HomeMy WebLinkAbout09 APPROVAL OF ISSUANCE OF 2014 SPECIAL TAX BONDS FOR THE CITY OF TUSTIN COMMUNITY FAC. DIST. 14-01Agenda Item 9
AGENDA REPORT Reviewed:
r
City Manager
Finance Director
MEETING DATE: SEPTEMBER 16, 2014
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: PAMELA ARENDS -KING, FINANCE DIRECTOR /CITY TREASURER
SUBJECT: ADOPT RESOLUTION NO. 14 -60, A RESOLUTION OF THE CITY
COUNCIL ACTING AS THE LEGISLATIVE BODY OF THE CITY OF
TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014 -1 ( TUSTIN
LEGACY /STANDARD PACIFIC) AUTHORIZING THE ISSUANCE OF ITS
SPECIAL TAX BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED
TWENTY NINE MILLION DOLLARS ($29,000,000) AND APPROVING
RELATED DOCUMENTS AND ACTIONS
SUMMARY:
In June 2014, the City of Tustin as the fee title owner of 100% of the real property
located in the Tustin Legacy Project (the 'Project ") received a written request from two
of its Councilpersons to commence proceedings to form a community facilities district
with boundaries coterminous with the Property to be known as the "City of Tustin
Community Facilities District No. 2014 -1 (Tustin Legacy /Standard Pacific) ". After a
regularly scheduled public hearing and election, on June 17, 2014, CFD No. 2014 -1
(Tustin Legacy /Standard Pacific) (the "District ") was formed pursuant to the provisions
of the Mello -Roos Community Facilities Act of 1982 as amended to provide for financing
facilities and services in the Project that will be developed into 375 single family homes,
a focal park, and other neighborhood amenities. In August 2014 the property was
conveyed to Standard Pacific Corporation ( "Standard Pacific ") pursuant to the City's
Development Disposition Agreement (the "DDA ") with Standard Pacific dated March 4,
2014.
Adoption of Resolution No. 14 -60 to issue special tax bonds will provide funds to
construct backbone infrastructure for the new development and school district facilities.
RECOMMENDATION:
It is recommended that the City Council adopt:
Resolution No. 14 -60, a resolution of the City Council of the City of Tustin acting as the
legislative body of the City of Tustin Community Facilities District No. 2014 -1 (Tustin
Legacy /Standard Pacific) authorizing the issuance of its special tax bonds in a principal
Approval of Issuance of Special Tax Bonds
September 16, 2014 Page 2 of 3
amount not to exceed twenty nine million dollars ($29,000,000) and approving related
documents and actions.
FISCAL IMPACT: -
The District is authorized to levy special taxes to repay its indebtedness, and to pay the
annual costs of administration of the District. The District is only authorized to levy special
taxes on land included within the boundaries of the District.
The Bonds will not be obligations of the City of Tustin, but will be limited obligations of the
District secured solely by the special taxes of the District and amounts held in certain
funds and accounts established under the Indenture of Trust for the District. All costs of
issuance of the Bonds will be paid from the proceeds of the Bonds. All administrative costs
of the District and the Bonds will be paid from proceeds of the special taxes levied in the
District.
CORRELATION TO STRATEGIC PLAN:
The recommendation correlates to the City's strategic plan by implementing Goal A,
item number one (Develop critical phases of Tustin Legacy) letter e, to establish a
financing structure for an assessment district.
BACKGROUND:
The City of Tustin was the fee title owner of 100% of the real property (the "Property ")
located in the Legacy Project described in the DDA by and between the City and
Standard Pacific dated March 4, 2014. On December 10, 2013, the Planning
Commission adopted Resolution No. 4239 recommending that the City approve the
proposed project to construct 375 single family detached units, a focal park, and other
neighborhood amenities ('Proposed Project'). Further, on February 4, 2014, the City
Council approved the DDA, Specific Plan Amendment 2013 -002 and Resolution No. 14-
14 approving the concept plan for the project.
The DDA provides for the establishment of a community facilities district to provide for
financing of certain facilities and services. The Mello -Roos Community Facilities Act of
1982, as amended, commencing with Section 53311 of the Government Code (the
"Act") is the authorizing act and pursuant to Section 53318(a) of the Act, the City
Council received a written request from two of its City Councilpersons to commence
proceedings to form a community facilities district with boundaries coterminous with the
Property to be known as the "City of Tustin Community Facilities District No. 2014 -1
(Tustin Legacy /Standard Pacific)."
On May 6th, 2014, the City Council approved the Resolution of Intention for CFD No.
2014 -1 and set the time and place for the Public Hearing for the contemplated CFD No.
2014 -1. The Public Hearing and Election were held on June 17, 2014, at which time the
City formed CFD No. 2014 -1 (Tustin Legacy /Standard Pacific) and introduced for first
reading an ordinance authorizing the levy of special taxes in CFD No. 2014 -1. The
second reading of the special tax ordinance was held on July 1, 2014 and the ordinance
went into effect on July 15, 2014. In August 2014 the land was conveyed to Standard
Approval of Issuance of Special Tax Bonds
September 16, 2014 Page 3 of 3
Pacific and the City now would like to proceed with the bond issuance to fund
infrastructure and school district infrastructure for the Tustin Legacy /Standard Pacific
Project. The term of the bonds will be for up to 35 years and the Bonds are expected to
be issued in an aggregate principal amount not to exceed $29.0 million. The Bonds will
require a reserve fund and the estimated interest rates for the various maturities of the
Bonds will not exceed 7.00 %. Bonded indebtedness will be funded with the collection of
Special Tax A. Special Tax A rates are calculated on the square footage of dwellings.
The maximum rates range from $1,745 for a single family residential property of less
than 2,250 s.f. to $3,120 for a single family residential property with more than 3,530 s.f.
TONIGHT'S ACTIONS:
The Bonds for CFD No. 2014 -1 are proposed to be issued pursuant to an Indenture of
Trust setting forth the various terms and provisions for the Bonds. The proceeds of the
Bonds will be used to finance certain facilities within CFD No. 2014 -1. The Bonds are
expected to be offered to investors for sale pursuant to a Preliminary Official Statement,
and are expected to be sold to Stifel, Nicolaus & Company, Incorporated, the
underwriter for the Refunding Bonds, subject to parameters set forth in the respective
resolution for the Bonds, the title of which is set forth above. Those parameters allow for
the issuance of up to $29,000,000 of Bonds for the District, interest rate of the Bonds
does not exceed 7.00% per annum and the underwriter's discount (without regard to
any original issue discount) is not in excess of 1.75% of the principal amount of the
Bonds. The City will enter into a Continuing Disclosure Agreement for the Bonds, which
will require that the City provide certain ongoing information for the District on an annual
basis until the Bonds have been paid in full. City Staff and consultants have reviewed
the legal documents described above and they are now in form ready for approval by
the City Council authorizing the issuance of the Bonds. Staff will return to the Council
on November 4, 2014 for approval of the Preliminary Official Statement, which serves
as the disclosure document for the Bonds.
NEXT STEPS:
Following tonight's action, the proposed schedule to complete the bond sale is as
follows:
• November 4, 2014: City Council considers approval of Preliminary Official
Statement
• November 18, 2014: Bond Sale date
• December 3, 2014: Bond Closing date
Pamela Arends -King
Finance Director /City Treasurer
Attachments: Resolution 14 -60
Indenture of Trust
Bond Purchase Agreement
Continuing Disclosure Agreement
RESOLUTION NO. 14-60
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN ACTING AS THE LEGISLATIVE BODY OF THE CITY
OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC) AUTHORIZING THE
ISSUANCE OF ITS SPECIAL TAX BONDS IN A PRINCIPAL
AMOUNT NOT TO EXCEED TWENTY NINE MILLION
DOLLARS ($29,000,000) AND APPROVING CERTAIN
DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Tustin, located in Orange County, California
(hereinafter sometimes referred to as the "legislative body of the Community Facilities District"),
has heretofore undertaken proceedings and declared the necessity of the City of Tustin
Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) (the "Community
Facilities District") to issue bonds pursuant to the terms and provisions of the Mello-Roos
Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of
the Government Code of the State of California (the "Act") in an aggregate principal amount not
to exceed $29,000,000; and
WHEREAS, the Community Facilities District now desires to accomplish the financing of
certain public facilities authorized to be financed by the Community Facilities District through the
issuance of bonds in an aggregate principal amount not to exceed $29,000,000 designated as
the "City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific)
Special Tax Bonds, Series 2014" (the "Bonds") under the Act; and
WHEREAS, pursuant to Section 53345.8 of the Act and the Community Facilities
District's Local Goals and Policies, unless the bonds are escrowed or otherwise credit
enhanced, the Community Facilities District may sell bonds if the legislative body of the
Community Facilities District determines prior to the award of the sale of such bonds that the
value of the real property that would be subject to the special tax to pay debt service on the
bonds will be at least three (3) times the principal amount of the bonds to be sold and the
principal amount of all other bonds outstanding that are secured by a special tax levied pursuant
to the Act or a special assessment levied on taxable property within the Community Facilities
District (subject to adjustment for escrowed bonds); and
WHEREAS, the legislative body of the Community Facilities District desires to authorize
the preparation of a an appraisal of the taxable real property within the Community Facilities
District (the "Appraisal") which shall be prepared for the Community Facilities District by Harris
Realty Appraisal (the "Appraiser") in order for the legislative body of the Community Facilities
District to make the above determination at a subsequent meeting; and
WHEREAS, in accordance with Section 53360.4 of the Act, the legislative body of the
Community Facilities District determines that a negotiated sale of the Bonds to Stifel, Nicolaus &
Company, Incorporated (the "Underwriter") will result in a lower overall cost to the Community
Facilities District than a public sale; and
WHEREAS, the legislative body of the Community Facilities District has determined that
it is prudent in the management of its fiscal affairs to issue the Bonds; and
WHEREAS, in order to effect the issuance of the Bonds, the legislative body of the
Community Facilities District desires to approve the form of and authorize the execution and
delivery of an Indenture of Trust for the Bonds, by and between the Community Facilities District
and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Indenture"), a
Continuing Disclosure Agreement, by and between the Community Facilities District and Albert
A. Webb Associates, as dissemination agent (the "Continuing Disclosure Agreement") and a
Bond Purchase Agreement, by and between the Community Facilities District and the
Underwriter relating to the Bonds (the "Bond Purchase Agreement"), the forms of which are on
file with the City Clerk; and
WHEREAS, the legislative body of the Community Facilities District desires to authorize
the preparation of a Preliminary Official Statement with respect to the Bonds (the "Preliminary
Official Statement"); and
WHEREAS, approval of the Preliminary Official Statement in substantially final form and
the final Appraisal by the legislative body of the Community Facilities District shall occur at a
subsequent meeting of the legislative body of the Community Facilities District and such
approvals shall be conditions precedent to the sale and issuance of the Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN ACTING AS THE
LEGISLATIVE BODY OF THE CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO.
2014-1 (TUSTIN LEGACY/STANDARD PACIFIC) DOES HEREBY RESOLVE, ORDER AND
DETERMINE AS FOLLOWS:
Section 1. Each of the above recitals is true and correct and is adopted by the
legislative body of the Community Facilities District.
Section 2. The Community Facilities District is authorized pursuant to the Act to
issue the Bonds for the purpose of financing public facilities which the Community Facilities
District is authorized to finance.
Section 3. The issuance of the Bonds in a principal amount not to exceed
$29,000,000 is hereby authorized, with the exact principal amount of Bonds to be determined by
the official signing the Bond Purchase Agreement in accordance with Section 6 below. The
Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase
Agreement. The Bonds shall be governed by the terms and conditions of the Indenture, the
form of which is on file with the City Clerk. The Indenture shall be prepared by Bond Counsel to
the Community Facilities District and executed by any one of the Mayor, the City Manager or the
Finance Director of the City of Tustin or the written designee of one of the foregoing (collectively
the "Authorized Officers") substantially in the form presented at this meeting, with such additions
thereto and changes therein as the officer or officers executing the same deem necessary to
cure any ambiguity or defect therein if such addition or change does not materially alter the
substance or content thereof, to insert the offering price(s), interest rate(s), selling
compensation, principal amount per maturity, redemption dates and prices and such other
related terms and provisions as are ultimately set forth in the Bond Purchase Agreement, or to
conform any provisions therein to the Bond Purchase Agreement and an Official Statement
relating to the Bonds delivered to the purchasers of the Bonds. Approval of such changes shall
be conclusively evidenced by the execution and delivery of the Indenture by any one of the
Authorized Officers. Capitalized terms used in this Resolution which are not defined herein
have the meanings ascribed to them in the Indenture.
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Section 4. The Bonds shall be executed on behalf of the Community Facilities
District by the manual or facsimile signature of the Mayor of the City or designee acting as
Mayor, as Chairperson of the legislative body of the Community Facilities District, and the seal
of the City, or a facsimile thereof, shall be impressed or imprinted thereon and attested with the
manual or facsimile signature of the City Clerk or Deputy City Clerk. The Bank of New York
Mellon Trust Company, N.A. is hereby appointed to act as trustee for the Bonds.
Section 5. The covenants set forth in the Indenture to be executed in accordance
with Section 3 above are hereby approved, shall be deemed to be covenants of the legislative
body of the Community Facilities District, and shall be complied with by the Community
Facilities District and its officers.
Section 6. The form of the Bond Purchase Agreement presented at this meeting is
hereby approved and any one of the Authorized Officers is hereby authorized to execute the
Bond Purchase Agreement, with such additions thereto and changes therein as the Authorized
Officer executing the same shall deem necessary. Approval of such additions and changes
shall be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement;
provided, however, that the Bond Purchase Agreement shall be signed only if the Bonds are
purchased by the Underwriter at an overall interest rate that does not exceed 7.00% per annum
and the discount paid to the Underwriter (exclusive of original issue discount) does not exceed
1.75% of the principal amount of Bonds. Each of the Authorized Officers is authorized to
determine the day on which the Bonds are to be priced in order to attempt to produce the lowest
borrowing cost for the Community Facilities District and may reject any terms presented by the
Underwriter if determined not to be in the best interest of the Community Facilities District.
Section 7. The form of the Continuing Disclosure Agreement presented at this
meeting is hereby approved and any one of the Authorized Officers is hereby authorized and
directed to execute the Continuing Disclosure Agreement in the form hereby approved, with
such additions therein and changes thereto as the Authorized Officer or Authorized Officers "
executing the same deem necessary to cure any defect or ambiguity therein if such change
does not materially alter the substance or content thereof, with such approval to be conclusively
evidenced by the execution and delivery of the Continuing Disclosure Agreement.
Section 8. In accordance with the requirements of Section 53345.8 of the Act and
the policies of the City of Tustin, it shall be a condition precedent to the sale and issuance of the
Bonds that the legislative body of the Community Facilities District determine that the value of
the real property in the Community Facilities District subject to the special tax to pay debt
service on the Bonds (the "Taxable Property") is at least three times the principal amount of the
Bonds and the principal amount of all other bonds outstanding that are secured by a special tax
levied pursuant to the Act or a special assessment levied on property within the Community
Facilities District ("Secured Indebtedness"). This determination shall be based on the value of
the Taxable Property as set forth in the Appraisal (the "Value"), which Appraisal shall be made
in a manner consistent with the City of Tustin policies adopted pursuant to Section 53312.7 of
the Act. However, notwithstanding the above, in the event that the Taxable Property is less
than three times the Secured Indebtedness, the Community Facilities District may escrow a
sufficient portion of Bonds (the "Escrowed Bonds") so that the Value is at least three times the
Secured Indebtedness, less the Escrowed Bonds. The Escrowed Bonds shall be held in escrow
(or redeemed) until such time as the Value of the Taxable Property equals or exceeds three
times the Secured Indebtedness, included any released Escrowed Bonds. The Authorized
Officers are hereby authorized to make such additions and changes to the Indenture as the
officer or officers executing the same deem necessary to the Indenture to provide for Escrowed
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Bonds. Approval of such changes shall be conclusively evidenced by the execution and delivery
of the Indenture by any one of the Authorized Officers.
Section 9. The preparation of a Preliminary Official Statement relating to the Bonds
is hereby authorized. Approval of the Preliminary Official Statement in substantially final form
shall occur at a subsequent meeting of the legislative body of the Community Facilities District,
and such approval is hereby made a condition precedent to the sale and issuance of the Bonds.
Section 10. The Mayor, City Manager, Finance Director, or designee of either, and
the other officers and staff of the City of Tustin and the Community Facilities District responsible
for the fiscal affairs of the Community Facilities District, are hereby authorized and directed to
take any actions and execute and deliver any and all documents as are necessary to
accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of
this Resolution and the fulfillment of the purposes of the Bonds as described in the Indenture,
including, but not limited to, providing certificates as to the accuracy of any information relating
to the Community Facilities District which is included in an Official Statement relating to the
Bonds and executing any and all agreements related to the delivery of the Bonds as provided in
the Indenture or otherwise as reasonably required to implement the transactions described
herein or in the documents relating hereto. Except for the execution of the Bonds which are to
be executed by the Mayor or designee acting as Mayor; any Authorized Officer may sign any
document authorized for execution herein. Any document authorized herein to be signed by the
City Clerk may be signed by a duly appointed deputy clerk.
Section 11. This Resolution shall take effect upon adoption.
PASSED AND ADOPTED by the City Council at a regular meeting held on the 16th day
of September, 2014.
CITY COUNCIL OF THE CITY OF TUSTIN
• By:
Elwyn A. Murray,
Mayor of the City of Tustin
ATTEST:
Jeffrey C. Parker
City Clerk of the City of Tustin
4
STATE OF CALIFORNIA
COUNTY OF ORANGE )ss.
CITY OF TUSTIN
I, JEFFREY C. PARKER, City Clerk of the City of Tustin, do hereby certify that the
foregoing Resolution was duly adopted by the City Council of the City of Tustin at a regular
meeting held on the 16th day of September, 2014, by the following votes:
AYES: COUNCIL MEMBERS
NOES: , COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
JEFFREY C. PARKER, CITY CLERK
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Stradling Yocca Carlson &Rauth
Draft dated September 9, 2014
INDENTURE OF TRUST
by and between
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
AS TRUSTEE
Dated as of December 1,2014
Relating to
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions 2
Section 1.02 Equal Security 12
ARTICLE II
THE BONDS
Section 2.01 Authorization of Bonds 13
Section 2.02 Terms of Series 2014 Bonds 13
Section 2.03 Transfer and Exchange of Bonds 15
Section 2.04 Registration Books 15
Section 2.05 Execution of Bonds 15
Section 2.06 Authentication of Bonds 15
Section 2.07 Temporary Bonds 16
Section 2.08 Bonds Mutilated, Lost, Destroyed or Stolen 16
Section 2.09 Book-Entry Bonds 16
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01 Issuance of Series 2014 Bonds 19
Section 3.02 Application of Proceeds of the Series 2014 Bonds 19
Section 3.03 Costs of Issuance Fund 19
Section 3.04 Improvement Fund 20
Section 3.05 Conditions for the Issuance of Additional Bonds 20
Section 3.06 Procedure for the Issuance of Additional Bonds 21
Section 3.07 Additional Bonds 22
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2014 Bonds 22
Section 4.02 Notice of Redemption 24
Section 4.03 Selection of Bonds for Redemption 24
Section 4.04 Partial Redemption of Bonds 24
Section 4.05 Effect of Notice of Redemption 24
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge 25
Section 5.02 Special Tax Fund 25
Section 5.03 Bond Fund 26
TABLE OF CONTENTS
(continued)
Page
Section 5.04 Redemption Fund 27
Section 5.05 Reserve Fund 27
Section 5.06 Rebate Fund 28
Section 5.07 Administrative Expense Fund 29
Section 5.08 Investment of Moneys 29
ARTICLE VI
COVENANTS
Section 6.01 Collection of Special Tax Revenues 30
Section 6.02 Foreclosure 31
Section 6.03 Punctual Payment 31
Section 6.04 Extension of Payment of Bonds 31
Section 6.05 Against Encumbrances 31
Section 6.06 Power to Issue Bonds and Make Pledge 31
Section 6.07 Accounting Records and Financial Statements 32
Section 6.08 Tax Covenants 32
Section 6.09 Continuing Disclosure 32
Section 6.10 Compliance with Act 33
Section 6.11 State Reporting 33
Section 6.12 Annual Reports to the California Debt and Investment Advisory Commission 33
Section 6.13 Non-Cash Payments of Special Taxes 33
Section 6.14 Reduction in Special Taxes 33
Section 6.15 Further Assurances 33
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01 Events of Default 34
Section 7.02 Foreclosure 34
Section 7.03 Other Remedies 34
Section 7.04 Application of Net Special Tax Revenues After Default 35
Section 7.05 Power of Trustee to Enforce 35
Section 7.06 Owners Direction of Proceedings 35
Section 7.07 Limitation on Owners' Right to Sue 36
Section 7.08 Absolute Obligation 36
Section 7.09 Termination of Proceedings 36
Section 7.10 Remedies Not Exclusive 36
Section 7.11 No Waiver of Default 37
ARTICLE VIII
TRUSTEE
Section 8.01 Duties and Liabilities of Trustee 37
Section 8.02 Qualifications; Removal and Resignation; Successors 37
Section 8.03 Liability of Trustee 38
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TABLE OF CONTENTS
(continued)
Page
Section 8.04 Right to Rely on Documents and Opinions 40
Section 8.05 Accounting Records and Financial Statements 40
Section 8.06 Preservation and Inspection of Documents 40
Section 8.07 Compensation and Indemnification 40
ARTICLE IX
MODIFICATION OR AMENDMENT
Section 9.01 Supplemental Indentures 41
Section 9.02 Effect of Supplemental Indenture 42
Section 9.03 Endorsement of Bonds; Preparation of New Bonds 42
Section 9.04 Amendment of Particular Bonds 42
ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture 43
Section 10.02 Bonds Deemed To Have Been Paid 43
Section 10.03 Unclaimed Moneys 44
ARTICLE XI
MISCELLANEOUS
Section 11.01 Successor Is Deemed Included in All References to Predecessor 44
Section 11.02 Limitation of Rights 45
Section 11.03 Waiver of Notice; Requirement of Mailed Notice 45
Section 11.04 Destruction of Bonds 45
Section 11.05 Severability of Invalid Provisions 45
Section 11.06 Notices 45
Section 11.07 Evidence of Rights of Owners 46
Section 11.08 Disqualified Bonds 47
Section 11.09 Money Held for Particular Bonds 47
Section 11.10 Funds and Accounts 47
Section 11.11 Payment on Non-Business Days 47
Section 11.12 Waiver of Personal Liability 47
Section 11.13 Interpretation 48
Section 11.14 Conflict with Act 48
Section 11.15 Conclusive Evidence of Regularity 48
Section 11.16 Governing Laws 48
Section 11.17 Execution in Several Counterparts 48
EXHIBIT A FORM OF SERIES 2014 BOND A-1
EXHIBIT B FORM OF REQUISITION FOR DISBURSEMENT OF PROJECT COSTS B-1
•
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INDENTURE
THIS INDENTURE OF TRUST (this "Indenture"), dated as of December 1, 2014, is by
and between CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT NO. 2014-1 (TUSTIN
LEGACY/STANDARD PACIFIC), a community facilities district formed and existing under the
laws of the State of California (the "Community Facilities District"), and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing
under the laws of the United States of America, as trustee(the"Trustee").
WITNESSETH:
WHEREAS, the City Council of the City of Tustin has formed the Community Facilities
District under the provisions of the Mello-Roos Community Facilities Act of 1982 (the"Act");
WHEREAS, the Community Facilities District is authorized under the Act to levy special
taxes (the "Special Taxes") to pay for the costs of certain public facilities (the "Facilities") and to
authorize the issuance of bonds payable from the Special Taxes;
WHEREAS, in order to provide funds to finance Facilities required in connection with
development occurring within the boundaries of the Community Facilities District, the Community
Facilities District desires to provide for the issuance of the City of Tustin Community Facilities
District No. 2014-1 (Tustin Legacy/Standard Pacific) Special Tax Bonds, Series 2014 (the "Series
2014 Bonds"), in the aggregate principal amount of$
WHEREAS, the Community Facilities District desires to provide for the issuance of
additional bonds (the "Additional Bonds") for refunding purposes, payable from the Special Taxes
on a parity with the Series 2014 Bonds (the Series 2014 Bonds and any such Additional Bonds being
collectively referred to as the "Bonds");
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 Community
Facilities District has authorized the execution and delivery of this Indenture; and
WHEREAS, the Community Facilities District has determined that all acts and proceedings
required by law necessary to make the Bonds, when executed by the Community Facilities District,
authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special
obligations of the Community Facilities District, and to constitute this Indenture a valid and binding
agreement for the uses and purposes herein set forth in accordance with its terms, have been done
and taken, and the execution and delivery of this Indenture has been in all respects duly authorized;
NOW, THEREFORE, in order to secure the payment of the principal of, premium, if any, -
and the interest on all Bonds at any time issued and outstanding under this Indenture according to
their tenor, and to secure the performance and observance of all the covenants and conditions therein
and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are
to be issued, and in consideration of the premises and of the mutual covenants herein contained and
of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable
consideration the receipt whereof is hereby acknowledged, the Community Facilities District does
hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to
time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this
Section shall for all purposes of this Indenture and of any certificate, opinion or other document
herein or therein mentioned, have the meanings herein specified.
"Act" means the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311
et seq. of the California Government Code.
"Additional Bonds" means Bonds other than Series 2014 Bonds issued hereunder in
accordance with the provisions of Sections 3.05 and 3.06.
"Administrative Expense Fund" means the fund by that name established hereunder and
held by the Community Facilities District pursuant to Section 5.07.
"Administrative Expenses" means costs directly related to the administration of the
Community Facilities District, consisting of the costs of computing the Special Taxes and preparing
the annual Special Tax schedules and the costs of collecting the Special Taxes, the costs of remitting
the Special Taxes to the Trustee, the fees and costs of the Trustee (including its legal counsel) in the
discharge of the duties required of it under this Indenture, the costs incurred by the Community
Facilities District in complying with the disclosure provisions of any continuing disclosure
undertaking and this Indenture, including those related to public inquiries regarding the Special Tax
and disclosures to Owners, the costs of the Community Facilities District related to an appeal of the
Special Tax, any amounts required to be rebated to the federal government in order for the
Community Facilities District to comply with Sections 5.06 and 6.08, an allocable share of the
salaries of the staff of the City providing services on behalf of the Community Facilities District
directly related to the foregoing and a proportionate amount of general administrative overhead of the
City related thereto, and the costs of collection (including foreclosure)of delinquent Special Taxes.
"Administrative Expenses Cap" means $30,000 per Fiscal Year, escalating two percent
(2%) each July 1, beginning July 1, 2015.
"Annual Debt Service" means, for each Bond Year, the sum of(a) the interest due on the
Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled
(including by reason of mandatory sinking fund redemptions), and (b)the principal amount of the
Outstanding Bonds due in such Bond Year (including any mandatory sinking fund redemptions due
in such Bond Year).
"Auditor"means the auditor of the County of Orange.
"Authorized Representative" means, with respect to the Community Facilities District, the
Finance Director or the City Manager of the City, and any other Person designated as an Authorized
Representative of the Community Facilities District in a Written Certificate of the Community
Facilities District filed with the Trustee.
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"Average Annual Debt Service"means the average of the Annual Debt Service for all Bond
Years, including the Bond Year in which the calculation is made.
"Bond Counsel" means a firm of nationally recognized bond counsel selected by the
Community Facilities District.
"Bond Fund" means the fund by that name established and held by the Trustee pursuant to
Section 5.03.
"Bond Year" means each twelve-month period beginning on September 2 in each year and
extending to the next succeeding September 1, both dates inclusive, except that the first Bond Year
shall begin on the Closing Date and end on September I, 2015.
"Bonds" means the City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific) Special Tax Bonds issued hereunder, and includes the Series 2014 Bonds
and any Additional Bonds.
"Book-Entry Bonds" means the Bonds of a Series registered in the name of the Depository,
or the Nominee thereof, as the registered owner thereof pursuant to the terms and provisions of
Section 2.09.
"Business Day" means a day which is not (a) a Saturday, Sunday or legal holiday in the
State, (b) a day on which banking institutions in the State, or in any state in which the Office of the
Trustee 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.
"Capitalized Interest Account" means the account of the Bond Fund by that name
established and held by the Trustee pursuant to Section 5.03.
"Cede & Co." means Cede &Co., the nominee of DTC, and any successor nominee of DTC
with respect to a Series of Book-Entry Bonds.
"City" means the City of Tustin, California, a general law city organized and existing under
the laws of the State, and any successor thereto.
"City Council" means the City Council of the City.
"Closing Date" means the date upon which the Series 2014 Bonds are delivered to the
Original Purchaser, being December_, 2014.
"Code" means the Internal Revenue Code of 1986, as amended, and any Regulations,
rulings, judicial decisions, and notices, announcements, and other releases of the United States
Treasury Department or Internal Revenue Service interpreting and construing it.
"Community Facilities District" means City of Tustin Community Facilities District
No. 2014-1 (Tustin Legacy/Standard Pacific), a community facilities district formed and existing
under the laws of the State of California, and any successor thereto.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the Community Facilities District relating to the authorization, issuance, sale and
3
delivery of the Bonds, including but not limited to printing expenses, rating agency fees, filing and
recording fees, initial fees, expenses and charges of the Trustee and its counsel, including the
Trustee's first annual administrative fee, fees, charges and disbursements of attorneys, financial
advisors, accounting firms, consultants and other professionals, fees and charges for preparation,
execution and safekeeping of the Bonds, Bond insurance premiums and any other cost, charge or fee
in connection with the original issuance of the Bonds.
"Costs of Issuance Fund" means the fund by that name established and held by the Trustee
pursuant to Section 3.03.
"Defeasance Securities" means (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.
"Developer" means Standard Pacific Corp., a Delaware corporation, and its successors.
"Developer Continuing Disclosure Agreement" means the Continuing Disclosure
Agreement, dated as of the date hereof, by and between the Developer and the Webb, as originally
executed and as it may be amended from time to time in accordance with the terms thereof.
"District Continuing Disclosure Agreement" means the Continuing Disclosure Agreement,
dated as of the date hereof, by and between the Community Facilities District and Webb, as
originally executed and as it may be amended from time to time in accordance with the terms thereof.
"Depository" means DTC, and its successors as securities depository for any Series of Book-
Entry Bonds, including any such successor appointed pursuant to Section 2.09.
"DTC" means The Depository Trust Company, a limited-purpose trust company organized
under the laws of the State of New York.
"Event of Default"means any event listed in Section 7.01(a)through(d) herein.
"Extraordinary Administrative Expenses" means Administrative Expenses required for
extraordinary Community Facilities District events such as foreclosure actions against delinquent
taxpayers within the Community Facilities District required to be prosecuted pursuant to this
Indenture, the approval and implementation of actions requiring Owner consent under this Indenture,
or actual or threatened Owner or property owner litigation arising out of the Bonds or the
Community Facilities District.
"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 Community Facilities District.
"Improvement Fund" means the fund by that name established and held by the Trustee
pursuant to Section 3.04.
"Indenture" means this Indenture, as originally executed and as it may be amended or
supplemented from time to time by any Supplemental Indenture.
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"Independent Consultant" means any consultant or firm of such consultants selected by the
Community Facilities District and who, or each of whom (a) is generally recognized to be qualified
in the financial consulting field, (b) is in fact independent and not under the domination of the
Community Facilities District or the City, (c) does not have any substantial interest, direct or indirect,
with or in the Community Facilities District or the City, or any owner of real property in the
Community Facilities District, or any real property in the Community Facilities District, and (d) is
not connected with the Community Facilities District or the City as an officer or employee thereof,
but who may be regularly retained to make reports to the Community Facilities District or the City.
"Interest Payment Dates" means March 1 and September 1 of each year, commencing
March 1, 2015, so long as any Bonds remain Outstanding.
"Letter of Representations" means the Letter of Representations from the Community
Facilities District to the Depository, or any successor securities depository for any Series of Book-
Entry Bonds, in which the Community Facilities District makes certain representations with respect
to issues of its securities for deposit by the Depository or such successor depository.
"Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond
Year, including the Bond Year the calculation is made.
"Moody's" means Moody's Investors Service, Inc., a corporation duly organized and
existing under the laws of the State of Delaware, and its successors and assigns, except that if such
entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency selected by the Community Facilities District.
"Net Special Tax Revenues" means Special Tax Revenues, less amounts required to pay
Administrative Expenses not in excess of the Administrative Expenses Cap in any Fiscal Year.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant to Section 2.09.
"Office of the Trustee" means (a) the principal corporate trust office of the Trustee in Los
Angeles, California, or such other office as may be specified to the Community Facilities District by
the Trustee in writing, and(b) with respect to presentation of Bonds for payment or for registration of
transfer and exchange, the office or agency of the Trustee at which, at any particular time, its
corporate trust agency business shall be conducted.
"Ordinance" means Ordinance No. _ adopted by the City Council on July 15, 2014, as
originally adopted and as it may be amended from time to time.
"Original Purchaser" means the original purchaser of the Series 2014 Bonds from the
Community Facilities District.
"Outstanding" means, when used as of any particular time with reference to Bonds, subject
to the provisions of Section 11.08, all Bonds theretofore, or thereupon being, authenticated and
delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or
surrendered to the Trustee for cancellation, (b) Bonds with respect to which all liability of the
Community Facilities District shall have been discharged in accordance with Section 10.01,
5
including Bonds (or portions of Bonds) disqualified under Section 11.08, 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 Trustee pursuant to this Indenture.
"Owner" means, with respect to a Bond, the Person in whose name such Bond is registered
on the Registration Books.
"Participant" means any entity which is recognized as a participant by DTC in the book-
entry system of maintaining records with respect to Book-Entry Bonds.
"Participating Underwriter" has the meaning ascribed thereto in the District Continuing
Disclosure Agreement and the Developer Continuing Disclosure Agreement.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein (the
Trustee is entitled to rely upon the investment direction of the Community Facilities District in
determining such investment is a legal investment):
(1) (A) Direct obligations (other than an obligation subject to variation in
principal repayment) of the United States of America ("United States Treasury Obligations");
(B) obligations fully and unconditionally guaranteed as to timely payment of principal and
interest by the United States of America; (C) obligations fully and unconditionally
guaranteed as to timely payment of principal and interest by any agency or instrumentality of
the United States of America when such obligations are backed by the full faith and credit of
the United States of America; or (D) evidences of ownership of proportionate interests in
future interest and principal payments on obligations described above held by a bank or trust
company as custodian, under which the owner of the investment is the real party in interest
and has the right to proceed directly and individually against the obligor and the underlying
government obligations are not available to any person claiming through the custodian or to
whom the custodian may be obligated.
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not
backed by the full faith and credit of the United States of America:
Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates(excluded are stripped mortgage
securities which are purchased at prices exceeding their
principal amounts)
Senior Debt obligations
Farm Credit Banks(formerly: Federal Land Banks, Federal
Intermediate Credit Banks and Banks for Cooperatives)
Consolidated system-wide bonds and notes
Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
6
Federal National Mortgage Association(FNMA)
Senior debt obligations
Mortgage-backed securities(excluded are stripped mortgage
securities which are purchased at prices exceeding their
principal amounts)
Financing Corporation(FICO)
Debt obligations
Resolution Funding Corporation(REFCORP)
Debt obligations •
(4) Unsecured certificates of deposit, time deposits, and bankers' acceptances
(having maturities of not more than 30 days) of any bank (including the Trustee and any
affiliate)the short-term obligations of which are rated"A-1" or better by S&P.
(5) Deposits the aggregate amount of which are fully insured by the Federal
Deposit Insurance Corporation (FDIC), in banks (including the Trustee and any affiliate)
which have capital and surplus of at least $5 million.
(6) Commercial paper(having original maturities of not more than 270 days rated
"A-1+"by S&P and"Prime-1"by Moody's).
(7) Money market funds rated"AAm" or"AAm-G" by S&P, or better (including
those of the Trustee or its affiliates).
(8) "State Obligations,"which means:
(A) Direct general obligations of any state of the United States of
America or any subdivision or agency thereof to which is pledged the full faith and
credit of a state the unsecured general obligation debt of which is rated "A3" by
Moody's and "A" by S&P, or better, or any obligation fully and unconditionally
guaranteed by any state, subdivision or agency whose unsecured general obligation
debt is so rated.
(B) Direct general short-term obligations of any state agency or
subdivision or agency thereof described in (A) above and rated "A-1+" by S&P and
"Prime-1"by Moody's.
(C) Special Revenue Bonds (as defined in the United States Bankruptcy
Code) of any state, state agency or subdivision described in (A) above and rated
"AA"or better by S&P and"Aa"or better by Moody's.
(9) Pre-refunded municipal obligations rated "AAA" by S&P and "Aaa" by
Moody's meeting the following requirements:
(A) the municipal obligations are (1) not subject to redemption prior to
maturity or (2) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the municipal
obligations has covenanted not to redeem such municipal obligations other than as set
forth in such instructions;
7
(B) the municipal obligations are secured by cash or United States
Treasury Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;
(C) the principal of and interest on the United States Treasury Obligations
has been verified by the report of independent certified public accountants to be
sufficient to pay in full all principal of, interest, and premium, if any, due and to
become due on the municipal obligations ("Verification");
(D) the cash or United States Treasury Obligations serving as security for
the municipal obligations are held by a trustee in trust for owners of the municipal
obligations;
(E) no substitution of a United States Treasury Obligation shall be
permitted except with another United States Treasury Obligation and upon delivery
of a new Verification; and
(F) the cash or United States Treasury Obligations are not available to
satisfy any other claims, including those by or against the trustee.
(10) Repurchase agreements:
(A) With(1) any domestic bank, or domestic branch of a foreign bank, the
long term debt of which is rated at least "A" by S&P and Moody's; or (2) any
broker-dealer with"retail customers" or a related affiliate thereof which broker-dealer
has, or the parent company (which guarantees the provider) of which has, long-term
debt rated at least "A" by S&P and Moody's, which broker-dealer falls under the
jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity
rated"A" or better by S&P and Moody's,provided that:
(a) The market value of the collateral is maintained at levels
equal to 104% of the amount of cash transferred by the Trustee to the provider of the
repurchase agreement plus accrued interest with the collateral being valued weekly
and marked-to-market at one current market price plus accrued interest;
(b) The Trustee or a third party acting solely as agent therefor or
for the Community Facilities District (the "Holder of the Collateral") has possession
of the collateral or the collateral has been transferred to the Holder of the Collateral in
accordance with applicable state and federal laws (other than by means of entries on
the transferor's books);
(c) The repurchase agreement shall state and an opinion of
counsel shall be rendered at the time such collateral is delivered that the Holder of the
Collateral has a perfected first priority security interest in the collateral, any
substituted collateral and all proceeds thereof (in the case of bearer securities, this
means the Holder of the Collateral is in possession);
(d) The repurchase agreement shall provide that if during its term
the provider's rating by either Moody's or S&P is withdrawn or suspended or falls
8
below "A-" by S&P or "A3" by Moody's, as appropriate, the provider must, at the
direction of the Community Facilities District or the Trustee, within 10 days of
receipt of such direction, repurchase all collateral and terminate the agreement, with
no penalty or premium to the Community Facilities District or Trustee.
(B) Notwithstanding the above, if a repurchase agreement has a term of
270 days or less (with no evergreen provision), collateral levels need not be as
specified in (a) above, so long as such collateral levels are 103% or better and the
provider is rated at least"A"by S&P and Moody's, respectively.
(11) Investment agreements with a domestic or foreign bank or corporation (other
than a life or property casualty insurance company) the long-term debt of which or, in the
case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial
guaranty insurance company, claims paying ability, of the guarantor is rated at least"AA" by
S&P and"Aa"by Moody's; provided that,by the terms of the investment agreement:
(A) interest payments are to be made to the Trustee at times and in
amounts as necessary to pay debt service (or, if the investment agreement is for the
Acquisition and Construction Fund, construction draws) on the Bonds and Parity
Bonds;
(B) the invested funds are available for withdrawal without penalty or
premium, at any time upon not more than seven days' prior notice; the Community
Facilities District and the Trustee hereby agree to give or cause to be given notice in
accordance with the terms of the investment agreement so as to receive funds
thereunder with no penalty or premium paid;
(C) the investment agreement shall state that is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof, or, in the case of a bank, that the obligation of the bank to make payments
under the agreement ranks pari passis with the obligations of the bank to its other
depositors and its other unsecured and unsubordinated creditors;
(D) the Community Facilities District and the Trustee receives the opinion
of domestic counsel (which opinion shall be addressed to the Community Facilities
District and the Trustee) that such investment agreement is legal, valid, binding and
enforceable upon the provider in accordance with its terms and of foreign counsel (if
applicable) in form and substance acceptable, and addressed to, the Community'
Facilities District;
(E) the investment agreement shall provide that if during its term.
(1) the provider's rating by either S&P or Moody's falls below
"AA-" or "Aa3", respectively, the provider shall, at its option, within 10 days of
receipt of publication of such downgrade, either (i) collateralize the investment
agreement by delivering or transferring in accordance with applicable state and
federal laws (other than by means of entries on the provider's books) to the
Community Facilities District, the Trustee or a third party acting solely as agent
therefor (the "Holder of the Collateral") collateral free and clear of any third-party
9
liens or claims the market value of which collateral is maintained at levels and upon
such conditions as would be acceptable to S&P and Moody's to maintain an "A"
rating in an "A" rated structured financing (with a market value approach); or
(ii) repay the principal of and accrued but unpaid interest on the investment; and
(2) the provider's rating by either S&P or Moody's is withdrawn
or suspended or falls below "A-" or "A3", respectively, the provider must, at the
direction of the Community Facilities District or the Trustee, within 10 days of
receipt of such direction, repay the principal of and accrued but unpaid interest on the
investment, in either case with no penalty or premium to the Community Facilities
District or Trustee; and
(F) The investment agreement shall state and an opinion of counsel shall
be rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof(in the case of bearer securities, this
means the Holder of the Collateral is in possession); and
(G) the investment agreement must provide that if during its term
(1) the provider shall default in its payment obligations, the
provider's obligations under the investment agreement shall, at the direction of the
Community Facilities District or the Trustee, be accelerated and amounts invested
and accrued but unpaid interest thereon shall be repaid to the Community Facilities
District or Trustee, as appropriate, and
(2) the provider shall become insolvent, not pay its debts as they
become due, be declared or petition to be declared bankrupt, etc. ("event of
insolvency"), the provider's obligations shall automatically be accelerated and
amounts invested and accrued but unpaid interest thereon shall be repaid to the
Community Facilities District or Trustee, as appropriate.
(12) The State of California Local Agency Investment Fund; provided that the
Trustee may restrict investments in such Fund to the extent necessary to keep moneys
available for the purposes of this Indenture.
"Person" means an individual, corporation, limited liability company, firm, association,
partnership, trust, or other legal entity or group of entities, including a governmental entity or any
agency or political subdivision thereof
"Project" means the facilities authorized to be financed by the Community Facilities
District, as more particularly described in the Resolution of Formation.
"Rate and Method" means the rate and method of apportionment of the Special Taxes
approved by the qualified electors of the Community Facilities District.
"Rebate Fund" means the fund by that name established and held by the Trustee pursuant to
Section 5.06.
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"Rebate Requirement" has the meaning ascribed thereto in the Tax Certificate.
"Record Date" means the 15th calendar day of the month preceding each Interest Payment
Date, whether or not such day is a Business Day.
"Redemption Fund" means the fund by that name established and held by the Trustee
pursuant to Section 5.04.
"Redemption Price" means the aggregate amount of principal of and premium, if any, on
the Bonds upon the redemption thereof pursuant hereto.
"Registration Books" means the records maintained by the Trustee for the registration of
ownership and registration of transfer of the Bonds pursuant to Section 2.04.
"Reserve Fund" means the fund by that name established and held by the Trustee pursuant
to Section 5.05.
"Reserve Requirement" means, as of the date of any calculation, the least of(a) 10% of the
original aggregate principal amount of the Bonds (excluding Bonds refunded with the proceeds of
subsequently issued Bonds), (b) Maximum Annual Debt Service, and (c) 125% of Average Annual
Debt Service.
"Resolution of Formation" means Resolution No. 14-40, adopted by the City Council on
June 17, 2014, as originally adopted and as it may be amended or supplemented from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., a corporation duly organized and existing under the laws of the State of New York,
and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, then the term "S&P" shall be deemed to
refer to any other nationally recognized securities rating agency selected by the Community Facilities
District.
"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 Indenture as the Series 2014 Bonds,
and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate
Series of Bonds.
"Series 2014 Bonds" means the City of Tustin Community Facilities District No. 2014-1
(Tustin Legacy/Standard Pacific) Special Tax Bonds, Series 2014, issued hereunder.
"Special Tax Fund" means the fund by that name established and held by the Trustee
pursuant to Section 5.02.
"Special Tax Revenues" means the proceeds of the Special Taxes received by or on behalf
of the Community Facilities District, including any prepayments thereof, interest and penalties
thereon, proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of
the Special Taxes and proceeds of any security for payment of Special Taxes taken in lieu of
foreclosure after payment of administrative costs and attorneys' fees payable from proceeds of such
redemption, sale or security.
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"Special Taxes" means the special taxes described in the Rate and Method as "Special
Tax A" levied within the Community Facilities District pursuant to the Act, the Ordinance and this
Indenture.
"State"means the State of California.
"Supplemental Indenture" means any supplemental indenture amendatory of or
supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is
specifically authorized hereunder.
"Tax Certificate" means the Tax Certificate executed by the Community Facilities District
at the time of issuance of the Series 2014 Bonds to establish certain facts and expectations and which
contains certain covenants relevant to compliance with the Code, as originally executed and as it may
be amended from time to time in accordance with the terms thereof.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., a national banking
association organized and existing under the laws of the United States of America, or any successor
thereto as Trustee hereunder, substituted in its place as provided herein.
"Verification Report" means, with respect to the deemed payment of Bonds pursuant to
Section 10.02(a), a report of a nationally recognized certified public accountant, or firm of such
accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with
such deemed payment satisfy the requirements of Section 10.02(a).
"Webb" means Albert A. Webb Associates and any successors or assigns thereof under the
District Continuing Disclosure Agreement.
"Written Certificate" and "Written Request" of the Community Facilities District mean,
respectively, a written certificate or written request signed in the name of the Community Facilities
District by an 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 1.02 Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the
Community Facilities District, the Trustee and the Owners from time to time of all Bonds authorized,
executed, issued and delivered hereunder and then Outstanding to secure the full and final payment
of the principal of, premium, if any, and interest on all Bonds which may from time to time be
authorized, executed, issued and delivered hereunder, subject to the agreements, conditions,
covenants and provisions contained herein; and all agreements and covenants set forth herein to be
performed by or on behalf of the Community Facilities District shall be for the equal and
proportionate benefit, protection and security of all Owners of the Bonds without distinction,
preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the
number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or
for any cause whatsoever, except as expressly provided herein or therein.
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ARTICLE II
THE BONDS
Section 2.01 Authorization of Bonds.
(a) The Community Facilities District hereby authorizes the issuance of the
Bonds under and subject to the terms of this Indenture, the Act and other applicable laws of the State.
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 Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific) Special Tax Bonds,"each Series thereof to bear such additional designation
as may be necessary or appropriate to distinguish such Series from every other Series of Bonds.
(b) The Bonds shall be special obligations of the Community Facilities District,
payable, as provided herein, solely from Net Special Tax Revenues and the other assets pledged
therefor hereunder. Neither the faith and credit nor the taxing power of the Community Facilities
District (except to the limited extent set forth herein), the City or the State, or any political
subdivision thereof, is pledged to the payment of the Bonds.
Section 2.02 Terms of Series 2014 Bonds.
(a) The Series 2014 Bonds shall be designated "City of Tustin Community
Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) Special Tax Bonds, Series 2014."
The aggregate principal amount of Series 2014 Bonds that may be Outstanding under this Indenture
•
shall not exceed$ , except as may be otherwise provided in Section 2.08.
(b) The Series 2014 Bonds shall be issued in fully registered form without
coupons in denominations of$5,000 or any integral multiple thereof, so long as no Series 2014 Bond
shall have more than one maturity date. The Series 2014 Bonds shall be dated as of the Closing
Date, shall be issued in the aggregate principal amount of$ , shall mature
on September 1 of each year and shall bear interest (calculated on the basis of a 360-day year
comprised of twelve 30-day months) at the rates per annum as follows:
13
Maturity Date Principal Interest
(September I) Amount Rate
$
(c) Interest on the Series 2014 Bonds shall be payable from the Interest Payment
Date next preceding the date of authentication thereof unless (i) a Series 2014 Bond is authenticated
on or before an Interest Payment Date and after the close of business on the preceding Record Date,
in which event interest thereon shall be payable from such Interest Payment Date, (ii) a Series 2014
Bond is authenticated on or before the first Record Date, in which event interest thereon shall be
payable from the Closing Date, or(iii) interest on any Series 2014 Bond is in default as of the date of
authentication thereof, in which event interest thereon shall be payable from the date to which
interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the
United States on each Interest Payment Date. Interest shall be paid by check of the Trustee mailed
by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2014
Bonds at their respective addresses shown on the Registration Books as of the close of business on
the preceding Record Date, or by wire transfer at the written request of an Owner of not less than
$1,000,000 aggregate principal amount of Series 2014 Bonds, which written request is received by
the Trustee on or prior to the Record Date. Notwithstanding the foregoing, interest on any Series
2014 Bond which is not punctually paid or duly provided for on any Interest Payment Date shall, if
and to the extent that amounts subsequently become available therefor, be paid on a payment date
established by the Trustee to the Person in whose name the ownership of such Series 2014 Bond is
registered on the Registration Books at the close of business on a special record date to be established
by the Trustee for the payment of such defaulted interest, notice of which shall be given to such
Owner not less than ten days prior to such special record date.
(d) The principal of the Series 2014 Bonds shall be payable in lawful money of
the United States of America upon presentation and surrender thereof upon maturity or earlier
redemption at the Office of the Trustee.
(e) The Series 2014 Bonds shall be subject to redemption as provided in
Article IV.
14
•
(f) The Series 2014 Bonds shall be in substantially the form set forth in
Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or
required hereby.
Section 2.03 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 Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Community
Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Bond or
. Bonds of the same Series and maturity in a like aggregate principal amount, in any authorized
denomination. The Trustee shall require the 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 Trustee for a like aggregate principal
amount of Bonds of the same Series and maturity of other authorized denominations. The Trustee
shall require the payment by the Owner requesting such exchange of any tax or other governmental
charge required to be paid with respect to such exchange.
The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series
pursuant to this Section during the period established by the Trustee for the selection of Bonds of
such Series for redemption, or with respect to any Bonds of such Series selected for redemption.
Section 2.04 Registration Books. The Trustee shall keep or cause to be kept, at the Office
of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which
shall be open to inspection during regular business hours and upon reasonable notice by the
Community Facilities District; and, upon presentation for such purpose, the Trustee 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 2.05 Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the Community Facilities District with the manual or facsimile signature of the Mayor of the City
attested by the manual or facsimile signature of the City Clerk of the City. The Bonds shall then be
delivered to the Trustee for authentication by it. In case any of such officers of the City who shall
have signed or attested any of the Bonds shall cease to be such officers before the Bonds so signed or
attested shall have been authenticated or delivered by the Trustee, or issued by the Community
Facilities District, such Bonds may nevertheless be authenticated, delivered and issued and, upon
such authentication, delivery and issue, shall be as binding upon the Community Facilities District as
though those who signed and attested the same had continued to be such officers, and also any Bonds
may be signed and attested on behalf of the Community Facilities District 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 2.06 Authentication of Bonds. Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in the form as that set forth in Exhibit A hereto for the
Series 2014 Bonds, manually executed by the Trustee, shall be valid or obligatory for any purpose or
entitled to the benefits of this Indenture, and such certificate of the Trustee 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 Indenture.
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Section 2.07 Temporary Bonds. The Bonds of a Series may be issued in temporary form
exchangeable for definitive Bonds of such Series 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 Community Facilities District, shall be in fully registered form without coupons
and may contain such reference to any of the provisions of this Indenture as may be appropriate.
Every temporary Bond shall be executed by the Community Facilities District and authenticated by
the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds.
If the Community Facilities District issues temporary Bonds of a Series it shall execute and deliver
definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary
Bonds of such Series may be surrendered, for cancellation, at the Office of the Trustee and the
Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate
principal amount of definitive Bonds of such Series and maturities in authorized denominations.
Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under
this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.
Section 2.08 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Community Facilities District, at the expense of the Owner of said Bond, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity
in a like principal amount in exchange and substitution for the Bond so mutilated, but only upon
surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the
Trustee shall be canceled by it and delivered to, or upon the order of, the Community Facilities
District. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft
may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall
be given, the Community Facilities District, at the expense of the Owner, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a
like aggregate principal amount in lieu of and in replacement for the Bond so lost, destroyed or stolen
(or if any such Bond shall have matured or shall have been selected for redemption, instead of
issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The
Community Facilities District 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 Community Facilities District and the Trustee. Any Bond of a Series issued under
the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen
shall constitute an original additional contractual obligation on the part of the Community Facilities
District 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 Indenture with all other Bonds of such Series
secured by this Indenture.
Section 2.09 Book-Entry Bonds.
(a) Prior to the issuance of a Series of Bonds, the Community Facilities District
may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such
event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully-
registered Bond(which may be typewritten). Upon initial issuance, the ownership of each such Bond
of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee
of the Depository. The Series 2014 Bonds shall initially be issued as Book-Entry Bonds.
Payment of principal of, and interest and premium, if any, on, any Book-Entry Bond
registered in the name of the Nominee shall be made on the applicable 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
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account of the Nominee. Such payments shall be made to the Nominee at the address which is, on
the Record Date, shown for the Nominee in the Registration Books.
(b) With respect to Book-Entry Bonds, the Community Facilities District and the
Trustee 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 Community Facilities District and the Trustee 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 redemption, (iii) the
selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a
maturity to be redeemed in the event such Book-Entry 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, or 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 Community Facilities District and the Trustee 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, and 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
Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for
the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes
whatsoever, and the Community Facilities District and the Trustee shall not be affected by any notice
to the contrary.
(d) In the event of a redemption of all or a portion of a Book-Entry Bond, the
Depository, in its discretion(i) may request the Trustee to authenticate and deliver a new Book-Entry
Bond, or(ii) if the Depository is the sole Owner of such Book-Entry Bond, shall make an appropriate
notation on the Book-Entry Bond indicating the date and amounts of the reduction in principal
thereof resulting from such redemption, except in the case of final payment, in which case such
Book-Entry Bond must be presented to the Trustee prior to payment.
(e) The Trustee shall pay all principal of, and premium, if any, and interest on the
Book Entry 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 such
Owner's respective attorney duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the obligations with respect to payment of principal of, and
premium, if any, and interest on the Book-Entry 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 an authenticated
Book-Entry Bond. Upon delivery by the Depository to the Owners, the Community Facilities
District and the Trustee 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.
(0 In order to qualify the Book-Entry Bonds for the Depository's book-entry
system, the Community Facilities District 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
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impose upon the Community Facilities District or the Trustee 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 Community Facilities District, the Community Facilities District and the
Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary
to qualify Book-Entry Bonds for the Depository's book-entry program.
(g) In the event the Community Facilities District determines that it is in the best
interests 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 and the Trustee of such
determination, the Depository will notify the Participants of the availability through the Depository
of certificated Bonds. In such event, the Trustee 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 Trustee of such determination, then
the Community Facilities District shall discontinue the Book-Entry system with the Depository. If
the Community Facilities District determines to replace the Depository with another qualified
securities depository, the Community Facilities District shall prepare or direct the preparation of a
new single, separate, fully-registered Bond of the appropriate Series 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 Community Facilities District fails to identify another qualified
securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be
restricted to being registered in the Registration Books 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 2.03, 2.07 and 2.08. Whenever the
Depository requests the Community Facilities District to do so, the Community Facilities District
shall cooperate with the Depository in taking appropriate action after reasonable notice (i)to make
available one or more separate certificates 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 certificates evidencing the Book-Entry Bonds.
(h) Notwithstanding any other provision of this Indenture to the contrary, if the
Depository is the sole Owner of the Bonds of a Series, so long as any Book-Entry Bond of such
Series is registered in the name of the Nominee, all payments of principal of, and premium, if any,
and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be
made and given, respectively, as provided in the Letter of Representations or as otherwise instructed
by the Depository.
(i) In connection with any notice or other communication to be provided to
Owners pursuant to this Indenture by the Community Facilities District or the Trustee, with respect
to any consent or other action to be taken by Owners of Book-Entry Bonds, the Trustee 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.
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ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01 Issuance of Series 2014 Bonds. The Community Facilities District shall, on
or before the Closing Date, execute the Series 2014 Bonds and deliver the same to the Trustee. The
Trustee shall, on the Closing Date, authenticate the Series 2014 Bonds and deliver the Series 2014
Bonds to the Original Purchaser upon receipt of a Written Request of the Community Facilities
District and upon receipt of the purchase price therefor.
Section 3.02 Application of Proceeds of the Series 2014 Bonds. On the Closing Date,
the proceeds of the sale of the Series 2014 Bonds received by the Trustee, $ , shall be
deposited by the Trustee as follows:
(a) the Trustee shall deposit the amount of $ in the Reserve Fund,
which is equal to the Reserve Requirement;
(b) the Trustee shall deposit the amount of$ in the Costs of Issuance
Fund;
(c) the Trustee shall deposit the amount of $ in the Improvement
Fund;
(d) the Trustee shall transfer $ to the Community Facilities District
for deposit in the Administrative Expenses Fund; and
(e) the Trustee shall deposit the amount of $ in the Capitalized
Interest Account of the Bond Fund.
Section 3.03 Costs of Issuance Fund. The Trustee shall establish and maintain a separate
fund designated the "Costs of Issuance Fund." On the Closing Date, the Trustee shall deposit in the
Costs of Issuance Fund the amount required to be deposited therein pursuant to Section 3.02.
The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from
time to time to pay the Costs of Issuance upon submission of a Written Request of the Community
Facilities District 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 the date that is six months after the Closing Date, the Trustee
shall (i) if the Improvement Fund has not been closed in accordance with Section 3.04(c), transfer
from the Costs of Issuance Fund to the Improvement Fund the amount remaining on deposit in the
Costs of Issuance Fund on such date, and(ii) if the Improvement Fund has been closed in accordance
with Section 3.04(c), transfer from the Costs of Issuance Fund to the Bond Fund the amount
remaining on deposit in the Costs of Issuance Fund on such date. Upon making such transfer or
transfers, as the case may be, the Costs of Issuance Fund shall be closed.
If the Costs of Issuance Fund has been closed in accordance with the provisions hereof, such
Fund shall be reopened and reestablished by the Trustee in connection with the issuance of any
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Additional Bonds, if so provided in the Supplemental Indenture pursuant to which such Additional
Bonds are issued. There shall be deposited in the Cost of Issuance Fund the portion, if any, of the
proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental
Indenture pursuant to which such Additional Bonds are issued.
Section 3.04 Improvement Fund.
(a) The Trustee shall establish and maintain a separate fund designated the
"Improvement Fund." On the Closing Date, the Trustee shall deposit in the Improvement Fund the
amount required to be deposited therein pursuant to Section 3.02.
(b) The moneys in the Improvement Fund shall be used and withdrawn by the
Trustee from time to time to pay the costs of the Project upon submission to the Trustee of a Written
Request of the Community Facilities District in substantially the form attached as Exhibit B hereto
stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for
which the obligation was incurred, (iv) that such payment constitutes a cost of the Project and is a
proper charge against the Improvement Fund, and (v) that such amounts have not been the subject of
a prior disbursement from the Improvement Fund, together with a statement or invoice for each
amount requested thereunder.
(c) Upon the filing of a Written Certificate of the Community Facilities District
stating (i) that the portion of the Project to be financed from the Improvement Fund has been
completed and that all costs of such Project have been paid, or(ii) that such portion of the Project has
been substantially completed and that all remaining costs of such portion of the Project have been
determined and specifying the amount to be retained therefor, the Community Facilities District shall
direct the Trustee in a Written Certificate of the Community Facilities District to transfer the
remaining proceeds (less any retention) to (i) the Redemption Fund to redeem Bonds in accordance
with Section 4.01(a) hereof, (ii) the Bond Fund to pay the principal of and interest on the Bonds, or
(iii) the Community Facilities District for any other lawful purpose, provided that the Trustee receive
an opinion of Bond Counsel that such use of the remaining proceeds in the Improvement Fund, in
and of itself, will not adversely affect the exclusion of interest on the Bonds from gross income for
federal income tax purposes. Upon making such transfer or transfers, as the case may be, the
Improvement Fund shall be closed.
Section 3.05 Conditions for the Issuance of Additional Bonds. The Community
Facilities District may at any time issue one or more Series of Additional Bonds (in addition to the
Series 2014 Bonds) payable from Net Special Tax Revenues as provided herein on a parity with all
other Bonds theretofore issued hereunder, but only subject to the following conditions, which are
hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of such Additional Bonds shall have been authorized under and
pursuant to the Act and under and pursuant hereto and shall have been provided for by a
Supplemental Indenture which shall specify the following:
(i) The purposes for which the proceeds of such Additional Bonds are to
be applied, which purposes may only include one or more of (A)providing funds to refund any
Bonds issued hereunder, (B) providing funds to pay Costs of Issuance incurred in connection with
the issuance of such Additional Bonds, and (C) providing funds to make any deposit to the Reserve
Fund required pursuant to paragraph(vi) below;
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(ii) The principal amount and designation of such Series of Additional
Bonds and the denomination or denominations of the Additional Bonds;
(iii) The date, the maturity date or dates, the interest payment dates and
the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional
Bonds; provided, that (A) the serial Bonds of such Series of Additional Bonds shall be payable as to
principal annually on September 1 of each year in which principal falls due, and the term Bonds of
such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on
September 1, (B) the Additional Bonds shall be payable as to interest semiannually on March 1 and
September 1 of each year, except that the first installment of interest may be payable on either
March 1 or September 1 and shall be for a period of not longer than twelve months and the interest
shall be payable thereafter semiannually on March 1 and September 1, (C) all Additional Bonds of a
Series of like maturity shall be identical in all respects, except as to number or denomination, and
(D) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any
combination thereof, shall be established to provide for the redemption or payment of such
Additional Bonds on or before their respective maturity dates;
(iv) The redemption premiums and terms, if any, for such Additional
Bonds;
(v) The form of such Additional Bonds;
(vi) The amount, if any, to be deposited from the proceeds of sale of such
Additional Bonds in the Reserve Fund; provided, that the amount on deposit in the Reserve Fund at
the time that such Additional Bonds become Outstanding shall be at least equal to the Reserve
Requirement; and
(vii) Such other provisions that are appropriate or necessary and are not
inconsistent with the provisions hereof;
(b) Upon the issuance of such Additional Bonds, no Event of Default shall have
occurred and be continuing hereunder; and
(c) Annual Debt Service in each Bond Year, calculated for all Bonds to be
Outstanding after the issuance of such Additional Bonds, shall be less than or equal to Annual Debt
Service in such Bond Year, calculated for all Bonds Outstanding immediately prior to the issuance of
such Additional Bonds.
Nothing contained herein shall limit the issuance of any special tax bonds payable from
Special Taxes if, after the issuance and delivery of such special tax bonds, none of the Bonds
theretofore issued hereunder will be Outstanding.
Section 3.06 Procedure for the Issuance of Additional Bonds. At any time after the sale
of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the
Community Facilities District and shall be delivered to the Trustee and thereupon shall be
authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) A certified copy of the Supplemental Indenture authorizing the issuance of
such Additional Bonds;
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(b) A Written Request of the Community Facilities District as to the delivery of
such Additional Bonds;
(c) A Written Certificate of the Community Facilities District stating that the
conditions precedent to the issuance of such Additional Bonds specified in Section 3.05 have been
satisfied;
(d) An opinion of Bond Counsel substantially to the effect that (i) the
Supplemental Indenture has been duly authorized, executed and delivered by, and constitutes the
valid and binding obligation of, the Community Facilities District, enforceable in accordance with its
terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors rights and by the application of equitable principles and by
the exercise ofjudicial discretion in appropriate cases and subject to the limitations on legal remedies
against political subdivisions in the State of California), (ii) such Additional Bonds constitute valid
and binding special obligations of the Community Facilities District payable solely from Net Special
Tax Revenues and amounts in funds and accounts under this Indenture as provided herein and are
enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors rights and by the
application of equitable principles and by the exercise ofjudicial discretion in appropriate cases and
subject to the limitations'on legal remedies against political subdivisions in the State), and (iii)the
issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest
on the Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for
federal income tax purposes;
(e) The proceeds of the sale of such Additional Bonds; and
(f) Such further documents or money as are required by the provisions hereof or
by the provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.
Section 3.07 Additional Bonds. So long as any of the Bonds remain Outstanding, the
Community Facilities District shall not issue any Additional Bonds or obligations payable from Net
Special Tax Revenues on a parity with the Bonds, except pursuant to Sections 3.05 and 3.06. So
long as any of the Bonds remain Outstanding, the Community Facilities District shall not issue any
obligations payable from Net Special Tax Revenues on a basis senior to the Bonds.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2014 Bonds.
(a) Optional Redemption. The Series 2014 Bonds maturing on or after
September 1, 2025 are subject to optional redemption, in whole or in part, on any Interest Payment
Date on or after September 1, 2024, from any source of available funds, at a Redemption Price equal
to the principal amount of the Series 2014 Bonds to be redeemed, plus accrued interest thereon to the
date of redemption, without premium.
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The Community Facilities District shall give the Trustee written notice of its
intention to redeem Series 2014 Bonds pursuant to this subsection not less than 45 days prior to the
applicable redemption date, unless such notice shall be waived by the Trustee.
(b) Mandatory Redemption from Special Tax Prepayments. The Series 2014
Bonds are subject to mandatory redemption, in whole or in part, on any Interest Payment Date on or
after March 1, 2015, from and to the extent of any prepaid Special Taxes deposited in the
Redemption Fund and corresponding transfers from the Reserve Fund, at the following respective
Redemption Prices (expressed as percentages of the principal amount of the Series 2014 Bonds to be
redeemed), plus accrued interest thereon to the date of redemption:
Redemption
Redemption Dates Price
March 1, 2015 through March 1, 2022 103%
September 1, 2022 and March 1, 2023 102
September 1, 2023 and March 1, 2024 101
September 1, 2024 and any Interest Payment Date thereafter 100
(c) Mandatory Sinking Fund Redemption. The Series 2014 Bonds maturing
September 1, 20_shall be subject to mandatory sinking fund redemption, in part, on September 1 in
each year, commencing September 1, 20 , at a Redemption Price equal to the principal amount of
the Series 2014 Bonds to be redeemed, without premium, plus accrued interest thereon to the date of
redemption, in the aggregate respective principal amounts in the respective years as follows:
Sinking Fund Redemption Principal Amount to
Date (September 1) be Redeemed
•
$
If some but not all of the Series 2014 Bonds maturing on September 1, 20_ are redeemed
pursuant to Section 4.01(a), the principal amount of Series 2014 Bonds maturing on September 1,
20 to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced, by
$5,000 or an integral multiple thereof, as designated by the Community Facilities District in a
Written Certificate of the Community Facilities District filed with the Trustee; provided, however,
that the aggregate amount of such reductions shall not exceed the aggregate amount of Series 2014
Bonds maturing on September 1, 20_ redeemed pursuant to Section 4.01(a). If some but not all of
the Series 2014 Bonds maturing on September 1, 20_are redeemed pursuant to Section 4.01(b), the
principal amount of Series 2014 Bonds maturing on September 1, 20_ to be redeemed pursuant to
Section 4.01(c) on any subsequent September 1 shall be reduced by the aggregate principal amount
of the Series 2014 Bonds maturing on September 1, 20_ so redeemed pursuant to Section 4.01(b),
such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis in
amounts of $5,000 or integral multiples thereof, as determined by the Trustee, notice of which
determination shall be given by the Trustee to the Community Facilities District.
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Section 4.02 Notice of Redemption. The Trustee on behalf and at the expense of the
Community Facilities District 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 to the Original Purchaser 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, if any, the Bond
numbers and the maturity or maturities of the Bonds to be redeemed (except in the event of
redemption of all of the Bonds of such maturity or maturities in whole), and shall require that such
Bonds be then surrendered at the Office of the Trustee 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 validity 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. With respect to any notice of any
optional redemption of Bonds, unless at the time such notice is given the Bonds to be redeemed shall
be deemed to have been paid as provided in Section 10.02, such notice shall state that such
redemption is conditional upon receipt by the Trustee, on or prior to the date fixed for such
redemption, of moneys that, together with other available amounts held by the Trustee, are sufficient
to pay the Redemption Price of, and accrued interest on, the Bonds to be redeemed, and that if such
moneys shall not have been so received said notice shall be of no force and effect and the
Community Facilities District shall not be required to redeem such Bonds. In the event a notice of
redemption of Bonds contains such a condition and such moneys are not so received, the redemption
of Bonds as described in the conditional notice of redemption shall not be made and the Trustee
shall, within a reasonable time after the date on which such redemption was to occur, give notice to
the Persons and in the manner in which the notice of redemption was given, that such moneys were
not so received and that there shall be no redemption of Bonds pursuant to such notice of redemption.
Section 4.03 Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be
redeemed from all Bonds not previously called for redemption (a) with respect to any optional
redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written
Request of the Community Facilities District, (b) with respect to any redemption pursuant to
Section 4.01(b) and the corresponding provision of any Supplemental Indenture pursuant to which
Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as
practicable, and (c)with respect to any other redemption of Additional Bonds, among maturities as
provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by
lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its
sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to
be comprised of separate $5,000 denominations and such separate denominations shall be treated as
separate Bonds which may be separately redeemed.
Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in
part only, the Community Facilities District shall execute and the Trustee shall authenticate and
deliver to the Owner thereof, at the expense of the Community Facilities District, a new Bond or
Bonds of the same Series in authorized denominations equal in aggregate principal amount
representing the unredeemed portion of the Bonds surrendered.
Section 4.05 Effect of Notice of Redemption. Notice having been mailed as aforesaid,
and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption,
having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date,
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and, upon presentation and surrender thereof at the Office of the Trustee, 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 Price of all the Bonds to be
redeemed, together with interest to said date, shall be held by the Trustee 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 accrue and become
payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in
trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners
for interest thereon.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof
shall be canceled by the Trustee upon surrender thereof and destroyed by the Trustee.
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge. Subject only to the provisions of this Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth herein, in order to
secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with
their terms, the provisions of this Indenture and the Act, the Community Facilities District hereby
pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special
Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve
Fund. Said pledge shall constitute a first lien on and security interest in such assets, which shall
immediately attach to such assets and be effective, binding and enforceable against the Community
Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting
rights therein, to the extent set forth in, and in accordance with, this Indenture, irrespective of
whether those parties have notice of the pledge of, lien on and security interest in such assets and
without the need for any physical delivery, recordation, filing or further act.
Section 5.02 Special Tax Fund.
(a) The Trustee shall establish and maintain a separate fund designated the
"Special Tax Fund." As soon as practicable after the receipt by the Community Facilities District of
any Special Tax Revenues, the Community Facilities District shall transfer such Special Tax
Revenues to the Trustee for deposit in the Special Tax Fund; provided, however, that with respect to
any such Special Tax Revenues that represent prepaid Special Taxes that are to be applied to the
redemption of Bonds in accordance with the provisions hereof, said prepaid Special Taxes shall be
identified as such in a Written Certificate of the Community Facilities District delivered to the
Trustee at the time such prepaid Special Taxes are transferred to the Trustee, the portion of such
prepaid Special Taxes to be applied to the Redemption Price of the Bonds to be so redeemed shall be
identified in such Written Certificate of the Community Facilities District and shall be deposited by
the Trustee in the Redemption Fund and the portion of such prepaid Special Taxes to be applied to
the payment of interest on the Bonds to be so redeemed shall be identified in such Written Certificate
of the Community Facilities District and shall be deposited by the Trustee in the Bond Fund.
(b) . Upon receipt of a Written Request of the Community Facilities District, the
Trustee shall withdraw from the Special Tax Fund and transfer to the Community Facilities District
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for deposit in the Administrative Expense Fund the amount specified in such Written Request of the
Community Facilities District as the amount necessary to be transferred thereto in order to have
sufficient amounts available therein to pay Administrative Expenses and Extraordinary
Administrative Expenses, in the event there are Extraordinary Administrative Expenses; provided,
however, that, the total amount transferred in a Fiscal Year, commencing with the 2015-16 Fiscal
Year, shall not exceed the Administrative Expenses Cap (plus Extraordinary Administrative
Expenses in the event there are Extraordinary Administrative Expenses) until such time as there has
been deposited to the Bond Fund an amount, together with any amounts already on deposit therein,
that is sufficient to pay the interest and principal on and mandatory sinking fund payments of all
Bonds due in such Bond Year and to restore the Reserve Fund to the Reserve Requirement.
On the Business Day immediately preceding each Interest Payment Date, after having made
any requested transfer to the Community Facilities District for deposit in the Administrative Expense
Fund, the Trustee shall withdraw from the Special Tax Fund and transfer, first, to the Bond Fund, Net
Special Tax Revenues in the amount, if any, necessary to cause the amount on deposit in the Bond
Fund to be equal to the principal and interest due on the Bonds on such Interest Payment Date, and,
second, to the Reserve Fund,Net Special Tax Revenues in the amount, if any, necessary to cause the
amount on deposit in the Reserve Fund to be equal to the Reserve Requirement.
Section 5.03 Bond Fund. The Trustee shall establish and maintain a separate fund
designated the "Bond Fund" and a separate account designated the "Capitalized Interest Account"
therein. On the Closing Date, the Trustee shall deposit in the Bond Fund and the Capitalized Interest
Account therein the amounts required to be deposited therein pursuant to Section 3.02. The Trustee
shall deposit in the Bond Fund from time to time the amounts required to be deposited therein
pursuant to Section 5.02. There shall additionally be deposited in the Bond Fund the portion, if any,
of the proceeds of the sale of Additional Bonds required to be deposited therein under the
Supplemental Indenture pursuant to which such Additional Bonds are issued.
On each Interest Payment Date, the Trustee shall withdraw from the Bond Fund for payment
to the Owners of the Bonds the principal, if any, of and interest on the Bonds then due and payable,
including principal due and payable by reason of mandatory sinking fund redemption of such Bonds.
In the event that, on the Business Day prior to an Interest Payment Date, amounts in the Bond
Fund are insufficient to pay the principal, if any, of and interest on the Bonds due and payable on
such Interest Payment Date, including principal due and payable by reason of mandatory sinking
fund redemption of such Bonds, the Trustee shall withdraw from the Reserve Fund, to the extent of
any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to
the Bond Fund.
The Trustee shall transfer from the Capitalized Interest Account to the Bond Fund the
following amounts on the following dates:
$ on March 1, 2015;
$ on September 1, 2015;
$ on March 1, 2016;
$ on September 1, 2016;
•
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$ on March 1, 2017;
$ on September 1, 2017;
$ on March 1, 2018; and
on September 1, 2018, the remaining balance in the Capitalized Interest Account, at which time the
Capitalized Interest Account shall be closed.
Section 5.04 Redemption Fund.
(a) The Trustee shall establish and maintain a special fund designated the
"Redemption Fund." As soon as practicable after the receipt by the Community Facilities District of
prepaid Special Taxes, but in any event not later than ten Business Days after such receipt, the
Community Facilities District shall transfer the portion of such prepaid Special Taxes to be applied to
the Redemption Price of the Bonds to be redeemed from such prepaid Special Taxes to the Trustee
for deposit in the Redemption Fund. Additionally, the Trustee shall deposit in the Redemption Fund
amounts received from the Community Facilities District in connection with the Community
Facilities District's exercise of its rights to optionally redeem Series 2014 Bonds pursuant to
Section 4.01(a) and any other amounts required to be deposited therein pursuant to Section 5.05 or
pursuant to any Supplemental Indenture.
(b) Amounts in the Redemption Fund shall be disbursed therefrom for the
payment of the Redemption Price of Series 2014 Bonds redeemed pursuant to Section 4.01(a) or
Section 4.01(b) and to pay the Redemption Price of Additional Bonds redeemed under the
Supplemental Indenture pursuant to which such Additional Bonds are issued.
(c) In lieu of the optional redemption of Bonds otherwise to be redeemed
pursuant hereto from amounts on deposit in the Redemption Fund, amounts on deposit in the
Redemption Fund may, no later than 45 days prior to the date on which such Bonds are to be so
redeemed, be used and withdrawn by the Trustee, upon the Written Request of the Community
Facilities District, for the purchase of such Bonds at public or private sale at a purchase price
(including brokerage and other charges, but excluding accrued interest, which is payable from the
Bond Fund) that shall not exceed the Redemption Price of such Bonds.
Section 5.05 Reserve Fund.
(a) The Trustee shall establish and maintain a special fund designated the
"Reserve Fund." On the Closing Date, the Trustee shall deposit in the Reserve Fund the amount
required to be deposited therein pursuant to Section 3.02. The Trustee shall deposit in the Reserve
Fund from time to time the amounts required to be deposited therein pursuant to Section 5.02(b).
There shall additionally be deposited in the Reserve Fund, in connection with the issuance of
Additional Bonds, the amount required to be deposited therein under the Supplemental Indenture
pursuant to which such Additional Bonds are issued.
(b) Except as otherwise provided in this Section, all amounts deposited in the
Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of (i) making
transfers to the Bond Fund in accordance with Section 5.03 in the event of any deficiency at any time
in the Bond Fund of the amount then required for payment of the principal of and interest on the
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Bonds, (ii) redeeming Bonds in accordance with the provisions of this Section, and (iii) making any
required transfer to the Rebate Fund pursuant to Section 5.6 hereof.
(c) Whenever Bonds are to be redeemed pursuant to Section 4.01(a) or
Section 4.01(b) or the corresponding provisions of a Supplemental Indenture, a proportionate share,
determined as provided below, of the amount on deposit in the Reserve Fund shall, on the date on
which amounts to redeem such Bonds are deposited in the Redemption Fund or otherwise deposited
with the Trustee pursuant to Section 10.02, be transferred by the Trustee from the Reserve Fund to
the Redemption Fund or to such deposit held by the Trustee and shall be applied to the redemption of
said Bonds; provided, however, that such amount shall be so transferred only if and to the extent that
the amount remaining on deposit in the Reserve Fund will be at least equal to the Reserve
Requirement (excluding from the calculation thereof said Bonds to be redeemed). Such
proportionate share shall be equal to the largest integral multiple of$5,000 that is not larger than the
amount equal to the product of(a) the amount on deposit in the Reserve Fund on the date of such
transfer, times (b) a fraction, the numerator of which is the principal amount of Bonds to be so
redeemed and the denominator of which is the principal amount of Bonds to be Outstanding on the
day prior to the date on which such Bonds are to be so redeemed.
(d) Whenever the balance in the Reserve Fund exceeds the amount required to
redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or
redemption and premium, if any, due upon redemption, the Trustee shall, upon receipt of a Written
Request of the Community Facilities District, transfer the amount in the Reserve Fund to the Bond
Fund or Redemption Fund, as applicable, to be applied, on the next succeeding Interest Payment
Date to the payment and redemption of all of the Outstanding Bonds.
(e) If as a result of the scheduled payment of principal of or interest on the
Outstanding Bonds, the Reserve Requirement is reduced, the Trustee shall transfer to the Bond Fund
an amount equal to the amount by which the amount on deposit in the Reserve Fund exceeds such
reduced Reserve Requirement.
Section 5.06 Rebate Fund.
(a) The Trustee shall establish and maintain a special fund designated the
"Rebate Fund." There shall be transferred from the Reserve Fund and deposited in the Rebate Fund
such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a
Written Request of the Community Facilities District. All money at any time deposited in the Rebate
Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement,
for payment to the United States of America. Moneys deposited in the Rebate Fund are not pledged
to the repayment of the Bonds. Notwithstanding defeasance of the Bonds pursuant to Article X
hereof or anything to the contrary contained herein, all amounts required to be deposited into or on
deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate
(which is incorporated herein by reference). The Trustee shall be deemed conclusively to have
complied with such provisions if it follows the written directions of the Community Facilities
District, and shall have no liability or responsibility to enforce compliance by the Community
Facilities District with the terms of the Tax Certificate. The Trustee may conclusively rely upon the
Community Facilities District's.determinations, calculations and certifications required by the Tax
Certificate. The Trustee shall have no responsibility to independently make any calculation or
determination or to review the Community Facilities District's calculations.
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(b) Any funds remaining in the Rebate Fund after payment in full of all of the
Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee
of a Written Request of the Community Facilities District, be withdrawn by the Trustee and remitted
to the Community Facilities District.
Section 5.07 Administrative Expense Fund. The Community Facilities District shall
establish and maintain a special fund designated the "Administrative Expense Fund." The
Community Facilities District shall deposit in the Administrative Expense Fund the amounts
transferred thereto from the Trustee from the Special Tax Fund and required to be deposited therein
pursuant to Section 5.02. The moneys in the Administrative Expense Fund shall be used and
withdrawn by the Community Facilities District from time to time to pay Administrative Expenses.
Section 5.08 Investment of Moneys.
(a) Except as otherwise provided herein, all moneys in any of the funds or
accounts established pursuant to this Indenture and held by the Trustee shall be invested by the
Trustee solely in Permitted Investments, as directed in writing by the Community Facilities District
two Business Days prior to the making of such investment. Moneys in all funds and accounts held
by the Trustee 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 Indenture; provided,
however, that Permitted Investments in which moneys in the Reserve Fund are so invested shall
mature no later than the earlier of five years from the date of investment or the final maturity date of
the Bonds; provided, further, that if such Permitted Investments may be redeemed at par so as to be
available on each Interest Payment Date, any amount in the Reserve Fund may be invested in such
redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the
Bonds. Absent timely written direction from the Community Facilities District, the Trustee shall
invest any funds held by it in Permitted Investments described in paragraph (7) of the definition
thereof.
(b) Subject to the provisions of Section 6.08(b), all interest, profits and other
income received from the investment of moneys in any fund or account established pursuant to this
Indenture (other than the Reserve Fund) shall be retained therein. Subject to the provisions of
Section 6.08(b), all interest, profits or other income received from the investment of moneys in the
Reserve Fund shall, prior to the date on which a Written Certificate of the Community Facilities
District is delivered to the Trustee pursuant to Section 3.04(c), be transferred to the Improvement
Fund and, thereafter, shall be deposited in the Bond Fund; provided, however, that, notwithstanding
the foregoing, any such transfer shall be made only if and to the extent that, after such transfer, the
amount on deposit in the Reserve Fund is at least equal to the Reserve Requirement.
(c) Permitted Investments acquired as an investment of moneys in any fund or
account established under this Indenture shall be credited to such fund or account. For the purpose of
determining the amount in any fund or account, all Permitted Investments credited to such fund shall
be valued by the Trustee at the market value thereof, such valuation to be performed not less
frequently than semiannually on or before each February 15 and August 15.
(d) The Trustee may act as principal or agent in the making or disposing of any
investment. Upon the Written Request of the Community Facilities District, the Trustee 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 to
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which such Permitted Investments are credited, and the Trustee 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 Trustee may commingle moneys in any of the funds and accounts established
hereunder.
(e) The Community Facilities District acknowledges that to the extent regulations
of the Comptroller of the Currency or other applicable regulatory entity grant the Community
Facilities District the right to receive brokerage confirmations of security transactions as they occur,
the Community Facilities District specifically waives receipt of such confirmations to the extent
permitted by law. The Trustee will furnish the Community Facilities District periodic cash
transaction statements which include detail for all investment transactions made by the Trustee
hereunder.
ARTICLE VI
COVENANTS
Section 6.01 Collection of Special Tax Revenues.
(a) The Community Facilities District shall comply with all requirements of the
Act, the Ordinance and this Indenture so as to assure the timely collection of Special Tax Revenues,
including without limitation, the enforcement of delinquent Special Taxes.
(b) Prior to August 1 of each year, the Community Facilities District shall
ascertain from the Orange County Assessor the relevant parcels on which the Special Taxes are to be
levied, taking into account any parcel splits during the preceding and then current year. The
Community Facilities District shall effect the levy of the Special Taxes each Fiscal Year in
accordance with the Ordinance by each August 10 that the Bonds are Outstanding, or otherwise such
that the computation of the levy is complete before the final date on which the Auditor will accept
the transmission of the Special Tax amounts for the parcels within the Community Facilities District
for inclusion on the next real property tax roll. Upon the completion of the computation of the
amounts of the levy, the Community Facilities District shall prepare or cause to be prepared, and
shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special
Taxes on the next real property tax roll.
(c) The Community Facilities District shall fix and levy the amount of Special
Taxes within the Community Facilities District each Fiscal Year in accordance with the Rate and
Method and, subject to the limitations in the Rate and Method as to the maximum Special Tax that
may be levied, in an amount sufficient to yield Special Tax Revenues in the amount required for
(a) the payment of principal of and interest on any Outstanding Bonds becoming due and payable
during the Bond Year commencing in such Fiscal Year, (b) any necessary replenishment of the
Reserve Fund, and (c) the payment of Administrative Expenses estimated to be required to be paid
from such Special Tax Revenues, taking into account the balances in the funds and accounts
established hereunder.
(d) The Special Taxes shall be payable and be collected in the same manner and
at the same time and in the same installment 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
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and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes
on real property.
Section 6.02 Foreclosure. Pursuant to Section 53356.1 of the Act, the Community
Facilities District hereby covenants with and for the benefit of the Owners that it will commence
appropriate judicial foreclosure proceedings against parcels with total Special Tax delinquencies in
excess of$7,500 (not including interest and penalties thereon) by the October 1 following the close
of each Fiscal Year in which the last of such Special Taxes were due and will commence appropriate
judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1
following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less
than 95% of the total Special Taxes levied in such Fiscal Year, and diligently pursue to completion
such foreclosure proceedings; provided, however, that, notwithstanding the foregoing, the
Community Facilities District may elect to accept payment from a property owner of at least the
enrolled amount but less than the full amount of the penalties, interest, costs and attorneys' fees
related to a Special Tax delinquency, if permitted by law. Notwithstanding the foregoing, in certain
instances the amount of a Special Tax delinquency on a particular parcel is so small that the cost of
appropriate foreclosure proceedings will far exceed the Special Tax delinquency and in such cases
foreclosure proceedings may be delayed by the Community Facilities District until there are
sufficient Special Tax delinquencies accruing to such parcel (including interest and penalties thereon)
to warrant the foreclosure proceedings cost.
Section 6.03 Punctual Payment. The Community Facilities District 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 terms of the Bonds and of this Indenture, according to the true
intent and meaning thereof, but only out of Net Special Tax Revenues and other assets pledged for
such payment as provided in this Indenture and received by the Community Facilities District or the
Trustee.
Section 6.04 Extension of Payment of Bonds. The Community Facilities District 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 Indenture, 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 Community
Facilities District 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 6.05 Against Encumbrances. The Community Facilities District shall not create,
or permit the creation of, any pledge, lien, charge or other encumbrance upon the Special Tax
Revenues and other assets pledged under this Indenture while any of the Bonds are Outstanding,
except as permitted by this Indenture.
Section 6.06 Power to Issue Bonds and Make Pledge. The Community Facilities District
is duly authorized pursuant to the Act to issue the Bonds and to enter into this Indenture and to
pledge the Net Special Tax Revenues and other assets pledged under this Indenture in the manner
and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and
will be the legal, valid and binding special obligations of the Community Facilities District in
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accordance with their terms, and the Community Facilities District and the Trustee (subject to the
provisions of Article VIII) shall at all times, to the extent permitted by law, defend, preserve and
protect said pledge of Net Special Tax Revenues and other assets and all the rights of the Owners
under this Indenture against all claims and demands of all Persons whomsoever.
Section 6.07 Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
prudent corporate trust industry standards, in which accurate entries shall be made of all transactions
made by it relating to the proceeds of the Bonds, the Special Tax Revenues and all funds and
accounts established by it pursuant to this Indenture. Such books of record and account shall be
available for inspection by the Community Facilities District, during regular business hours and upon
reasonable notice and under reasonable circumstances as agreed to by the Trustee. The Trustee shall
deliver to the Community Facilities District a monthly accounting of the funds and accounts it holds
under this Indenture; provided, however, that the Trustee shall not be obligated to deliver an
accounting for any fund or account that (a) has a balance of zero, and (b) has not had any activity
since the last reporting date.
Section 6.08 Tax Covenants.
(a) The Community Facilities District shall not take any action, or fail to take any
action, if such action or failure to take such action would adversely affect the exclusion from gross
income of interest on the Series 2014 Bonds under Section 103 of the Code. Without limiting the
generality of the foregoing, the Community Facilities District shall comply with the requirements of
the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall
survive payment in full or defeasance of the Series 2014 Bonds.
(b) In the event that at any time the Community Facilities District is of the
opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the
investment of any moneys held by the Trustee in any of the funds or accounts established hereunder,
the Community Facilities District shall so instruct the Trustee in writing, and the Trustee shall take
such action as may be necessary in accordance with such instructions.
(c) Notwithstanding any provisions of this Section, if the Community Facilities
District shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified
action required under this Section is no longer required or that some further or different action is
required to maintain the exclusion from federal income tax of interest on the Series 2014 Bonds, the
Trustee may conclusively rely on such opinion in complying with the requirements of this Section
and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.
Section 6.09 Continuing Disclosure. The Community Facilities District shall comply
with and carry out all of the provisions of the District Continuing Disclosure Agreement.
Notwithstanding any other provision of this Indenture, failure of the Community Facilities District to
comply with the District Continuing Disclosure Agreement shall not be considered an Event of
Default; provided, however, that the Trustee may (and, at the written direction of any Participating
Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Series 2014
Bonds, and upon indemnification of the Trustee to its reasonable satisfaction, shall) or any Owner or
beneficial owner of the Series 2014 Bonds may, take such actions as may be necessary and
appropriate to compel performance, including seeking mandate or specific performance by court
order.
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The Developer has entered into the Developer Continuing Disclosure Agreement.
Notwithstanding any other provision of this Indenture, failure of the Developer or the Trustee to
comply with the Developer Continuing Disclosure Agreement shall not be considered an Event of
Default; provided, however, that the Trustee may (and, at the written direction of any Participating
Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Series 2014
Bonds, and upon indemnification of the Trustee to its reasonable satisfaction, shall) or any Owner or
beneficial owner of the Series 2014 Bonds may, take such actions as may be necessary and
appropriate to compel performance, including seeking mandate or specific performance by court
order.
•
Section 6.10 Compliance with Act. The Community Facilities District shall comply with
all applicable provisions of the Act.
Section 6.11 State Reporting. If at any time the Trustee fails to pay principal or interest
due on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve Fund
to pay principal or interest on the Bonds, the Trustee shall notify the Community Facilities District in
writing of such failure or withdrawal, and the Community Facilities District shall notify the
California Debt and Investment Advisory Commission of such failure or withdrawal within 10 days
of the failure to make such payment or the date of such withdrawal, and shall provide any notices
required under the District Continuing Disclosure Agreement.
Section 6.12 Annual Reports to the California Debt and Investment Advisory
Commission. Not later than October 30 of each year, commencing October 30, 2015 and until the
October 30 following the final maturity of the Bonds, the Community Facilities District shall supply
to the California Debt and Investment Advisory Commission the information required to be provided
thereto pursuant to Section 53359.5(b) of the Act. Such information shall be made available to any
Owner upon written request to the Community Facilities District accompanied by a fee determined
by the Community Facilities District to pay the costs of the Community Facilities District in
connection therewith. The Community Facilities District shall in no event be liable to any Owner or
any other person or entity in connection with any error in any such information.
Section 6.13 Non-Cash Payments of Special Taxes. The Community Facilities District
shall not authorize owners of taxable parcels within the Community Facilities District to satisfy
Special Tax obligations by the tender of Bonds unless the Community Facilities District shall have
first obtained a report of an Independent Consultant certifying that doing so would not result in the
Community Facilities District having insufficient Special Tax Revenues to pay the principal of and
interest on all Outstanding Bonds when due.
Section 6.14 Reduction in Special Taxes. The Community Facilities District shall not
initiate proceedings under the Act to modify the Rate and Method if such modification would
adversely affect the Net Special Tax Revenues pledged as the security for the Bonds. If an initiative
or referendum measure is proposed that purports to modify the Rate and Method in a manner that
would adversely affect the security for the Bonds, the Community Facilities District shall, to the
extent permitted by law, commence and pursue reasonable legal actions to prevent the modification
of the Rate and Method in a manner that would adversely affect the security for the Bonds.
Section 6.15 Further Assurances. The Community Facilities District shall 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 Indenture and for
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the better assuring and confirming unto the Owners of the rights and benefits provided in this
Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01 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 Community Facilities District to observe and perform any of
the other covenants, agreements or conditions on its part in this Indenture 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 Community
Facilities District by the Trustee or the Owners of not less than 5% in aggregate principal amount of
the Bonds at the time Outstanding; provided, however, if in the reasonable opinion of the Community
Facilities District 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
Community Facilities District within such 60 day period and the Community Facilities District shall
thereafter diligently and in good faith cure such failure in a reasonable period of time.
(d) The Community Facilities District or the City shall commence a voluntary
case under Title 11 of the United States Code or any substitute or successor statute.
Section 7.02 Foreclosure. If an Event of Default shall occur under Section 7.01(a) or
Section 7.01(b) then, and in each and every such case during the continuance of such Event of
Default, the Trustee may, or at the written direction of the Owners of not less than a majority in
aggregate principal amount of the Bonds at the time Outstanding, and upon being indemnified to its
satisfaction therefor, shall, commence foreclosure against any parcels of land in the Community
Facilities District with delinquent Special Taxes, as provided in Section 53356.1 of the Act;
provided, however, that the Trustee need not commence any such foreclosure if such foreclosure has
been commenced by the Community Facilities District.
Section 7.03 Other Remedies. If an Event of Default shall have occurred under
Section 7.01, the Trustee shall have the right:
(a) by mandamus, suit, action or proceeding, to compel the Community Facilities
District and its officers, agents or employees to perform each and every term, provision and covenant
contained in this Indenture and in the Bonds, and to require the carrying out of any or all such
covenants and agreements of the Community Facilities District and the fulfillment of all duties
imposed upon it by this Indenture and the Act;
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(b) by suit, action or proceeding in equity, to enjoin any acts or things which are
unlawful, or the violation of any of the rights of the Trustee or the Owners; or
(c) by suit, action or proceeding in any court of competent jurisdiction, to require
the Community Facilities District and its officers and employees to account as if it and they were the
trustees of an express trust.
Section 7.04 Application of Net Special Tax Revenues After Default. If an Event of
Default shall occur and be continuing, all Net Special Tax Revenues and any other funds thereafter
received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee
as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to
protect the interests of the Owners and payment of reasonable fees, charges and expenses of the
Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the
performance of its powers and duties under this Indenture;
(b) To the payment of the principal of and interest then due with respect to the
•
Bonds (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 Indenture, as
follows:
First: 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 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 on the date of
maturity or redemption, and, if the amount available shall not be sufficient to pay in full all
the Bonds, 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) Any remaining funds shall be transferred by the Trustee to the Special Tax
Fund.
Section 7.05 Power of Trustee to Enforce. All rights of action under this Indenture or the
Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of
the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and
protection of the Owners of such Bonds, subject to the provisions of this Indenture.
Section 7.06 Owners Direction of Proceedings. Anything in this Indenture to the
contrary notwithstanding, 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 Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to
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direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided,
however, that such direction shall not be other than in accordance with the provisions of this
Indenture, the Act and other applicable law and, provided, further, that the Trustee shall have the
right to decline to follow any such direction which in the opinion of the Trustee would be unjustly
prejudicial to Owners not parties to such direction.
Section 7.07 Limitation on Owners' Right to Sue. No Owner 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 Indenture, the Act or any other applicable law with respect to such Bonds,
unless (a) such Owner shall have given to the Trustee 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 Trustee 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 Trustee indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request, and (d) the Trustee 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 Trustee.
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 any remedy hereunder or
under law; it being understood and intended that no one or more Owners shall have any right in any
manner whatever by such Owner's or Owners' action to affect, disturb or prejudice the security of
this Indenture or the rights of any other Owners, or to enforce any right under the Bonds, this
Indenture, the Act 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,
subject to the provisions of this Indenture.
Section 7.08 Absolute Obligation. Nothing in Section 7.07 or in any other provision of
this Indenture or in the Bonds contained shall affect or impair the obligation of the Community
Facilities District, which is absolute and unconditional, to pay the principal of and interest on the
Bonds to the respective Owners at their respective dates of maturity, or upon call for redemption, as
herein provided, but only out of the Net Special Tax Revenues and other assets herein pledged
therefor and received by the Community Facilities District or the Trustee, 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 7.09 Termination of Proceedings. In case any proceedings taken by the Trustee
or any one or more 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 Trustee or the Owners, then
in every such case the Community Facilities District, the Trustee and the 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 duties of the Community Facilities
District, the Trustee and the Owners shall continue as though no such proceedings had been taken.
Section 7.10 Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee or to the Owners 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.
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Section 7.11 No Waiver of Default. No delay or omission of the Trustee or of any Owner
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 Indenture to the Trustee or to the Owners may be exercised
from time to time and as often as may be deemed expedient.
ARTICLE VIII
TRUSTEE
Section 8.01 Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of
Default, and after the curing or waiver 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 Indenture. The
Trustee shall, during the existence of any Event of Default which has not been cured or waived,
exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
Section 8.02 Qualifications; Removal and Resignation; Successors.
(a) The Trustee initially a party hereto and any successor thereto shall at all times
be a trust company, national banking association or bank having trust powers in good standing in or
incorporated under the laws of the United States or any state thereof, having (or if such trust
company, national banking association or bank is a member of a bank holding company system, its
parent bank holding company shall have) a combined capital and surplus of at least $75,000,000, and
subject to supervision or examination by a federal or state agency. If such trust company, national
banking association or bank 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 trust company, national banking association or
bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published.
(b) The Community Facilities District may, by an instrument in writing, upon at
least 30 days' notice to the Trustee, remove the Trustee initially a party hereto and any successor
thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the
Trustee initially a party hereto and any successor thereto if(i) 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(ii)the Trustee shall cease to be eligible in accordance with subsection(a) of this Section,
or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or its property shall be appointed, or any public officer shall take control or charge of the
Trustee 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 Trustee.
(c) The Trustee may at any time resign by giving written notice of such
resignation by first-class mail, postage prepaid, to the Community Facilities District, and to the
Owners at the respective addresses shown on the Registration Books. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of subsection (a) of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in this Section.
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•
(d) Upon removal or resignation of the Trustee, the Community Facilities District
shall promptly appoint a successor Trustee by an instrument in writing. Any removal or resignation
of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of
appointment by the successor Trustee; provided, however, that any successor Trustee shall be
qualified as provided in subsection (a) of this Section. If no qualified successor Trustee shall have
been appointed and have accepted appointment within 45 days following notice of removal or notice
of resignation as aforesaid, the removed or resigning Trustee or any Owner(on behalf of such Owner
and all other Owners) may petition any court of competent jurisdiction for the appointment of a
successor Trustee, and such court may thereupon, after such notice, if any, as it may deem proper,
appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify
its acceptance of such appointment by executing and delivering to the Community Facilities District
and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the moneys, estates,
properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect
as if originally named Trustee herein; but, nevertheless at the Written Request of the Community
Facilities District or the request of the successor Trustee, such predecessor Trustee 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
Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it
under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any
money or other property subject to the trusts and conditions herein set forth. Upon acceptance of
appointment by a successor Trustee as provided in this subsection, the successor Trustee shall, within
15 days after such acceptance, mail, by first-class mail postage prepaid, a notice of the succession of
such Trustee to the trusts hereunder to the Owners at the addresses shown on the Registration Books.
(e) Any trust company, national banking association or bank into which the
Trustee may be merged or converted or with which it may be consolidated or any trust company,
national banking association or bank resulting from any merger, conversion or consolidation to
which it shall be a party or any trust company, national banking association or bank to which the
Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust
company, national banking association or bank shall be eligible under subsection (a) of this Section,
shall be the successor to such Trustee, without the execution or filing of any paper or any further act,
anything herein to the contrary notwithstanding.
Section 8.03 Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as
statements of the Community Facilities District, and the Trustee shall not assume responsibility for
the correctness of the same or 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 Trustee shall, however, be responsible for its representations contained in
its certificate of authentication on the Bonds.
(b) The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of any Bonds, or in respect of the security afforded by this Indenture and the Trustee
shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty
with respect to the issuance of the Bonds for value, the application of the proceeds thereof except to
the extent that such proceeds are received by it in its capacity as Trustee, or the application of any
moneys paid to the Community Facilities District or others in accordance with this Indenture.
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(c) The Trustee shall not be liable in connection with the performance of its
duties hereunder, except for its own negligence or willful misconduct.
(d) No provision of this Indenture or any other document related hereto shall
require the Trustee to risk or advance its own funds.
(e) The Trustee may execute any of its powers or duties hereunder through
attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or
receivers if selected by it with reasonable care.
(f) The Trustee shall not be liable for any error of judgment made in good faith
by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts.
(g) The immunities and protections extended to the Trustee also extend to its
directors, officers, employees and agents.
(h) Before taking action under Article VII, under this Article or upon the
direction of the Owners, the Trustee may require indemnity satisfactory to the Trustee be furnished to
it to protect it against all fees and expenses, including those of its attorneys and advisors, and protect
it against all liability it may incur.
(i) The Trustee 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 Trustee, or exercising any trust
or power conferred upon the Trustee under this Indenture.
(j) The Trustee may become the Owner of Bonds with the same rights it would
have if it were not Trustee 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 Owners, whether or not such committee shall represent the
Owners of a majority in aggregate principal amount of the Bonds then Outstanding.
(k) The Trustee shall have no responsibility with respect to any information,
statement, or recital in any official statement, offering memorandum or any other disclosure material
prepared or distributed with respect to the Bonds.
(1) The Trustee shall not be liable for the failure to take any action required to be
taken by it hereunder if and to the extent that the Trustee's taking such action is prevented by reason
of an act of God, terrorism, war, riot, strike, fire, flood, earthquake, epidemic or other, similar
occurrence that is beyond the control of the Trustee and could not have been avoided by exercising
due care.
(m) The Trustee shall not be deemed to have knowledge of an Event of Default
hereunder unless it has actual knowledge thereof.
(n) The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty and it shall not be answerable for other than its negligence or willful
misconduct.
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Section 8.04 Right to Rely on Documents and Opinions.
(a) The Trustee shall be protected in acting upon any notice, requisition,
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.
(b) Whenever in the administration of the duties imposed upon it by this
Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior
to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a
Written Certificate of the Community Facilities District, and such Written Certificate shall be full
warrant to the Trustee for any action taken or suffered in good faith under the provisions of this
Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu
thereof, accept other evidence of such matter or may require such additional evidence as it may deem
reasonable.
(c) The Trustee may consult with counsel, who may be counsel to the
Community Facilities District, 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.
Section 8.05 Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
prudent corporate trust industry standards, in which accurate entries shall be made of all transactions
made by it relating to the proceeds of the Bonds, the Special Tax Revenues received by it and all
funds and accounts established by it pursuant to this Indenture. Such books of record and account
shall be available for inspection by the Community Facilities District during regular business hours
and upon reasonable notice and under reasonable circumstances as agreed to by the Trustee. The
Trustee shall deliver to the Community Facilities District a monthly accounting of the funds and
accounts it holds under this Indenture; provided, however, that the Trustee shall not be obligated to
deliver an accounting for any fund or account that (a) has a balance of zero, and (b) has not had any
activity since the last reporting date.
Section 8.06 Preservation and Inspection of Documents. All documents received by the
Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject
during business hours and upon reasonable notice to the inspection of the Community Facilities
District, the Owners and their agents and representatives duly authorized in writing.
Section 8.07 Compensation and Indemnification. The Community Facilities District
shall pay to the Trustee from time to time from Special Tax Revenues all reasonable compensation
pursuant to a pre-approved fee letter for all services rendered under this Indenture, and also all
reasonable expenses, charges, legal and consulting fees pursuant to a pre-approved fee letter and
other disbursements pursuant to a pre-approved fee letter and those of its attorneys, agents and
employees, incurred in and about the performance of their powers and duties under this Indenture.
The Community Facilities District shall, to the extent permitted by law, from Special Tax Revenues,
indemnify and save the Trustee harmless against any costs, claims, expenses and liabilities which it
may incur in the exercise and performance of its powers and duties hereunder (including reasonable
legal fees and expenses of counsel retained by the Trustee in connection with the performance of its
duties hereunder), including the enforcement of any remedies and the defense of any suit, and which
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are not due to its negligence or its willful misconduct. The duty of the Community Facilities District
to indemnify the Trustee shall survive the resignation or removal of the Trustee and the termination
and discharge of this Indenture.
ARTICLE IX
MODIFICATION OR AMENDMENT
Section 9.01 Supplemental Indentures.
(a) This Indenture and the rights and obligations of the Community Facilities
District, the Trustee and the Owners hereunder may be modified or amended from time to time and at
any time by a Supplemental Indenture, which the Community Facilities District and the Trustee may
enter into when there are filed with the Trustee the written consents of the Owners of a majority of
the aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as
provided in Section 11.08. No such modification or amendment shall (i) extend the fixed maturity of
any Bond, reduce the amount of principal thereof or the rate of interest thereon, extend the time of
payment thereof or alter the redemption provisions thereof, without the consent of the Owner of each
Bond so affected, (ii)permit any pledge of, or the creation of any lien on, security interest in or
charge or other encumbrance upon the assets pledged under this Indenture prior to or on a parity with
the pledge contained in, and the lien and security interest created by, this Indenture or deprive the
Owners of the pledge contained in, and the lien and security interest created by, this Indenture,
except as expressly provided in this Indenture, without the consent of the Owners of all of the Bonds
then Outstanding, or (iii) modify or amend this Section without the prior written consent of the
Owners of all Bonds then Outstanding.
(b) This Indenture and the rights and obligations of the Community Facilities
District, the Trustee and the Owners hereunder may also be modified or amended from time to time
and at any time by a Supplemental Indenture, which the Community Facilities District and the
Trustee may enter into without the consent of any Owners for any one or more of the following
purposes:
(i) to add to the covenants and agreements of the Community Facilities
District in this Indenture 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 Community Facilities District;
(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
Indenture, provided that such modification or amendment does not materially adversely affect the
rights or interests of the Owners hereunder;
(iii) to provide for the issuance of one or more Series of Additional Bonds,
and to provide the terms and conditions under which such Series of Additional Bonds may be issued,
subject to and in accordance with the provisions of Article III;
(iv) to permit the qualification of this Indenture under the Trust Indenture
Act of 1939, as amended, or any similar federal statute hereafter in effect;
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(v) 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
(vi) in any other respect whatsoever as the Community Facilities District
may deem necessary or desirable, provided that such modification or amendment does not materially
adversely affect the rights or interests of the Owners hereunder.
(c) Promptly after the execution by the Community Facilities District and the
Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be
furnished to the Trustee by the Community Facilities District), by first-class mail, postage prepaid,
setting forth in general terms the substance of such Supplemental Indenture, to the Owners 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
Indenture.
Section 9.02 Effect of Supplemental Indenture. Upon the execution of any
Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and
amended in accordance therewith, and the respective rights, duties and obligations under this
Indenture of the Community Facilities District, the Trustee and the Owners 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 Indenture shall be deemed to
be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.03 Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after
the effective date of any Supplemental Indenture pursuant to this Article may and, if the Community
Facilities District so determines, shall bear a notation by endorsement or otherwise in form approved
by the Community Facilities District and the Trustee as to any modification or amendment provided
for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond
Outstanding at the time of such effective date and presentation of such Bond for such purpose at the
Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture
shall so provide, new Bonds so modified as to conform, in the opinion of the Community Facilities
District and the Trustee, to any modification or amendment contained in such Supplemental
Indenture, shall be prepared and executed by the Community Facilities District and authenticated by
the Trustee and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such
effective date, and presentation of such Bond for such purpose at the Office of the Trustee, such a
new Bond in equal principal amount of the same Series, interest rate and maturity shall be exchanged
for such Owner's Bond so surrendered.
Section 9.04 Amendment of Particular Bonds. The provisions of this Article shall not
prevent any Owner from accepting any amendment or modification as to any particular Bond owned
by it, provided that due notation thereof is made on such Bond.
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ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture.
(a) If the Community Facilities District shall pay or cause to be paid or there
shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest
and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the
Owners shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets
as provided herein, and all agreements, covenants and other obligations of the Community Facilities
District hereunder shall thereupon cease, terminate and become void and this Indenture shall be
discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community
Facilities District all such instruments as may be necessary or desirable to evidence such discharge
and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District all
money or securities held by it pursuant hereto which are not required for the payment of the principal
of and interest and premium, if any, on the Bonds.
(b) Subject to the provisions of subsection (a) of this Section, when any Bond
shall have been paid and if, at the time of such payment, the Community Facilities District shall have
kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture
required or contemplated to be kept, performed and observed by it or on its part on or prior to that
time, then this Indenture shall be considered to have been discharged in respect of such Bond and
such Bond shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other
assets as provided herein, and all agreements, covenants and other obligations of the Community
Facilities District hereunder shall cease, terminate, become void and be completely discharged and
satisfied as to such Bond.
(c) Notwithstanding the discharge and satisfaction of this Indenture or the
discharge and satisfaction of this Indenture in respect of any Bond, those provisions of this Indenture
relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of
Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of
Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the
foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of such Bond,
and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by
the Trustee for the payment of the principal of and interest and premium, if any, on such Bond, and
to pay to the Owner of such Bond the funds so held by the Trustee as and when such payment
becomes due.
Section 10.02 Bonds Deemed To Have Been Paid.
(a) If moneys shall have been set aside and held by the Trustee for the payment
or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date
thereof, such Bond shall be deemed to have been paid within the meaning and with the effect
provided in Section 10.01. Any Outstanding Bond shall prior to the maturity date or redemption date
thereof be deemed to have been paid within the meaning of and with the effect expressed in
Section 10.01 if 0) in case any of such Bonds are to be redeemed on any date prior to their maturity
date, the Community Facilities District shall have given to the Trustee in form satisfactory to it
irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02 notice of
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•
redemption of such Bond on said redemption date, said notice to be given in accordance with
Section 4.02, (ii) there shall have been deposited with the Trustee either (A) money in an amount
which shall be sufficient, or (B) Defeasance Securities, the principal of and the interest on which
when due, and without any reinvestment thereof, together with the money, if any, deposited
therewith, will provide moneys which shall be sufficient to pay when due the interest to become due
on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and
the principal of and premium, if any, on such Bond, and (iii) in the event such Bond is not by its
terms subject to redemption within the next succeeding 60 days, the Community Facilities District
shall have given the Trustee, in form satisfactory to it, irrevocable instructions to mail as soon as
practicable, a notice to the Owner of such Bond that the deposit required by clause (ii) above has
been made with the Trustee and that such Bond is deemed to have been paid in accordance with this
Section and stating the maturity date or redemption date upon which money is to be available for the
payment of the principal of and premium, if any, on such Bond.
(b) No Bond shall be deemed to have been paid pursuant to clause (ii) of
subsection (a) of this Section unless the Community Facilities District shall have caused to be
delivered to the Community Facilities District and the Trustee (i) an executed copy of a Verification
Report with respect to such deemed payment, addressed to the Community Facilities District and the
Trustee, in form and in substance acceptable to the Community Facilities District and the Trustee,
(ii) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause
(ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement
shall be in form and in substance acceptable to the Community Facilities District and the Trustee and
which escrow agreement shall provide that no substitution of Defeasance Securities shall be
permitted except with other Defeasance Securities and upon delivery of a new Verification Report,
and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the
original Verification Report or upon delivery of a new Verification Report, and (iii) a copy of an
opinion of Bond Counsel, dated the date of such deemed payment and addressed to the Community
Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities
District and the Trustee, to the effect that such Bond has been paid within the meaning and with the
effect expressed in this Indenture, this Indenture has been discharged in respect of such Bond and all
agreements, covenants and other obligations of the Community Facilities District hereunder as to
such Bond have ceased, terminated,become void and been completely discharged and satisfied.
Section 10.03 Unclaimed Moneys. Subject to the escheat laws of the State, any moneys
held by the Trustee in trust for the payment and discharge of the principal of, or premium or interest
on, any Bond which remain unclaimed for two years after the date when such principal, premium or
interest has become payable, if such moneys were held by the Trustee at such date, or for two years
after the date of deposit of such moneys if deposited with the Trustee after the date when such
principal, premium or interest become payable, shall be repaid by the Trustee to the Community
Facilities District as its absolute property free from trust, and the Trustee shall thereupon be released
and discharged with respect thereto and the Owner of such Bond shall look only to the Community
Facilities District for the payment of such principal,premium or interest.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Successor Is Deemed Included in All References to Predecessor.
Whenever in this Indenture either the Community Facilities District or the Trustee is named or
44
referred to, such reference shall be deemed to include the successors or assigns thereof, and all the
covenants and agreements in this Indenture contained by or on behalf of the Community Facilities
District or the Trustee shall bind and inure to the benefit of the respective successors and assigns
thereof whether so expressed or not.
Section 11.02 Limitation of Rights. Nothing in this Indenture or in the Bonds expressed or
implied is intended or shall be construed to give to any Person other than the Trustee, the Community
Facilities District and the Owners of the Bonds, any legal or equitable right, remedy or claim under
or in respect of this Indenture 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 Trustee, the Community Facilities District and the Owners of the Bonds.
Section 11.03 Waiver of Notice; Requirement of Mailed Notice. Whenever in this
Indenture 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 Indenture 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 11.04 Destruction of Bonds. Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the Community Facilities District of any Bonds, the
Trustee shall, in lieu of such cancellation and delivery, destroy such Bonds.
Section 11.05 Severability of Invalid Provisions. If any one or more of the provisions
contained in this Indenture 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 Indenture and such invalidity, illegality or unenforceability
shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein. The Community
Facilities District hereby declares that it would have entered into this Indenture and each and every
other Section, subsection, paragraph, sentence, clause or phrase hereof and authorized the issuance of
the Bonds pursuant thereto irrespective of the fact that any one or more Sections, subsections,
paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or
unenforceable.
Section 11.06 Notices. Any written notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder shall be
given to the party entitled thereto at its address set forth below, or at such other address as such party
may provide to the other parties in writing from time to time, namely:
45
If to the Community Facilities District:
City of Tustin
Community Facilities District
No. 2014-1 (Tustin Legacy/Standard Pacific)
do City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Finance Director
If to the Trustee:
The Bank of New York Mellon Trust Company,N.A.
400 South Hope Street, Suite 400
Los Angeles, CA 90071
Attention: Corporate Trust Services
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or
other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if
given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given
by telecopier, upon the sender's receipt of an appropriate answerback or other written
acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with
the United States mail postage prepaid, 72 hours after such notice is deposited with the United States
mail, or(d) if given by any other means, upon delivery at the address specified in this Section.
Section 11.07 Evidence of Rights of Owners. Any request, consent or other instrument
required or permitted by this Indenture to be signed and executed by Owners may be in any number
of concurrent instruments of substantially similar tenor and shall be signed or executed by such
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 Indenture
and shall be conclusive in favor of the Trustee and the Community Facilities District 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 Trustee or the Community
Facilities District in accordance therewith or reliance thereon.
46
Section 11.08 Disqualified 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 Indenture, Bonds which are known by the Trustee to be owned or held by or for the
account of the Community Facilities District, or by any other obligor on the Bonds, or by any Person
directly or indirectly controlling or controlled by, or under direct or indirect common control with,
the Community Facilities District 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 Trustee 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 Community Facilities District or any other obligor on the
Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee, the Community Facilities
District shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section
and the Trustee may conclusively rely on such certificate.
Section 11.09 Money Held for Particular Bonds. The money held by the Trustee 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 10.03 but without any liability for
interest thereon.
Section 11.10 Funds and Accounts. Any fund or account required by this Indenture to be
established and maintained by the Trustee may be established and maintained in the accounting
records of the Trustee, 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 prudent corporate trust industry standards to the extent practicable,
and with due regard for the requirements hereof and for the protection of the security of the Bonds
and the rights of every Owner thereof. The Trustee may establish any such additional funds or
accounts as it deems necessary to perform its obligations hereunder.
Section 11.11 Payment on Non-Business Days. If the date for making any payment or the
last date for performance of any act or the exercising of any right, as provided in this Indenture shall
not be a Business Day, such payment may be made or act performed or right exercised on the next
succeeding Business Day, with the same force and effect as if done on the nominal date provided in
this Indenture and, unless otherwise specifically provided in this Indenture, no interest shall accrue
for the period from and after such nominal date.
Section 11.12 Waiver of Personal Liability. No member, officer, agent or employee of the
Community Facilities District or 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 of the legislative body, officer, agent or employee from the performance of any official duty
provided by any applicable provisions of law or by this Indenture.
47
Section 11.13 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 Indenture; the words "herein," "hereof,"
"hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or subdivision hereof.
Section 11.14 Conflict with Act. In the event of any conflict between any provision of this
Indenture and any provision of the Act, the provision of the Act shall prevail over the provision of
this Indenture.
Section 11.15 Conclusive Evidence of Regularity. Bonds issued pursuant to this Indenture
shall constitute evidence of the regularity of all proceedings under the Act relative to their issuance
and the levy of the Special Taxes.
Section 11.16 Governing Laws. This Indenture shall be governed by and construed in
accordance with the laws of the State.
Section 11.17 Execution in Several Counterparts. This Indenture 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 shall together constitute but one and the same instrument.
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•
IN WITNESS WHEREOF, the Community Facilities District has caused this Indenture to be
signed in its name by its representative thereunto duly authorized, and the Trustee, in token of its
acceptance of the trusts created hereunder, has caused this Indenture 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 COMMUNITY
FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD
PACIFIC)
By:
Pamela Arends-King, Finance Director
of the City of Tustin
THE BANK OF NEW YORK MELLON
TRUST COMPANY,N.A., AS TRUSTEE
By:
Authorized Officer
S-1
EXHIBIT A
FORM OF SERIES 2014 BOND
No. $
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO.2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BOND, SERIES 2014
INTEREST RATE MATURITY DATE DATED DATE CUSIP
December , 2014
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard
Pacific) (the "Community Facilities District"), for value received, hereby promises to pay, solely
from the sources hereinafter described, to the Registered Owner identified above or registered
assigns (the"Registered Owner"), on the Maturity Date identified above or on any earlier redemption
date, the Principal Amount identified above in lawful money of the United States of America; and to
pay interest thereon at the Rate of Interest identified above in like lawful money from the date hereof
payable semiannually on March 1 and September 1 in each year, commencing March 1, 2015 (the
"Interest Payment Dates"), until payment of such Principal Amount in full. This Bond shall bear
interest from the Interest Payment Date next preceding the date of authentication of this Bond(unless
this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day
of the month preceding such Interest Payment Date, whether or not such day is a business day, in
which event it shall bear interest from such Interest Payment Date, or unless this Bond is
authenticated on or prior to February 15, 2015, in which event it shall bear interest from the Dated
Date identified above; provided, however, that if, at the time of authentication of this Bond, interest
is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which
interest hereon has previously been paid or duly provided for). The Principal Amount hereof is
payable upon surrender hereof upon maturity or earlier redemption at the Office of the Trustee (as
hereinafter defined). Interest hereon is payable by check of The Bank of New York Mellon Trust
Company, N.A., as Trustee (the "Trustee"), mailed by first class mail on each Interest Payment Date
to the Registered Owner hereof at the address of the Registered Owner as it appears on the
Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the
month preceding such Interest Payment Date. "Office of the Trustee" means the principal corporate
trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the
Community Facilities District by the Trustee in writing.
This Bond is one of a series of a duly authorized issue of bonds approved by the qualified
electors of the Community Facilities District, pursuant to the Mello-Roos Community Facilities Act
of 1982, constituting Sections 53311 et seq. of the California Government Code (the "Act"), and
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issued for the purpose of financing certain public facilities, and is one of the series of bonds
designated "City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard
Pacific) Special Tax Bonds, Series 2014" (the "Series 2014 Bonds") in the aggregate principal
amount of$ . The Series 2014 Bonds are issued pursuant to the Indenture
of Trust, dated as of December 1, 2014 (the "Indenture"), by and between the Community Facilities
District and the Trustee, and this reference incorporates the Indenture herein, and by acceptance
hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more
particularly provided in the Indenture, additional bonds ("Additional Bonds") may be issued by the
Community Facilities District secured by a lien on a parity with the lien securing the Series 2014
Bonds for the purpose of refunding all or a portion of the outstanding Series 2014 Bonds or
Additional Bonds. The Series 2014 Bonds and any Additional Bonds are collectively referred to as
the"Bonds." The Indenture is entered into, and this Bond is issued under, the Act and the laws of the
State of California. Capitalized undefined terms used herein shall have the meanings ascribed thereto
in the Indenture.
Pursuant to the Act and the Indenture, the principal of and interest on the Bonds are payable
solely from Net Special Tax Revenues and the other assets pledged therefor under the Indenture. Net
Special Tax Revenues generally consist of the annual special tax authorized under the Act to be
collected within the Community Facilities District, after the payment therefrom of certain
administrative expenses up to the Administrative Expenses Cap. Subject only to the provisions of
the Indenture permitting the application thereof for the purposes and on the terms and conditions set
forth therein, all of the Net Special Tax Revenues and any other amounts (including proceeds of the
sale of the Bonds) held in the Special Tax Fund, the Bond Fund and the Reserve Fund established
under the Indenture are pledged to secure the payment of the principal of premium, if any, and
interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act.
Said pledge constitutes a first lien on such assets.
The Series 2014 Bonds maturing on or after September 1, 2025 are subject to optional
redemption, in whole or in part,on any Interest Payment Date on or after September 1, 2024, from
any source of available funds, at a Redemption Price equal to the principal amount of the Series 2014
Bonds to be redeemed,plus accrued interest thereon to the date of redemption, without premium.
The Series 2014 Bonds shall be subject to mandatory redemption, in whole or in part, on any
Interest Payment Date on or after March 1, 2015, from and to the extent of any prepayment of
Special Taxes and corresponding transfers from the Reserve Fund, at the following respective
redemption prices (expressed as percentages of the principal amount of the Series 2014 Bonds to be
redeemed), plus accrued interest thereon to the date of redemption:
Redemption
Redemption Dates Price
March 1, 2015 through March 1, 2022 103%
September 1, 2022 and March 1, 2023 102
September 1, 2023 and March 1, 2024 101
September 1, 2024 and any Interest Payment Date thereafter 100
The Series 2014 Bonds maturing September 1, 20 shall be subject to mandatory sinking
fund redemption, in part, on September 1 in each year, commencing September 1, 20 at a
redemption price equal to the principal amount of such Series 2014 Bonds to be redeemed, without
A-2
premium, plus accrued interest thereon to the date of redemption, in the aggregate respective
principal amounts specified in the Indenture.
The Trustee on behalf and at the expense of the Community Facilities District shall mail (by
first class mail) notice of any redemption to the respective owners of any Series 2014 Bonds
designated for redemption, at their respective addresses appearing on the Registration Books
maintained by the Trustee, at least 30 but not more than 60 days prior to the redemption date;
provided, however, that neither failure to receive any such notice so mailed nor any defect therein
shall affect the validity of the proceedings for the redemption of such Series 2014 Bonds or the
cessation of the accrual of interest thereon. The redemption price of the Series 2014 Bonds to be
redeemed shall be paid only upon presentation and surrender thereof at the Office of the Trustee.
From and after the date fixed for redemption of any Series 2014 Bonds, interest on such Series 2014
Bonds will cease to accrue.
The Series 2014 Bonds are issuable as fully registered Bonds without coupons in
denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon
payment of the charges, if any, provided in the Indenture, fully registered Series 2014 Bonds may be
exchanged at the Office of the Trustee for a like aggregate principal amount and maturity of fully
registered Series 2014 Bonds of other authorized denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his or her attorney
duly authorized in writing, at the Office of the Trustee, but only in the manner, subject to the
limitations and upon payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond. Upon such transfer a new fully registered Series 2014 Bond or Series
2014 Bonds, of authorized denomination or denominations, for the same aggregate principal amount
and of the same maturity will be issued to the transferee in exchange herefor. The Community
Facilities District and the Trustee may treat the Registered Owner hereof as the absolute owner
hereof for all purposes, and the Community Facilities District and the Trustee shall not be affected by
any notice to the contrary.
The Indenture and the rights and obligations of the Community Facilities District, the owners
of the Bonds and the Trustee 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 Indenture; provided that no such
modification or amendment shall (a) extend the fixed maturity of any Bonds, reduce the amount of
principal thereof or the rate of interest thereon, alter the redemption provisions thereof or extend the
time of payment thereof, without the consent of the Owner of each Bond so affected, (b) reduce the
percentage of Bonds the consent of the owners of which is required to effect any such amendment or
modification, without the consent of the owners of all outstanding Bonds, or (c) permit the creation
of any lien on the Net Special Tax Revenues and other assets pledged under the Indenture prior to or
on a parity with the lien created by the Indenture, or deprive the Bonds owners of the lien created
under the Indenture on such Net Special Tax Revenues and such other assets (except as expressly
provided in the Indenture), without the consent of the owners of all outstanding Bonds.
The Indenture contains provisions permitting the Community Facilities District to make
provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so
that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture.
All obligations of the Community Facilities District under the'Indenture shall be special
obligations of the Community Facilities District, payable solely from Special Tax Revenues and the
A-3
other assets pledged therefor thereunder; provided, however, that all obligations of the Community
Facilities District under the Bonds shall be special obligations of the Community Facilities District,
payable solely from Net Special Tax Revenues and the other assets pledged therefor thereunder.
Neither the faith and credit nor the taxing power of the Community Facilities District (except to the
limited extent set forth herein and in the Indenture), the City of Tustin or the State of California, or
any political subdivision thereof, is pledged to the payment of the Bonds.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Trustee 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, the Community Facilities District has caused this Bond to be
signed in its name and on its behalf by the manual or facsimile signatures of the Mayor of the City of
Tustin and the City Clerk of the City of Tustin, all as of the Dated Date identified above.
CITY OF TUSTIN COMMUNITY
FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD
PACIFIC)
By:
Mayor of the City of Tustin
Attest:
By:
City Clerk of the City of Tustin
A-4
CERTIFICATE OF AUTHENTICATION
This is one of the Series 2014 Bonds described in the within-mentioned Indenture and
registered on the Registration Books.
Date: December , 2014
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEE
By:
Authorized Officer
A-5
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 Trustee with full power of substitution in the premises.
Date:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible Note: The signature(s) on this Assignment must correspond
guarantor. with the name(s) as written on the face of the within Bond in
• every particular without alteration or enlargement or any
change whatsoever.
A-6
EXHIBIT B
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS
FORM OF REQUISITION FOR
DISBURSEMENT OF PROJECT COSTS
The Bank of New York Mellon Trust Company, N.A., as Trustee, is hereby requested to pay
from the Improvement Fund established by the Indenture of Trust between the Trustee and City of
Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) (the "Community
Facilities District"), dated as of December 1, 2014 (the "Indenture"), the amount specified and to the
payee named below for payment of the Project costs set forth in Attachment No. 1 hereto.
Payee:
Address:
Purpose:
Amount: $
The amount is due and payable under purchase order, contract or other authorization and has
not formed the basis of any prior request for payment. The conditions for the release of this amount
from the Improvement Fund, including those conditions in Section 3.04(b) of the Indenture have
been satisfied.
There has not been filed with or served upon the Community Facilities District notice of any
lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of
the amount specified above which has not been released or will not be released simultaneously with -
the payment of such amount, other than materialmen's or mechanic's liens accruing by mere
operation of law.
Dated: CITY OF TUSTIN COMMUNITY FACILITIES
DISTRICT NO. 2014-1 (TUSTIN
LEGACY/STANDARD PACIFIC)
By:
Pamela Mends-King, Finance Director
of the City of Tustin
B-1
ATTACHMENT NO. 1
[Insert Description of Project Costs.]
B-2
BOND PURCHASE AGREEMENT
•
$[ 1
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
November , 2014
City of Tustin
Community Facilities District No. 2014-1
(Tustin Legacy/Standard Pacific)
do City of Tustin
300 Centennial Way
Tustin, California 92780
Attention: Finance Director
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), acting not as a fiduciary
or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this
"Purchase Agreement) with City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific) (the "Issuer"), which, upon your acceptance of this offer, will be
binding upon the Issuer and the Underwriter. Capitalized terms used in this Purchase
Agreement and not otherwise defined herein have the meanings given to such terms in the
Bond Indenture described below.
This offer is made subject to the acceptance by the Issuer of this Purchase Agreement
on or before 5:00 p.m. (California time) on the date set forth above.
1. Upon the terms and conditions and in reliance upon the respective
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than all)
of the above-captioned bonds (the "Bonds") at a purchase price (the "Purchase Price") of
$1 1 (equal to the par amount of the Bonds ($f 1.00) [plus/less] a net original
issue [premium/discount] of$[ ], less an Underwriter's discount of$[ ]).
The Bonds will be issued by the Issuer under the authority of the Mello-Roos Community
Facilities Act of 1982 (constituting Section 53311 et seq. of the California Government Code)
(the "Act"), and Resolution No. 1 1 (the "Bond Resolution") adopted on September 16,
2014 by the City Council (the "City Council") of the City of Tustin (the "City"), acting as the
legislative body of the Issuer.
The special taxes that will provide a source of payment for the Bonds (the "Special
Taxes") are being levied pursuant to (i) Resolution No. 14-40, adopted by the City Council on
June 17, 2014 (the "Resolution of Formation"), which established the Issuer and authorized
the levy of a special tax on taxable property located within the boundaries of the Issuer (ii) a
two-thirds vote of the qualified electors at an election held in the boundaries of the Issuer on
June 17, 2014, and (iii) Ordinance No. 1445 enacted by the City Council on July 15, 2014 (the
"Ordinance"), pursuant to which the Special Taxes were levied on the taxable property in the
boundaries of the Issuer. Additionally, the City Council approved the substantially final
Preliminary Official Statement (as defined below) and the distribution thereof pursuant to
Resolution No 1 1 (the "Disclosure Resolution") adopted on [ ), 2014. Together, the
Bond Resolution, the Resolution of Formation, the Disclosure Resolution and the Ordinance are
referred to as the "Resolutions and the Ordinance" in this Purchase Agreement.
The Bonds will be issued pursuant to the terms of an Indenture of Trust, dated as of
December 1, 2014 (the "Bond Indenture"), by and between the Issuer and The Bank of New
York Mellon Trust Company, N.A., as trustee (the "Trustee").
The proceeds of the sale of the Bonds will be applied in accordance with the Bond
Indenture to (i) pay for the cost of certain public facilities (the "Facilities"); (ii) fund a debt
service reserve fund for the Bonds; (iii) fund capitalized interest on a portion of the Bonds
through September 1, 2017; (iv) pay certain administrative expenses of the Issuer; and (v) pay
costs of issuing the Bonds.
2. The Bonds will mature on the dates and in the principal amounts, and will bear
interest at the rates, and will be subject to redemption, as set forth in Exhibit B hereto. The
Underwriter agrees to make a bona fide public offering of all of the Bonds at the offering prices
set forth on Exhibit B hereto. Subsequent to the initial public offering, the Underwriter reserves
the right to change the public offering prices (or yields) as it deems necessary in connection with
the marketing of the Bonds, provided that the Underwriter shall not change any of the principal
amounts or the interest rates set forth on Appendix B. The Bonds may be offered and sold to
certain dealers at prices lower than such initial public offering prices. The Bonds will be subject
to redemption as set forth on Exhibit B.
3. The Issuer agrees to deliver to the Underwriter as many copies of the Official
Statement dated the date hereof relating to the Bonds (as supplemented and amended from
time to time, the "Final Official Statement") as the Underwriter shall reasonably request as
necessary to comply with paragraph (b)(4) of Rule 15c2-12 under the Securities Exchange Act
of 1934, as amended (the "Rule"). The Issuer agrees to deliver such Final Official Statements
within seven (7) business days after the execution hereof, or such earlier date identified by the
Underwriter to be necessary to allow the Underwriter to meet its obligations under the Rule and
Rule G-32 of the Municipal Securities Rulemaking Board ("MSRB"). The Underwriter agrees to
file the Final Official Statement in compliance with MSRB Rule G-32. The Underwriter agrees to
deliver a copy of the Final Official Statement to each of its customers purchasing Bonds that
request the same no later than the settlement date of the transaction.
The Issuer has authorized and approved the Preliminary Official Statement dated
f ), 2014 relating to the Bonds (the "Preliminary Official Statement") and the Final
Official Statement and consents to their distribution and use by the Underwriter in connection
with the offer and sale of the Bonds. The Issuer deems such Preliminary Official Statement final
as of its date for purposes of the Rule, except for information allowed by the Rule to be omitted,
and has executed a certificate to that effect in the form of Exhibit C.
2
In connection with issuance of the Bonds, and in order to assist the Underwriter in
complying with the Rule, the Issuer will execute a Continuing Disclosure Agreement dated as of
December 1, 2014 (the "Issuer Continuing Disclosure Agreement"), by and between the
Issuer and Albert A. Webb Associates, as dissemination agent (the "Dissemination Agent").
Also in order to assist the Underwriter in complying with the Rule, Standard Pacific Homes,
Southern California Coastal (the "Property Owner"), owner of taxable property in the District,
will execute a Continuing Disclosure Agreement dated as of December 1, 2014 (the "Property
Owner Continuing Disclosure Agreement"), by and between The Property Owner and the
Dissemination Agent. The forms of the Issuer Continuing Disclosure Agreement and the
Property Owner Continuing Disclosure Agreement are attached as Appendices _and _to the
Final Official Statement, respectively.
4. The Issuer represents and warrants to the Underwriter that:
(a) The Issuer is a community facilities district duly organized and validly
existing under the laws of the State of California (the "State"), including the Act. The
Issuer has the full legal right, power and authority, among other things, (i) upon
satisfaction of the conditions in this Purchase Agreement and the Bond Indenture, to
issue the Bonds for the purpose specified in Section 1 hereof, (fi) to secure the Bonds in
the manner contemplated in the Bond Indenture and (Hi) to levy the Special Taxes
according to the rate and method of apportionment of special taxes for the Issuer (the
"Rate and Method").
(b) The City Council has the full legal right, power and authority to adopt the
Resolutions and the Ordinance, and the Issuer has the full legal right, power and
authority (i) to enter into this Purchase Agreement, the Bond Indenture and the Issuer
Continuing Disclosure Agreement (such documents are collectively referred to herein as
the "Issuer Documents"), (H) to issue, sell and deliver the Bonds to the Underwriter as
provided herein, and (Hi) to carry out and consummate all other transactions on its part
contemplated by each of the Issuer Documents and the Resolutions and the Ordinance,
and the Issuer and the City Council have complied with all provisions of applicable law,
including the Act, in all matters relating to such transactions.
(c) The Issuer has duly authorized (i) the execution and delivery by the
Issuer and the execution, delivery and due performance by the Issuer of its obligations
under the Issuer Documents, (H) the distribution and use of the Preliminary Official
Statement and execution, delivery and distribution of the Final Official Statement, and
(Hi) the taking of any and all such action as may be required on the part of the Issuer to
carry out, give effect to and consummate the transactions on its part contemplated by
such instruments. All consents or approvals necessary to be obtained by the Issuer in
connection with the foregoing have been received, and the consents or approvals so
received are still in full force and effect.
(d) The Resolutions and the Ordinance have been duly adopted by the City
Council, acting as legislative body of the Issuer, and are in full force and effect; and each
of the Issuer Documents, when executed and delivered by the Issuer and the other party
thereto, will constitute a legal, valid and binding obligation of the Issuer enforceable
against the Issuer in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights generally.
3
(e) When delivered to the Underwriter, the Bonds will have been duly
authorized by the City Council, acting as legislative body of the Issuer, and duly
executed, issued and delivered by the Issuer and will constitute legal, valid and binding
obligations of the Issuer enforceable against the Issuer in accordance with their
respective terms, except as enforceability thereof may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally, and will be entitled to the
benefit and security of the Bond Indenture.
(f) The statements and information contained in the Final Official Statement
(other than information relating to DTC and its book-entry only system and information in
Appendix thereto) are correct in all material respects, and the information contained
in the Final Official Statement (other than information relating to DTC and its book-entry
only system and information in Appendix _ thereto) does not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make
such statements therein, in the light of the circumstances under which they were made,
not misleading.
(g) If, at any time prior to the date twenty-five (25) days following the later of
the Closing (as described in Section 6 below) or the date the Underwriter no longer
retains, directly or as a member of an underwriting syndicate, an unsold balance of the
Bonds for safe to the public, which date, if other than the date of the Closing, shall be
provided to the Issuer by written notice of the Underwriter (the "End of the
Underwriting Period"), any event of which the Issuer has knowledge shall occur which
might or would cause the Final Official Statement to contain an untrue statement of a
material fact or to omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, the Issuer will promptly notify the Underwriter in writing
of the circumstances and details of such event. If, as a result of such event or any other
event, it is necessary, in the opinion of the Underwriter, the Issuer or their respective
counsel, to amend or supplement the Final Official Statement in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, the Issuer will forthwith cooperate with the Underwriter in the prompt
preparation and furnishing to the Underwriter of a reasonable number of copies of an
amendment of or a supplement to the Final Official Statement, in form and substance
reasonably satisfactory to the Underwriter, which will so amend or supplement the Final
Official Statement so that, as amended or supplemented, it will not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
(h) None of the adoption of the Resolutions and the Ordinance, the execution
and delivery of the Issuer Documents or the Final Official Statement, the consummation
of the transactions on the part of the Issuer contemplated herein or therein and the
compliance by the Issuer with the provisions hereof or thereof will conflict with, or
constitute on the part of the Issuer, a material violation of, or a material breach of or
default under, (i) any indenture, mortgage, commitment, note or other agreement or
instrument to which the Issuer is a party or by which it is bound, (H) any provision of the
State Constitution, or(iii) any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer (or the members of the City Council or any of its officers in
their respective capacities as such) is subject, that would have a material adverse affect
on the ability of the Issuer to perform its obligations under the Issuer Documents.
4
(i) The Issuer has never been in default at any time, as to principal of or
interest on any obligation which it has issued, including those which it has issued as a
conduit for another entity, which default may have an adverse effect on the ability of the
Issuer to consummate the transactions on its part under the Issuer Documents, except
as specifically disclosed in the Final Official Statement; and other than the Bond
Indenture, the Issuer has not entered into any contract or arrangement of any kind which
might give rise to any lien or encumbrance on the Net Special Taxes following issuance
of the Bonds. •
(j) Except as is specifically disclosed in the Final Official Statement, there is
no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending with respect to which the Issuer has been served
with process or known by the official of the Issuer executing this Purchase Agreement to
be threatened, which in any way questions the powers of the City Council or the Issuer
referred to in paragraph (b) above, or the validity of any proceeding taken by the City
Council in connection with the issuance of the Bonds, or wherein an unfavorable
decision, ruling or finding could materially adversely affect the transactions on the part of
the Issuer contemplated by this Purchase Agreement, or of any other Issuer Document,
or which, in any way, could adversely affect the validity or enforceability of the
Resolutions and the Ordinance, the Bond Indenture, the Bonds or this Purchase
Agreement or which in any way questions the exclusion from gross income of the
recipients thereof of the interest on the Bonds for federal income tax purposes or in any
other way questions the status of the interest on the Bonds under State tax laws or
regulations.
(k) Any certificate signed by an official of the Issuer authorized to execute
such certificate and delivered to the Underwriter in connection with the transactions
contemplated by the Issuer Documents shall be deemed a representation and warranty
by the Issuer to the Underwriter as to the truth of the statements therein contained.
(I) The Issuer has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The Bonds will be paid from Net Special Tax Revenues received by the
Issuer and moneys held in certain funds and accounts established under the Bond
Indenture and pledged thereunder to the payment of the Bonds.
(n) The Special Taxes may lawfully be levied in accordance with the Rate
and Method and the Ordinance, and, when levied, will be secured by a lien on the
property on which they are levied.
(o) The Bond Indenture creates a valid pledge of and first lien upon the Net
Special Tax Revenues deposited thereunder, and the moneys in certain funds and
accounts established pursuant to the Bond Indenture, subject in all cases to the
provisions of the Bond Indenture permitting the application thereof for the purposes and
on the terms and conditions set forth therein.
(p) Except as disclosed in the Preliminary Official Statement and the Final
Official Statement, the Issuer, the City, and any related entities have not failed in any
5
material respect to comply with any undertaking under the Rule in the previous five
years. [The report of prepared in connection with the issuance of the Bonds lists
(1) all of the securities for which the Issuer, the City and any related entities were
obligated to provide continuing disclosure in the previous five years and (2) all
"material"/enumerated events of which the Issuer, the City and any related entities were
obligated to provide notice in the previous five years.]
(q) The Issuer acknowledges and agrees that: (i) the purchase and sale of
the Bonds pursuant to this Purchase Agreement is an arm's length, commercial
transaction between the Issuer and the Underwriter, (ii) in connection with such
transaction and the discussions, undertakings and procedures leading up to the
consummation of such transaction, the Underwriter is acting solely as a principal and is
not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange
Act of 1934, as amended); (iii) the Underwriter has not assumed any advisory or
fiduciary responsibility to the Issuer with respect to the transaction contemplated hereby
and the discussions, undertakings and proceedings leading thereto (irrespective of
whether the Underwriter has provided other services or is currently providing other
services to the Issuer on other matters) or any other obligation to the Issuer except the
obligations expressly set forth in this Purchase Agreement, (iv) the Issuer has consulted
its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it
has deemed appropriate in connection with the transaction contemplated herein, and (v)
the Underwriter has financial interests that may differ from and be adverse to those of
the Issuer.
5. The Issuer covenants with the Underwriter that the Issuer will cooperate with the
Underwriter (at the cost and written directions of the Underwriter), in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as
the Underwriter may reasonably request; provided, however, that the Issuer shall not be
required to consent to suit or to service of process, or to qualify to do business, in any
jurisdiction. The Issuer consents to the use by the Underwriter of the Issuer Documents, the
Preliminary Official Statement and the Final Official Statement in the course of its compliance
with the securities or Blue Sky laws of the various jurisdictions related to the offering and sale of
the Bonds.
6. At 9:00 a.m. on December _, 2014 (the "Closing Date") or at such other time
and/or date as shall have been mutually agreed upon by the Issuer and the Underwriter, the
Issuer will deliver or cause to be delivered to the Underwriter: (i) the Bonds in definitive form
duly executed and authenticated by the Trustee together with the other documents mentioned in
Section 8 hereof and (ii) the certificates, opinions and other instruments described in Section 8
hereof. The Underwriter will accept such delivery and pay the Purchase Price of the Bonds by
delivering to the Trustee for the account of the Issuer a check payable in federal funds or
making a wire transfer in federal funds payable to the order of the Trustee.
The activities relating to the final execution and delivery of the Bonds and the Bond
Indenture and the delivery of the certificates, opinions and other instruments as described in
Section 8 of this Purchase Agreement shall occur at the offices of Stradling Yocca Carlson &
Rauth, a Professional Corporation, Newport Beach, California ("Bond Counsel"). The payment
for the Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as
the "Closing." The Bonds will be delivered as fully registered, book-entry only Bonds initially in
denominations equal to the principal amount of each maturity thereof. The Bonds will be
registered in the name of Cede & Co., as nominee of The Depository Trust Company, and will
6
be made available for checking by the Underwriter at such place as the Underwriter and the
Trustee shall agree not less than 24 hours prior to the Closing.
7. The Underwriter shall have the right to cancel its obligations to puechase the
Bonds if between the date hereof and the date of Closing:
(a) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have
passed or recommended favorably, legislation introduced previous to the date hereof,
which legislation, if enacted in its form as introduced or as amended, would have the
purpose or effect of imposing federal income taxation upon revenues or other income of
the general character to be derived by the Issuer or by any similar body under the Bond
Indenture or upon interest received on obligations of the general character of the Bonds,
or of causing interest on obligations of the general character of the Bonds, to be
includable in gross income for purposes of federal income taxation, and such legislation,
in the Underwriter's opinion, materially adversely affects the market price of the Bonds;
or
(b) a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the United
States, or legislation shall be favorably reported or re-reported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of
Representatives or the Senate, or recommended to the Congress of the United States
for passage by the President of the United States, or be enacted or a decision by a
federal court of the United States or the United States Tax Court shall have been
rendered, or a ruling, release, order, circular, regulation or official statement by or on
behalf of the United States Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be made having the
purpose or effect, or any other action or event shall have occurred which has the
purpose or effect, directly or indirectly, of adversely affecting the federal income tax
consequences of owning the Bonds, including causing interest on the Bonds to be
included in gross income for purposes of federal income taxation, or imposing federal
income taxation upon revenues or other income of the general character to be derived
by the Issuer under the Bond Indenture or upon interest received on obligations of the
general character of the Bonds, or the Bonds and also including adversely affecting the
tax-exempt status of the Issuer under the Code, which, in the opinion of the Underwriter,
materially adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States
shall have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Bond Indenture, as the case may be, is not exempt from the
registration, qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect, the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect;
or
(d) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the
subject matter shall have been issued or made or any other event occurs, the effect of
which is that the issuance, offering or sale of the Bonds, including any underlying
7
obligations, or the execution and delivery of the Bond Indenture as contemplated hereby
or by the Final Official Statement, is or would be in violation of any provision of the
federal securities laws, including the Securities Act of 1933, as amended and as then in
effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the
Trust Indenture Act of 1939, as amended and as then in effect; or
(e) any event shall have occurred or any information shall have become
known to the Underwriter which causes the Underwriter to reasonably believe that the
Final Official Statement includes an untrue statement of a material fact, or omits to state
any material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the Issuer fails to amend or
supplement such Final Official Statement to cure such omission or misstatement
pursuant to Section 4(g); or
(f) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the
Bonds; or
(g) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such
as, in the reasonable judgment of the Underwriter, would materially adversely affect the '
market for or market price of the Bonds; or
(h) a general banking moratorium shall have been declared by federal, New
York or State authorities; or
(I) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Issuer; or
(j) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange which adversely affects the Underwriter's ability to sell
the Bonds; or
(k) the New York Stock Exchange or other national securities exchange, or
any governmental authority, shall impose, as to the Bonds or obligations of the general
character of the Bonds, any material restrictions not now in force, or increase materially
those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of, the Underwriter; or
(I) an amendment to the federal or State constitution shall be enacted or
action taken by any federal or State court, legislative body, regulatory body or other
authority materially adversely affecting the tax status of the Issuer, its property, income
• or securities (or interest thereon), the validity or enforceability of the Special Tax or the
ability of the Issuer to issue the Bonds and levy the Special Tax as contemplated by the
Bond Indenture, the Rate and Method and the Final Official Statement; or
8. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to
the performance by the Issuer of its obligations to be performed by it hereunder at and prior to
8
the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of the
representations and warranties of the Issuer herein, and (c)to the following conditions, including
the delivery by the Issuer of such documents as are enumerated herein in form and substance
satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Final Official Statement, this Purchase
Agreement, the Issuer Continuing Disclosure Agreement, the Property Owner
Continuing Disclosure Agreement and the Bond Indenture shall be in full force and effect
and shall not have been amended, modified or supplemented except as may have been
agreed to by the Underwriter, and (ii) the Issuer shall have duly adopted and there shall
be in full force and effect such resolutions and ordinances (including, but not limited to,
the Resolutions and the Ordinance) as, in the opinion of Bond Counsel, shall be
necessary in connection with the transactions contemplated hereby.
(b) Delivery of the Bonds to the Underwriter, executed by the Issuer and
authenticated by the Trustee, at or prior to the Closing. The terms of the Bonds, when
delivered, shall in all instances be as described in Final Official Statement.
(c) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually agreeable to the
Underwriter and the Issuer:
(i) A final approving opinion of Bond Counsel dated the date of
Closing in the form attached to the Final Official Statement as Appendix [ 1.
(ii) A letter or letters of Bond Counsel addressed to the Underwriter,
which includes a statement to the effect that Bond Counsel's final approving
opinion may be relied upon by the Underwriter to the same extent as if such
opinion were addressed to the Underwriter, and further provides:
(A) the statements contained in the Official Statement on the
cover page and under the captions ["INTRODUCTION," "THE BONDS"
(other than information relating to DTC and its book-entry only system, as
to which no opinion need be expressed), "SECURITY AND SOURCES
OF PAYMENT FOR THE BONDS," and "TAX MATTERS," and in
Appendices [B] and [D] thereto], are accurate insofar as such statements
expressly summarize certain provisions of the Bonds, the Bond Indenture
and Bond Counsel's opinion concerning certain federal tax matters
relating to the Bonds;
(B) this Purchase Agreement constitutes the legal, valid and
binding obligation of the Issuer enforceable against the Issuer in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws affecting enforcement of
creditors' rights in general and to the application of equitable principles if
equitable remedies are sought; and
(C) the Bonds are not subject to the registration requirements
of the Securities Act of 1933, as amended, and the Bond Indenture is
exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended.
9
(iii) A letter of Quint & Thimmig, LLP ("Disclosure Counsel"),
addressed to the Issuer and the Underwriter, to the effect that:
(A) during the course of serving as Disclosure Counsel in
connection with the issuance of the Bonds and without having undertaken
to determine independently or assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Final Official Statement, no information came to the attention of the
attorneys in such firm rendering legal services in connection with the
issuance of the Bonds that would lead them to believe that the Final
Official Statement (excluding therefrom the financial statements, any
financial or statistical data, or forecasts, charts, numbers, estimates,
projections, assumptions or expressions of opinion included in the Official
Statement, information regarding DTC, and the appendices to the Official
Statement, as to which no opinion need be expressed), as of the date
thereof or the Closing Date, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(B) the Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended.
(iv) A letter of Jones Hall, A Professional Law Corporation
("Underwriter's Counsel"), addressed to the Underwriter, in form and substance
acceptable to the Underwriter.
(v) The Final Official Statement executed on behalf of the Issuer by a
duly authorized officer of the Issuer.
(vi) Certified copies of the Resolutions and the Ordinance.
(vii) Evidence of recordation in the real property records of the County
of Orange of the Notice of Special Tax Lien in the form required by the Act.
(viii) A certificate, in form and substance as set forth in Exhibit A
hereto, of the Issuer, dated as of the Closing Date.
(ix) Evidence that Federal Form 8038 has been executed by the
Issuer and will be filed with the Internal Revenue Service.
(x) Executed copies of the Bond Indenture, the Issuer Continuing
Disclosure Agreement, and the Property Owner Continuing Disclosure
Agreement.
(xi) A tax certificate in form satisfactory to Bond Counsel and the
Underwriter.
(xii) An opinion, dated the Closing Date and addressed to the
Underwriter, of the City Attorney, to the effect that:
10
•
(A) the Issuer is duly organized and validly existing as a community
facilities district under and by virtue of the Constitution and laws of the
State, with full legal right, power and authority to adopt the Resolutions
and the Ordinance;
(B) the Resolutions and the Ordinance were each duly adopted at a
meeting of the City Council, acting as legislative body of the Issuer, which
was called and held pursuant to law and with all public notice required by
law and at which a quorum was present and acting throughout, and the
Resolutions and the Ordinance are in full force and effect and have not
been amended or repealed, except as set forth therein;
(C) the Issuer Documents were duly authorized, executed and
delivered by the Issuer, and constitute the legal, valid and binding
obligations of the Issuer enforceable against the Issuer in accordance
with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws affecting enforcement of creditors' rights in
general and to the application of equitable principles if equitable remedies
are sought.
(D) no action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, regulatory agency, public board or body is
pending with respect to which the Issuer has been served with process or
to the knowledge of the City Attorney, is threatened, in any way affecting
the existence of the Issuer or the titles of the Issuer's officials to their
respective offices, or seeking to restrain or to enjoin the issuance, sale or
delivery of the Bonds or the application of the proceeds, thereof in
accordance with the Bond Indenture, or the collection or application of the
Special Taxes to pay the principal of and interest on the Bonds, or in any
way contesting or affecting the validity or enforceability of the Bonds, the
Issuer Documents or any action of the Issuer contemplated by any of said
documents, or in any way contesting the completeness or accuracy of the
Final Official Statement or the powers of the Issuer or its authority with
respect to the Bonds, the Issuer Documents or any action on the part of
the Issuer contemplated by any of said documents, wherein an
unfavorable decision, ruling, or finding could materially adversely affect
the validity or enforceability of the Bonds or the Issuer Documents;
(E) the execution and delivery of the Bonds and the Issuer
Documents, and compliance with the provisions of each, will not conflict
with or constitute a breach of or default under any loan agreement, note,
ordinance, resolution, indenture, contract, agreement or other instrument
of which the Issuer is a party or is otherwise subject or bound, a
consequence of which could be to materially and adversely affect the
ability of the Issuer to perform its obligations under the Bonds or the
Issuer Documents;
(F) all approvals, consents, authorization, elections and orders of or
filings or registrations with any governmental authority, board, agency or
commission having jurisdiction which would constitute a condition
11
precedent to, or the absence of which would materially adversely affect,
the ability of the Issuer, to perform its obligations under the Bonds or the
Issuer Documents; have been obtained or made, as the case may be,
and are in full force and effect; and
(G) based upon the information made available to the City Attorney in
the course of its participation in the transaction and without having
undertaken to determine independently or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Final Official Statement, nothing has come to the attention of the City
Attorney which has led the City Attorney to believe that the Final Official
Statement (excluding therefrom the financial and statistical data included
in the Final Official Statement, as to which no opinion need be expressed)
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading in any material respect.
(xiii) In connection with printing and distribution of the Preliminary
Official Statement, an executed certificate of the Issuer in the form attached
hereto as Exhibit C.
(xiv) A certificate in form and substance as set forth in Exhibit D hereto
of the Trustee and an opinion of its counsel in form and substance satisfactory to
the Underwriter.
(xv) A certificate in form and substance as set forth in Exhibit E hereto,
of Albert A. Webb Associates, in its capacity as special tax consultant ("Special
Tax Consultant"), dated as of the Closing Date.
(xvi) A certificate in form and substance as set forth in Exhibit F hereto,
of Albert A. Webb Associates, in its capacity as Dissemination Agent, dated as of
the Closing Date.
(xvii) With respect to historical continuing disclosure compliance, (i) a
report of Applied Best Practice addressed to the Underwriter in form and
substance acceptable to the Underwriter as to compliance by the Issuer, the City
and all related entities with their continuing disclosure undertakings during the
previous five years and (ii) evidence satisfactory to the Underwriter of compliance
by the Property Owner with its continuing disclosure undertakings during the
previous five years.
(xviii) Executed certificates of The Property Owner in the form of
Exhibits G and H hereto.
(xix) A certificate of Harris Realty Appraisal (the "Appraiser"), in the
form attached hereto as Exhibit I, along with a copy of its appraisal report in the
form attached to the Final Official Statement as Appendix
(xx) A certificate of Empire Economics, Inc., Capistrano Beach,
California (the "Market Absorption Analyst"), in the form attached hereto as
12
Exhibit J, along with a copy of its "Market Absorption Study" (the "Market
Absorption Study") in the form attached to the Final Official Statement as
Appendix
(xxi) An opinion and/or negative assurance letter of counsel to the
Property Owner, addressed to the Underwriter, in the form attached hereto as
•
Exhibit K.
(xxii) Certificates of the City in the forms attached hereto as Exhibit L
and Exhibit M.
(xiii) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter or Bond Counsel may
reasonably request to evidence compliance by the Issuer with legal
requirements, the truth and accuracy, as of the time of Closing, of the respective
representations of the Issuer herein contained and the due performance or
satisfaction by the Issuer at or prior to such time of all agreements then to be
•
performed and all conditions then to be satisfied.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase and
accept delivery of the Bonds shall be terminated for any reason permitted by this Purchase
Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the Issuer
shall be under further obligation hereunder; except that the respective obligations to pay
expenses, as provided in Section 11 hereof shall continue in full force and effect.
9. The obligations of the Issuer to issue and deliver the Bonds on the Closing Date
shall be subject, at the option of the Issuer, to the performance by the Underwriter of its
obligations to be performed hereunder at or prior to the Closing Date, and to the delivery by
Bond Counsel of the opinion described in Section 8(c)(i) and by Disclosure Counsel of the letter
described in Section 8(c)(iii).
10. All representations, warranties and agreements of the Issuer hereunder shall
remain operative and in full force and effect, regardless of any investigations made by or on
behalf of the Underwriter, and shall survive the Closing.
11. The Issuer shall pay or cause to be paid all expenses incident to the performance
of its obligations under this Purchase Agreement, including, but not limited to, delivery of the
Bonds, costs of printing the Bonds, the Preliminary Official Statement and the Final Official
Statement, any amendment or supplement to the Preliminary Official Statement or Final Official
Statement and this Purchase Agreement, fees and disbursements. of Bond Counsel and
Disclosure Counsel, the financial advisor, the Appraiser, the Market Absorption Consultant and
other consultants engaged by the Issuer, including the fees and expenses of the Special Tax
Consultant, the California Debt Investment and Advisory Commission fee and fees of the
Trustee. The Issuer shall be under no obligation to pay, and the Underwriter shall pay, the cost
of preparation of any "blue sky" or other state securities laws; and all other expenses incurred
by the Underwriter in connection with its public offering and distribution of the Bonds (except
those specifically enumerated in this Section 11 above), including the fees and disbursements
of its counsel and any advertising expenses.
13
12. Any notice or other communication to be given to the Issuer under this Purchase
Agreement may be given by delivering the same in writing at its address set forth above, and
any notice or other communication to be given to the Underwriter under this Purchase
Agreement may be given by delivering the same in writing to the following: Stifel, Nicolaus &
Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, CA 94104,
Attention: Sara Brown.
13. This Purchase Agreement is made solely for the benefit of the Issuer and the
Underwriter (including the successors or assigns of the Underwriter) and no other person,
including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue
hereof.
14. This Purchase Agreement shall be governed by and construed in accordance
with the laws of the State applicable to contracts made and performed in the State.
14
15. This Purchase Agreement shall become effective upon acceptance hereof by the
Issuer.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Authorized Representative
Accepted and agreed to as of
the date first above written and the time set
forth below:
CITY OF TUSTIN COMMUNITY
FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
By:
Authorized Representative
Time: (Pacific Time)
15
EXHIBIT A
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 20141
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
ISSUER CLOSING CERTIFICATE
I, the undersigned, hereby certify that I am the of the City of Tustin, the City
Council of which is the legislative body for City of Tustin Community Facilities District No. 2014-
1 (Tustin Legacy/Standard Pacific) (the `Issuer"), a community facilities district duly organized
and existing under the laws of the State of California (the "State") and that as such, I am
authorized to execute this Certificate on behalf of the Issuer in connection with the issuance of
the above-referenced bonds (the "Bonds").
I hereby further certify on behalf of the Issuer that:
(A) no litigation is pending with respect to which the Issuer has been served
with process or, to my best knowledge after reasonable inquiry, threatened (1) to restrain
or enjoin the issuance of any of the Bonds, the levy or collection of Special Taxes, or
the pledge of Net Special Tax Revenues under the Bond Indenture; (2) in any way
contesting or affecting the authority for the issuance of the Bonds or the validity or
enforceability of the Bonds, the Bond Indenture, the Issuer Continuing Disclosure
Agreement or the Purchase Agreement; or (3) in any way contesting the existence or
powers of the Issuer;
(B) the representations and warranties made by the Issuer in the Issuer
Documents are true and correct in all material respects on the Closing Date, with the
same effect as if made on the Closing Date;
(C) no event has occurred since the date of the Final Official Statement that,
as of the Closing Date, would cause any statement or information contained in the Final
Official Statement to be incorrect or incomplete in any material respect or would cause
the information in the Final Official Statement to contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make such statements
therein, in the light of the circumstances under which they were made, not misleading;
and
(D) as of the date hereof, the Bond Indenture is in full force and effect in
accordance with its terms and has not been amended, modified or supplemented except
in such case as may have been agreed to by the Underwriter; and
(E) the Issuer has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the Issuer Documents prior to
issuance of the Bonds.
Capitalized terms used in this Certificate and not defined herein shall have the same
respective meanings given them in the Bond Purchase Agreement dated November , 2014,
between the Issuer and Stifel, Nicolaus & Company, Incorporated.
A-1
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
set forth below.
Dated: [Closing Date]
CITY OF TUSTIN COMMUNITY FACILITIES
DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
By:
Authorized Representative
A-2
EXHIBIT B
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
Serial Bonds
Maturity Principal Interest
Date (Sept. 11 Amount Rate Yield Price
Term Bonds
Redemption Provisions
Optional Redemption. The Bonds maturing on or after September 1, 2025 are
subject to optional redemption, in whole or in part, on any Interest Payment Date on or
after September 1, 2024, from any source of available funds, at a redemption price equal
to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to
the date of redemption, without premium.
Mandatory Redemption from Special Tax Prepayments. The Bonds maturing
on or after September 1, 2025 are subject to Mandatory Redemption in whole or in part,
on any Interest Payment Date on or after March 1, 2015, from and to the extent of any
prepaid Special Taxes deposited in the Redemption Fund and corresponding to
transfers from the Reserve Fund, at the following respective Redemption Prices
(expressed as percentages of the principal amount of the Bonds to be redeemed), plus
accrued interest thereon to the date of redemption:
Redemption Dates Redemption
Price
March 1, 2015 through March 1, 2022 103%
September 1, 2022 and March 1, 2023 102
September 1, 2023 and March 1, 2024 101
September 1, 2024 and any Interest Payment Date 100
thereafter
B-1
Mandatory Sinking Fund Redemption. Bonds maturing on September 1, 20_
(the "Term Bonds") shall be subject to mandatory sinking fund redemption, in part, on
September 1 in each year, commencing September 1, 20_, at a Redemption Price
equal to the principal amount of the Bonds to be redeemed, without premium, plus
accrued interest thereon to the date of redemption, in the aggregate respective principal
amounts in the respective years as follows:
Term Bonds Due on September 1, 20_
Year
(September 1) Principal Amount
(Maturity)
B-2
EXHIBIT C
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
RULE 15C2-12 CERTIFICATE
The undersigned hereby certifies and represents that the undersigned is the duly elected
and acting of the City of Tustin, the City Council of which is the legislative body of the
City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) (the
"Issuer"), and is duly authorized to execute and deliver this Certificate and further hereby
certifies on behalf of the Issuer as follows:
(1) This Certificate is delivered in connection with the offering and sale of the
above-referenced bonds (the "Bonds") in order to enable the underwriter of the Bonds to
comply with Securities and Exchange Commission Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended (the "Rule").
(2) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement, setting forth information concerning the Bonds
and the Issuer(the "Preliminary Official Statement").
(3) As used herein, "Permitted Omissions" shall mean the offering price(s),
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Bonds depending on such
matters, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule.
IN WITNESS WHEREOF, I have hereunto set my hand as of , 2014.
CITY OF TUSTIN COMMUNITY FACILITIES
DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
By:
Authorized Representative
C-1
EXHIBIT D
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF TRUSTEE
The undersigned hereby states and certifies that the undersigned is an authorized officer
of The Bank of New York Mellon Trust Company, N.A. (the "Bank"), which is acting as trustee
under that certain Indenture of Trust, dated as of December 1, 2014 (the `Bond Indenture"), by
and between the City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific) (the "Issuer") and the Bank, and as such, is familiar with the following
facts and is authorized and qualified to certify the following facts on behalf of the Bank:
(1) The Bank is duly organized and existing as a national banking association
under the laws of the United States of America, having the full power and authority to
enter into and perform its duties under the Bond Indenture.'
(2) The Bond Indenture has been duly authorized, executed and delivered by the
Bank, and is a legal, valid and binding agreement of the Bank enforceable upon the
Bank in accordance with their respective terms.
(3) The Bonds have been authenticated by a duly authorized representative of
the Bank in accordance with the Bond Indenture.
(4) To the best knowledge of the Bank, after due inquiry, there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or governmental
agency, public board or body pending against the Bank or threatened against the Bank
which in the reasonable judgment of the Bank would affect the existence of the Bank or
in any way contesting or affecting the validity or enforceability of the Bond Indenture or
contesting the powers of the Bank or its authority to enter into and perform its obligations
under the Bond Indenture.
Dated: [closing date] THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By
Authorized Officer
D-1
EXHIBIT E
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF SPECIAL TAX CONSULTANT
Albert A. Webb Associates (the "Special Tax Consultant") has been retained as
Special Tax administrator for the City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific) (the "Issuer") and has reviewed the Rate and Method of
Apportionment of Special Tax for the Issuer (the "Rate and Method"), a copy of which is set
forth in Appendix f 1 to the Official Statement, dated November _, 2014 (the "Official
Statement") relating to the above-captioned bonds (the `Bonds").
Based upon such review, the Special Tax Consultant hereby certifies that the special
taxes levied under the Rate and Method (the "Special Taxes"), if collected in the maximum
amounts permitted pursuant to the Rate and Method on the date hereof, would generate at least
110% debt service coverage on the Bonds, provided that the annual debt service amounts on
the attached debt service schedule, which were relied upon by Special Tax Consultant, are
accurate.
Although the Special Tax if collected in the maximum amounts pursuant to the Rate and
Method, would generate the debt service coverage described in the previous paragraph, no
representation is made herein as to actual amounts that will be collected in future years.
All information with respect to the Rate and Method in the Official Statement and all
other information in the Official Statement sourced to the Special Tax Consultant is true and
correct as of the date of the Official Statement and as of the date hereof, and a true and correct
copy of the Rate and Method is attached to the Official Statement as Appendix [ I.
The Special Tax Consultant has reviewed the Summary Appraisal Report attached as
Appendix _ to the Official Statement and is of the opinion that information contained therein
with respect to taxes and tax rates applicable, and projected to be applicable, to the property
located within the boundaries of the Issuer is consistent with such information provided by the
Special Tax Consultant to the Harris Realty Appraisal.
Dated: , 2014
ALBERT A. WEBB ASSOCIATES
By:
Authorized Officer
E-1
EXHIBIT F
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF DISSEMINATION AGENT
The undersigned hereby states and certifies that the undersigned is an authorized officer
of Albert A. Webb Associates, as dissemination agent (the "Dissemination Agent") pursuant to
a continuing disclosure agreement dated as of _ 1, 2014 (the "Continuing Disclosure
Agreement"), by and between the City of Tustin Community Facilities District No. 2014-1
(Tustin Legacy/Standard Pacific) (the `Issuer) and the Dissemination Agent, as well as
pursuant to a continuing disclosure agreement dated as of 1, 2014 (the "Property
Owner Continuing Disclosure Agreement"), by and between Standard Pacific Homes,
Southern California Coastal (the "Property Owner") and the Dissemination Agent, and as such,
is familiar with the following facts and is authorized and qualified to certify the following facts on
behalf of the Dissemination Agent:
(1) The Dissemination Agent has the full power and authority to enter into and
perform its duties under the Issuer Continuing Disclosure Agreement and the Property
Owner Continuing Disclosure Agreement.
(2) The Issuer Continuing Disclosure Agreement and the Property Owner
Continuing Disclosure Agreement have been duly authorized, executed and delivered by
the Dissemination Agent, and are legal, valid and binding agreements of the
Dissemination Agent enforceable upon the Dissemination Agent in accordance with its
terms.
(3) To the best knowledge of the Dissemination Agent, after due inquiry, there is
no action, suit, proceeding or investigation, at law or in equity, before or by any court or
governmental agency, public board or body pending against the Dissemination Agent or
threatened against the Dissemination Agent which in the reasonable judgment of the
Dissemination Agent would affect the existence of the Dissemination Agent or in any
way contesting or affecting the validity or enforceability of the Issuer Continuing
Disclosure Agreement or the Property Owner Continuing Disclosure Agreement or
contesting the powers of the Dissemination Agent or its authority to enter into and
perform its obligations under the Issuer Continuing Disclosure Agreement or the
Property Owner Continuing Disclosure Agreement.
Dated: [closing date] ALBERT A. WEBB ASSOCIATES
By
• Authorized Officer
F-1
EXHIBIT G
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 20144
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
10b-5 CERTIFICATE OF PROPERTY OWNER
The undersigned hereby states and certifies that the undersigned is the Chief Financial
Officer of Standard Pacific Homes, Southern California Coastal (the "Property Owner"), and in
connection with the issuance, sale and delivery by City of Tustin Community Facilities District
No. 2014-1 (Tustin Legacy/Standard Pacific) (the "Issuer" or the "District) of the bonds
captioned above (the "Bonds"), hereby certifies as'follows as of the date hereof:
(1) The undersigned is duly authorized to execute this Certificate on behalf of
the Property Owner.
(2) This Certificate is delivered in connection with the offering and sale of the
Bonds.
(3) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement (the "Preliminary Official
Statement"), setting forth certain information concerning, among other
things, the Bonds, the Property Owner, the Property Owner's organization,
activities, properties and financial condition, and the Property Owner's
development within the District.
(4) The sections in the Preliminary Official Statement entitled ["THE
COMMUNITY FACILITIES DISTRICT — The Development, "THE
COMMUNITY FACILITIES DISTRICT — The Property Owners,"] to the
extent they include information about the Property Owner, the Property
Owner's organization, activities, properties and financial condition, and the
Property Owner's development within the District, contain no untrue
statement of a material fact and do not omit any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(5) The Property Owner has never failed in any material respect to comply with
previous undertakings to provide periodic continuing disclosure reports or
notices of material events with respect to community facilities districts or
assessment districts in California within the past five years. [discuss
organizational structure to define appropriate scope of due diligence]
(6) The Property Owner and its affiliates have not failed in any material extent
to pay property taxes, special taxes or assessments when due or to cure
any delinquency within 45 days. [discuss organizational structure to define
appropriate scope of due diligence]
G-1
(7) The Property Owner and its affiliates are not currently in default on any
loans, lines of credit or other obligation, the result of which could materially
adversely affect the development of the property owned by the Property
Owner in the District.
(8) The Property Owner and its affiliates are solvent and no proceedings are
pending or threatened in which they may be adjudicated as bankrupt or
become the debtor in a bankruptcy proceeding, or discharged from all of
their debts or obligations, or granted an extension of time to pay their debts
or a reorganization or readjustment of their debts. Except as disclosed in
the Preliminary Official Statement, the Property Owner and its affiliates
have not previously been adjudicated as bankrupt or been the debtor in a
bankruptcy proceeding, or been discharged from all of their debts or
obligations, or granted an extension of time to pay their debts or undergone
a reorganization or readjustment of their debts.
(9) There is no litigation or administrative proceeding of any nature in which the
Property Owner has been served, or is pending or threatened which, if
successful, would materially adversely affect the Property Owner's ability to
complete the development and sale of the property owned by the Property
Owner in the District, or to pay the Special Taxes, the special benefit
assessments or ordinary ad valorem property tax obligations when due on
its property within the District, or which challenges or questions the validity
or enforceability of the Bonds or the Property Owner Continuing Disclosure
Agreement executed by the Property Owner.
(10) Except as disclosed in the Preliminary Official Statement, there is no debt
outstanding that is payable from special taxes or assessments levied on the
property owned by the Property Owner in the District, and the Property
Owner has not applied for and is not aware of any ongoing proceedings to
approve or issue such debt.
(11)
Capitalized terms not defined herein have the same meaning as is set forth in the
[Preliminary Official Statement] relating to the Bonds.
Dated: , 2014 [STANDARD PACIFIC]
By
Chief Financial Officer
G-2
EXHIBIT H
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CLOSING CERTIFICATE OF PROPERTY OWNER
The undersigned (the `Property Owner"), in connection with the issuance, sale and
delivery by City of Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard
Pacific) (the "Issuer" or the "District") of the bonds captioned above (the "Bonds"), hereby
certifies as follows as of the date hereof:
(1) The undersigned is duly authorized to execute this Certificate on behalf of
the Property Owner, [and the Acquisition Agreement].
(2) The Property Owner is duly authorized to execute, deliver and perform its
Property Owner Continuing Disclosure Agreement [and the Acquisition
Agreement].
(3) The Property Owner has duly executed and delivered the Property Owner
Continuing Disclosure Agreement [and the Acquisition Agreement].
(4) The Property Owner has full power and authority to own and develop the
property located within the District and to carry on its business as presently
conducted and as described in the Final Official Statement.
(5) Except as disclosed in the Final Official Statement, no event has occurred
since the date of the Preliminary Official Statement which has materially
and adversely affected or is reasonably expected to materially and
adversely affect the business, properties, operations or financial condition
of the Property Owner.
(6) The representations and warranties made by the Property Owner in the
10b-5 Certificate of Property Owner are true and correct in all material
respects on the Closing Date, with the same effect as if made on the
Closing Date. If at any time subsequent hereto and within 25 days after the
Closing Date any such statements in the Official Statement become untrue,
the Developer agrees to notify the Issuer and the Underwriter immediately.
(7) The Property Owner covenants that, while the Bonds are outstanding, the
Property Owner will not bring any action, suit, proceeding, inquiry or
investigation at law or in equity, before any court, regulatory agency, public
board or body which in any way seeks to challenge or overturn the District,
the levy of the Special Tax in accordance with the Rate and Method or the
validity of the Bonds or the proceedings leading up to their issuance. The
H-1
•
foregoing covenant shall not prevent the Property Owner from bringing an
action or suit contending that the Special Tax has not been levied in
accordance with the methodology contained in the Rate and Method, so
long as any such action or suit does not seek to interfere, or have the effect
of interfering, with the levy and collection of the Special Tax in amounts and
at times sufficient to pay the principal of and interest on the Bonds when
due.
•
Capitalized terms not defined herein have the same meaning as is set forth in the Bond
Purchase Agreement between Stifel, Nicolaus & Company, Incorporated and the Issuer relating
to the Bonds.
Dated: , 2014 [SIGNATURE BLOCK OF STANDARD PACIFIC ]
H-2
EXHIBIT I
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF APPRAISER
The undersigned, on behalf of Harris Realty Appraisal (the "Appraiser"), has prepared an
"Appraisal Report" dated (the "Appraisal Report") regarding the value of certain
real property and improvements within City of Tustin Community Facilities District No. 2014-1
(Tustin Legacy/Standard Pacific) (the "District"), and certifies that:
1. The assumptions made in the Appraisal Report are reasonable. The Appraisal Report
fairly and accurately described, as of the stated date of value, the market values of the
properties in the District that are subject to the special taxes.
2. The Appraiser is not aware of any event or act which occurred since the date of the
Appraisal Report which, in its opinion, would materially and adversely affect the conclusions as
to the market value of the appraised property in the District.
3. The Appraiser consents to the reproduction of the Appraisal Report as Appendix
to the Preliminary Official Statement dated , 2014 (the "Preliminary Official Statement"),
and the final Official Statement dated , 2014 (the "Official Statement"), each with respect
to the above-referenced bonds, and to the references to the Appraiser and the Appraisal Report
made in the Preliminary Official Statement and the Official Statement.
4. The Appraiser has reviewed the Preliminary Official Statement and the Official
Statement, and the statements concerning the Appraisal Report and the value of the property in
the District contained in the Preliminary Official Statement and the Official Statement are true,
correct and complete in all material respects and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading.
5. A true and correct copy of the Appraisal Report is attached as Appendix_to the
Preliminary Official Statement and the Official Statement.
6. The Appraisal Report complies with the Appraisal Standards for Land-Secured
Financings issued by the California Debt and Investment Advisory Commission and dated July,
2004.
Dated: [closing date]
HARRIS REALTY APPRAISAL
By:
Its:
I-1
EXHIBIT J
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF MARKET ABSORPTION ANALYST
The undersigned, on behalf of Empire Economics, Inc., Capistrano Beach, California (the
"Market Absorption Consultant"), has prepared a report entitled "Market Absorption Study(the
"Market Absorption Study"), dated , 2014, regarding proposed development within the
"Appraisal Report") regarding the value of certain real property and improvements within City of
Tustin Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) (the "District"),
and certifies that:
1. The assumptions made in the Market Absorption Study are reasonable.
2. The Market Absorption Consultant is not aware of any event or act which occurred since
the date of the Market Absorption Study which, in its opinion, would materially and adversely
affect the conclusions set forth in the Market Absorption Study.
3. The Market Absorption Consultant consents to the reproduction of the Market Absorption
Study as Appendix_to the Preliminary Official Statement dated , 2014 (the "Preliminary
Official Statement"), and the final Official Statement dated _, 2014 (the "Official Statement"),
and to the references to the Market Absorption Consultant and the Absorption Study made in
the Preliminary Official Statement and the Official Statement.
4. A true and correct copy of the Market Absorption Study is attached as Appendix_to
the Preliminary Official Statement and the Official Statement.
5. The Market Absorption Consultant has reviewed the Preliminary Official Statement and
the Official Statement, and the statements concerning the Market Absorption Study and
proposed development in the District contained in the Preliminary Official Statement and the
Official Statement are true, correct and complete in all material respects and do not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Dated: [closing date]
EMPIRE ECONOMICS, INC.
By:
Its:
J-1
EXHIBIT K
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
FORM OF OPINION OF COUNSEL TO STANDARD PACIFIC HOMES, SOUTHERN
CALIFORNIA COASTAL
A letter of counsel to Standard Pacific Homes, Southern California Coastal (the
"Property Owner"), addressed to the Underwriter, which contains the following opinions:
(1) The Property Owner is a limited liability company, duly formed, validly existing
and in good standing under the laws of the State of California, and has full power and authority
to enter into its Property Owner Continuing Disclosure Agreement.
(2) The Property Owner has duly and validly executed and delivered its Property
Owner Continuing Disclosure Agreement and its Property Owner Continuing Disclosure
Agreement constitutes the legal, valid and binding obligations of the Property Owner.
(3) Based upon counsel's review of the Final Official Statement, and without having
undertaken to determine independently the accuracy, completeness or fairness of the
statements contained in the Final Official Statement, no facts came to our attention that would
lead us to believe that the information in the sections of the Final Official Statement entitled
["INTRODUCTION -- the District," "DEVELOPMENT IN THE DISTRICT," and other sections to
come] to the extent that they relate to the Property Owner and its respective managers and/or
members, the Property Owner's organization, its property in the District and development
related thereto, or representations made by the Property Owner, contains any untrue statement
of a material fact or omits any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(4) There are no legal or governmental actions, proceedings, inquiries or
investigations pending or threatened to which the property owned by the Property Owner in
Community Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific) (the "Property") is
subject, which, if determined adversely to the Property Owner, would individually or in the
aggregate (a) have a material adverse effect on the financial position or results of operations of
the Property Owner, considered as a whole, or (b) materially and adversely affect the ability of
the Property Owner to complete the proposed development of the Property.
K-1
EXHIBIT L
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF REPRESENTATIONS
AND WARRANTIES OF THE CITY (POS)
[insert date of POS]
To: Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, CA 94104
Ladies and Gentlemen:
We are delivering to you this certificate in connection with the distribution of the
Preliminary Official Statement for the captioned bonds (the "Bonds"). All capitalized terms used
herein without definition shall have the meanings assigned to such terms in the Preliminary
Official Statement.
The undersigned, in his or her capacity as an officer of the City of Tustin (the "City") and
not in his or her individual capacity, on behalf of the City, represents and warrants to you that:
(1) The information contained in the following sections of the Preliminary Official
Statement are true and correct in all material respects and do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading: [INSERT SECTIONS RELATING TO TUSTIN LEGACY, THE DEVELOPMENT
TUSTIN LEGACY AND THE PLANNED EXPENDITURE OF BOND PROCEEDS ON
INFRASTRUCTURE].
(2) Except as is specifically disclosed in the Preliminary Official Statement, there is
no litigation is pending with respect to which the City has been served with process or, to my
best knowledge after reasonable inquiry, threatened (A) to restrain or enjoin the issuance of any
' of the Bonds, the levy or collection of Special Taxes, or the pledge of Net Special Tax Revenues
under the Bond Indenture; (B) in any way contesting or affecting the authority for the issuance of
the Bonds or the validity or enforceability of the Bonds or the Bond Indenture; or (C) in any way
contesting the authority of the City to expend the proceeds of the Bonds as described in the
Preliminary Official Statement.
(3) Except as disclosed in the Preliminary Official Statement, the City and its related
entities have not failed in any material respect to comply with any undertaking under Rule 15c2-
12 in the previous five years. The securities listed in the report of Applied Best Practices dated
, 2014 are all of the securities with respect to which the City and its related were obligated to
provide continuing disclosure pursuant to undertakings under Rule 15c2-12 during the past five
years.
L-1
CITY OF TUSTIN
By:
Authorized Representative
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EXHIBIT M
CITY OF TUSTIN
COMMUNITY FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
SPECIAL TAX BONDS, SERIES 2014
CERTIFICATE OF REPRESENTATIONS
AND WARRANTIES OF THE CITY (CLOSING)
[insert closing date]
To: Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, CA 94104
Ladies and Gentlemen:
We are delivering to you this certificate in connection with the issuance of the captioned
bonds (the "Bonds"). All capitalized terms used herein without definition shall have the
meanings assigned to such terms in the final Official Statement for the Bonds.
The undersigned, in his or her capacity as an officer of the City of Tustin (the "City") and
not in his or her individual capacity, on behalf of the City, represents and warrants to you that
the representations and warranties made by the City in the Certificate of Representations and
Warranties of the City (POS) are true and correct in all material respects on the date hereof,
with the same effect as if made on the date hereof, except that all references to the Preliminary
Official Statement shall be deemed to be references to the Preliminary Official Statement and
the final Official Statement. If at any time subsequent hereto and within 25 days after the date
hereof any such statements in the final Official Statement become untrue, the Developer agrees
to notify immediately the City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific), as issuer of the Bonds, and Stifel, Nicolaus & Company,
Incorporated, as underwriter of the Bonds.
CITY OF TUSTIN
By:
Authorized Representative
M-1
Quint&Thimmig LLP - 8/29/14
9/5/14
9/9/14
CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement"), dated
as of December 1, 2014, is by and between Albert A. Webb Associates, as dissemination agent
(the "Dissemination Agent"), and the CITY OF TUSTIN COMMUNITY FACILITIES DISTRICT
NO. 2014-1 (TUSTIN LEGACY/STANDARD PACIFIC), a community facilities district duly
established and existing under the laws of the State of California (the "Community Facilities
District").
RECITALS:
WHEREAS, the Community Facilities District has issued its City of Tustin Community
Facilities District No. 2014-1 (Tustin Legacy/Standard Pacific), Special Tax Bonds, Series 2014
(the "Bonds") in the initial principal amount of$ ;and
WHEREAS, the Bonds have been issued pursuant to an Indenture of Trust, dated as of
December 1, 2014 (the "Indenture"), by and between The Bank of New York Mellon Trust
Company,N.A.,as trustee(the "Trustee")and the District;and
WHEREAS, this Disclosure Agreement is being executed and delivered by the
Community Facilities District and the Dissemination Agent for the benefit of the owners and
beneficial owners of the Bonds and in order to assist the underwriter of the Bonds in complying
with S.E.C.Rule 15c2-12(b)(5).
AGREEMENT:
NOW, THEREFORE, for and in consideration of the premises and mutual covenants
herein contained, and for other consideration the receipt and sufficiency of which is hereby
acknowledged,the parties hereto agree as follows:
Section 1. Definitions. In addition to the definitions of capitalized terms set forth in
Section 1.01 of the Indenture, which apply to any capitalized term used in this Disclosure
Agreement unless otherwise defined in this Section or in the Recitals above, the following
capitalized terms shall have the following meanings when used in this Disclosure Agreement:
"Annual Report" means any Annual Report provided by the Community Facilities
District pursuant to,and as described in,Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person who (a) has the power, directly or indirectly,
to vote or consent with respect to, or to dispose of ownership of, any Bond (including persons
holding any Bonds through nominees, depositories or other intermediaries), or (b) is treated as
the owner of any Bond for federal income tax purposes.
"Disclosure Representative" means the Finance Director of the City of Tustin, or such
Finance Director's designee, or such other officer or employee as the Community Facilities
District shall designate as the Disclosure Representative hereunder in writing to the
Dissemination Agent from time to time.
"Dissemination Agent" means Albert A. Webb Associates, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing
20015.05:J12827
by the Community Facilities District and which has filed with the Community Facilities District
a written acceptance of such designation.
"EMMA" or "Electronic Municipal Market Access" means the centralized on-line
repository for documents to be filed with the MSRB, such as official statements and disclosure
information relating to municipal bonds, notes and other securities as issued by state and local
governments.
"Listed Events" means any of the events listed in Section 5(a) or 5(b) of this Disclosure
Agreement.
"MSRB" means the Municipal Securities Rulemaking Board, which has been designated
by the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information which may be
designated by the Securities and Exchange Commission as such for purposes of the Rule in the
future.
"Official Statement" means the Official Statement, dated November _, 2014, relating to
the Bonds.
"Participating Underwriter" means the original underwriter of the Bonds required to
comply with the Rule in connection with offering of the Bonds.
"Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
Section 2. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Community Facilities District and the Dissemination Agent for
the benefit of the owners and Beneficial Owners of the Bonds and in order to assist the
Participating Underwriter in complying with the Rule.
Section 3. Provision of Annual Reports.
(a) Delivery of Annual Report. The Community Facilities District shall, or shall cause the
Dissemination Agent to, not later than nine months after the end of the Community Facilities
District's fiscal year (which currently ends on June 30), commencing with the report for the
2013-14 fiscal year, which is due not later than March 31, 2015, file with EMMA, in a readable
PDF or other electronic format as prescribed by the MSRB, an Annual Report that is consistent
with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be
submitted as a single document or as separate documents comprising a package and may cross-
reference other information as provided in Section 4 of this Disclosure Agreement; provided
that any audited financial statements of the Community Facilities District may be submitted
separately from the balance of the Annual Report and later than the date required above for the
filing of the Annual Report if they are not available by that date.
(b) Change of Fiscal Year. If the Community Facilities District's fiscal year changes, it shall
give notice of such change in the same manner as for a Listed Event under Section 5(c), and
subsequent Annual Report filings shall be made no later than six months after the end of such
new fiscal year end.
(c) Delivery of Annual Report to Dissemination Agent. Not later than fifteen (15) Business
Days prior to the date specified in subsection (a) (or, if applicable, subsection (b) of this Section
3 for providing the Annual Report to EMMA), the Community Facilities District shall provide
the Annual Report to the Dissemination Agent (if other than the Community Facilities District).
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If by such date, the Dissemination Agent has not received a copy of the Annual Report, the
Dissemination Agent shall notify the Community Facilities District.
(d) Report of Non-Compliance. If the Community Facilities District is the Dissemination
Agent and is unable to file an Annual Report by the date required in subsection (a) (or, if
applicable,subsection(b)) of this Section 3, the Community Facilities District shall send a notice
to EMMA substantially in the form attached hereto as Exhibit A. If the Community Facilities
District is not the Dissemination Agent and is unable to provide an Annual Report to the
Dissemination Agent by the date required in subsection (c) of this Section 3, the Dissemination
Agent shall send a notice to EMMA in substantially the form attached hereto as Exhibit A.
(e) Annual Compliance Certification. The Dissemination Agent shall, if the Dissemination
Agent is other than the Community Facilities District, file a report with the Community
Facilities District certifying that the Annual Report has been filed with EMMA pursuant to
Section 3 of this Disclosure Agreement,stating the date it was so provided and filed.
Section 4. Content of Annual RepOri . It is acknowledged that the Closing Date for the
Bonds occurred after the end of the 2013-2014 fiscal year of the Community Facilities District.
In light of the foregoing, submission of the Official Statement shall satisfy the Community
Facilities District's obligation to file an Annual Report for fiscal year 2013-2014.
The Annual Report for each fiscal year commencing with the Annual Report for the
2014-2015 fiscal year,shall contain or incorporate by reference the following:
(a) Financial Statements. Audited financial statements of the Community Facilities
District, if any, for the most recently completed fiscal year, prepared in accordance generally
accepted accounting principles as promulgated to apply to governmental entities from time to
time by the Governmental Accounting Standards Board. If the Community Facilities District's
audited financial statements, if any, are not available by the time the Annual Report is required
to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial
statements in a format similar to that used for the Community Facilities District's audited
financial statements, and the audited financial statements, if any, shall be filed in the same
manner as the Annual Report when they become available. If there are no financial statements
prepared for the Community Facilities District for any fiscal year, no unaudited financial
statements need be so included with the Annual Report for such fiscal year.
(b) Other Annual Information. To the extent not included in the audited final statements of
the Community Facilities District, if any, the Annual Report for each fiscal year commencing
with the Annual Report for the 2014-2015 fiscal year, shall also include the following
information:
(i) The principal amount of Bonds Outstanding as of the September 30 next
preceding the date of the Annual Report.
(ii) The balance in the Reserve Fund, and a statement of the Reserve
Requirement,as of the September 30 next preceding the date of the Annual Report.
(iii)The balance in the Improvement Fund as of the September 30 next preceding
the date of the Annual Report.
(iv) The total assessed value of all parcels within the Community Facilities
District on which the Special Taxes are levied, as shown on the assessment roll of the
Orange County Assessor last equalized prior to the September 30 next preceding the
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date of the Annual Report, and a statement of assessed value-to-lien ratios therefor,
either by individual parcel or by categories(e.g. "below 3:1," "3:1 to 4:1" etc.).
(v) The Special Tax delinquency rate for all parcels within the Community
Facilities District on which the Special Taxes arc levied, as shown on the assessment roll
of the Orange County Assessor last equalized prior to the September 30 next preceding
the date of the Annual Report, and the number of parcels within the Community
Facilities District on which the Special Taxes are levied and which arc delinquent in
payment or Special Taxes, as shown on the assessment roll of the Orange County
Assessor last equalized prior to the September 30 next preceding the date of the Annual
Report, the amount of each delinquency, the length of time delinquent and the date on
which foreclosure was commenced, or similar information pertaining to delinquencies
deemed appropriate by the Community Facilities District; provided, however, that
parcels with aggregate delinquencies of less than $5,000 (excluding penalties and
interest) may be grouped together and such information may be provided by category.
(vi) The status of foreclosure proceedings for any parcels within the Community
Facilities District on which the Special Taxes are levied and a summary or the results of
any foreclosure sales,or other collection efforts with respect to delinquent Special Taxes,
as of the September 30 next preceding the date of the Annual Report.
(vii) The identity of any property owner representing more than five percent
(5%) of the annual Special Tax levy who is delinquent in payment of such Special Taxes,
as shown on the assessment roll of the Orange County Assessor last equalized prior to
the September 30 next preceding the date of the Annual Report.
(viii) A land ownership summary listing property owners responsible for more
than five percent (5%) of the annual Special Tax levy,as shown on the assessment roll of
the Orange County Assessor last equalized prior to the December next preceding the
date of the Annual Report.
(ix) The most recent annual information required to be provided to the California
Debt and Investment Advisory Commission pursuant to Section 6.12 of the Indenture.
(c) Cross References. Any or all of the items listed above may be included by specific
reference to other documents, including official statements of debt issues of the Community
Facilities District or related public entities, which are available to the public on EMMA. The
Community Facilities District shall clearly identify each such other document so included by
reference.
If the document included by reference is a final official statement, it must be available
from EMMA.
(d) Further Information. In addition to any of the information expressly required to be
provided under paragraph (b) of this Section 4, the Community Facilities District shall provide
such further information, if any, as may be necessary to make the specifically required
statements,in the light of the circumstances under which they are made,not misleading.
Section 5. Reporting of Listed Events.
(a) Reportable Events. The Community Facilities District shall, or shall cause the
Dissemination (if not the Community Facilities District) to, give notice of the occurrence of any
of the following events with respect to the Bonds:
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(1) Principal and interest payment delinquencies.
(2) Unscheduled draws on debt service reserves reflecting financial
difficulties.
(3) Unscheduled draws on credit enhancements reflecting financial
difficulties.
(4) Substitution of credit or liquidity providers,or their failure to perform.
(5) Defeasances.
(6) Rating changes.
(7) Tender offers.
(8) Bankruptcy, insolvency, receivership or similar event of the obligated
person.
(9) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax status of
the security,or other material events affecting the tax status of the security.
Note: For the purposes of the event identified in subparagraph (8), the event is
considered to occur when any of the following occur: the appointment of a receiver,
trustee or similar officer for an obligated person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a court
or governmental authority has assumed jurisdiction over substantially all of the assets or
business of the obligated person, or if such jurisdiction has been assumed by leaving the
existing governmental body and officials or officers in possession but subject to the
supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the obligated person.
(b)Material Reportable Events. The Community Facilities District shall give,or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds, if
material:
(1) Non-payment related defaults.
(2) Modifications to rights of security holders.
(3) Bond calls.
(4) The release, substitution, or sale of property securing repayment of the
securities.
(5) The consummation of a merger, consolidation, or acquisition involving
an obligated person or the sale of all or substantially all of the assets of the obligated
person, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement
relating to any such actions,other than pursuant to its terms.
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(6) Appointment of a successor or additional trustee, or the change of name
of a trustee.
(c) Time to Disclose. The Community Facilities District shall, or shall cause the
Dissemination Agent (if not the Community Facilities District) to, file a notice of such
occurrence with EMMA, in an electronic format as prescribed by the MSRB, in a timely manner
not in excess of 10 business days after the occurrence of any Listed Event. Notwithstanding the
foregoing, notice of Listed Events described in subsections (a)(5) and (b)(3) above need not be
given under this subsection any earlier than the notice (if any) of the underlying event is given
to owners of affected Bonds under the Indenture.
Section 6. Identifying Information for Filings with EMMA. All documents provided to
EMMA under this Disclosure Agreement shall be accompanied by identifying information as
prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Community Facilities District's
obligations under this Disclosure Agreement shall terminate upon the defeasance, prior
redemption or payment in full of all of the Bonds. If such termination occurs prior to the final
maturity of the Bonds, the Community Facilities District shall give notice of such termination in ,
the same manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent.
(a)Appointment of Dissemination Agent. The Community Facilities District may,from time
to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations
under this Disclosure Agreement and may discharge any such agent, with or without
appointing a successor Dissemination Agent.The initial Dissemination Agent shall be Albert A.
Webb Associates.
If the Dissemination Agent is not the Community Facilities District, the Dissemination
Agent shall not be responsible in any manner for the content of any notice or report prepared by
the Community Facilities District pursuant to this Disclosure Agreement. It is understood and
agreed that any information that the Dissemination Agent may be instructed to file with EMMA
shall be prepared and provided to it by the Community Facilities District. The Dissemination
Agent has undertaken no responsibility with respect to the content of any reports, notices or
disclosures provided to it under this Disclosure Agreement and has no liability to any person,
including any Bond owner,with respect to any such reports,notices or disclosures.The fact that
the Dissemination Agent or any affiliate thereof may have any fiduciary or banking relationship
with the Community Facilities District shall not be construed to mean that the Dissemination
Agent has actual knowledge of any event or condition, except as may be provided by written
notice from the Community Facilities District.
(b) Compensation of Dissemination Agent. The Dissemination Agent shall be paid
compensation by the Community Facilities District for its services provided hereunder as
agreed to between the Dissemination Agent and the Community Facilities District from time to
time and all expenses, legal fees and expenses and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall
not be deemed to be acting in any fiduciary capacity for the Community Facilities District, the
owners of the Bonds, the Beneficial Owners, or any other party. The Dissemination Agent may
rely, and shall be protected in acting or refraining from acting, upon any written direction from
the Community Facilities District or a written opinion of nationally recognized bond counsel.
The Dissemination Agent may at any time resign by giving written notice of such resignation to
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•
the Community Facilities District.The Dissemination Agent shall not be liable hereunder except
for its negligence or willful misconduct.
(c) Responsibilities of Dissemination Agent. In addition of the filing obligations of the
Dissemination Agent set forth in Sections 3(e) and 5, the Dissemination Agent shall be
obligated, and hereby agrees, to provide a request to the Community Facilities District to
compile the information required for its Annual Report at least 30 days prior to the date such
information is to be provided to the Dissemination Agent pursuant to subsection (c) of Section
3. The failure to provide or receive any such request shall not affect the obligations of the
Community Facilities District under Section 3.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the Community Facilities District may amend this Disclosure Agreement (and the
Dissemination Agent shall agree to any amendment so requested by the Community Facilities
District that does not impose any greater duties or risk of liability on the Dissemination Agent),
and any provision of this Disclosure Agreement may be waived, provided that all of the
following conditions are satisfied:
(a) Change in Circumstances. If the amendment or waiver relates to the provisions
of Sections 3(a), 4 or 5(a) or (b), it may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change
in the identity, nature, or status of an obligated person with respect to the Bonds, or the
type of business conducted.
(b) Compliance as of Issue Date. The undertaking, as amended or taking into
account such waiver, woul& in.the opinion of a nationally recognized bond counsel,
have complied with the requirements of the Rule at the time of the original issuance of
the Bonds, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances.
(c) Consent of Holders; Non-impairment Opinion. The amendment or waiver either
(i) is approved by the Bond owners in the same manner as provided in the Indenture for
amendments to the Indenture with the consent of Bond owners, or (ii) does not, in the
opinion of nationally recognized bond counsel, materially impair the interests of the
Bond owners or Beneficial Owners.
If this Disclosure Agreement is amended or any provision of this Disclosure Agreement
is waived, the Community Facilities District shall describe such amendment or waiver in the
next following Annual Report and shall include, as applicable, a narrative explanation of the
reason for the amendment or waiver and its impact on the type (or in the case of a change of
accounting principles, on the presentation) of financial information or operating data being
presented by the Community Facilities District. In addition, if the amendment relates to the
accounting principles to be followed in preparing financial statements, (i) notice of such change
shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual
Report for the year in which the change is made should present a comparison(in narrative form
and also, if feasible, in quantitative form) between the financial statements as prepared on the
basis of the new accounting principles and those prepared on the basis of the former accounting
principles.
Section 10. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Community Facilities District from disseminating any other information,
using the means of dissemination set forth in this Disclosure Agreement or any other means of
communication, or including any other information in any Annual Report or notice of
occurrence of a Listed Event, in addition to that which is required by this Disclosure
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Agreement. If the Community Facilities District chooses to include any information in any
Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically
required by this Disclosure Agreement, the Community Facilities District shall have no
obligation under this Disclosure Agreement to update such information or include it in any
future Annual Report or future notice of occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the Community Facilities District to
comply with any provision of this Disclosure Agreement, any Bond owner, any Beneficial
Owner, the Trustee or the Participating Underwriter may take such actions as may be necessary
and appropriate, including seeking mandate or specific performance by court order, to cause
the Community Facilities District to comply with its obligations under this Disclosure
Agreement. The sole remedy under this Disclosure Agreement in the event of any failure of the
Community Facilities District to comply with this Disclosure Agreement shall be an action to
compel performance.
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the Community Facilities District, the Trustee, the Dissemination Agent, the Participating
Underwriter and the owners and the Beneficial Owners from time to time of the Bonds, and
shall create no rights in any other person or entity.
Section 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts,each of which shall be an original and all of which shall constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as
of the date first above written.
CITY OF TUSTIN COMMUNITY
FACILITIES DISTRICT NO. 2014-1
(TUSTIN LEGACY/STANDARD PACIFIC)
By
of the City of Tustin
ALBERT A. WEBB ASSOCIATES,as
Dissemination Agent
By
Authorized Officer
20015.O5:J12827
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Obligor: City of Tustin Community Facilities District No. 2014-1 (Tustin
Legacy/Standard Pacific)
Name of Bond Issue: $ City of Tustin Community Facilities District No. 2014-
1 (Tustin Legacy/Standard Pacific),Special Tax Bonds,Series 2014
Date of Issuance: December_,2014
NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with
respect to the above-named Bonds as required by Section 6.09 of the Indenture of Trust, dated
as of December 1, 2014, between the Obligor and The Bank of New York Mellon Trust
Company, N.A., as trustee. The Obligor anticipates that the Annual Report will be filed by
Date:
Albert A. Webb Associates,as Dissemination Agent
on behalf of the City of Tustin Community
Facilities District No.2014-1 (Tustin Legacy/
Standard Pacific)
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