal Agent or to the Owners of the Bonds is intended to be exclusive of any other
remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be
cumulative and in addition to any other remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.
Section 8.11. No Waiver of Default. No delay or omission of the Fiscal Agent or of
any Owner of the Bonds to exercise any right or power arising upon the occurrence of any
default shall impair any such right or power or shall be construed to be a waiver of any such
default or an acquiescence therein; and every power and remedy given by this Agreement to the
Fiscal Agent or to the Owners of the Bonds may be exercised from time to time and as often as
may be deemed expedient.
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ARTICLE IX
FISCAL AGENT; PAYING AGENT;
REMARKETING AGENT
Section 9.01. Duties and Liabilities of Fiscal Agent. (a) Duties of Fiscal Agent
Generally. The Fiscal Agent shall, prior to an Event of Default, and after the curing of all Events
of Default which may have occurred, perform such duties and only such duties as are expressly
and specifically set forth in this Agreement. The Fiscal Agent shall, during the existence of any
Event of Default which has not been cured, exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Removal of Fiscal Agent. The City may upon 30 days' prior written notice remove
the Fiscal Agent at any time unless an Event of Default shall have occurred and then be
continuing, and shall remove the Fiscal Agent if at any time requested to do so by an instrument
or concurrent instruments in writing signed by the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in
writing) or if at any time the Fiscal Agent shall cease to be eligible in accordance with subsection
(e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Fiscal Agent or its property shall be appointed, or any public
officer shall take control or charge of the Fiscal Agent or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, in each case by giving written notice of such
removal to the Fiscal Agent and thereupon shall, with the written consent of the Bank (when the
Letter of Credit is in effect and so long as the Bank is not in default of its obligation to honor a
draw on the Letter of Credit), appoint a successor Fiscal Agent by an instrument in writing.
(c) Resignation of Fiscal Agent. The Fiscal Agent may at any time resign by giving
written notice of such resignation by first class mail, postage prepaid, to the City, to the Bank, to
the Remarketing Agent and to the Bond Owners notice of such resignation at the respective
addresses shown on the Registration Books. Upon receiving such notice of resignation, the City
shall, with the written consent of the Bank (when the Letter of Credit is in effect and so long as
the Bank is not in default of its obligation to honor a draw on the Letter of Credit), promptly
appoint a successor Fiscal Agent by an instrument in writing. The Fiscal Agent shall not be
relieved of its duties until such successor Fiscal Agent has accepted appointment.
(d) Appointment of Successor Fiscal Agent. Any removal or resignation of the Fiscal
Agent and appointment of a successor Fiscal Agent shall become effective upon acceptance of
appointment by the successor Fiscal Agent; provided, however, that under any circumstances the
successor Fiscal Agent shall be qualified as provided in subsection (e) of this Section. If no
qualified successor Fiscal Agent shall have been appointed and have accepted appointment
within 45 days following giving notice of removal or notice of resignation as aforesaid, the
resigning Fiscal Agent, the Bank or any Bond Owner (on behalf of himself and all other Bond
Owners) may petition any court of competent jurisdiction for the appointment of a successor
Fiscal Agent, and such court may thereupon, after such notice (if any) as it may deem proper,
appoint such successor Fiscal Agent. Any successor Fiscal Agent appointed under this
Agreement shall signify its acceptance of such appointment by executing and delivering to the
City and to its predecessor Fiscal Agent a written acceptance thereof, and to the predecessor
Fiscal Agent an instrument indemnifying the predecessor Fiscal Agent for any costs or claims
arising during the time the successor Fiscal Agent serves as Fiscal Agent hereunder, and after
payment by the City of all unpaid fees and expenses of the predecessor Fiscal Agent, the such
successor Fiscal Agent, without any further act, deed or conveyance, shall become vested with
all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such
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predecessor Fiscal Agent, with like effect as if originally named Fiscal Agent herein; but,
nevertheless at the Written Request of the City or the request of the successor Fiscal Agent or the
Bank, such predecessor Fiscal Agent shall execute and deliver any and all instruments of
conveyance or further assurance and do such other things as may reasonably be required for
more fully and certainly vesting in and confirming to such successor Fiscal Agent all the right,
title and interest of such predecessor Fiscal Agent in and to any property held by it under this
Agreement and shall pay over, transfer, assign and deliver to the successor Fiscal Agent any
money or other property subject to the trusts and conditions herein set forth. Upon request of the
successor Fiscal Agent, the City shall execute and deliver any and all instruments as may be
reasonably required for more fully and certainly vesting in and confirming to such successor
Fiscal Agent all such moneys, estates, properties, rights, powers, trusts, duties and obligations.
Upon acceptance of appointment by a successor Fiscal Agent as provided in this subsection, the
City shall mail or cause the successor Fiscal Agent to mail, by first class mail postage prepaid, a
notice of the succession of such Fiscal Agent to the trusts hereunder to each rating agency which
then maintains a rating on the Bonds, to the Bond Owners at the addresses shown on the
Registration Books, to the Bank and to the Remarketing Agent. If the City fails to mail such
notice within 15 days after acceptance of appointment by the successor Fiscal Agent, the
successor Fiscal Agent shall cause such notice to be mailed at the expense of the City.
(e) Authority Trustee To Act As Fiscal Agent Hereunder. Notwithstanding anything
herein to the contrary, so long as the Authority Trustee shall be the owner of any Bonds, no
entity shall be qualified to act as the Fiscal Agent (or to act as any successor Fiscal Agent) except
the Authority Trustee. Upon any resignation or removal of the Authority Trustee in accordance
with the Authority Indenture, such event shall automatically cause the resignation or removal of
the Fiscal Agent hereunder; and upon the appointment of a successor Authority Trustee in
accordance with the Authority Indenture, such appointment shall, unless objected to in writing by
the Bank (when the Letter of Credit is in effect and so long as the Bank is not in default of its
obligation to honor a draw on the Letter of Credit), automatically constitute the appointment of a
successor Fiscal Agent hereunder. Under no circumstances shall the Fiscal Agent be removed or
resign hereunder unless the Authority Trustee shall be removed or resign as such under and
pursuant to the Authority Indenture.
In the event that the Authority Trustee shall not be the owner of any Bonds, the Fiscal
Agent appointed under the provisions of this Section 9.01 in succession to the Fiscal Agent shall
be a trust company or bank having the powers of a trust company, having (or if such bank or
trust company is a member of a bank holding company system, its parent bank holding company
has) a combined capital and surplus of at least one hundred million dollars ($100,000,000), and
subject to supervision or examination by federal or state agency. 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 agency above referred to, then for the purpose of this subsection 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.
In case at any time the Fiscal Agent shall cease to be eligible in accordance with the
provisions of this subsection (e), the Fiscal Agent shall resign immediately in the manner and
with the effect specified in this Section.
Section 9.02. Merger or Consolidation. Any bank or trust company into which the
Fiscal Agent may be merged or converted or with which it may be consolidated or any bank or
trust company resulting from any merger, conversion or consolidation to which it shall be a party
or any bank or trust company to which the Fiscal Agent may sell or transfer all or substantially
all of its corporate trust business, provided such bank or trust company shall be eligible under
subsection (e) of Section 9.01 shall be the successor to such Fiscal Agent, without the execution
or filing of any paper or any further act, anything herein to the contrary notwithstanding.
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Section 9.03. Liability of Fiscal Agent. (a) The recitals of facts herein and in the
Bonds contained shall be taken as statements of the City, and the Fiscal Agent shall not assume
responsibility for the correctness of the same, or make any representations as to the validity or
sufficiency of this Agreement or of the Bonds or shall incur any responsibility in respect thereof,
other than as expressly stated herein in connection with the respective duties or obligations
herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall, however, be
responsible for its representations contained in its certificate of authentication on the Bonds. The
Fiscal Agent makes no representations as to the validity or sufficiency of the Agreement or of
any Bonds, or in respect of the security afforded by the Agreement and the Fiscal Agent shall
incur no responsibility in respect thereof. The Fiscal Agent shall be under no responsibility or
duty with respect to: (i) the issuance of the Bonds for value; (ii) the application of the proceeds
thereof except to the extent that such proceeds are received by it in its capacity as Fiscal Agent;
or (iii) the application of any moneys paid to the City or others in accordance with the
Agreement except as the application of any moneys paid to it in its capacity as Fiscal Agent. The
Fiscal Agent shall not be liable in connection with the performance of its duties hereunder,
except for its own negligence or willful misconduct. The Fiscal Agent shall not be liable for any
action taken or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by the Agreement. The Fiscal Agent may
become the Owner of Bonds with the same rights it would have if it were not Fiscal Agent, and,
to the extent permitted by law, may act as depository for and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee formed to
protect the rights of Bond Owners, whether or not such committee shall represent the Owners of
a majority in aggregate principal amount of the Bonds then Outstanding.
(b) The Fiscal Agent shall not be liable for any error of judgment made in good faith by
a responsible officer, unless it shall be proved that the Fiscal Agent was negligent in ascertaining
the pertinent facts.
(c) The Fiscal Agent shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of not less than a
majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Fiscal Agent, or
exercising any trust or power conferred upon the Fiscal Agent under this Agreement.
Section 9.04. Right to Rely on Documents. The Fiscal Agent shall be protected in
acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or
other paper or document believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Fiscal Agent may consult with counsel, who may be counsel of or to
the City, with regard to legal questions, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered by it hereunder
in good faith and in accordance therewith; provided, however, the Fiscal Agent shall in no event
delay any payment with respect to the Bonds in anticipation of any such opinion.
Whenever in the administration of the trusts imposed upon it by this Agreement the
Fiscal Agent 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
Written Certificate of the City, and such Written Certificate shall be full warrant to the Fiscal
Agent for any action taken or suffered in good faith under the provisions of this Agreement in
reliance upon such Written Certificate, but in its discretion the Fiscal Agent may, in lieu thereof,
accept other evidence of such matter or may require such additional evidence as it may deem
reasonable.
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Section 9.05. Preservation and Inspection of Documents. All documents received by
the Fiscal Agent under the provisions of this Agreement shall be retained in its possession and
shall be subject during business hours and upon 24 hours' notice to the inspection of the City, the
Owners, the Bank and their agents and representatives duly authorized in writing.
Section 9.06. Compensation and Indemnification. The City shall pay to the Fiscal
Agent from time to time all reasonable compensation for all services rendered under this
Agreement, and also all reasonable expenses, charges, legal and consulting fees and other
disbursements and those of its attorneys, agents and employees, incurred in and about the
performance of their powers and duties under this Agreement. The City further agrees, to the
extent permitted by law, to indemnify and save the Fiscal Agent harmless against any liabilities
which it may incur in the exercise and performance of its powers and duties hereunder and under
any related documents, including the enforcement of any remedies and the defense of any suit,
and which are not due to its negligence or its willful misconduct. The duty of the City to
indemnify the Fiscal Agent shall survive the terruination and discharge of this Agreement.
Section 9.07. Appointment of Plying Agent. The City hereby appoints the Paying
Agent to authenticate and deliver the Adjustable Rate Bonds as provided herein and to hold all
Adjustable Rate Bonds delivered to it pursuant to this Agreement in trust for the benefit of the
respective Owners who shall have so delivered such Adjustable Rate Bonds until monies
representing the purchase price of such Adjustable Rate Bonds shall have been delivered to or for
the account of or to the order of such Owners, to hold all money delivered to it for the purchase
of Adjustable Rate Bonds in trust for the benefit of the person or entity which shall have so
delivered such money until the Adjustable Rate Bonds purchased with such money shall have
been delivered to or for the account of such person or entity.
The Paying Agent may at any time resign and be discharged of the duties and obligations
set forth in this Agreement by giving at least 60 days' notice to the Bank, the City, the
Remarketing Agent and the Fiscal Agent. The Paying Agent may be removed at any time, at the
direction of the City, by an instrument filed with the Paying Agent and the Fiscal Agent. The
resignation or removal of the Paying Agent shall become effective only upon the acceptance of
the appointment by the successor Paying Agent or the assumption of all duties and
responsibilities of the Paying Agent by the Fiscal Agent. Any successor Paying Agent shall be a
commercial bank, national banking association or trust company doing business and having an
office in New York, New York, and shall be appointed by the City, with the consent of the Fiscal
Agent and, when a Letter of Credit is in effect and so long as the Bank is not in default of its
obligation to honor a draw on the Letter of Credit, the consent of the Bank, in the same manner
provided in Section 9.01 for appointment of a successor Fiscal Agent.
Section 9.08. ~npointment of Remarketing Agent. The City hereby appoints the
Remarketing Agent to remarket Bonds pursuant to this Agreement, and to keep such books and
records as shall be consistent with prudent industry practice and to make such books and records
available for inspection by the Bank, the City, the Fiscal agent and the. Paying Agent at all
reasonable times, and to give telegraphic or telephonic notice, promptly confirmed by a written
notice, to the Fiscal Agent (who shall then promptly notify the Bank and the Paying Agent),
specifying (a) the principal amount of such Bonds, if any, remarketed by it as provided in this
Agreement, and (b) the interest rates on the remarketed Bonds as determined pursuant to and in
accordance herewith.
The Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Agreement by giving at least 60 days' notice to the Bank, the City, the
Fiscal Agent and the Paying Agent. The Remarketing Agent may be removed at any time, at the
direction of the City, by an instrument filed with the Remarketing Agent, the Fiscal Agent and
the Paying Agent. Any successor Remarketing Agent shall be selected by the City and shall be a
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member of the National Association of Securities Dealers, Inc., shall have a capitalization of at
least $15,000,000, and shall be authorized by law to perform all the duties set forth in this
Agreement. When a Letter of Credit is in effect and so long as the Bank is not in default of its
obligation to honor a draw on the Letter of Credit, the City shall obtain the Bank's consent to the
appointment of such successor Remarketing Agent, which consent shall not be unreasonably
withheld. The City's delivery to the Fiscal Agent of a certificate setting forth the effective date
of the appointment of a successor Remarketing Agent and the name of such successor shall be
conclusive evidence that (a) if applicable, the predecessor Remarketing Agent has been removed
in accordance with the provisions of this Agreement and (b) such successor has been appointed
and is qualified to act as Remarketing Agent under the terms of this Agreement.
Section 9.09. Successor Remarketing Agent by Merger. If the Remarketing Agent
consolidates with, merges or converts into, or transfers all or substantially all of its assets to,
another corporation, the resulting, surviving or transferee corporation without any further act
shall be the successor Remarketing Agent, but only if such successor meets the eligibility
requirements of Section 9.08.
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ARTICLE X
MODIFICATION OR AMENDMENT
Section 10.01. Amendments Permitted. (a) This Agreement and the rights and
obligations of the City, the Owners of the Bonds and the Fiscal Agent may be modified or
amended from time to time and at any time by a Supplemental Agreement, which the City and
the Fiscal Agent may enter into with the written consent of the Owners of a majority in aggregate
principal amount of all Bonds then Outstanding and, when a Letter of Credit is in effect and so
long as the Bank has not is not in default of its obligation to honor a draw on the Letter of Credit,
the written consent of the Bank which shall have been filed with the Fiscal Agent. No such
modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the
amount of principal thereof, or reduced the interest rate borne thereby, or extend the time of
payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid
percentage of Bonds the consent of the Owners of which is required to effect any such
modification or amendment, or (iii) permit the creation of any lien on the Reassessments and
other assets pledged under this Agreement prior to or on a parity with the lien created by this
Agreement or deprive the Owners of the Bonds of the lien created by this Agreement on such
Reassessments and other assets (except as expressly provided in this Agreement), without the
consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the
consent of the Bond Owners to approve the particular form of any Supplemental Agreement, but
it shall be sufficient if such consent shall approve the substance thereof. Promptly after the
execution by the City and the Fiscal Agent of any Supplemental Agreement pursuant to this
subsection (a), the Fiscal Agent shall mail a notice (the form of which shall be furnished to the
Fiscal Agent by the City), by first class mail postage prepaid, setting forth in general terms the
substance of such Supplemental Agreement, to the Owners of the Bonds at the respective
addresses shown on the Registration Books. Any failure to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such Supplemental
Agreement.
(b) This Agreement and the rights and obligations of the City, of the Fiscal Agent and the
Owners of the Bonds may also be modified or amended from time to time and at any time by a
Supplemental Agreement, which the City and the Fiscal Agent may enter into without the
consent of any Bond Owners but, when a Letter of Credit is in effect and so long as the Bank has
not is not in default of its obligation to honor a draw on the Letter of Credit, only with the written
consent of the Bank, for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City in this Agreement
contained other covenants and agreements thereafter to be observed, to pledge or
assign additional security for the Bonds (or any portion thereof), or to surrender
any right or power herein reserved to or conferred upon the City;
(ii) to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission, or of curing or correcting any defective provision
contained in this Agreement;
(iii) to provide for the issuance of additional Series of Bonds, and to
provide the terms and conditions under which such additional Series of Bonds
may be issued, subject to and in accordance with the provisions of Article III;
(iv) to modify, amend or supplement this Agreement in such manner as to
permit the qualification hereof under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in effect, and to add such other
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terms, conditions and provisions as may be permitted by said act or similar federal
statute;
(iv) to modify, amend or supplement this Agreement in such manner as to
cause interest on the Bonds to be excludable from gross income for purposes of
federal income taxation by the United States of America; and
(v) in any other respect whatsoever as the City may deem necessary or
desirable, provided that such modification or amendment does not materially
adversely affect the interests of the Bond Owners hereunder, in the opinion of
Bond Counsel filed with the City and the Fiscal Agent.
Section 10.02. Effect of Supplemental Agreement. Upon the execution of any
Supplemental Agreement pursuant to this Article, this Agreement shall be deemed to be
modified and amended in accordance therewith, and the respective rights, duties and obligations
under this Agreement of the City, the Fiscal Agent and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such Supplemental
Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and
all purposes.
Section 10.03. Endorsement of Bonds: Prgparation of New Bonds. Bonds delivered
after the execution of any Supplemental Agreement pursuant to this Article may, and if the City
so determines shall, bear a notation by endorsement or otherwise in form approved by the City
and the Fiscal Agent as to any modification or amendment provided for in such Supplemental
Agreement, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time
of such execution and presentation of his Bonds for the purpose at the Office of the Fiscal Agent
a suitable notation shall be made on such Bonds. If the Supplemental Agreement shall so
provide, new Bonds so modified as to conform, in the opinion of the City and the Fiscal Agent,
to any modification or amendment contained in such Supplemental Agreement, shall be prepared
and executed by the City and authenticated by the Fiscal Agent, and upon demand of the Owners
of any Bonds then Outstanding shall be exchanged at the Office of the Fiscal Agent, without cost
to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds,
in equal aggregate principal amount of the same interest rate and maturity.
Section 10.04. Amendment of Particular Bonds. The provisions of this Article shall
not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by
such Owner.
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ARTICLE XI
DEFEASANCE
Section 11.01. Discharge of Agreement. The Bonds may be paid by the City in any of
the following ways, provided that the City also pays or causes to be paid any other sums payable
hereunder by the City:
(a) by paying or causing to be paid the principal of and interest and
premium (if any) on the Bonds, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust (pursuant to an escrow
agreement), at or before maturity, money or securities in the necessary amount (as
provided in Section 11.03) to pay or redeem all Bonds then Outstanding; or
(c) by delivering to the Fiscal Agent, for cancellation by it, all of the
Bonds then Outstanding.
If the City shall also pay or cause to be paid or provide for the payment of all other sums
payable hereunder by the City including without limitation any compensation due and owing the
Fiscal Agent hereunder and all sums payable or which may become payable under the
Reimbursement Agreement, as verified by the Bank to the Fiscal Agent in writing, then and in
that case, at the election of the City (evidenced by a Written Certificate of the City, filed with the
Fiscal Agent, signifying the intention of the City to discharge all such indebtedness and this
Agreement), and notwithstanding that any Bonds shall not have been surrendered for payment,
this Agreement and the pledge of Reassessments and other assets made under this Agreement
and all covenants, agreements and other obligations of the City under this Agreement shall cease,
terminate, become void and be completely discharged and satisfied. l:n such event, upon the
Written Request of the City, and upon receipt of a Written Certificate of an Authorized
Representative of the City and an opinion of Bond Counsel acceptable to the Fiscal Agent, each
to the effect that all conditions precedent herein provided for relating to the discharge and
satisfaction of the obligations of the City have been satisfied, the Fiscal Agent shall cause an
accounting for such period or periods as may be requested by the City to be prepared and filed
with the City and shall execute and deliver to the City all such instruments as may be necessary
or desirable to evidence such discharge and satisfaction, and the Fiscal Agent shall pay over,
transfer, assign or deliver all moneys or securities or other property held by it pursuant to this
Agreement, which are not required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption, to the City.
Section 11.02. Discharge of Liability on Bonds. Upon the deposit with the Fiscal
Agent, in trust, at or before maturity, of money or securities in the necessary amount (as provided
in Section 11.03) to pay or redeem any or all Outstanding Bonds (whether upon or prior to the
maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed
prior to maturity, notice of such redemption shall have been given as provided in Article IV or
provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice,
then all liability of the City in respect of such Bonds shall cease, terminate and be completely
discharged, and the Owners thereof shall thereafter be entitled only to payment out of such
money or securities deposited with the Fiscal Agent as aforesaid for their payment, subject,
however, to the provisions of Section 11.04.
Notwithstanding the foregoing, the liability of the City in respect of Adjustable Rate
Bonds shall not cease, terminate and be discharged as provided above unless and until the Fiscal
Agent shall have received an opinion of counsel that the prior and future payments of the
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principal of and interest and premium, f any, on such Adjustable Rate Bonds do not constitute a
voidable preference under then applicable bankruptcy laws.
The City may at any time surrender to the Fiscal Agent for cancellation by it any Bonds
previously issued and delivered, which the City may have acquired in any manner whatsoever,
and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
Section 11.03. Deposit of Monev or Securities with )rascal Agent. Whenever in this
Agreement it is provided or permitted that there be deposited with or held in trust by the Fiscal
Agent money or securities in the necessary amount to pay or redeem any Bonds, the money or
securities so to be deposited or held may include money or securities held by the Fiscal Agent in
the funds and accounts established pursuant to this Agreement and shall be--
(a) Lawful money of the United States of America, in an amount equal to
the principal amount of such Bonds and all unpaid interest thereon to maturity,
except that, in the case of Bonds which are to be redeemed prior to maturity and
in respect of which notice of such redemption shall have been given as provided
in Article IV or provision satisfactory to the Fiscal Agent shall have been made
for the giving of such notice, the amount to be deposited or held shall be the
principal amount of such Bonds, premium, f any, and all unpaid interest thereon
to the redemption date; or
(b) Non-callable Federal Securities described in clause (a) of the
definition thereof, the principal of and interest on which when due, in the opinion
or report of an independent accountant selected by the City, will provide money
sufficient to pay the principal of and all unpaid interest to maturity, or to the
redemption date, as the case may be, on the Bonds to be paid or redeemed, as such
principal and interest become due, provided that in the case of Bonds which are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article IV or provision satisfactory to the Fiscal Agent
shall have been made for the giving of such notice;
provided, in each case, that the Fiscal Agent shall have been irrevocably instructed (by the terms
of this Agreement or by Written Request of the City) to apply such funds to the payment of such
principal and interest with respect to such Bonds.
Section 11.04. Payment of Bonds After Discharge of Agrreement. Notwithstanding
any provisions of this Agreement, any moneys held by the Fiscal Agent in trust for the payment
of the principal of, premium, if any, or interest on, any Bonds and remaining unclaimed for two
years after the date of deposit of such moneys shall be repaid to the City free from the trusts
created by this Agreement and all liability of the Fiscal Agent with respect to such moneys shall
thereupon cease; provided, however, that before the repayment of such moneys to the City as
aforesaid, the Fiscal Agent may (at the cost of the City) first mail, by first class mail postage
prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown
on the Registration Books, a notice, in such form as may be deemed appropriate by the Fiscal
Agent with respect to the Bonds so payable and not presented and with respect to the provisions
relating to the repayment to the City of the moneys held for the payment thereof.
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ARTICLE XII
MISCELLANEOUS
Section 12.01. Limited Obligation. All obligations of the City under this Agreement
and the Bonds shall not be general obligations of the City, but shall be limited obligations,
payable solely from the Reassessments and the other assets pledged therefor hereunder. Neither
the faith and credit of the City nor of the State of California or any political subdivision thereof is
pledged to the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds"
and are payable solely from and secured solely by the Reassessments and the other assets
pledged hereunder. Notwithstanding any other provision of this Agreement, the City is not
obligated to advance available surplus funds from the City treasury to cure any deficiency in the
Redemption Fund.
Section 12.02. Successor Is Deemed Included in All References to Predecessor.
Whenever in this Agreement the City, the Fiscal Agent, the Paying Agent, the Bank or the
Remarketing Agent is named or referred to, such reference shall be deemed to include the
successors or assigns thereof, and all the covenants and agreements in this Agreement contained
by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the
respective successors and assigns thereof whether so expressed or not.
Section 12.03. Limitation of Rights to Parties and Bond Owners. Nothing in this
Agreement or in the Bonds expressed or implied is intended or shall be construed to give to any
Person other than the Fiscal Agent, the City, the Paying Agent, the Bank, the Remarketing Agent
and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any covenant, condition or provision therein or herein contained; and all such
covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit
of the Fiscal Agent, the City, the Paying Agent, the Bank, the Remarketing Agent and the
Owners of the Bonds.
Section 12.04. Waiver of Notice: Requirement of Mailed Notice. Whenever in this
Agreement the giving of notice by mail or otherwise is required, the giving of such notice may
be waived in writing by the Person entitled to receive such notice and in any such case the giving
or receipt of such notice shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. Whenever in this Agreement any notice shall be required to be given
by mail, such requirement shall be satisfied by the deposit of such notice in the United States
mail, postage prepaid, by first class mail.
Section 12.05. Destruction of Bonds. Whenever in this Agreement provision is made
for the cancellation by the Fiscal Agent and the delivery to the City of any Bonds, the Fiscal
Agent may, upon the Written Request of the City, in lieu of such cancellation and delivery,
destroy such Bonds (in the presence of an officer of the City, if the City shall so require) as may
be allowed by law, and deliver a certificate of such destruction to the City.
Section 12.06. Severability of Invalid Provisions. If any one or more of the provisions
contained in this Agreement or in the Bonds shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions contained in this Agreement and such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, and this Agreement shall
be construed as if such invalid or illegal or unenforceable provision had never been contained
herein. The City hereby declares that it would have entered into this Agreement and each and
every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of
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the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs,
sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.
Section 12.07. Bank Deemed Owner: References to Bank. Notwithstanding anything
contained herein to the contrary, so long as the Bank is not in default of its obligation to honor
draws under the Letter of Credit, the Bank shall at all times be deemed to be the sole and
exclusive Owner of the Outstanding Adjustable, for the purpose of all approvals, consents,
waivers, institution of any action and the direction of all remedies. Notwithstanding any
provisions contained herein to the contrary, after the expiration or termination of the Letter of
Credit and after all obligations owed to the Bank pursuant to the Reimbursement Agreement
have been paid in full or discharged, all references to the Bank contained herein shall be null and
void and of no further force and effect.
Section 12.08. Notices. All notices or communications herein required or permitted to
be given to any Notice Party shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes by being delivered or sent by telecopy or by being deposited,
postage prepaid, in a post office letter box, to the addresses set forth below, or to such other
address as may be provided to the other parties hereinafter listed in writing from time to time,
namely:
If to the City: City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Finance Director
If to the Fiscal Agent: State Street Bank and Trust Company of
California, N.A.
725 South Figueroa Street, Suite 3100
Los Angeles, California 90017
Attention: Corporate Trust Department
If to the Paying Agent: State Street Bank and Trust Company of
California, N.A.
If to the Remarketing Agent: PaineWebber Incorporated
1285 Avenue of the Americas, 10th Floor
New York, New York 10019
Attention: Short-Term Desk
If to the Bank: Kredietbank N.V.
550 South Hope Street, Suite 775
Los Angeles, California 90071
Attention: Roxanne Cheng
With a copy to : Kredietbank N.V., New York Branch
125 W. 55 Street
New York, New York 10019
Attention: Linda Resuma, Loan Administrator
A copy of each notice given pursuant to this Section shall be given to Moody's and S&P
and shall be mailed to Moody's Investors Service, Inc., Attention: Public Finance Department-
Structured Financing Group, 99 Church Street, New York, New York 10007 and to Standard &
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Poor's Corporation, Attention: Municipal Finance Department, 25 Broadway, New York, New
York 10004.
Section 12.09. Additional Notices to Moody's and S&P. For so long as any of the
Bonds shall be rated by Moody's and S&P and without limitation on any other notice
requirement contained in this Agreement (including any notice requirement applicable to
Moody's and S&P), the Fiscal Agent shall mail to Moody's and S&P a notice of each of the
following events, promptly upon becoming aware thereof:
(a) The removal, resignation or replacement of the Fiscal Agent or the Remarketing
Agent or any of their respective successors;
(b) Any change in this Agreement, the Letter of Credit, the Reimbursement Agreement
or the Remarketing Agreement;
(c) Conversion of any or all of the Bonds to another Mode; or
(d) Redemption, defeasance or mandatory purchases of all or a portion of the Adjustable
Rate Bonds.
Section 12.10. Evidence of Rights of Bond Owners. Any request, consent or other
instrument required or permitted by this Agreement to be signed and executed by Bond Owners
may be in any number of concurrent instruments of substantially similar tenor and shall be
signed or executed by such Bond Owners in Person or by an agent or agents duly appointed in
writing. Proof of the execution of any such request, consent or other instrument or of a writing
appointing any such agent, or of the holding by any Person of Bonds transferable by delivery,
shall be sufficient for any purpose of this Agreement and shall be conclusive in favor of the
Fiscal Agent and the City if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such request, consent or other
instrument or writing may be proved by the certificate of any notary public or other officer of
any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that
the Person signing such request, consent or other instrument 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.
The ownership of Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind
every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the Fiscal Agent or the
City in accordance therewith or reliance thereon.
Section 12.11. Dis~uali6ed Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this Agreement, Bonds which are known by the Fiscal Agent to be owned or
held by or for the account of the City, or by any other obligor on the Bonds, or by any Person
(other than the Authority) directly or indirectly controlling or controlled by, or under direct or
indirect common control with, the City or any other obligor on the Bonds, shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned
which have been pledged in good faith may be regarded as Outstanding for the purposes of this
Section if the pledgee shall establish to the satisfaction of the Fiscal Agent the pledgee's right to
vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the City or any other obligor on
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the Bonds. In case of a dispute as to such right, any decision by the Fiscal Agent taken upon the
advice of counsel shall be full protection to the Fiscal Agent.
Section 12.12. Money Held for Particular Bonds. Tfie money held by the Fiscal Agent
for the payment of the interest, principal or premium due on any date with respect to particular
Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such
date and pending such payment, be set aside on its books and held in trust by it for the Owners of
the Bonds entitled thereto, subject, however, to the provisions of Section 11.04 but without any
liability for interest thereon.
Section 12.13. Funds and Accounts. Any fund or account required by this Agreement
to be established and maintained by the Fiscal Agent may be established and maintained in the
accounting records of the Fiscal Agent, either as a fund or an account, and may, for the purposes
of such records, any audits thereof and any reports or statements with respect thereto, be treated
either as a fund or as an account; but all such records with respect to all such funds and accounts
shall at all times be maintained in accordance with industry standards to the extent practicable,
and with due regard for the requirements of Section 6.08 and for the protection of the security of
the Bonds and the rights of every Owner thereof and the Bank. The Fiscal Agent may establish
such funds and accounts as it deems necessary or appropriate to perform its obligations
hereunder.
Section 12.14. Payment on Non-Business DaXs. In the event any payment is required
to be made hereunder on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day with the same effect as if made on such non-Business Day.
Section 12.15. Waiver of Personal Liability. No member, officer, agent or employee
of the City shall be individually or personally liable for the payment of the principal of or
premium or interest on the Bonds or be subject to any personal liability or accountability by
reason of the issuance thereof; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law or by this
Agreement.
Section 12.16. Conflict with Act or Bond Law. In the event of any conflict between
any provision of this Agreement and any provision of the Act or the Bond Law, the provision of
the Act or the Bond Law, respectively, shall prevail over the provision of this Agreement.
Section 12.17. Conclusive Evidence of Regulari Bonds issued pursuant to this
Agreement shall constitute evidence of the regularity of all proceedings under the Act relative to
their issuance and the levy of the Reassessments.
Section 12.18. Execution in Several Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original; and all such counterparts, or as many of them as the City and the Fiscal Agent
shall preserve undestroyed, shall together constitute but one and the same instrument.
Section 12.19. New York 'I~me. Unless otherwise expressly stated, all times referred to
in this Agreement shall be New York time
Section 12.20. Governing_Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the City has caused this Agreement to be signed in its name
by its officer thereunto duly authorized, and the Fiscal Agent, in token of its acceptance of the
trusts created hereunder, has caused this Agreement to be signed in its corporate name by its
officer thereunto duly authorized, all as of the day and year first above written.
CITY OF TUSTIN
By:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as
Fiscal Agent
By:
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EXHIBIT A
No.
FORM OF SERIES A BOND
CITY OF TUSTIN
Limited Obligation Improvement Bond
Reassessment District No. 95-2
(Tustin Ranch), Series A
INTEREST RATE MATURITY DATE DATED DATE
As described herein
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Under and by virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds,
Division 11.5 of the Streets and Highways Code of California (the "Act"), the City of Tustin,
County of Orange, State of California (the "City"), will, out of the redemption fund for the
payment of the bonds issued upon the unpaid portion of reassessments made for the refunding
bonds more fully described in proceedings taken pursuant to Resolution No. _ adopted by the
City Council of the City on , 1994, pay to the Registered Owner identified above,
on the Maturity Date identified above or on any earlier redemption date, the Principal Amount
identified above and to pay interest thereon at the Rate of Interest as provided in this Bond.
This Bond shall not be entitled to any benefit under the Act, the Resolution authorizing
the issuance of the bonds, adopted by the City Council of the City on , 1995 (the
"Resolution of Issuance") or the Fiscal Agent Agreement, dated as of .1995 (the
"Agreement"), by and between the City and State Street Bank and Trust Company of California,
N.A., as Fiscal Agent (the "Fiscal Agent"), executed pursuant to the Resolution of Issuance, or
become valid or obligatory for any purpose, until the certificate of authentication hereon shall
have been dated and signed by the State Street Bank and Trust Company of California, N.A., as
Paying Agent (the "Paying Agent"), acting through its office in New York, New York (the
"Office of the Paying Agent"). Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Agreement.
This Bond is one of several annual series of Limited Obligation Improvement Bonds,
Reassessment District No. 95-2 (Tustin Ranch), Series A (the "Bonds") of like date, maturity,
interest rate, tenor and effect, but differing in amounts, issued by the City under the Act and the
Agreement for the purpose of providing means for paying for the refunding of the bonds as more
particularly described in said proceedings, and is secured by the moneys in the redemption fund
(as may be limited by the Agreement) and by the unpaid portion of the Reassessments made for
the payment of said refunding and, including principal and interest, is payable exclusively out of
said fund.
Reference is hereby made to the Agreement and all agreements supplemental thereto for a
description of the rights thereunder of the owners of the Bonds, of the nature and extent of the
Reassessments, of the rights, duties and unmunities of the Fiscal Agent and the Paying Agent
and of the rights and obligations of the City thereunder; and all of the terms of the Agreement are
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hereby incorporated herein and constitute a contract between the City and the Registered Owner
hereof, and to all of the provisions of which Agreement the Registered Owner hereof, by
acceptance hereof, assents and agrees.
The Bonds shall initially bear interest in the Daily Mode. The interest rate on the Bonds,
when in the Daily Mode, will be the rate of interest per annum determined by PaineWebber
Incorporated (together with any successor thereto, the "Remarketing Agent") on and as of each
Business Day, for such day, as the minimum rate of interest which, in the opinion of the
Remarketing Agent would, under then existing marketing conditions, result in the sale of the
Bonds on such day at a price equal to the principal amount thereof plus accrued interest, if any;
provided, however, that Bank Bonds shall bear interest at a rate of 0%, as provided in the
Agreement. The rate of interest on the Bonds shall on no day exceed 12% per annum. During the
Daily Mode, the Remarketing Agent shall establish the interest rate on the Bonds by 9:45 A.M.
(New York City time) on each Business Day. The interest rate for any day during the Daily
Mode which is not a Business Day shall be the rate established on the immediately preceding
Business Day. "Business Day" means any day other than (a) a Saturday, Sunday or legal holiday,
(b) a day on which banking institutions in Los Angeles, California or New York, New York or in
any other city where either the principal corporate trust office of the Fiscal Agent, the corporate
trust office of the Paying Agent designated for payment and tender of the Bonds or the office of
the Bank at which drafts are required to be presented under the Letter of Credit, is located are
required or authorized by law (including executive order) to close, or (c) a day on which the New
York Stock Exchange is closed. The Remarketing Agent will make the interest rate for any day
available by telephone to the registered owner of any Bond (an "Owner") requesting such
information. When the Bonds are in the Daily Mode, interest will be calculated on the basis of a
365/366-day year for the actual number of days elapsed.
Interest will accrue on the unpaid portion of the principal of this Bond from the Interest
Payment Date immediately preceding the date of authentication of this Bond, unless this Bond is
authenticated prior to the initial Record Date, in which case this Bond shall bear interest from the
date of the original authentication and delivery of this Bond, until the entire principal amount of
this Bond is paid.
The principal of, premium, if any, and interest on the Bonds shall be payable in lawful
money of the United States of America. Except as otherwise provided in the Representation
Letter, the interest on the Bonds shall be payable, during the Daily Mode, on the fifth Business
Day of each month (the "Interest Payment Dates"), for unpaid interest accrued from and
including the first day of the preceding calendar month, through and including the last day of the
preceding calendar month, except that payment shall be made on the initial Interest Payment
Date for unpaid interest accrued from and including the date of initial delivery of the Bonds, by
check mailed by the Paying Agent to the respective Owners thereof at their addresses as they
appear on the last day of the preceding calendar month (the "Record Date") in the registration
books for the Bonds required to be kept by the Paying Agent. In the case of an Owner of
$1,000,000 or more in aggregate principal amount of Bonds, upon the written request of such
Owner to the Paying Agent, received at least ten days prior to a Record Date, specifying the
account or accounts to which such payment shall be made, payment of interest shall be made by
wire transfer of immediately available funds on the following Interest Payment Date. Any such
request shall remain in effect until revoked or revised by such Owner by an instrument in writing
delivered to the Paying Agent. The principal of each Bond shall be payable on the maturity date,
or earlier redemption, upon surrender thereof at the Office of the Paying Agent. If any payment
on the Bonds is due on anon-Business Day, it will be made on the next succeeding Business Day
with the same effect as if made on such non-Business Day.
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During the Daily Mode, the Bonds shall be issued in registered form without coupons in
denominations of $100,000 or any integral multiple thereof (said denominations being
"Authorized Denominations" for Bonds in the Daily Mode).
The interest rate determination method may be changed (a "Change in Mode"), at the
election of the City, from the Daily Mode to the VIP Mode, the Weekly Mode, the Monthly
Mode, the Semi-Annual Mode, the Extended Rate Mode or the Fixed Rate Mode, all as
described in the Agreement. A Change in Mode from the Daily Mode to any other Mode shall
take effect only on the first day of a calendar month. All Bonds shall be purchased, at a purchase
price equal to 100% of the principal amount thereof, on the effective date of a Change in Mode
(a "Mandatory Purchase Date"). Not less than 40 days prior to the date of a proposed Change in
Mode, the Fiscal Agent shall give written notice to the Owners, which notice shall describe the
Change in Mode and the mandatory purchase of the Bonds in connection therewith. Bonds
which are subject to mandatory purchase must be tendered to the Paying Agent for purchase on
the Mandatory Purchase Date. Any Bond subject to mandatory purchase which is not tendered
for purchase as required, shall nonetheless be deemed to have been so tendered and, upon
provision for payment of the purchase price therefor, shall be deemed to have been purchased on
the Mandatory Purchase Date after which no interest shall accrue on such Bond for the benefit of
the Owner required to tender such Bond from and after such Mandatory Purchase Date and such
Owner shall have no rights under the Agreement as the Owner of such Bond except the right to
receive the purchase price thereof.
The Bonds initially have the benefit of a Letter of Credit issued by Kredietbank N.V.
Such Letter of Credit entitles the Fiscal Agent to draw an amount sufficient to pay the principal
amount of the Bonds and not less than _ days' interest accrued on the Bonds at a rate of 12%
per annum. The Fiscal Agent will draw on the Letter of Credit to pay the principal of and
interest on the Bonds, when due, whether at maturity or upon earlier redemption, and to pay the
purchase price thereof. The Letter of Credit expires by its terms on 1, 199_, and may
be terminated prior thereto upon the occurrence of certain events. An alternate letter of credit or
other credit facility may be substituted for the Letter of Credit, as provided in the Agreement.
The date five Business Days prior to the date on which the Letter of Credit expires or is
terminated or on which an alternate letter of credit is substituted for the Letter of Credit is a
Mandatory Purchase Date. A letter of credit or other credit facility meeting the requirements of
the Agreement and in effect at the relevant time is referred to as a "Letter of Credit" and the
issuer of the Letter of Credit is referred to as the "Bank."
The Bonds in the Daily Mode are subject to optional redemption by the City, in whole, or
in part in Authorized Denominations, on the first day of any .calendar month, at a redemption
price equal to 100% of the principal amount thereof to be redeemed plus accrued and unpaid
interest to such redemption date, if any, without premium. If such redemption is in part, Bank
Bonds shall be redeemed first, and all other Bonds in the Daily Mode shall be redeemed by lot in
such manner as shall be determined by the Fiscal Agent.
The Bonds in the Daily Mode are subject to mandatory redemption from prepaid
Reassessments, in whole, or in part in Authorized Denominations, on the first day of any
calendar month, at a redemption price equal to 100% of the principal amount thereof to be
redeemed plus accrued and unpaid interest to such redemption date, if any, without premium. If
such redemption is in part, Bank Bonds shall be redeemed first, and other Bonds in the Daily
Mode shall be redeemed by lot in such manner as shall be determined by the Fiscal Agent.
The Fiscal Agent on behalf and at the expense of the City shall mail (by first class mail)
notice of any redemption to the respective owners of any Bonds designated for redemption, at
their respective addresses appearing on the registration books maintained by the Fiscal Agent, at
least 30 but not more than 60 days prior to the redemption date. Neither failure to receive any
A-3
such notice so mailed nor any defect therein shall affect the validity of the proceedings for the
redemption of such Bonds or the cessation of the accrual of interest thereon from and after the
date fixed for redemption.
If, on the date fixed for redemption, moneys for the redemption of all the Bonds to be
redeemed, together with interest to said date, shall be held by the Paying Agent so as to be
available therefor on such date, and, if notice of redemption thereof shall have been mailed as
provided in the Agreement and not canceled, then, from and after said date, interest on said
Bonds shall cease to accrue and become payable.
During the Daily Mode, any Owner of a Bond may demand that such Bond, or any
portion thereof (so long as the principal amount purchased, and the principal amount not
purchased, are each in Authorized Denominations), be purchased on any Business Day at a price
equal to the principal amount thereof plus accrued interest, if any, to the purchase date. Unless
otherwise provided in a Representation Letter, such demand for purchase shall be made as
follows: (i) delivery to the Remarketing Agent at its principal office in New York, New York, no
later than 10:30 A.M. (New York City time), and to the Paying Agent at the Office of the Paying
Agent, of a Tender Notice, and (ii) delivery of such Bond duly endorsed in blank for transfer at
the Office of the Paying Agent at or prior to 12:00 Noon (New York City time) on such date.
"Tender Notice" means a written notice or telephonic notice, immediately confirmed in writing,
(i) that states the Bond number, the principal amount of such Bond and the principal amount of
such Bond to be purchased, (ii) that states the date on which such Bond is to be purchased, and
(iii) that irrevocably demands such purchase. Any Tender Notice by any Owner shall be
irrevocable. If such Owner is required to but fails to deliver the Bond referred to in such notice
to the Paying Agent, such Bond shall nonetheless be deemed to have been tendered and, upon
provision for payment of the purchase price therefor, no interest shall accrue on such Bond for
the benefit of such Owner from and after the purchase date and such Owner shall have no rights
under the Agreement as the Owner of such Bond except the right to receive the purchase price of
such Bond. Notwithstanding the foregoing, the Owners shall have no right to demand purchase
of Bonds from the third Business Day prior to any Mandatory Purchase Date until after such
Mandatory Purchase Date.
Any Bond may, in accordance with its terms, be transferred upon the registration books
by the person in whose name it is registered, in person or by his duly authorized attorney, upon
surrender of such Bond for cancellation, accompanied by delivery of a written instrument of
transfer, duly executed in a form acceptable to the Paying Agent. Whenever any Bond or Bonds
shall be surrendered for transfer, the City shall execute and the Paying Agent shall authenticate
and shall deliver a new Bond or Bonds for a like aggregate principal amount, in any Authorized
Denomination. The Paying Agent shall require the Bond Owner requesting such transfer to pay
any tax or other governmental charge required to be paid with respect to such transfer.
The Bonds may be exchanged at the Office of the Paying Agent for a like aggregate
principal amount of Bonds of the same maturity of other Authorized Denominations. The Paying
Agent shall require the payment by the Bond Owner requesting such exchange of any tax or
other governmental charge required to be paid with respect to such exchange.
The Paying Agent shall not be obligated to make any transfer or exchange of Bonds
during the period established by the Paying Agent for the selection of Bonds for redemption, or
with respect to any Bonds selected for redemption.
The Agreement and the rights and obligations of the City and of the owners of the Bonds
and of the Fiscal Agent may be modified or amended from time to time and at any time in the
manner, to the extent, and upon the terms provided in the Agreement; provided that no such
modification or amendment shall (a) extend the maturity of or reduce the interest rate on any
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Bond or the amount of principal thereof without the express written consent of the owner of such
Bond, (b) reduce the percentage of Bonds required for the written consent to any such
amendment or modification, or (c) permit the creation of any lien on the Reassessments and other
assets pledged under the Agreement, or deprive the Bonds owners of the lien created under the
Agreement on the Reassessments and such other assets, without the consent of the owners of all
outstanding Bonds.
The Bonds are Limited Obligation Bonds because, under the Agreement, the Ciry is not
obligated to advance funds from the City treasury to cure any deficiency which may occur in the
redemption fund for the Bonds; provided, however, the City is not prevented, in its sole
discretion, from so advancing funds.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond
issued is registered in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
IN WITNESS WHEREOF, said City has caused the Bond to be signed in its name and
on its behalf by the facsimile signatures of its Treasurer and City Clerk, and has caused its
corporate seal to be reproduced in facsimile hereon all as of the Dated Date identified above.
CITY OF TUSTIN
By:
(SEAL)
Attest:
By:
City Clerk
Treasurer
A-5
[FORM OF PAYING AGENT' S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Agreement and registered on
the Registration Books.
Date:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as
Paying Agent
By:
Authorized Signatory
A-6
ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
whose address and social security or other tax
identifying number is ,the within-mentioned Bond and hereby
irrevocably constitute(s) and appoint(s) attorney, to
transfer the same on the registration books of the Paying Agent with full power of substitution in
the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible Note: The signature(s) on this Assignment must
guarantor. correspond with the name(s) as written on the face of
the within Bond in every particular without alteration or
enlazgement or any change whatsoever.
A-7
ESCROW AGREEMENT (95-2)
by and between the
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY, N.A.,
as Escrow Bank
Dated as of , 1995
Reassessment District No. 95-2 (Tustin Ranch)
TABLE OF CONTENTS
Page
Section 1. Definitions ............................................................................................................ 1
Section 2. The 85-1 Escrow Fund ......................................................................................... 2
Section 3. The 86-2 Escrow Fund ......................................................................................... 2
Section 4. Use and Investment of Moneys ............................................................................ 3
Section 5. Payment of Prior Bonds ....................................................................................... 4
Section 6. Irrevocable Instructions to Mail Notices .............................................................. 5
Section 7. Performance of Duties ......................................................................................... 5
Section 8. Escrow Bank's Authority to Make Investments .................................................. 5
Section 9. Indemnity ............................................................................................................. 5
Section 10. Responsibilities of Escrow Bank ......................................................................... 6
Section 11. Amendments ..........- ............................................................................................. 6
Section 12. Term ..................................................................................................................... 7
Section 13. Compensation .......................................................................................................7
Section 14. Severability .......................................................................................................... 7
Section 15. Counterparts ......................................................................................................... 7
Section 16. Governing Law .................................................................................................... 7
Section 17. Assignment ........................................................................................................... 8
EXHIBIT 1 -United States Treasury Securities; Variable 85-1 Bonds ................................ l-1
EXHIBIT 2 -United States Treasury Securities; Variable 86-2 Bonds ................................2-1
ESCROW AGREEMENT (95-2)
THIS ESCROW AGREEMENT (95-2) (this "Agreement"), is entered into as of
1995, by and between the City of Tustin (the "City") and State Street Bank and
Trust Company, N.A., as escrow bank (the "Escrow Bank").
WITNESSETH:
WHEREAS, pursuant to an Indenture of Trust, dated as of August 1, 1986 (the "85-1
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount of $50,650,000;
WHEREAS, pursuant to an Indenture of Trust, dated as of September 1, 1988 (the "86-2
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2 Bonds")
in the original principal amount of $81,400,000;
WHEREAS, State Street Bank and Trust Company, N.A., is the successor trustee under
the 85-1 Indenture and under the 86-2 Indenture;
WHEREAS, the City has determined that certain savings and efficiencies may be
obtained by refunding the outstanding $ aggregate principal amount of 85-1 Bonds
that have not been converted to a fixed interest rate pursuant to the 85-1 Indenture (the "Variable
85-1 Bonds") and the outstanding $ aggregate principal amount of 86-2 Bonds that
have not been converted to a fixed interest rate pursuant to the 86-2 Indenture (the "Variable 85-
2Bonds" and, together with the Variable 85-1 Bonds, the "Prior Bonds");
WHEREAS, in order to provide a portion of the moneys required to refund the Prior
Bonds, the City has authorized the issuance of the City of Tustin Limited Obligation
Improvement Bonds, Reassessment District No. 95-2 (Tustin Ranch) (the "Bonds"), in an
aggregate principal amount of $ ;
WHEREAS, the City has determined apply a portion of the proceeds of the Bonds,
together with other available moneys, to pay, when due, the interest on the outstanding Prior
Bonds on March 2, 1996 and to redeem the outstanding Prior Bonds on March 2, 1996 (the
"Redemption Date") at a redemption price (the "Redemption Price") equal to 100% of the
principal amount of such outstanding Prior Bonds; and
WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and the
City has determined to provide for the call for redemption on the Redemption Date of the Prior
Bonds outstanding on the Redemption Date;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City and the Escrow Bank agree as follows:
Section 1. Definitions. The term "Federal Securities" shall mean United States of
America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the
full faith and credit of the United States of America are pledged for the payment of interest and
principal, which are not subject to redemption except by the owners 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).
Section 2. The 85-1 Escrow Fund. (a) There is hereby established a fund (the "85-1
Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Bank, which the
Escrow Bank shall keep separate and apart from all other funds of the City and the Escrow Bank
and which shall be applied solely as provided in this Agreement. Pending application as
provided in this Agreement, amounts on deposit in the 85-1 Escrow Fund are hereby pledged and
assigned solely to the payment of (i) the accrued interest on the Variable 85-1 Bonds coming due
on the Redemption Date, and (ii) the Redemption Price of the Variable 85-1 Bonds on the
Redemption Date, which amounts shall be held in trust by the Escrow Bank for the owners of the
Variable 85-1 Bonds.
(b) Upon the issuance and delivery of the Bonds, there shall be deposited in the 85-1
Escrow Fund the following:
(i) $ transferred from the
85-1 Indenture;
(ii) $ transferred from the
85-1 Indenture;
(iii) $ transferred from the
85-1 Indenture; and
Fund established under the
Fund established under the
Fund established under the
(iv) $ received from the proceeds of the sale of the Bonds.
(c) The City acknowledges that, upon the deposit of moneys pursuant to Section 2(b), the
moneys on deposit in the 85-1 Escrow Fund will, based upon the certification provided for in
Section 4(a) hereof, be at least equal to an amount sufficient to purchase the aggregate principal
amount of the Federal Securities set forth in Exhibit 1 hereto (the "Exhibit 1 Securities"), which
principal, together with all interest due or to become due on such Exhibit 1 Securities, and any
uninvested cash held by the Escrow Bank in the 85-1 Escrow Fund, will be sufficient to make the
payments required by Section 5(a) hereof.
Section 3. The 86-2 Escrow Fund. (a) There is hereby established a fund (the "86-2
Escrow Fund" and, together with the 85-1 Escrow Fund, the "Escrow Funds") to be held as an
irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and
apart from all other funds of the City and the Escrow Bank and which shall be applied solely as
provided in this Agreement. Pending application as provided in this Agreement, amounts on
deposit in the 86-2 Escrow Fund are hereby pledged and assigned solely to the payment of (i) the
accrued interest on the Variable 86-2 Bonds coming due on the Redemption Date, and (ii) the
Redemption Price of the Variable 86-2 Bonds on the Redemption Date, which amounts shall be
held in trust by the Escrow Bank for the owners of the Variable 86-2 Bonds.
(b) Upon the issuance and delivery of the Bonds, there shall be deposited in the 86-2
Escrow Fund the following:
(i) $ transferred from the Fund established under the
86-2 Indenture;
(ii) $ transferred from the Fund established under the
86-2 Indenture;
(iii) $ transferred from the Fund established under the
86-2 Indenture; and
(iv) $ received from the proceeds of the sale of the Bonds.
(c) The City acknowledges that, upon the deposit of moneys pursuant to Section 3(b), the
moneys on deposit in the 86-2 Escrow Fund will, based upon the certification provided for in
Section 4(b) hereof, be at least equal to an amount sufficient to purchase the aggregate principal
amount of the Federal Securities set forth in Exhibit 2 hereto (the "Exhibit 2 Securities"), which
principal, together with all interest due or to become due on such Exhibit 2 Securities, and any
uninvested cash held by the Escrow Bank in the 86-2 Escrow Fund, will be sufficient to make the
payments required by Section 5(b) hereof.
Section 4. Use and Investment of Moneys. (a) The Escrow Bank hereby acknowledges
receipt of the moneys described in Section 2(b) hereof and agrees to invest $ of
such moneys in the Exhibit 1 Securities upon receipt of certification by a nationally recognized
firm of independent certified public accountants that the Exhibit 1 Securities will mature in such
principal amounts and earn interest in such amounts and, in each case, at such times, so that
sufficient moneys will be available from maturing principal and interest on the Exhibit 1
Securities, together with any uninvested moneys then held by the Escrow Bank in the 85-1
Escrow Fund, to make all payments required by Section 5(a) hereof. Except as provided in
Section 4(c) or Section 4(d) hereof, the balance of the moneys described in Section 2(b) hereof
shall be held uninvested in the 85-1 Escrow Fund.
(b) The Escrow Bank hereby acknowledges receipt of the moneys described in
Section 3(b) hereof and agrees to invest $ of such moneys in the Exhibit 2
Securities upon receipt of certification by a nationally recognized firm of independent certified
public accountants that the Exhibit 2 Securities will mature in such principal amounts and earn
interest in such amounts and, in each case, at such times, so that sufficient moneys will be
available from maturing principal and interest on the Exhibit 2 Securities, together with any
uninvested moneys then held by the Escrow Bank in the 86-2 Escrow Fund, to make all
payments required by Section 5(b) hereof. Except as provided in Section 4(c) or Section 4(d)
hereof, the balance of the moneys described in Section 3(b) hereof shall be held uninvested in the
86-2 Escrow Fund.
(c) Upon the written request of the City, but subject to the conditions and limitations
herein set forth, the Escrow Bank shall purchase substitute Federal Securities for the Federal
Securities then held in an Escrow Fund with the proceeds derived from the sale, transfer,
redemption or other disposition of Federal Securities then on deposit in such Escrow Fund and
any uninvested money then held by the Escrow Bank in such Escrow Fund in accordance with
the provisions of this Section 4(c). Such sale, transfer, redemption or other disposition of
Federal Securities then on deposit in an Escrow Fund and substitution of other Federal Securities
shall be effected by the Escrow Bank upon the written request of the City but only by a
simultaneous transaction and only upon receipt of: (i) certification by a nationally recognized
firm of independent certified public accountants that the Federal Securities to be substituted,
together with the Federal Securities which will continue to be held in such Escrow Fund, will
mature in such principal amounts and earn interest in such amounts and, in each case, at such
times so that sufficient moneys will be available from maturing principal and interest on such
Federal Securities held in such Escrow Fund, together with any uninvested moneys, to make all
payments required by Section 5(a) or Section 5(b) hereof, as applicable, which have not
previously been made, and (ii) receipt by the Escrow Bank of an opinion of counsel of
recognized standing in the field of law relating to municipal bonds to the effect that the sale,
transfer, redemption or other disposition and substitution of Federal Securities will not adversely
affect the exclusion of interest on any Bonds or Prior Bonds from gross income for purposes of
federal income taxation.
(d) Upon the written request of the City, but subject to the conditions and limitations
herein set forth, the Escrow Bank will apply any moneys received from the maturing principal of
or interest or other investment income on any Federal Securities held in an Escrow Fund, or the
proceeds from any sale, transfer, redemption or other disposition of Federal Securities held in an
Escrow Fund pursuant to Section 4(c) not required for the purposes of said Section, as follows:
(i) to the extent such moneys will not be required at any time for the purpose of making a
payment required by Section 5 hereof, as certified by a nationally recognized firm of independent
certified public accountants delivered to the Escrow Bank, such moneys shall be paid over to the
City upon the written request of the City as received by the Escrow Bank, free and clear of any
trust, lien, pledge or assignment securing the Prior Bonds or otherwise existing hereunder, and
(ii) to the extent such moneys will be required for such purpose at a later date, shall, to the extent
practicable, be invested or reinvested in Federal Securities maturing at times and in amounts
sufficient to make such payment required by Section 5 hereof (provided that the amount of the
funds to be realized from time to time from such investment or reinvestment shall be certified by
a nationally recognized firm of independent certified public accountants delivered to the Escrow
Bank by the City and provided that the City shall deliver to the Escrow Bank an opinion of
counsel of recognized standing in the field of law relating to municipal bonds to the effect that
such investment or reinvestment will not adversely affect the exclusion of interest on any Bonds
or Prior Bonds from gross income for purposes of federal income taxation) and interest earned
from such investments or reinvestments shall be paid over to the City, upon the written request of
the City, as received by the Escrow Bank, free and clear of any trust, lien, pledge or assignment
securing the Prior Bonds or otherwise existing hereunder.
(e) All Federal Securities purchased pursuant to this Agreement shall be deposited in and
held for the credit of the appropriate Escrow Fund. Except as provided in this Section 4, no
moneys or Federal Securities deposited with the Escrow Bank pursuant to this Agreement nor
principal of, or interest payments or other investment income on, any such Federal Securities
shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment
of the interest and Redemption Price with respect to the Variable 85-1 Bonds or the Variable 86-
2 Bonds, as applicable, as provided by Section 5 hereof.
(f) The owners of the Variable 85-1 Bonds shall have a lien on the moneys and Federal
Securities in the 85-1 Escrow Fund until such moneys and Federal Securities are used and
applied as provided in this Agreement. The owners of the Variable 86-2 Bonds shall have a lien
on the moneys and Federal Securities in the 86-2 Escrow Fund until such moneys and Federal
Securities are used and applied as provided in this Agreement.
(g) The Escrow Bank shall not be held liable for investment losses resulting from
compliance with the provisions of this Agreement.
Section 5. Payment of Prior Bonds. (a) From the maturing principal of the Federal
Securities held in the 85-1 Escrow Fund and the investment income and other earnings thereon
and any uninvested money then held in the 85-1 Escrow Fund, the Escrow Bank shall transfer
and apply the amounts at the times as follows:
(i) On March 2, 1996, the Escrow Bank shall pay the interest on the Variable 85-
1 Bonds then due in accordance with the terms of the 85-1 Indenture; and
(ii) On the Redemption Date, the Escrow Bank shall pay the Redemption Price of
the Variable 85-1 Bonds in accordance with the terms of the 85-1 Indenture.
To the extent that the amount on deposit in the 85-1 Escrow Fund on the Redemption
Date is in excess of the amount necessary to make the required payments with respect to the
Variable 85-1 Bonds, as shown in the then applicable escrow verification of the nationally
4
recognized firm of independent certified public accountants, such excess shall be transferred to
the Redemption Fund established under the Fiscal Agent Agreement, dated as of ,
1995 (the "Fiscal Agent Agreement"), by and between the City and State Street Bank and Trust
Company of California, N.A., as fiscal agent, relating to the Bonds.
(b) From the maturing principal of the Federal Securities held in the 86-2 Escrow Fund
and the investment income and other earnings thereon and any uninvested money then held in the
86-2 Escrow Fund, the Escrow Bank shall transfer and apply the amounts at the times as follows:
(i) On March 2, 1996, the Escrow Bank shall pay the interest on the Variable 86-
2 Bonds then due in accordance with the terms of the 86-2 Indenture; and
(ii) On the Redemption Date, the Escrow Bank shall pay the Redemption Price of
the Variable 86-2 Bonds in accordance with the terms of the 86-2 Indenture.
To the extent that the amount on deposit in the 86-2 Escrow Fund on the Redemption
Date is in excess of the amount necessary to make the required payments with respect to the
Variable 86-2 Bonds, as shown in the then applicable escrow verification of the nationally
recognized firm of independent certified public accountants, such excess shall be transferred to
the Redemption Fund established under the Fiscal Agent Agreement.
Section 6. Irrevocable Instructions to Mail Notices. (a) The City hereby irrevocably
designates the Variable 85-1 Bonds for prior redemption on the Redemption Date as indicated in
Section 5(a) hereof, and hereby irrevocably instructs the Escrow Bank, as trustee under the 85-1
Indenture, to give the mailed notice of redemption with respect thereto, as provided in
Section 3.06 of the 85-1 Indenture.
(b) The City hereby irrevocably designates the Variable 86-2 Bonds for prior redemption
on the Redemption Date as indicated in Section 5(b) hereof, and hereby irrevocably instructs the
Escrow Bank, as trustee under the 86-2 Indenture, to give the mailed notice of redemption with
respect thereto, as provided in Section 3.07 of the 86-2 Indenture.
Section 7. Performance of Duties. The Escrow Bank agrees to perform only the duties
set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided
are in a form satisfactory to it.
Section 8. Fscrnw Rank's Authority to Make Investments. The Escrow Bank shall
have no power or duty to invest any funds held under this Agreement except as provided in
Section 4 hereof. The Escrow Bank shall have no power or duty to transfer or otherwise dispose
of the moneys held hereunder except as provided in this Agreement.
Section 9. Indemnity, To the extent permitted by law, the City hereby assumes liability
for, and hereby agrees (whether or not any of the transactions contemplated hereby are
consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective
successors, assigns, agents, employees and servants, from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature
which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time
(whether or not also indemnified against the same by the City or any other person under any
other agreement or instrument, but without double indemnity) in any way relating to or arising
out of the execution, delivery and performance of this Agreement, the establishment hereunder of
the Escrow Funds, the acceptance of the funds and securities deposited therein, the purchase of
any securities to be purchased pursuant thereto, the retention of such securities or the proceeds
thereof and any payment, transfer or other application of moneys or securities by the Escrow
Bank in accordance with the provisions of this Agreement; provided, however, that the City shall
not be required to indemnify the Escrow Bank against the Escrow Bank's own negligence or
willful misconduct or the negligence or willful misconduct of the Escrow Bank's respective
successors, assigns, agents and employees or the material breach by the Escrow Bank of the
terms of this Agreement. In no event shall the City or the Escrow Bank be liable to any person
by reason of the transactions contemplated hereby other than to each other as set forth in this
Section. The indemnities contained in this Section shall survive the termination of this
Agreement.
Section 10. Responsibilities of Escrow Bank. The Escrow Bank and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in
tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the
establishment of the Escrow Funds, the acceptance of the moneys or any securities deposited
therein, the purchase of the securities to be purchased pursuant hereto, the retention of such
securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held
hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other
application of moneys or securities by the Escrow Bank in accordance with the provisions of this
Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error
of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained
in the "Whereas" clauses herein shall be taken as the statements of the City, and the Escrow
Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no
representation as to the sufficiency of the securities to be purchased pursuant hereto and any
uninvested moneys to accomplish the redemption of the Prior Bonds or to the validity of this
Agreement as to the City and, except as otherwise provided herein, the Escrow Bank shall incur
no liability in respect thereof. The Escrow Bank shall not be liable in connection with the
performance of its duties under this Agreement except for its own negligence and willful
misconduct, and the duties and obligations of the Escrow Bank shall be determined by the
express provisions of this Agreement.
The Escrow Bank may consult with counsel, who may or may not be counsel to the City,
and in reliance upon the written opinion of such counsel shall have full and complete
authorization and protection in respect of any action taken, suffered or omitted by it in good faith
in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a
matter be proved or established prior to taking, suffering, or omitting any action under this
Agreement, such matter (except the matters set forth herein as specifically requiring a certificate
of a nationally recognized firm of independent certified public accountants or an opinion of
counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to
be conclusively established by a written certification of the City. Whenever the Escrow Bank
shall deem it necessary or desirable that a matter specifically requiring a certificate of a
nationally recognized firm of independent certified public accountants or an opinion of counsel
of recognized standing in the field of law relating to municipal bonds be proved or established
prior to taking, suffering, or omitting any such action, such matter may be established only by a
certificate signed by a nationally recognized firm of certified public accountants or such opinion
of counsel of recognized standing in the field of law relating to municipal bonds.
Section 11. Amendments. The City and the Escrow Bank may, without the consent of,
or notice to, the owners of the Prior Bonds, amend this Agreement or enter into such agreements
supplemental to this Agreement as shall not adversely affect the rights of such owners and as
shall not be inconsistent with the terms and provisions of this Agreement or of the 85-1 Indenture
or 86-2 Indenture, as applicable, for any one or more of the following purposes: (i) to cure any
ambiguity or formal defect or omission in this Agreement, (ii) to grant to, or confer upon, the
Escrow Bank for the benefit of the owners of the Prior Bonds any additional rights, remedies,
powers or authority that may lawfully be granted to, or conferred upon, such owners or the
Escrow Bank, and (iii) to include under this Agreement additional funds, securities or properties.
6
The Escrow Bank shall be entitled to rely conclusively upon an opinion of counsel of recognized
standing in the field of law relating to municipal bonds with respect to compliance with this
Section, including the extent, if any, to which any change, modification, addition or elimination
affects the rights of the owners of the Prior Bonds or that any instrument executed hereunder
complies with the conditions and provisions of this Section.
Section 12. Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the date upon which the Prior Bonds have been paid in accordance with this
Agreement and the 85-1 Indenture or 86-2 Indenture, as applicable..
Section 13. Compensation. The City shall from time to time, on demand, pay the
Escrow Bank the agreed upon compensation for its services to be rendered hereunder and
reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of
its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be
entitled to any lien whatsoever on any moneys or obligations in either Escrow Fund for the
payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank
under this Agreement or otherwise.
Section 14. Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the City or the Escrow Bank to be performed should be deterruined
by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be
null and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
Section 15. Counterparts. This Agreement may be executed in several counterparts, all
or any of which shall be regarded for all purposes as an original but all of which shall constitute
and be but one and the same instrument.
Section 16. Governing Law. This Agreement shall be construed under the laws of the
State of California.
7
Section 17. Assignment. This Agreement shall not be assigned by the Escrow Bank or
any successor thereto without the prior written consent of the City.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
STATE STREET BANK AND TRUST
COMPANY, N.A., as Escrow Bank
By:,
Authorized Officer
CITY OF TUSTIN
By:
EXHIBIT 1
UNITED STATES TREASURY SECURITIES
VARIABLE 85-1 BONDS
Principal Interest
Tvoe Maturity Am n Rate
Accrued Purchase
Pnce In r Puce
Exhibit 1-1
EXHIBIT 2
UNITED STATES TREASURY SECURITIES
VARIABLE 86-2 BONDS
Principal Interest
Tvne Maturity Am n Rate
Accrued Purchase
Pn~ n r P~~
Exhibit 2-1
PROTOCOL AGREEMENT
THIS PROTOCOL AGREEMENT (the "Agreement") is made as of ,
1996, by and between the City of Tustin, a municipal corporation organized and existing under
the laws of the State of California (the "City"), and The Irvine Company, a Michigan corporation
("TIC").
RECITALS
A. Pursuant to proceedings under the Municipal Improvement Act of 1913, the City
has formed its Reassessment District No. 95-2 (Tustin Ranch) (the "Reassessment District") and
expects to issue its Limited Obligation Improvement Bonds, Reassessment District No. 95-2
(Tustin Ranch), Series A (the "Bonds") pursuant to a Fiscal Agent Agreement (the "Fiscal Agent
Agreement") dated as of 1996 by and between the Ciry and State Street Bank
and Trust Company of California, N. A. (the "Fiscal Agent") for the purpose of refinancing
certain debt.
B. The Bonds and certain related obligations are to be paid from Reassessments and
amounts for Continuing Costs of the Adjustable Rate Bonds (as such terms are defined in the
Fiscal Agent Agreement) imposed on designated benefited parcels, which are either owned by
TIC or by Irvine Apartment Communities, L. P., a Delaware limited partnership in which TIC
owns a majority economic interest ("IACLP" and, together with TIC, the "Company"), or the
Reassessments and amounts for Continuing Costs of the Adjustable Rate Bonds applicable to
which are payable by TIC. In light of these facts, the parties recognize that TIC is materially
affected by the manner in which the City exercises its rights and obligations under the Fiscal
Agent Agreement.
C. The parties have heretofore cooperated in efforts to provide for the administration
of the assessment districts which were the predecessors of the Reassessment District, and they
wish to continue to cooperate with respect to the Reassessment District by entering into this
Agreement to provide a cooperative means of dealing with certain on-going aspects of monitoring
and administering the aforesaid financing.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the above recitals and the covenants and
conditions contained herein, the parties agree as follows:
1. Definitions. All capitalized terms used in this Agreement and not otherwise
defined herein shall have the respective meanings ascribed to them in the Fiscal Agent
Agreement.
2. Alternate Letter of Credit. Section 5.04 of the Fiscal Agent Agreement provides
that the Fiscal Agent shall accept an Alternate Letter of Credit upon satisfaction of certain
conditions stated therein. In the event that TIC delivers a written request to the City that an
Pua~:31835 4~016iB2495.00038 1 01/05/96
Alternate Letter of Credit be presented to the Fiscal Agent, the City and TIC will enter into an
agreement whereby TIC agrees to pay all reasonable costs and expenses incurred by the City and
the Fiscal Agent in connection with the substitution of said Alternate Letter of Credit for the
Letter of Credit then in effect. Upon execution of such agreement, the City and TIC shall take
such action as may be reasonably required to obtain such Alternate Letter of Credit, to present
the same to the Fiscal Agent, and to satisfy the conditions set forth in said Section 5.04;
provided, however, that the City shall not be required to enter into any agreement with the issuer
of the Alternate Letter of Credit which differs from the Reimbursement Agreement in any respect
which would be materially adverse to the City, nor shall the City be required to cause an
Alternate Letter of Credit to be substituted for the Letter of Credit then in effect if such
substitution would have a material adverse effect on the City.
3. Information and Notices. Under various provisions of the Fiscal Agent
Agreement and the Reimbursement Agreement the City may receive or give notice for various
purposes specified therein. The City agrees to provide TIC, at TIC's expense, with copies of all
such notices promptly upon its receipt or transmittal thereof, as the case may be. Various
provisions of the Fiscal Agent Agreement permit the City to request and obtain specified
information from various parties described therein. The Ciry hereby agrees to provide TIC, at
TIC's expense, with copies of such information promptly upon its receipt by the City. In
addition, the City shall request and furnish to TIC, at TIC's expense, such information available
to the City pursuant to the Fisca( Agent Agreement as TIC may from time to time reasonably
request.
4. Remarketing Agent. Pursuant to the provisions of the Remarketing Agreement,
the City has reserved the right to remove the Remarketing Agent and to appoint a successor
thereto. Inasmuch as the effectiveness of the Remarketing Agent in performing its duties directly
affects the interest payments required to made by the Company, the City agrees that (i) it will not
remove the Remarketing Agent without the prior written consent of TIC, (ii) if requested to do so
by written notice from TIC setting forth TIC's reasons for so requesting, it will remove the
Remarketing Agent (subject to the consent of the Bank), and (iii) it will meet and consult with
TIC concerning the appointment of any successor to the Remarketing Agent (which appointment
shall be subject to the consent of the Bank).
5. Changes in Fiscal Agent Agreement or Reimbursement Agreement. Except to the
extent required, in the opinion of Bond Counsel, in order to maintain the exclusion from gross
income for purposes of federal income taxation of interest on the Bonds, the City will not,
without the prior written consent of the Company, enter into any amendment of or supplement to
the Fiscal Agent Agreement or the Reimbursement Agreement which would materially adversely
affect the Company's obligations with respect thereto or with respect to the Reassessments and
the Continuing Costs of the Adjustable Rate Bonds applicable to the Company's properties or to
properties the Reassessments and the Continuing Costs of the Adjustable Rate Bonds applicable to
which are payable by the Company; provided that if such consent is withheld, and if the failure
to enter into such amendment or supplement would have a material adverse effect on the City's
obligation with respect thereto, then the City shall not be prohibited from entering into said
amendment or supplement.
Pus~:31835_4;016;B2495.00038 2 01/05/96
6. Conversions to Fixed Rate Bonds. The Bonds are to be initially issued in the
Daily Mode, but they are to be converted to Fixed Rate Bonds as hereinafter described.
At least 90 days prior to a Qualified Conveyance (as hereinafter defined), TIC shall file
with the City and the Bank a written notice (a "Conversion Request") identifying the property
which is the subject of such Qualified Conveyance and the amount of the Reassessment applicable
thereto, provided that if, on the date which is 90 days prior to the date on which a Qualified
Conveyance occurs, TIC did not reasonably expect the Qualified Conveyance would occur within
90 days, it shall file the Conversion Request promptly upon becoming aware that the Qualified
Conveyance is expected to occur. As used herein, the term "Qualified Conveyance" means a
ground lease, sale, transfer or conveyance by TIC or IACLP of any parcel within the
Reassessment District to an entity other than TIC, IACLP or an entity which the Bank approves
in a written instrument filed with the City and the Fiscal Agent, as another affiliate of TIC to
which a parcel can be leased or conveyed without a corresponding conversion of Bonds to Fixed
Rate Bonds.
In addition to the foregoing, TIC may from time to time request that Bonds be converted
to Fixed Rate Bonds even in the absence of a Qualified Conveyance by filing with the City and
the Bank a Conversion Request specifying the properties the Reassessments applicable to which
are to be converted to fixed interest rates and the amount of such Reassessments.
Upon receipt of a Conversion Request from TIC, the City shall immediately notify the
Remarketing Agent, the Fiscal Agent and the Bank of the aggregate principal amount of
Adjustable Rate Bonds to be converted to Fixed Rate Bonds and shall take such other steps as are
reasonably necessary pursuant to the Fiscal Agent Agreement in order to cause the Remarketing
Agent to promptly complete such conversion, provided that the City shall not be required to
advance any funds required to complete such conversion under any circumstances, and provided
further that the Ciry may terminate a proposed conversion under the circumstances set forth in
Section 2.08(b) of the Fiscal Agent Agreement.
A conversion shall be cancelled, or one or more of the properties whose Reassessments
were to be the subject of such conversion shall be deleted from the conversion, as specified by
TIC, if prior to the Conversion Date selected pursuant to Section 2.08(x) of the Fiscal Agent
Agreement for the remarketing of Bonds as Fixed Rate Bonds, TIC files a written instrument
with the City so requesting and agrees that it may be assessed for any expenses theretofore
incurred by the City in connection with the originally proposed conversion for which the City is
not otherwise reimbursed.
On or prior to the Conversion Date selected pursuant to Section 2.08(a) of the Fiscal
Agent Agreement for the remarketing of Bonds as Fixed Rate Bonds, TIC will pay to the Fiscal
Agent, but only if and to the extent that the amounts available to the Fiscal Agent pursuant to the
Fiscal Agent Agreement are insufficient for such purposes, the sum of (i) an amount estimated by
the Remarketing Agent to be necessary to pay the fees, costs and expenses of such conversion
and remarketing, including any premium payable by reason of any mandatory purchase of Bonds,
(ii) the interest which will become payable on the Bonds to be so remarketed from the
Conversion Date until the first date subsequent to the Conversion Date on which the City will
receive payments of the applicable Reassessment installments and (iii) the Reserve Requirement
(as hereinafter defined) applicable to such group of Fixed Rate Bonds. As used herein, the term
PuaL:31835_4~016~B2495.00038 3 01/05/96
"Reserve Requirement" means an amount equal to one-half the average annual debt service on the
Fixed Rate Bonds for which the Reserve Requirement is being determined, provided that if the
Remarketing Agent certifies to the City and TIC that the Bonds in question cannot be successfully
remarketed at reasonable rates without a larger reserve the term "Reserve Requirement" shall
mean the amount specified by the Remarketing Agent.
The Bank is hereby expressly recognized as a third-party beneficiary of this Section 6.
7. Other Changes in Interest Rate Determination. In addition to the foregoing,
various provisions of the Fiscal Agent Agreement permit changes in the method by which the
interest rate applicable to such Bonds is to be determined if such change is requested or
consented to by the City, subject in some instances to certain conditions (each such change an
"Optional Change").
The parties agree that Optional Changes shall be limited as follows. Either TIC or the
City may initiate an Optional Change by giving to the other written notice that it desires to effect
the same. Upon receipt of such notice from TIC, the City shall promptly direct the Fiscal Agent
or the Remarketing Agent, as appropriate, to effect the Optional Change and shall take all other
action reasonably required to accomplish it. The City agrees that it shall not refuse to give such
direction provided that (i) the Company is not then in default in the payment of any Reassessment
or amount for Continuing Costs of the Adjustable Rate Bonds on any parcel owned by it or for
which it is responsible; (ii) the Company owns the parcel or parcels (or is responsible for the
payment of the Reassessment thereon) the interest rate applicable to which would be affected by
the Optional Change; and (iii) the Company agrees to pay any costs incurred in connection with
the Optional Change to the extent the funds available under the Fiscal Agent Agreement to pay
the same are insufficient. If the City wishes to initiate an Optional Change, TIC shall have 15
days after receipt of written notice from the City in which to consider the Optional Change and to
indicate TIC's agreement therewith or objection thereto. Pending TIC's response to such notice,
the City shall not take any action during such 15-day period to effect the Optional Change. If
TIC objects to the City's proposed Optional Change the City shall refrain from taking any action
under the Fiscal Agent Agreement to effect the same provided that (i) TIC is not then in default
in the payment of any Reassessment or amount for Continuing Costs of the Adjustable Rate
Bonds on any parcel owned by it or for which it is responsible, and (ii) the Company owns the
parcel or parcels (or is responsible for the payment of the Reassessment thereon) the interest rate
applicable to which would be affected by the Optional Change.
8. Prohibition Against Certain Transfers. At the time of their issuance the Bonds
and the Reassessments will bear interest at a Daily Rate. Such an arrangement would not be
desirable for any property within the Reassessment District from and after the date on which such
property is first occupied as a single family residence. Accordingly, the Company will not
ground-lease, sell, transfer or otherwise convey any parcel within the Reassessment District for
residential occupancy (other than for use as an apartment, hotel or other similar use) unless and
until either (i) the interest rate applicable to the Reassessment upon such parcel has been
converted so as to correspond to Fixed Interest Rates, or (ii) the Reassessment on such parcel has
been paid. The foregoing provision is not intended, and shall not be construed, to prevent the
Company from (i) entering into a contract for the sale, transfer or other conveyance of a parcel
for such purpose if such sale, transfer or conveyance is contingent upon either the conversion of
the interest rate applicable to the Reassessment upon such parcel so as to correspond to Fixed
PuB~:31835_4 ~ Ol 6 ~ B2495.00038 [~ Ol /05/96
Interest Rates or the payment of such Reassessment, or (ii) selling, transferring or otherwise
conveying any property within the Reassessment District to one or more developers or merchant
builders (each, a "Developer") for the development thereof for owner-occupied residential
purposes, so long as any such conveyance shall be by written contract which imposes an
obligation on the purchaser to be bound by the terms of this Agreement insofar as such terms are
applicable to the property transferred.
Except as hereinafter provided, the City at its option may include as a condition of its
approval of all tract maps covering land within the Reassessment District a requirement that no
building permit will be issued for construction of a structure for residential occupancy (other than
as an apartment, hotel or similar use) upon any lot upon which there is an unpaid Reassessment
unless and until the interest rate applicable to such Reassessment has been converted so as to
correspond to Fixed Interest Rates and satisfactory proof thereof has been furnished to the City.
The City will not enforce such a requirement in any case in which the City determines that as a
result of unusual or unexpected circumstances the withholding of building permits would impose
an undue hardship (as, for example, in the case of property with respect to which the Company
has notified the City that a Qualified Conveyance has occurred but the interest rate applicable to
the Reassessment upon such property has not yet been converted so as to correspond to Fixed
Interest Rates), provided that the City need not issue a certificate of occupancy with respect
thereto unless and until the interest rate applicable to the Reassessment upon the property in
question has been fixed so as to correspond to Fixed Interest Rates or such Reassessment has
been paid.
The Bank is hereby expressly recognized as a third-party beneficiary of this Section 8.
9. Company Advances. In the event a Qualified Conveyance occurs prior to the
earlier of the prepayment in full of the Reassessment applicable to the subject property or the
conversion of the interest rate thereon so as to correspond to Fixed Interest Rates, the Company
will advance to the Fiscal Agent (i) the Reassessment installments and Continuing Costs of
Adjustable Rate Bonds applicable to the subject property and (ii) the funds necessary to prepay
the Reassessment applicable thereto if the same has not been converted to correspond to one or
more Fixed Interest Rates within nine months after the date of such conveyance (or such longer
period as may be approved in writing by the Bank).
The Bank is hereby expressly recognized as athird-party beneficiary of this Section 9.
10. Notices. Any and all notices, demands or other communications required or
desired to be given hereunder by either party shall be in writing and shall be validly given or
made to another party if given by personal delivery, telex, facsimile, telegram, or if deposited in
the United States mail, certified or registered, postage prepaid, return receipt requested. If such
notice, demand or other communication be given by personal delivery, telex, facsimile or
telegram, notice shall be conclusively deemed made at the time of such delivery. If such notice,
Puat,:31835_4 ~ 016 ~ B2495.00038 5 01/05/96
demand or other communication be given by mail, it shall be conclusively deemed given
forty-eight (48) hours after the deposit thereof in the United States mail addressed to the party to
whom such notice, demand or other communication is to be given as hereinafter set forth:
To the City: City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: City Manager
With a copy to: City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Director of Finance
To the Company: The Irvine Company
550 Newport Center Drive
Newport Beach, California 92660
Attention: Vice President, Public Finance
With a copy to: The Irvine Company
550 Newport Center Drive
Newport Beach, California 92660
Attention: General Counsel
Either party hereto may change its address for the purpose of receiving notices, demands and
other communications as herein provided by a written notice given in the manner aforesaid to the
other party or parties hereto.
11. Expiration. This Agreement shall expire and be of no further force or effect on
the first day on which no Adjustable Rate Bond remains outstanding and all amounts due and
payable under the Reimbursement Agreement have been paid in full.
12. Governing Law. This Agreement shall, in all respects, be governed by the
internal laws of the State of California.
13. Further Assurances. Each of the parties hereto shall execute and deliver any and
all additional papers, documents, and other assurances, and shall do any and all acts and things
reasonably necessary in connection with the performance of its obligations hereunder and to carry
out the intent of the parties hereto.
The Bank is hereby recognized as athird-party beneficiary of this Section 13.
14. Limitation on Citv Liabilitx. The City shall have no liability to the Bank of any
kind whatsoever arising out of or in connection with any act or omission of the Company
hereunder, including but not limited to, any failure on the part of the Company to file a
Conversion Request or to pay money pursuant to Section 6, any conveyance of property in
violation of Section 8, any failure to pay money pursuant to Section 9, and any failure to comply
with Section 13.
vuB~:31835_4 ~ 016 ~ B2495.00038 6 O1 /05/96
15. Amendment. No amendment, change or modification of this Agreement shall be
valid unless in writing and signed by both of the parties hereto.
16. Successors and Assigns. All of the terms and provisions contained herein shall
inure to the benefit of and shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
17. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above written.
CITY OF TUSTIN
By:
Mayor
ATTEST:
City Clerk
Approved as to form.
City Attorney
THE IRVINE COMPANY
Thomas B. Rogers
Senior Vice President
Corporate Finance
Daniel H. Tonini
Vice President
Public Finance
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