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HomeMy WebLinkAboutCC 6 EXECUTION AG'S 12-06-93, AGENDA DATE: NOV~-MBER 30 · 1993 CONSENT CALENDAR NO. 6 : 12-6-93 Inter-Cum WILLIAM A. HUSTONv CITY MANAGER TO: RONALD A. NAULT, DIRECTOR OF FINANCE FROM: CITY OF TUSTIN RESOLUTION N0.93-134 AUTHORIZIN~ EXECUTION OF SUBJECT: THE TRI PARTY AGREEMENT, THE GUARANTEE AGREEMENT, THE FOURTH SUPPLEMENTAL INDENTURE OF TRUST AND THE ]%MENDMENT TO THE RE COHHENDAT I ON: It is recommended.by staff and the Assessment District Bond Council that the City Council adopt Resolution No. 93-134, and related matters contained in Exhibits A through D. FISCAL IMPACT: None DISCUSSION: Citibank N.A. was selected and has served as Trustee for City Assessment District No. 85-1 since the sale of bonds for the district in 1986. Citibank N.A., has recently transferred its Municipal Corporate Trust Accounts to State Street Bank and Trust Company N.A.. Both Citibank and State Street Bank have requested that the City approve State Street Bank as Successor Trustee for Assessment District 85-1. Staff recommends this change. The variable rate portion of Assessment District No. 85-1 bonds are secured by a Letter of Credit currently provided by Mitsubishi Trust, an agent of.Mitsubishi Trust and Banking Corp. The ratings for Mitsubishi Trust and Banking Corp have twice recently been downgraded causing the variable rate property owners to pay higher interest rates than are commonly available in the market. Sanwa Bank Limited, has offered to provide a Standby Letter of Credit which will enhance the security on the variable rate bonds which should have a positive effect on interest rates paid by the property owner. The Fourth Supplemental Indenture of Trust and the Amendment to the Remarketing Agreement are necessary for the execution of the Sanwa Bank Standby Letter of Credit. The City's Bond Counsel, Mudge Rose Guthrie Alexander and Ferdon, have reviewed all the documentation regarding this Agreement and concurr with staff's recommendations. Director of Finance RAN:Is Attachment a: st at est .85~, .. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 93-134 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN AUTHORIZING THE EXECUTION AND DELIVERY OF THE TRI-PARTY AGREEMENT, THE GUARANTEE AGREEMENT, THE FOURTH SUPPLEMENTAL INDENTURE OF TRUST AND THE AMENDMENT TO THE REMARKETING AGREEMENT RELATING TO ASSESSMENT DISTRICT NO. 85-1 AND AUTHORIZING CERTAIN RELATED MATTERS The City Council of the city of Tustin does hereby resolve as follows: ~{E~AS, the City Council of the City of Tustin (the "City") has previously authorized the execution and delivery of an Indenture of Trust, dated as of August 1, 1986, by and between the city and Citibank, N.A., as trustee ("Citibank") with respect to the issuance of $50,650,000 aggregate principal amount of the City's Assessment District No. 85-1 Improvement Bonds (the "Bonds"); and W]{EREAS, the City Council has previously authorized the execution and delivery of the First Supplemental Indenture of Trust, dated as of February 1, 1987 by and between the City and Citibank, the Second Supplemental Indenture of Trust, dated as of September 1, 1989 by and between the City and-.Citibank, and the Third Supplemental Indenture of Trust, dated as of June 1, 1990 by and between the City and Citibank (as amended and supplemented, the "Original Indenture"); and WI~EREAS, the City has determined to provide for the maintenance of a standby letter of credit (the "Confirming Letter of Credit") to be issued by The Sanwa Bank, Limited, acting through its Los Angeles Branch ("Sanwa Bank"); and W~EREAS, the maintenance of the Confirming Letter of Credit will provide additional security for'the Bonds secured by the Letter of Credit (the "Primary Letter of Credit") iSsued by The Mitsubishi Trust and Banking Corporation, acting through its Los Angeles Agency ("Mitsubishi Trust") in the event any drawing made under the Primary Letter of Credit is not honored; and WI~EREAS, Sanwa Bank intends to issue its Confirming Letter of Credit in order to further secure the payment of the Bonds currentl~ secured by the Primary Letter of Credit; and 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 W~EREAS, in order to effect the confirmation of the Primary Letter of Credit by the issuance of the Confirming Letter of Credit, the City, Mitsubishi Trust and Sanwa Bank desire to enter into a Tri-Party Agreement, dated as of December 1, 1993 (the "Tri- Party Agreement"), the proposed form of which is attached hereto as Exhibit A; and W~EREAS, Citibank has transferred its municipal corporate trust accounts to State Street Bank and Trust Company, N.A., as the intended successor trustee (the "Trustee"); and W~EREAS, State Street Bank and Trust Company, the parent of the Trustee, has agreed to guarantee the performance by the successor Trustee of its obligations under the Original Indenture, as amended and supplemented by the Fourth Supplemental Indenture (as defined below); and WR~RE~S, in connection with such guarantee by State Street Bank and Trust Company, the City, Citibank and State street Bank and Trust Company, N.A. desire to enter into an Agreement, dated as of December 1, 1993, relating to the appointment of the Trustee as successor trustee, the proposed form of which is attached hereto as Exhibit B; and W~EREAS, the City and the successor Trustee desire to execute and deliver the Fourth Supplemental Indenture of Trust, dated as of DeCember 1, 1993 by and between the City and the successor Trustee (the "Fourth Supplemental Indenture") in order to provide for the confirming Letter of Credit and to facilitate the designation of State Street Bank and Trust Company, N~A~ as the successor Trustee, the proposed form of which is attached ~hereto as Exhibit ~C; and W]{EREAS, the desired amendments to the Original Indenture add to the conditions, covenants and terms contained therein to be observed or performed by the City and such additional conditions, covenants and terms will not adversely affect the interests of the Owners; and W~EREAS, the City has determined that the provisions with respect to the appointment of the successor Trustee are desirable and necessary and such provisions will not adversely affect the interests of the Owners; and W~EREAS, in accordance with Section 9.01 of the Original Indenture, this Fourth Supplemental Indenture will become binding when the written consent of Mitsubishi Trust and a Favorable Opinion of Bond Counsel (as defined in the Original Indenture) have been filed with the Trustee; and 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, the City Council of the City has previously authorized the execution and delivery of a Remarketing Agreement, dated as of August 1, 1986 by and between the City and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Original Remarketing Agreement") in order to facilitate the remarketing of the Bonds secured by the Primary Letter of Credit; and WHEREAS, in connection with the issuance of the Confirming Letter of Credit the City desires to effect certain amendments to the Original Remarketing Agreement pursuant to an Amendment to the Remarketing Agreement dated as of December 1, 1993 by and between 'the City and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Amendment to Remarketing Agreement"), the proposed form of which is attached hereto as Exhibit D. NOW, THEREFORE, the City Council of the City of Tustin does .hereb~ r~olve and order as follows: Section 1. The City hereby approves the Tri-Party Agreement, and the Mayor, the Mayor Pro-Tem or the Finance Director and the City Clerk are hereby authorized on behalf of the City to execute the Tri-Party Agreement with such additions, deletions and clarifications as approved by the Mayor, the Mayor Pro-Tem or the Finance Director, such execution being approval by the City of such additions, deletions or clarifications. Section 2. The City hereby approves the Guarantee Agreement, and the Mayor, the Mayor Pro-Tem or the Finance Director and the City Clerk are hereby authorized on behalf of the City t© execute the GuaranteeAgreement with such additions, deletions and clarifications as approved by the Mayor, the Mayor Pro-Tem or the Finance Director, such execution being approval by the City of such additions, deletions or clarifications. Section 3. The City hereby approves the Fourth Supplemental Indenture, and the Mayor, the Mayor Pro-Tem or the Finance Director and the City Clerk are hereby authorized on behalf of the City to execute the Fourth Supplemental Indenture with such additions, deletions and clarifications as approved by the Mayor, the Mayor Pro-Tem or the Finance Director, such execution being approval by the City of such additions, deletionS or clarifications. Section 4. The City hereby approves the Amendment to the Remarketing Agreement, and the Mayor, the Mayor Pro-Tem or the Finance Director and the City Clerk are hereby authorized on behalf of the City to execute the Amendment to the Remarketing Agr_eement with such additions, deletions and clarifications as approved by the Mayor, the Mayor Pro-Tem or the Finance Director, such execution being approval by the City of such additions, deletions or clarifications. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 5. The Mayor or Mayor Pro-Tem, the City Manager, the Finance Director, the Treasurer, the City Clerk and other appropriate officers of the City are hereby further authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts necessary and proper to carry out the transactions contemplated by this Resolution. PASSED AI~D ADOPTED at a regular meeting of the city Council of the City of Tustin held on the 6th day of December, 1993. Attest: Jim Potts, Mayor Mary Wynn, City Clerk TRI-PARTY AGREEMENT Exhibit A This TRI-PARTY AGREEMENT (hereinafter, .this "Agreement"), dated as of December , 1993 (hereinafter, the "Effective Date"), is entered into between and among the CITY OF TUSTIN, CALIFORNIA (hereinafter, the "City"), THE MITSUBISHI TRUST AND BANKING CORPORATION, acting through its Los Angeles Agency Office (hereinafter, the "Primary Letter of Credit Bank" or the "~ssuing Bank"), and THE SANWA BANK, LIMITED, acting through its Los Angeles Branch Office (hereinafter, the "Confirming Letter of Credit Bank"), and is agreed to and acknow- · ledged by STATE STREET BANK AND TRUST COMPANY, N.A., a national banking association, in its capacity as successor Trustee (as hereinafter defined). WITNESSET~: WHEREAS, the City has heretofore entered into an Indenture of Trust dated as of August 1, 1986 by and between the City and Citibank, N.A., a national banking association LBBO12&l .I.51 -1- incorporated under the laws of the United States of America (hereinafter~ t--he "Initial Trustee"), as amended and supplemented by (i) the First Supplemental Indenture of Trust dated as of February 1, 1987 by and between the City and the Initial Trustee, (ii) the Second Supplemental Indenture of Trust dated as of September 1, 1989 by and between the City and the Initial Trustee, and (iii) the Third Supplemental Indenture of Trust dated as of June 1, 1990 by and between the City and the Initial Trustee, and (iv) the Fourth Supplemental Indenture of Trust dated as of December , 1993 by and between the City and the Trustee (all of the foregoing collectively, as so amended and supplemented, the "Indenture") to provide for, among other things, the issuance and the securing of the City's U.S.$50,650,000 aggregate principal amount of City of Tustin Assessment District No. 85-1 Improvement Bonds (hereinafter, the "Bonds"); and WHEREAS, STATE STREET BANK AND TRUST COMPANY, N.A., has duly succeeded to the rights and obligations of the Initial Trustee in accordance with the provisions of Section 11.02 of the Indenture, and now serves as the successor Trustee; and WHEREAS, in order to provide credit enhancement and liquidity support for the Bonds, the Mitsubishi Trust and Banking Corpora~on, acting through its Los Angeles Agency Office, issued LB6012/,1 .t~51 --2-- upon August 26, 1986 its Irrevocable Letter of Credit No. LC-080800 (hereinafter, as amended, the "Primary Letter of Credit", a copy of which, as so amended to conform to the administrative and timing requirements of the Confirming Letter of Credit (as hereinafter defined and described), is attached hereto as Exhibit "A"), at the request and for the account of the city and in favor of the Initial Trustee, with the said Primary Letter of Credit'being in the initial aggregate amount of Fifty One Million Eight Hundred Twenty-Two Thousand Five Hundred Eighty-Three United States Dollars (U.S.$51,822,583) (hereinafter, the "Stated Amount"), of which (i) U.S.$50,650,000 (hereinafter, the "Principal Portion") is available with respect to principal of, (ii) U.S.$666,083 (hereinafter, the "Interest Portion") is available with respect to interest on, and (iii) U.S.$506,500 (hereinafter, the "Premium Portion") is available with respect to premium on, the Bonds. The Stated Amount available to be drawn under the Primary Letter of Credit, and each of the aforementioned Principal Portion, Interest Portion and Premium Portion, are subject to reduction and reinstatement as provided by the specific terms and conditions of the Primary Letter of Credit; and WHEREAS, the Primary Letter of Credit was itself issued in conjunction with the execution of a certain Reimbursement Agreement (hereinafter, the ,,Reimbursement Agreement") dated as LBB012~i .U~l -3 - of August 1, 1986 by and between the City and the Primary Letter of Credit Ba~k~ which Reimbursement Agreement (the terms and conditions of which are incorporated herein by reference as if fully set forth herein) set forth those terms and conditions upon which the City, as the Account Party (as defined therein) and the Primary Letter of Credit Bank, as the Issuing Bank, had mutually agreed upon the issuance of the Primary Letter of Credit. The Reimbursement Agreement also set forth other terms and conditions in regard to the respective rights and obligations of the Account Party a~d {he Issuing Bank with respect thereto, including terms and conditions governing, without limitation and inter alia, the reimbursements of draws made under the Primary Letter of Credit and the making of other payments to the Issuing Bank by the Account Party, certain provisions with respect to Bank Bonds (as defined therein), specific terms and conditions governing the operations of the Primary Letter of Credit (including, without limitation, changes in the Stated Amount of the Primary Letter of Credit; separate purchase arrangements, and matters relating to usury; and the payment of drawings made under the Primary Letter of Credit), specific representations, warranties and covenants made by the City for the benefit of the Issuing Bank, the conditions precedent to the issuance and the delivery by the Issuing Bank of the Primary Letter of Credit, the setting forth of specific events of default, and numerous miscellaneous matters (including, without limitation, the right of the Issuing Bank to LBB012/, 1 . 1.151 --4 -- the exercise of its right of setoff; specific actions relating to the Financin~ Documents (as defined therein) and indemnities relating thereto; specific security granted to the Issuing Bank relating to the repayment to the Issuing Bank of any amounts drawn under the Primary Letter of Credit; and the extension of the term of the Primary Letter of Credit) and WHEREAS, Section 8.15 of the Reimbursement Agreement specifically provides that the security interest granted to the Issuing Bank pursuant to the. terms of the Indenture is incorporated therein by reference, and extends to and secures all obligations of the City to the Issuing Bank under the Reimbursement Agreement, notwithstanding any termination or discharge of the Indenture, and that the said security interest shall survive until all sums owing under the Reimbursement Agreement are paid in full; and WHEREAS, pursuant to the terms of the Indenture, including, without limitation, the specific terms and conditions contained in Article II and Article V thereof, there is pledged pursuant to the Indenture for the payment of the principal of and redemption premium' if any, and interest on the Bonds in accordance with the terms and provisions of the Indenture, and for the payment of the obligations owing to the Issuing Bank pursuan~to the Reimbursement Agreement to the extent payable in LBBO12&1 .I.151 --5-- accordance with the Indenture or the Act (as defined therein), (i) all righ~,~title and interest of the City in the Assessment Installments (as defined therein) and foreclosure proceeds relating thereto, (ii) the proceeds of the sale of the Bonds, (iii) to the Fixed Rate Bonds, the Fixed Rate Reserve Account (as defined therein), (iv) to the Unit Pricing Bonds and the Demand Bonds, the Variable Rate Reserve Account and the Interest Reserve Fund (all as defined therein), and (v) all other funds, accounts, and sub-accounts, if any, created under the Indenture (subject, however, to such specific exceptions therefrom as are set forth in the Indenture); and WHEREAS, in order to enhance the marketability of the Bonds, and in order to reduce the expense incurred by the City with regard to the same said Bonds, it is now desired by the City and by tWe parties hereto to confirm the Primary Letter of Credit with an irrevocable confirming letter of credit (hereinafter, the "Confirming Letter of Credit") issued by the confirming Letter of Credit Bank; NOW THEREFORE, in order to effect the confirmation of the Primary Letter of Credit by the issuance of the Confirming Letter of Credit, and in order to induce the Confirming Letter of Credit Bank to issue the same, and for a good and valuable LBB012/,1 . I,,,51 --6-- consideration, the receipt and adequacy of which are hereby --_ acknowledged~ the parties hereto agree as follows: 1. Upon the terms and conditions as are set forth in this Agreement, the confirming Letter of Credit Bank hereby agrees to issue the Confirming Letter of Credit (in that form attached hereto as Exhibit "B"), with an effective date of December , 1993. 2. The Confirming Letter of Credit shall be in an aggregate commitment amount of up to, but not to exceed, the sum of U.S. $30,866,000. 3. The term of the Confirming Letter of Credit shall be for a period from and including December , 1993 to an expiry date not to exceed December , 1994. 4. A commitment fee (the "Confirming Commitment Fee") shall be payable by the City to the Confirming Letter of Credit Bank of fifteen (15) basis points (0.15%) on its facility, with such Confirming Commitment Fee being payable at the commencement of the term of the Confirming Letter of Credit (and, should the Confirming Letter of Credit be extended (with any such extension to be in the sole and absolute, judgment of the Confirming Letter of Credit Bank), at the commencement of each subsequent term LBBO 1241.1a51 --7 -- thereafter). Should any such payment of the Confirming Commitment F~e not be paid when due, it shall thereafter bear interest at the Default Rate (as hereinafter defined). 5. Any and all draws made upon the Confirming Letter of Credit shall be immediately repayable to the Confirming Letter of Credit Bank by the Primary Letter of Credit Bank, and if the same are not so repaid on the date of any such draw, the same shall bear interest at a variable rate of interest per annum equal to the prime rate then being charged by the Confirming '~ Letter of Credit Bank plus two (2%) percent (hereinafter, the "Default Rate") . 6. It is expressly understood and agreed that all draws made on the Confirming Letter of Credit, together with all interest and/or other sums due thereupon, will be for the account of the Primary Letter of Credit Bank, and will be immediately reimbursed or paid to the Confirming Letter of Credit Bank by the Primary Letter of Credit Bank. The Confirming Letter of Credit Bank shall be, and hereby is, subrogated in all rights and particulars to all of the rights, remedies, and sources of security provided to the Primary Letter of Credit Bank pursuant to the above-described terms of the Indenture and the Reimbursement Agreement, in order to provide repayment security to the C~nfirming Letter of Credit Bank against the possibility LBBO 124~1 .I,151 --8 -- that the Primary Letter of Credit Bank for any reason whatsoever should fail %o~immediately reimburse the Confirming Letter of Credit Bank for any and all draws made upon the Confirming Letter of Credit, or should fail to pay any other amounts due to the Confirming Letter of Credit Bank pursuant to this Agreement. Such subrogation shall be absolute and without qualification, and shall remain in full force and effect until such time as the Confirming Letter of Credit Bank shall'have been repaid in full for all unreimbursed draws and other amounts due and owing to it. 7. Notwithstanding the payment of.any amounts by the Confirming Letter of Credit Bank, it is expressly understood and agreed that the Primary Letter of Credit Bank shall not be exonerated or excused thereby from all or any'of its obligations which are owed to the Confirming Letter of CreditBank hereunder. 8. The Confirming Letter of Credit Bank shall be under no obligation to take any action with respect to draws being sought under the Confirming Letter of Credit without, as respectively aPplicable, there first or concurrently being received by the Confirming Letter of Credit Bank from the Trustee (whether by hand delivery, tested telefax, or confirmed telefacsimile transmission) a specific and written notice of (i) in the instance of draws being made under the Confirming Letter of Credi~c pursuant to Sections 4.06 (A), (B) or (D) of the LBBO1Z&I .%;51 --9-- Indenture, the failure by the Primary Letter of Credit Bank to honor or to ~th~erwise pay a draw which the Trustee has sought to make under the Primary Letter of Credit, in accordance with its terms, or (ii) in the instance of draws being made under the Confirming Letter of Credit pursuant to Section 4.06 (C) of the Indenture, the concurrent demand for the payment of such draw under the Primary Letter of Credit, in accordance with its terms, having been duly presented to the Primary Letter of Credit Bank. The providing of this specific and written notice shall be, respectively, an express (i) condition precedent or (ii) condition concurrent to the honoring by the Confirming Letter of Credit Bank of its obligations under the Confirming Letter of Credit. 9. Upon its receipt of a draft or other demand for payment duly presented to the Primary Letter of Credit Bank, together with the above-described specific and written notice, the Confirming Letter of Credit Bank agrees to make the requested draw payment, in strict compliance with its terms, upon those terms and conditions as are set forth in Section 4.06 of the Indenture. 10. In the event that there should be a default in any of the terms of this Agreement (hereinafter, an "Event of LBB01241 . I."51 --10-- Default"), then the Confirming Letter of Credit Bank, at its sole option, may ta~e all or any of the following actions: (a) - Provide written notice to the Trustee of the termination of the Confirming Letter of Credit, with such termination to be effective not less than forty (40) calendar days from and after the date of such notice, or upon the expiry date, whichever shall f~rst occur in time. (b) Pursue all or any of its rights and remedies with regard to that security provided to it for the payment of obligations owed to it hereunder. 11. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to-the principles governing the conflict of laws. 12. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which counterparts shall together constitute but one and the same instrument. 13. This Agreement shall be binding upon and inure to the benefit of the City, the Primary Letter of Credit Bank, the LBBO12&l .U51 --11-- authorized officers, all as of the date and year first above -- written · CITY OF TUSTIN Mayor of the city of Tustin ATTEST: city Clerk of the City of Tustin THE MITSUBISHI TRUST AND BANKING CORPORATION, Los Angeles Agency By: Its: LBBO 12/,1 .'d51 -- 1 3 -- Confirming Letter of Credit Bank, the Trustee, and their respective successors and assigns. 14. Each of the parties hereto hereby represents and warrants for itself that as of the date hereof, and the Effective Date: (a) It has the power and authority to execute and deliver this Agreement and to perform its obligations ~er~'under, and all such action has been duly and validly authorized by all necessary proceedings on its part; and (b) This Agreement has been duly authorized, executed and delivered by it, and constitutes a legal, valid and binding agreement enforceable against it in accordance with its terms, except as the enforceability of this Agreement may be limited bY bankruptcy, insolvency or other similar laws of general application affecting the enforce- ment of creditor's rights or by general principles of equity limiting the availability of equitable remedies. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly LBBO 12&1 . 1,i51 -12 - THE SANWA BANK, LIMITED, Los Angeles Branch office By: Its: By: Its: AGREED AND ACKNOWLEDGED: STATE STREET BANK AND TRUST COMPANY, N.A., as Trustee By' Its. · LBBO1Z41 .I,45 1 -14 - [MODIFIED MTBC LETTER OF CREDIT NO. LC-080800] EXHIBIT LBBO12&l .I,,'51 --15-- [ CONFIRMING LETTER OF CREDIT] EXHIBIT "B" LBBO1Z/.1 .t,'51 --16-- EXHIBIT B AGREEMENT dated as of November , 1993 among the City of Tustin (the "City"), Citibank, N.A. ("Citibank") and State Street Bank and Trust Company, N.A. (the "Trust Company"). Recitals Citibank is the Trustee under the Indenture of Trust dated as of August 1, 1986 between the City and Citibank (the "Indenture") providing for the issuance of Assessment District No. 85-1 Limited Obligation Improvement Bonds (the "Bonds"). In connection with the acquisition by the Trust Company of the municipal trust and agency business of 'Citibank on June 28, 1993 Citibank hereby notifies the City of its intent to resign as Trustee and Paying Agent under the Indenture and the parties hereto wish to substitute the Trust C_ompgpy for Citibank as Trustee and Paying Agent under the Indenture. State Street Bank and Trust Company, the parent of the Trust Company, has guaranteed in a separate letter the performance of the obligations of the Trust Company under the Indenture. The City, Citibank and the Trust Company believe that the amendment to Section 8.02 of the Indenture provided for in the Fourth Supplemental Indenture to the Indenture is desirable or necessary and not inconsistent with the Indenture and shall not adversely affect the interests of the Owners (as defined in the Indenture). Section 1. ResiGnation and Appointment. Citibank hereby resigns as Trustee and Paying Agent under the Indenture. The City hereby waives~the 60 days' notice requirement under Section 8.06 of the Indenture. The City hereby appoints the Trust Company as successor Trustee and Paying Agent under the Indenture and the Trust Company hereby accepts such appointment. Each such resignation, appointment and acceptance shall be effective as of the date hereof. Section 2. Transfer of Property. Citibank hereby assigns and transfers to the Trust Company all of its right, title and interest in and to all property held by it under the Indenture and shall pay over, assign and deliver to the Trust Company all money or other property held by it under the Indenture. Section 3. Notices. The address of the Trust Company for receiving notices is 20 Exchange Place, 16th Floor, New York, New York 10005 or such other address as the Trust Company may specify to the parties hereto. Section 4. Counterparts. This Agreement may be executed in several counterparts and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. THE CITY OF TUSTIN By CITIBANK, N.A. By STATE STREET BANK AND TRUST COMPANY, N.A. By The appointment of the Trust Company as Trustee and Paying Agent under the Indenture is hereby consented to and the 60 days' notice requirement under Section 8.06 of the Indenture is hereby waived. [ BANK By Exhibit C FOURTH SUPPLEMENTAL INDENTURE OF TRUST THIS FOURTH SUPPLEMENTAL INDENTURE OF TRUST (this "Fourth Supplemental Indenture"), dated as of December , 1993, by and between the City of Tustin, California (the "City") and State Street Bank and Trust Company, N.A., a national banking association, in its capacity as successor Trustee (the "Trustee") WITNESSETH: WHEREAS, the City has heretofore entered into an Indenture-of Trust dated as of August 1, 1986 by and between the City and the Trustee, as amended and supplemented by the First Supplemental Indenture of Trust dated as of February 1, 1987 by and between the City and the Trustee, the Second Supplemental Indenture of Trust dated as of September 1, 1989 by and between the City and the Trustee and the Third Supplemental Indenture of Trust dated as of June 1, 1990 by and between the City and the Trustee (as amended and supplemented, the "Original Indenture") to provide for, among other things, the securing of the City's $50,650,000 aggregate principal amount of Assessment District No. 85-1 Improvement Bonds (the "Bonds"); and WHEREAS, the City has determined to provide for the maintenance of a standby letter of credit (the "Confirming Letter of Credit") to be issued'by The Sanwa Bank, Limited, acting through its Los Angeles Branch Office; and WHEREAS, the maintenance of the Confirming Letter of Credit will provide additional security for the Bonds in the event any drawing made under the Letter of Credit (as originally defined in the Indenture) (the "Primary Letter of Credit") is dishonored; and _WHEREAS, on December__, 1993, The Sanwa Bank, Limited, acting through its Los Angeles Branch Office, will issue its Confirming Letter of Credit to be delivered to the Trustee in order to further secure the payment of the Bonds currently secured by the Primary Letter of Credit; and WHEREAS, Citibank, N.A., the original trustee under the Original Indenture, has transferred its municipal corporate trust accounts-to State Street Bank and Trust Company, N.A., as successor Trustee in accordance with Section 11.02 of the Original Indenture; and LA01 \2534\10098.3 94691.13 WHEREAS, State Street Bank and Trust Company, the parent of the Trustee, has guaranteed the performance by the Trustee of its obligations under the Indenture; and WHEREAS, the parties desire to amend the Original Indenture to provide for the maintenance of the Confirming Letter of credit and the designation of the successor Trustee; and WHEREAS, the desired amendments to the Original Indenture add to the conditions, covenants and terms contained therein to be observed or performed by the City and such additional conditions, covenants and terms will not adversely affect the interests of the Owners; and WHEREAS, the City has deemed that the provisions with respect to the appointment of the successor Trustee are desirable and necessary and not inconsistent with Original Indenture and such provisions will not adversely affect the interests of the Owners; and WHEREAS, in accordance with Section 9.01 of the Original Indenture, this Fourth Supplemental Indenture shall become binding when the written consent of The Mitsubishi Trust and Banking Corporation, Los Angeles Agency (the "Bank") and a Favorable Opinion of Bond Counsel (as defined in the Original Indenture) have been filed with the Trustee; NOW, THEREFORE, KNOW ALL PEOPLE BY THESE PRESENTS, THIS FOURTH SUPPLEMENTAL INDENTURE OF TRUST WITNESSETH: That, in consideration of the premises, it is agreed by and between the City and the Trustee as follows: ARTICLE I AUTHORITY AND DEFINITIONS SECTION 1.01. Supplemental Indenture. This Fourth Supplemental Indenture is supplemental to the Original Indenture. SECTION 1.02. Authority for this Fourth Supplemental Indenture. This Fourth Supplemental Indenture is authorized pursuant to the provisions of the Act and in accordance with Section 9.01 of the Original Indenture. SECTION 1.03. Definitions. Ail terms which are defined in Section 1.01 of the Original Indenture shall have the same meanings, respectively, in the Fourth Supplemental Indenture as such terms are given in said Section 1.01 of the Original Indenture, except to the extent amended by this Fourth Supplemental Indenture. LA01 \2534\10098.3 2 94691 . 13 ARTICLE II AMENDMENTS TO CERTAIN PROVISIONS OF THE ORIGINAL INDENTURE SECTION 2.01. Amendments to certain Provisions of the original Indenture. The following amendments to the Original Indenture shall become effective at such time as this Fourth Supplemental Indenture is executed and delivered by the City and the Trustee, and the written consent of the Bank and the Favorable Opinion of Bond Counsel are filed with the Trustee, all as required by Section 9.01 of the Original Indenture. 1. Amendments to Section 1.01 of the Indenture. (a) The follOwing definitions are hereby amended and restated in the following manner: "Business Day" means a day of the year on which the Trustee, Paying Agent, Tender Agent, Remarketing Agent, the Bank, the Confirming Bank and banks or trust companies in New York, New York, or in California are not authorized or required to remain closed. "Expiration Date" means the stated expiration date of the Letter of Credit or the Confirming Letter of Credit, or such stated expiration date as it may be extended from time to time as provided in the Letter of Credit or the Confirming Letter of Credit. "Letter of Credit" means the irrevocable Letter of Credit issued by the Bank contemporaneously with the original delivery of the Bonds, except that upon the issuance of an Alternate Letter of Credit in accordance with Section 4.06 hereof it shall mean such Alternate Letter of Credit, provided, however, that if any draw under the Letter of Credit shall be dishonored, all references herein ('other than those contained in paragraphs (A), (B), (C) and (D) of Section 4.06) to "Letter of Credit" shall be deemed to refer to the Confirming Letter of Credit. · "Moody's" means Moody's Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation 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 City and approved by the Bank and the Confirming LA01 \2534\10098.3 3 94691.13 Bank (who shall not be under any liability by reason of such approval). "Opinion of Counsel" means a written opinion of Bond Counsel, appointed and paid by the City and satisfactory to and approved by the Bank and the Confirming Bank (who shall not be under any liability by reason of such approval). "Reimbursement Agreement" means that certain Reimbursement Agreement dated as of August 1, 1986, by and between the Bank and the City and the Tri-Party Agreement dated as of December , 1993 by and among the Bank, the Confirming Bank and the City or, if an Alternate Letter of Credit has been issued, the reimbursement agreement, if any, in connection with such Alternate Letter of Credit. "S&P" means Standard & Poor ' s Corporation, a corporation duly organized and existing under and by virtue of the laws of the State of New York, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer 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 City and approved by the Bank and the Confirming Bank (who shall not be under any liability by reason of such approval). "Substitution Date" means the date five Business Days prior to the date upon which an Alternate Letter of Credit (other than the Confirming Letter of Credit) is to be substituted for the Letter of Credit then in effect. "Termination Date" means the date specified in a notice from the Bank or the Confirming Bank of termination of the Letter of Credit or the Confirming Letter of Credit pursuant to the Letter of Credit or the confirming Letter of Credit. "Unit Pricing Interest Period" means, with respect to a Unit Pricing Bond, that period of time beginning on a Rate Adjustment Date and ending on the day preceding the Purchase Date, determined by the Remarketing Agent and selected by the purchaser of such Bonds by reference to the Preliminary Scale and Final Scale. No Unit Pricing Interest Period shall exceed one year in length; provided that the Unit Pricing Interest Periods may exceed one year in length upon (i) receipt by the City of a Favorable Opinion of Bond Counsel and (ii) an increase in the size of Letter of Credit and the Confirming Letter EA01 \2534\10098.3 4 94691.13 of Credit to cover additional premium to the extent such additional premium may be required. (b) Paragraphs (3) and (5) of the definition of "Permitted Investments,, are hereby amended and res%ated in the following manner: (3) Bills of exchange or time drafts drawn on and accepted by a commercial bank (including the Bank, the Confirming Bank, the Paying Agent and the Trustee), otherwise known as bankers acceptances, which are eligible for purchase by members of the Federal Reserve System; (5) Certificates of deposit issued by a state or national bank (including the Paying Agent and --the Trustee) or~ savings and loan association or a state-licensed branch of a foreign bank in which the City is authorized by law to deposit its funds whose deposits are insured by either the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, as the case may be, and the short-term debt obligations of which have the highest short-term rating or the debentures of which have an "A" or higher rating or the Bank or the Confirming Bank; and (c) The following definitions are hereby added to Section 1.01 of the Indenture: "Confirming Bank" means The Sanwa Bank, Limited, a Japanese banking corporation acting through its Los Angeles Branch Office; and upon the issuance of an Alternate Letter of Credit to replace the Confirming Letter of Credit, means the bank or other financial institution issuing such Alternate Letter of Credit. "Confirming Letter of~Credit" means the irrevocable confirming Letter of Credit issued by the Confirming Bank; and upon the..issuance and delivery of an Alternate Letter of Credi~i~o replace the Confirming Letter of Credit, means such Alternate Letter of Credit. 2. Amendment to the first sentence of Section 1.03 of the Original Indenture. The first sentence of Section 1.03 of the Original-Indenture is hereby amended to read as follows: In consideration of the acceptance of the Bonds by the Owners, this Indenture shall be deemed to be and LA01 \2534\10098.3 5 94691.13 shall constitute a contract among the City, the Bank, the Confirming Bank and the Owners to secure the full and final payment of the principal of and premium, if any, and interest on the Bonds or amounts or obligations owing to the Bank or the Confirming Bank pursuant to the Reimbursement Agreement to the extent payable in accordance with this Indenture or the Act, and the application of all moneys on deposit or to be deposited in accordance herewith including but not limited to foreclosure proceeds, subject to the pledge made in this Indenture and the conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the City and the Trustee shall be for the equal benefit, protection and security of all Owners without distinction, preference or priority of any Bonds over any other Bonds by reason of the number or date thereof or the time of authentication or delivery thereof or-- otherwise for any cause whatsoever, except as expressly provided herein. 3. Amendment to the second sentence of Section 2.01 of the Original Indenture. The second sentence of Section 2.01 of the Original Indenture is hereby amended to read as follows: There is hereby created, in the manner and to the extent provided herein, a continuous pledge and lien to secure the full and final payment of the principal of, premium, if any, and interest on the Bonds, other amounts due and payable hereunder or amounts or obligations owing to the Bank or the Confirming Bank pursuant to the Reimbursement Agreement to the extent payable in accordance with this Indenture or the Act. 4. Amendment to the last paragraph of Section 2.04 of the Original Indenture. The last paragraph of Section 2.04 of the Original Indenture is hereby amended to read as follows: The determination by the Remarketing Agent of each Adjusted Interest Rate, Variable Interest Rate and Fixed Interest Rate for any Bond, if in accordance with the provisions hereof, shall be conclusive and binding upon the City, the Paying Agent, the Tender Agent, the Trustee, the Bank, the Confirming Bank and the Owners. 5. Amendment to the last sentence of paragraph (e) of Se=tion 2.05 of the Original Indenture. The last sentence of paragraph (e) of Section 2 05 of the Original Indenture is hereby amended to read as follows: In no event shall a Unit Pricing Interest Period extend beyond the fifth Business Day prior to the Expiration Date. LA01 \2534\10098.3 6 94691.13 6. Amendment to the first sentence of paragraph (A) of Section 2.10 of the Original Indenture. The first sentence of paragraph (A) of Section 2.10 of the Original Indenture is hereby amended to read as follows: During any Unit Pricing Interest Period, the City maY give written notice at any time to the Bank, the Confirming Bank, the Remarketing Agent and the Trustee that it intends to effect a conversion of the interest rate on all of the Unit Pricing Bonds to a Variable Interest Rate on the Demand Date or Dates specified in such written notice, the earliest of which Demand Dates shall be not less than 40 days from the date of such notice. 7. Amendment to the first sentence of paragraph (B) of Section 2.10 of the Original Indenture. The first sentence of paragr~ph'~B) of Section 2.10 of the Original Indenture is hereby amended to read as follows: During any Demand Mode, the City may give written notice at any time to th~ Bank, the Confirming Bank, the Remarketing Agent and the Trustee that it intends to effect a conversion of the interest rate on all of such Demand Bonds to a Unit Pricing Mode on the Unit Pricing Date specified in such written notice, which shall be not less than forty (40) calendar days from the date of such notice. 8. Amendment to the first sentence of paragraph (C) of Section 2.10 of the Original Indenture. The first sentence of paragraph (C) of Section 2.10 of the Original Indenture is hereby amended to read as follows: The City may give written notice, in conformity with Section 2.07 hereof, at any time (and shall give such notice with respect to Bank-Owned Bonds upon the direction of the Bank or the Confirming Bank on any date after the Termination Date and before the fifth anniversary of such Termination Date or Expiration Date provided, however, that if the Bonds specified in such notice cannot be Converted by the fifth (5th) anniversary of such Termination Date or Expiration Date, whichever is applicable, then the Bank or the Confirming Bank may give such notice with respect to such Bonds until such time as the Bonds can be converted), to the Bank, the Confirming Bank, the Remarketing Agent and the Trustee that it intends to effect a conversion of the interest rate on ali--of the Bonds or a portion of the Bonds designated in such notice to a Fixed Interest Rate on the Proposed Conversion Date specified in such written notice, whick LA01 \2534\10098.3 7 9469~. 13 Proposed Conversion Date shall be not less than forty (40) days from the date of such notice. 9. Amendment to Section 2.11 of the Original Indenture. Section 2.11 of the Original Indenture is hereby amended to read as follows: The Bonds and the assignment to appear thereon shall each be in substantially the forms respectively set forth in Exhibit A attached hereto and incorporated herein, with appropriate or necessary insertions, omissions and variations as permitted or required hereby; provided, however, if use of a book entry form of Bonds becomes feasible in the opinion of the City, Trustee, Paying Agent, Bank, Confirming Bank and the Remarketing Agent, then the appropriate Sections herein shall be deemed to permit the use of a book entry form of Bond without fur-th~ amendment of this Indenture. 10. Amendment to the last sentence of Section 3.05 of the Original Indenture. The last sentence of Section 3.05 of the Original Indenture is hereby amended to read as follows: The Trustee shall promptly notify the Bank, the Confirming Bank, the City, the Remarketing Agent and the Paying Agent in writing of the numbers of the Bonds so selected for redemption in whole or in part on such date; provided, however, that if on the date of selection, the Bank is the Owner of any of the Bonds, such Bonds shall be selected for redemption by the Trustee prior to selecting any Unit Pricing Bonds or Demand Bonds. 11. Amendment to the last sentence of the first paragraph of (A) of Section 4.04 of the Original Indenture. The last sentence of the first paragraph of (A) of Section 4.04 of the Original Indenture is hereby amended to read as follows: The Remarketing Agent shall use its best efforts to remarket Bonds at a price of par plus accrued and unpaid interest; provided, however, that if there is on file with the Remarketing Agent, the Trustee and the Tender Agent a consent from the Bank and the Confirming Bank, such Bonds may be remarketed at a price less than par if the Remarketing Agent certifies that remarketing at less than par is necessary to remarket such Bonds, if amounts on deposit in the Remarketing Cost Account are sufficient to pay to or reimburse uhe Bank and the Confirming Bank the difference between Dar and the discount price and if the ~te on the remarkesed Bonds is equal to the Maximum Rate. [A01 \2534\10098.3 8 94691.13 12. Amendment to paragraph (A) of Section 4.05 of the Original Indenture. Paragraph (A) of Section 4.05 of the Original Indenture is hereby amended to read as follows: On the 180th day prior to the Expiration Date, the Trustee shall give written notice to the City, the Remarketing Agent, the Bank and the Confirming Bank that the Letter of Credit or the Confirming Letter of Credit expires on the Expiration Date. Unless the term of the Letter of Credit or the Confirming Letter of Credit shall have been extended or there shall have been delivered an Alternate Letter of Credit in substitution therefor as provided in Section 4.06 hereof or unless on or before five days prior to the Expiration Date all Bonds shall have been converted to the FiXed Interest Rate as provided in Section 2.10 hereof, all Unit Pricing Bonds .or Demand Bonds shall be purchased by the Tender Agent on t-he ~ifth Business Day prior to the Expir'ation Date, at the Tender Price 13. Amendment to the last paragraph of (C) of Section 4.05 of the Original Indenture. The last paragraph of (C) of Section 4.05 of the Original Indenture is hereby amended to read as follows: If subsequent to the commencement of the giving of such notice, the term of the Letter of Credit or the Confirming Letter of Credit shall have been extended or there shall have been delivered.an Alternate Letter of Credit in substitution therefor as provided in Section 4.06 hereof, then the Trustee shall discontinue giving the aforementioned notice and shall give notice by mail to all Owners of such extension of the term of the Letter of 'Credit or the Confirming Letter of Credit or the delivery of an Alternate Letter of Credit, which notice shall specify (i) that the giving of notice of the expiration or termination of the Letter of Credit or the Confirming Letter of Credit has been commenced, (ii) that subsequent to the commencement of the giving of such notice the term of the Letter of Credit or the Confirming Letter of Credit has been extended or that an Alternate Letter of Credit has been delivered to the Trustee in accordance with this Indenture, (iii) the rating of the Bonds by Moody's or S&P by reason of such extension or delivery, (iv) the date that the term of the Letter of Credit, the Confirming Letter of Credit or Alternate Letter of Credit will expire, and (v) that the prior notice of purchase and any proposed conversion to a Fixed Interest Rate are cancelled. Such notice that the term of the Letter of Credit or the Confirming Letter of Credit has been extended or that an Alternate Letter of Credit has been delivered shall be given not more than LA01 \2534\10098.3 9 94691.13 five (5) days following such extension or delivery and not less than five (5) days prior to such Mandatory Tender Date. 14. Amendment to paragraphs (A),(B),(C) and (D) of Section 4.06 of the Original Indenture. Paragraphs (A),(B),(C) and (D) of Section 4.06 of the Original Indenture are hereby amended to read as follows: (A) On the last Business Day of each calendar month the Trustee shall by telex or telegraphic demand given before 1:00 P.M., New York City time on such day draw on the Letter of Credit in accordance with the terms thereof so as to receive thereunder by 12:00 P.M., New York City time, on the first Business Day of the next calendar month an amount equal to the amount of interest accrued on the Unit Pricing Bonds and the Demand Bonds during the pre~ious calendar month whether or not paid or due and payable. If on the first Business Day of any calendar month, the Trustee shall not have received the amounts demanded in accordance with the preceding sentence, the Trustee shall by telex or telegraphic demand given before 1:00 P.M., New York City time on such day draw on the Confirming Letter of Credit in accordance with the terms thereof so as to receive thereunder by 3:00 P.M., New York City time, on such date an amount equal to the amount of interest accrued on the Unit Pricing Bonds and the Demand Bonds during the previous calendar month whether or not paid or due and payable. Such money shall be deposited in the Interest Reserve Fund. (B) On each Principal Payment Date and each date Unit Pricing Bonds or Demand Bonds are redeemed pursuant to Sections 3.01(A), 3.01(C), 3.02 and 3.03 hereof, the Trustee shall by telex or telegraphic demand given before 11:00 A.M, New York City time, draw on the Letter of Credit in accordance with the terms thereof so as to receive thereunder by 12:30 P.M., New York City time, on such date an amount sufficient to enable the Trustee to pay principal then payable on the Unit Pricing Bonds and Demand Bonds, whether at maturity or redemption thereof, in connection therewith and if on any such Principal Payment Date and any such date Unit Pricing Bonds or Demand Bonds are redeemed pursuant to Sections 3.01(A), 3.01(C), 3.02 and 3.03 hereof, the Trustee shall not have received such amounts demanded under the Letter of Credit, the Trustee shall by telex or telegraphic demand given before 1:00 P.M, New York City time, draw on the Confirming Letter of Credit in accordance with the terms thereof so as to receive thereunder by 3:00 P.M., New York City time, on such date an amount sufficient to enable the Trustee to pay principal then payable on the LA01 \2534\1009'.:.3 10 94691.13 Unit Pricing Bonds and Demand Bonds, whether at maturity or redemption thereof, in connection therewith; provided, however, the Trustee shall only make such draws in the event of a redemption pursuant to Section 3.02 or 3.03 to the extent there is on deposit in the Redemption Account moneys in an amount equal to such draws and available to reimburse the Bank for such draw; provided further, that if the Bank is not reimbursed on the same day for such draws the Bank shall be deemed to have purchased and the Trustee shall register, in the name of the Bank, Bonds which would otherwise have been redeemed or paid at maturity, and such Bonds shall be deemed to be Outstanding notwithstanding that such Bonds have been paid from such draws on the Letter of Credit. (C) On each date Unit Pricing Bonds or Demand Bonds are purchased pursuant to Sections 4.01, 4.02, 4.03, 4~0~A) or 4.05(B) hereof,'the Trustee shall by telex or telegraphic demand given before 1:00 P.M., New York City time, draw on the Letter of Credit and the Confirming Letter of Credit in accordance with the terms thereof so as to receive thereunder by 3:00 P.M. New York City time, on 'such date an amount sufficient to enable the Trustee to pay the Tender Price (except premium and interest) in connection therewith. (D) On each date Unit Pricing Bonds are redeemed pursuant to Sections 3.01(A), 3.01(C) or 3.02 hereof and each date Unit Pricing Bonds are purchased pursuant to Section 4.01 and 4.04 hereof, the Trustee shall by telex or telegraphic demand given before 11:00 A.M, New York City time draw on the Letter of Credit in accordance with the terms thereof so as to receive thereunder by 12:30 P.M, New York City time, on such date an amount sufficient to enable the Trustee to pay premium required herein in connection therewith and if on any such date Unit Pricing Bonds are redeemed pursuant to Sections 3.01(A), 3.01(C) or 3.02 hereof and any such date Unit Pricing Bonds are purchased pursuant to Section 4.01 and 4.04 hereof, the Trustee shall not have received such amounts demanded under the Letter of Credit, the Trustee shall by 'telex or telegraphic demand given before 1:00 p.m, New York City time draw on the Confirming Letter of Credit in accordance with the terms thereof so as to receive thereunder by 3:00 p.m, New York City time, on such date an amount sufficient to enable the Trustee to pay premium required herein in connection therewith; provided, however, the Trustee shall only make such draws in-the event of redemption pursuant to Section 3.02 to the extent there is on deposit in the Redemption Account moneys in an amount equal to such draws and available to reimburse the Bank for such draws. LA01 \2534\10098.3 1 1 94691.13 15. Amendment to paragraphs (G), (H) and (I) of Section 4.06 of the Original Indenture. Paragraphs (G) , (H) and (I) of Section 4.06 of the Original Indenture are hereby amended to read as follows: (G) If at any time there shall cease to be any Unit Pricing Bonds or Demand Bonds Outstanding hereunder, or in the event that all Unit Pricing Bonds or Demand Bonds have been purchased on a Bank Mandatory Purchase Date and the Trustee has received notice from the Bank or the Confirming Bank of termination of the Letter of Credit or the Confirming Letter of Credit as provided under the terms of the Letter of Credit, the Trustee shall thereafter surrender the Letter of Credit or the Confirming Letter of Credit then in effect to the Bank or the Confirming Bank in accordance with the terms thereof for cancellation. (H) The Trustee shall not sell, assign or otherwise transfer the Letter of Credit or the Confirming Letter of Credit, except to a successor Trustee hereunder and in accordance with the terms of the Letter of Credit, the Confirming Letter of Credit and this Indenture. (I) If at any time there shall be a redemption of Unit Pricing Bonds as provided in Section 3.01(A) herein and the applicable redemption price shall be in excess of 101% of the aggregate principal amount of the Bonds to be redeemed, the City shall not redeem and the Remarketing Agent shall not remarket such Unit Pricing Bonds unless the amount available under the Letter of Credit and the Confirming Letter of Credit is sufficient to cover any premium required to be paid pursuant to Section 3.01(A). 16. Amendment to Section 4.07 of the Original Indenture. Section 4.07 of the Original Indenture is hereby amended to read as follows: The Remarketing Agent shall have no duty to remarket Bonds pursuant to Sections 4.01, 4.02 or 4.03 hereof if there shall have occurred and be continuing an Event of Default'described in Section 7.01 (c) relating to an Assessment bearing interest at other than a fixed interest rate and the Remarketing Agent shall not so remarket Bonds on or after a Bank Mandatory Purchase Date provided, that if any such Event of Default shall thereafter be cured, as evidenced by a certificate of the City satisfactory to and approved by the Bank and the Conf~rming Bank (which shall not be under any liability by reason of such approval or disapproval), then the duty of the Remarketing Agent to remarket Bonds pursuant to Sections 4.01, 4.02 or 4.03 hereof shall be reinstated. LA01 \2534\10098.3 12 94691.13 17. Amendment to paragraphs (B) and (C) of Section 4.08 of the Original Indenture. Paragraphs of (B) and (C) of Section 4.08 of the Original Indenture are hereby amended to read as follows: (B) Letter of Credit Account. Upon receipt of moneys from the Bank for payment of all or a portion of the Tender Price for the Bonds, the Tender Agent shall· deposit such money in the Letter of Credit Account for application to the Tender Price of the Bonds to the extent that the moneys on deposit in the Remarketing Proceeds Account shall not be sufficient. Any amounts deposited in the Letter of Credit Account and not needed with respect to any optional Tender Date or Mandatory Tender Date for the payment of the Tender Price for any Bonds shall be immediately returned first to the Confirming Bank, to the extent there has been any draw u~de~ the Confirming Letter of Credit, and second to the Bank. (C) Discount Account. Upon receipt of moneys by the Tender Agent from any person or entity, which moneys such person or entity has designated to be used to pay discount in accordance with Section 2.07 hereof, the Tender Agent shall deposit such amounts in the Discount Account. On the relevant Conversion Date the Trustee shall apply such amounts to reimburse the Confirming Bank for draws on the Confirming Letter of Credit and the Bank for draws on the Letter of Credit used for the payment of the Tender Price of the Mandatorily Tendered Bonds. 18. Amendment to the first and third paragraphs of (D) of Section 4.08 of the Original Indenture. The first and third paragraphs of (D) of Section 4.08 of the Original Indenture are hereby amended to read as follows: (D) Remarketing Cost Account. Moneys on deposit in the Remarketing Cost Account shall be used for the purpose of paying, from time to time, remarketing costs consisting of discounts on the sale of Bonds at less than par, which discount sale is advised by the Remarketing Agent as necessary to remarket the Bonds pursuant to Section 4.04(A),or pursuant to Section 4.08(D) hereof. Payment of such costs, upon such advisement, shall be made directly to the Bank and the Confirming Bank by the Tender Agent from money held in the Remarketing Cost Account. Payment of remarketing costs to the Bank and the Confirming Bank shall be made in the amount required un~er the terms of the Reimbursement Agreement, which amount shall be computed by the Bank and the Confirming Bank and confirmed by the Tender Agent. LA01 \2534\10098.3 13 . 94691.13 Upon written direction of the Bank and the Confirming Bank, the Trustee shall transfer from the Remarketing Cost Account to the Fixed Rate Reserve Account an amount which together with moneys transferred pursuant to Section 5.04(D) (v) hereof equals the Fixed Rate Reserve Requirement for Bonds being converted to a Fixed Interest Rate. Such transfers shall be made even if such transfers result in amounts on deposit in the Remarketing Cost Account being less than the Remarketing Cost Account Requirement. 19. Amendment to Section 5.01 of the Original Indenture. Section 5.01 of the Original Indenture is hereby amended to read as follows: Pursuant to this Indenture there is pledged for the payment of the principal of and redemption premium, if an~, ~nd interest on the Bonds in accordance with the terms and provisions of this Indenture, and obligations owing to the Bank or the Confirming Bank pursuant to the Reimbursement Agreement to the extent payable in accordance with this Indenture or the Act, subject only to the Provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in this Indenture, (i) all right, title and interest of the City in the Assessment Installments and foreclosure proceeds relating thereto, (ii) the proceeds of the sale of the Bonds, (iii) to the Fixed Rate Bonds, the Fixed Rate Reserve AccOunt, (iv) to the Unit Pricing Bonds and the Demand Bonds, the Variable Rate Reserve Account and the Interest Reserve Fund and (v) all other funds, accounts and sub-accounts, if any, created hereunder (except the Purchase Fund). 20. Amendment to the first sentence of the third paragraph of Section 5.03 of the Original Indenture. The first sentence of the third paragraph of Section 5.03 of the Original Indenture is hereby amended to read as follows: The fees, costs and indemnifications of the Bank and the Confirming Bank due and payable under the Reimbursement Agreement and of the Remarketing Agent due and payable under the Remarketing Agreement in each case in excess of the fees, costs and indemnifications paid from the Reserve Earnings Fund shall also be collected through the tax bill or direct collections as incidental expenses from owners of property with Assessments bearing interest at other than a fixed interest rate. 21. Amendment to the second paragraph of Section 5.04 of the Original Indenture. The second paragraph of Section 5.04 of the Original Indenture is hereby amended to read as follows: LA01 \2534\10098.3 14 94691.13 The city or Trustee, as the case may be, shall deposit the money contained in the Assessment Fund and in the Construction Fund, as appropriate, at the following respective times in the Redemption Fund in the manner hereinafter provided, which fund and the accounts described below the Trustee hereby agrees to establish and maintain so long as the Indenture is not discharged in accordance with Article X hereof and each such fund and account shall constitute a trust fund for the benefit of the Owners°of the Bonds, the Bank and the Confirming Bank, and the money in each such fund and account shall be disbursed only for the purposes and uses hereinafter authorized. 22. Amendment to the second paragraph of (A) of Section 5.04 of the original Indenture. The second paragraph of (A) of Section 5.04 of the Original Indenture is hereby amended to read as folloW~: '- So long as a Letter of Credit is in effect, money in the Interest Account shall be used and withdrawn by the Trustee on an Interest Payment Date solely for the purpose of (i) paying interest on Fixed Rate Bonds, (ii) making payments'to the Bank or the Confirming Bank as required under the terms of the Reimbursement Agreement or (iii) to pay interest on Bank-Owned Bonds. Following expiration or termination of the Letter of Credit, the Confirming Letter of Credit or any Alternate Letter of Credit and the payment in full of all amounts due to the Bank or the Confirming Bank hereunder, money in the Interest Account shall be used and withdrawn by the Trustee on such Interest Payment Date solely for the payment of interest on the Outstanding Bonds. 23. Amendment to subparagraph (iv) of (D) of Section 5.04 of the Original Indenture. Subparagraph (iv) of (D) of Section 5.04 of the Original Indenture is hereby amended to read as follows: (vi) Upon the written direction of the Bank and the Confirming Bank all or a portion of the moneys on deposit in the Variable Rate Reserve Account shall be transferred to the Remarketing Cost Account to the extent moneys on deposit in the Remarketing Cost Account are less than the Remarketing Cost Account Requirement. Such transfer shall be made even if such transfer results in amounts on deposit in the Variable Rate Reserve Account being less than the Variable Rate Reserve Requirement. LA01 \2534\10098.3 15 94691.13 24. Amendment to Section 5.05 of the Original Indenture. Section 5.05 of the Original Indenture is hereby amended to read as follows: There is hereby established and there shall be maintained by the Trustee a separate fund to be known as the "Reserve Earnings Fund." Such fund shall constitute a trust fund for the benefit of the Owners of the Bonds the Bank and the Confirming Bank. Money on deposit in the Reserve Earnings'Fund shall be withdrawn solely for the payment of fees, expenses and indemnifications of the Bank, the Confirming Bank or the Remarketing Agent upon receipt of bills from the Bank, the Confirming Bank or Remarketing Agent, in accordance with the terms of the Reimbursement Agreement and the Remarketing Agreement as the case may be. Upon conversion of all Bonds to a Fixed Interest Rate or on the date on which no Bonds bearing int~reet at other than a Fixed Interest Rate are Outstanding and so long as all fees, expenses and indemnificatiOns of the Bank, the Confirming Bank and the Remarketing Agent are paid, amounts on deposit in the Reserve Earnings Fund shall be transferred to the Interest Account and applied'as a credit against interest on all Assessments, with such credit being applied pro rata based on the principal amount of such Assessments. 25. Amendment to the first sentence of the third paragraph of. Section 5.06 of the Original Indenture. The first sentence of the third paragraph of Section 5.06 of the Original Indenture is hereby amended to read as follows: When the construction of the works of improvement have been completed, or upon the decision of the City to terminate such construction the City shall deliver to the Trustee, the Bank and the Confirming Bank a certificate of the City stating the fact and date of such completion or termination of such construction and stating that all the costs of such construction and equipment and expenses incidental thereto have been determined and paid (or that all such costs and expenses have been paid less specified claims which are subject to dispute and for which a retention in'the Construction Fund is to be maintained in the full amount of such claims until such dispute is resolved or that such costs are fees, costs or indemnifications of the Trustee or Paying Agent). 26. Amendment to the first sentence of Section 5.07 of the Original Indenture. The first sentence of Section 5.07 of the Original ~ndenture is hereby amended to read as follows: The Trustee hereby agrees to establish and maintain, so long as any Bonds are Outstanding, the Interest [A01 \2534\10098.3 16 94691.13 Reserve Fund which fund shall constitute a trust fund for the benefit of the Owners of the Bonds, the Bank and the Confirming Bank. 27. Amendment to Section 6.04 of the Original Indenture. Section 6.04 oY the Original Indenture is hereby amended to read as follows: Except as provided in Section 7.02 the City will within sixty (60) days at the request of the Bank, the Confirming Bank, the Trustee or any Owner, take such action from time to time as may be necessary or proper to remedy or cure any default in the payment of Assessment Installments and will prosecute all actions, suits or other proceedings as may be appropriate for such purposes, including a judicial foreclosure action as set forth in the Act and Section 7.02 hereof. 28. Amendment to Section 6.05 of the Original Indenture. Section 6.05 of the Original Indenture is hereby amended to read as follows: The City will keep or cause to be kept proper accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, deposit and disbursement of the Assessment Installments, and such accounting records shall be available for inspection by the Bank, the Confirming Bank, the Trustee or any Owner or such Owner's agent duly authorized in writing at reasonable hours and under reasonable conditions. Not later than the twenty-fifth (25th) day of each month, commencing on September 2, 1987 and continuing so long as any Bonds are Outstanding, the City will, upon request, furnish to the Bank, the Confirming Bank, the Trustee and any Owner (but at the expense of such Owner) a complete statement covering the receipts, deposits and disbursements of the,Assessment Installments for the preceding monthly period. 29. Amendment to Section 6.07 of the Original Indenture. Section 6.07 of the Original Indenture is hereby amended to read as follows: .Whenever and so often as requested to do so by the Trustee, the Bank, the Confirming Bank or any Owner, the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cau~e to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Owners the LA01 \2534\10098.3 17 94691 . 13 benefit, protection and security conferred or intended to be conferred. 30. Amendment to the last paragraph of Section 7.03 of the Original Indenture. The last paragraph of Section 7.03 of the Original Indenture is hereby amended to read as follows: Anything to the contrary contained herein notwithstanding, so long as the Letter of Credit and the Confirming Letter of Credit are in effect, and neither the Bank or the Confirming Bank is not in default under the Letter of Credit or the Confirming Letter of Credit, the Trustee shall not exercise any of the foregoing rights which affect Unit Pricing Bonds or Demand Bonds without the prior written consent of the Bank and the Confirming Bank and shall, upon the Bank's or the Confirming Bank's offer to the Trustee of reasonable seeuri-~y and indemnity against costs, expenses and liabilities to be incurred by it, exercise all rights of the Trustee under Section 7.03 at the direction of the Bank or the Confirming Bank. 31. Amendment to Section 7.08 of the Original Indenture. Section 7.08 of the Original Indenture is hereby amended to read as follows: In the event the Trustee fails to take any action to eliminate an Event of Default under Section 7.01 hereof, the Owners of a majority in aggregate principal amount of Outstanding Bonds may, with the Consent of the Bank and the Confirming Bank if a Letter of Credit and Confirming Letter of Credit are outstanding, the Bank and the Confirming Bank are not in default thereunder and to the extent such failure relates to Unit Pricing Bonds or Demand Bonds, institute any suit, action, mandamus or other proceeding in equity or at law for the protection or enforcement of any right under this Indenture, but only if such Owners have first made written request of the Trustee after the right to exercise such powers or right of action shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exerciSe the powers granted therein or granted under law or to institute such action, suit or proceeding in its name and unless also, the Trustee shall have been offered reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. 32. Amendment to Section 8.02 of the Original Indenture. Section 8.02 of the Original Indenture is hereby amended to read as follows: LA01 \2534\10098.3 18 94691. '3 The City may at any time direct the removal of the Trustee initially appointed hereby and any successor thereto by giving written notice of such removal to the Trustee and by giving notice by mail of such removal to the Owners, and the Trustee initially appointed hereby and any successor thereto may at any time resign by giving written notice of such resignation to the City and by giving notice by mail of such resignation to the Owners. Upon giving any such notice of removal or upon receiving any such notice of resignation, the City, with~ the consent of the Bank and the Confirming Bank(which consent shall not be unreasonably withheld), shall promptly appoint a successor Trustee by an instrument in writing; provided that in the event the City does not appoint a successor Trustee within sixty (60) days following the giving of any such notice of removal or the receipt of any such notice of resignation, the removed or r~signing Trustee may petition any appropriate court having jurisdiction to appoint a successor Trustee. Any successor Trustee shall be a bank or trust company doing business and having a principal corporate trust office in either New York, New York or Los Angeles, or San Francisco, California, having a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($50,000,000) and subject to supervision or examination by state or national authorities. For the purpose on this Section 8.02, a bank or trust company shall be considered to have a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($50,000,000) if it is a wholly-owned subsidiary of a corporation having a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($50,000,000) and such corporation guaranties in writing the performance of such bank or trust company of its obligations hereunder. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 8.02 the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal or resignation of a Trustee and appointment of a successor Trustee shall become effective onl~ upon the acceptance of the appointment by the successor Trustee. \2534\10098.3 19 94691.13 33. Amendment to Section 8.05 of the Original Indenture. Section 8.05 of the Original Indenture is hereby amended to read as follows: The City hereby appoints the Remarketing Agent to remarket Bonds pursuant to this Indenture hereof, and to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the Bank, the Confirming Bank, the City, the Paying Agent and the Trustee at all reasonable times, and to give telegraphic or telephonic notice, promptly confirmed by a written notice, to the Trustee (who shall then promptly notify the Bank, the Confirming Bank and the Paying Agent), specifying (i) the principal amount of such Bonds, if any, remarketed by it as provided in this Indenture, and (ii) the interest rates on the remarketed Bonds as de~erm-bned pursuant to and in accordance herewith. The Remarketing Agent may at any time resign and be discharged of the duties and obligations created by this Indenture by-giving at least sixty (60) days' notice to the Bank, the confirming Bank, the Trustee, the City, the Paying Agent and the-Trustee. The Remarketing Agent may be removed at any time, at the direction of the Bank, the Confirming Bank and the City, by an instrument filed with the Remarketing Agent and the Paying Agent. Any successor Remarketing Agent shall be selected by the City with the consent of the Bank and the Confirming Bank (who shall be under no liability by reason of such consent) and shall be a member of the National Association of Securities Dealers, Inc., shall have a capitalization of at least fifteen million dollars ($15,000,000) or have a line of credit with a commercial bank in the amount of at least fifteen million dollars ($15,000,000), and shall be authorized by law to perform all the duties set forth in this'Indenture. 34. Amendment to Section 8.06 of the Original Indenture. Section 8.06 of the Original Indenture is hereby amended to read as follows: -.. The City hereby appoints the Paying Agent to authenticate and deliver the Bonds as provided herein and to hold all Bonds delivered to it pursuant to this Indenture in trust for the benefit of the respective Owners who shall have so delivered such Bonds until money representing the purchase price of such Bonds shall have been-~elivered to or for the account of or to the order of such Owners, to hold all money delivered to it for the purchase of Bonds in trust for the benefit of the person or entity which shall have so delivered such money until LA01 \2534\10098.3 2 0 94691.13 the Bonds purchased with such money shall have been delivered to or for the account of such person or entity, to deliver to the Bank, the Confirming Bank, the City, the Remarketing Agent and the Trustee a copy of each notice delivered to it in accordance with Section 4.01 hereof and, immediately upon the delivery to it of Bonds in accordance with Section 4.01 hereof, to give telephonic or telegraphic notice to the City, the Remarketing Agent and the TruStee specifying the principal amount of the Bonds so delivered to it. The Paying Agent may at any time resign and be discharged of the duties and obligations set forth in this Indenture by giving at least sixty (60) days' notice to the Bank, the Confirming Bank, the City, the Remarketing Agent and the Trustee. The Paying Agent may be removed at any time, at the direction of the Bank, the C~nf~ming Bank and the City, by an instrument filed with the Paying Agen~ and the Trustee. Any successor Paying Agent shall be a commercial bank or trust company doing business and having' an office in New York, New York and shall be appointed by the City, with the consent of the Bank and'the Confirming Bank (who shall not be under any liability by reason of such consent), in the same manner provided in Section 8.02 hereof for appointment of a successor Trustee. 35. Amendment to the first sentence of the first paragraph of Section 9.01 of the Original Indenture. The first sentence of the first paragraph of Section 9.01 of the Original Indenture is hereby amended to read as follows: This Indenture and the rights and obligations of the City, the Trustee, the Remarketing Agent and the Owners hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the written consents of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02 hereof, and the written consent of the Bank and the Confirming Bank, so long as the Bank and the Confirming.Bank are not in default on its Letter of Credit or Confirming Letter of Credit, are filed with the Trustee. 36. Amendment to the second paragraph of Section 9.01 of the Original Indenture. The second paragraph of Section 9.01 of the Original Indenture is hereby amended to read as follows: This Indenture and the rights and obligations of the City, the Trustee, the Remarketing Agent and the Owners hereunder may also be amended or supplemented at any time [A01 \2534\10098.3 ' 2 1 94691.13 by an amendment hereof or supplement.hereto which shall become binding upon execution without the written consent of any Owners, but with the written consent of the Bank and the Confirming Bank, but only to the extent permitted by law and after receipt of a Favorable Opinion of Counsel and only for any one or more of the following purposes - (a) to add to the conditions, covenants and terms contained herein required to be observed or performed by the City, or other conditions, covenants and terms thereafter to be observed or performed by the City, or to surrender any right reserved herein to or conferred herein on the City, and which in either case shall not adversely affect the interests of the Owners; (b) to make such provisions for the purpose of curing any ~ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the City may deem desirable or necessary and not inconsistent herewith, and which shall not adversely affect the interests of the Owners; or (c) to comply with the requirements of Moody's or S&P for the initial rating of the Bonds in the highest possible rating category. 37. Amendment to Section 11.01 of the Original. Section 11.01 of the Original Indenture is hereby amended to read as follows: Nothing contained herein, expressed or implied, is intended to give to any person other than the Bank, the Confirming Bank, the City, the Paying Agent, the Remarketing Agent, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term contained herein required to be observed or performed by or on behalf of the City shall be for the sole and exclusive benefit of the Bank, the Confirming Bank, the Paying Agent, the Remarketing Agent and the Trustee and the Owners. 38. Amendment to Section 11.02 of the Original Indenture. Section 11.02 of the Original Indenture is hereby amended to read as follows: Whenever either the Bank, the Confirming Bank, the City~ the Paying Agent, the Remarketing Agent, the Trustee or any officer thereof is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are [A01 \2534\10098.3 22 94691.13 presently vested in the Bank, the Confirming Bank, the City, the Paying Agent, the Remarketing Agent or the Trustee or such officer, and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Bank, the confirming Bank, the City, the Paying Agent, the Remarketing Agent or the Trustee or any officer thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. 39. Amendment to Section 11.12 of the Original Indenture. Section 11.12 of the Original Indenture is hereby amended to include the following address for notices to the Confirming Bank: If to the Confirming Bank: The Sanwa Bank Ltd Los Angeles Branch 601 S. Figueroa Street Los Angeles, California 90017 Attention: 40. Amendment to Section 11.13 of the Original Indenture. Section 11.13 of the Original Indenture is hereby amended to read as follows: The Trustee shall give immediate notice to Moody's in the event: replaced. The Trustee or Remarketing Agent resigns or is 2. The Indenture is amended or supplemented. 3. The Letter of Credit or the Confirming Letter of Credit expires or is terminated. 4. Ail or a portion of the Bonds are converted from one mode to another mode. ARTICLE III ORIGINAL INDENTURE TO REMAIN IN EFFECT; COUNTERPARTS SECTION 3.01 Original Indenture to Remain in Effect. Except as amended by this Fourth Supplemental Indenture, the Original Indenture shall remain in full force and effect. SECTION 3.02. Counterparts. This Fourth Supplemental Indenture may be executed in any number of counterpart, each of which, when so executed and delivered, shall be an original; but LA01 \2534\10098.3 23 94691.13 such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the City has caused these presents to be signed in its name and on its behalf by its Mayor, and its corporate seal to be hereunto affixed and attested by its City Clerk, thereunto duly authorized, and to evidence its acceptance hereof, the Trustee has caused these presents to be signed in its name and on its behalf by its duly authorized officers, and its official seal to be hereunto affixed. CITY OF TUSTIN, CALIFORNIA ATTEST: Mayor of the City of Tustin City Clerk of the City of Tustin STATE STREET BANK AND TRUST COMPANY, N.A., as Trustee ATTEST: Title: Title: Written consent is hereby given pursuant to the Protocol Agreement by: - , THE IRVINE COMPANY Written consent is hereby given pursuant to Section 9.01 of the Original Indenture by: THE MITSUBISHI TRUST AND BANKING CORPORATION, LOS ANGELES AGENCY Title: Title: ~.A01 \2534\10098.3 2 4 94691.13 AMENDMENT TO THE REMARKETING AGREEMENT Exhibit D THIS AMENDMENT TO THE REMARKETING AGREEMENT, dated as of December .. , 1993, is made and entered into between Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Remarketing Agent"), and the City of Tustin, California (the "Issuer"), in connection with the City of Tustin Improvement Bonds Assessment District No. 85-1 (the "Bonds") authorized pursuant to an Indenture dated as of August 1, 1986, as heretofore amended and supplemented (the "Indenture") between the Issuer and State Street Bank and Trust Company, N.A., as trustee (the Trustee"). RECITALS: WHEREAS, the Issuer has issued and sold the Bonds in order to better provide financing for certain improvements; and WHEREAS, the Remarketing Agent has agreed to accept the duties and responsibilities as the Remarketing Agent under the Indenture and the Remarketing Agreement; and WHEREAS, the Issuer and the Remarketing Agent have heretofore entered into a Remarketing Agreement dated as of August 1, 1986 (the "Original Remarketing Agreement"); and WHEREAS, the Issuer and Remarketing Agent desire to amend the Original Remarketing Agreement to reflect the amendments hereto made in the Indenture; Ail terms not otherwise defined herein shall have their respective meanings as provided in the Indenture. SECTION 1-. Amendments to the Original Remarketing Agreement. The following amendments to the Original Remarketing Agreement shall become effective at such time as this Amendment to the Remarketing Agreement is executed and delivered by the Issuer and the Remarketing Agent, as provided in Section 3.7 of the Original' RemarketingAgreement. (a) Amendment to the second and last sentences of paragraph (a) of Section 2.3 of the Original Remarketing Agreement. The second and last sentences of paragraph (a) of Section 2.3 of the Original Remarketing Agreement is hereby amended to read as follows: If for whatever reason the Remarketing Agent shall determine that it is unable to obtain the information concerning the 0~ner, the Issuer, the Bank, the LA01 \2534\10160.3 94691.13 Confirming Bank or other parties or circumstances necessary to prepare appropriate disclosures, if any, or if the Remarketing Agent shall be unable to procure the necessary cooperation of the Issuer, the Owner, the Bank, the Confirming Bank in order to comply with applicable law, including federal or state securities laws in connection with the marketing of Tendered Bonds and Repurchased Bonds, then this Agreement shall terminate and the Remarketing Agent shall be under no obligation to perform any of its duties under this Agreement other than to return any Tendered Bonds, Repurchased Bonds or funds for the purchase thereof to the appropriate parties. In addition, if, at any time during the term of this Agreement, any event known to the Issuer relating to or affecting the Issuer, the Indenture, the Reimbursement Agreement, the Letter of Credit, the Bank, the Confirming Barrk, t~is Agreement or the Bonds shall occur which might affect the correctness or completeness when made of any statement of a material fact contained in the Official Statement, the Issuer shall promptly notify the Remarketing Agent in writing of the circumstances and details of such event. (b) Amendment to the last sentence of Section 2.4 of the Original Remarketing Agreement. The last sentence of Section 2.4 of the Original Remarketing Agreement is hereby amended to read as follows: In the event that the Remarketing Agent determines, after consultation with such persons as it deems advisable, that it has no obligation to remarket Tendered Bonds or Repurchased Bonds pursuant to this Section 2.4 the Remarketing Agent will immediately provide written notice to that effect to the Bank, the Confirming Bank, the Issuer, and the Trustee. (c) Amen4ment to the first sentence of the first paragraph of Section 3.2 of the Original Remarketing Agreement. The first sentence of the first paragraph of Section 3.2 of the Original Remarketing Agreement is hereby amended to read as follows: The Remarketing Agent may be removed at any time by an instrument, signed by the Issuer and filed with the Remarketing Agent, the Paying -Agent, the Bank, the Confirming Bank and the Trustee. (d) Amendment to Section 3.3 of the Original Remarketing Agreement. Section 3.3 of the Original Remarketing Agreement is hereby amended to read as follows: LA01 \2534\10160.3 2 94691.13 The Remarketing Agent may at any time resign and be discharged of all duties and obligations hereunder and under the Indenture by giving notice, in writing, 60 days prior to the date set for resignation, to the Bank, the Confirming Bank, the Issuer, the Trustee and the Paying Agent. SECTION Z. Original Remarketing Agreement to Remain in Effect. Except as amended by this Amendment to the Remarketing Agreement, the Original Remarketing Agreement shall remain in full force and effect. SECTION 3. Counterparts. This Amendment to the Remarketing Agreement may be executed in any number of counterpart, each of which, when so executed and delivered, shall be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the Issuer and the Remarketing Agent have caused this Agreement to be executed in their respective names all as of the date first above written. CITY OF TUSTIN, CALIFORNIA By: Mayor MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED Acknowledged and Agreed to STONE &'YOUNGBERG By: Vice President By: Title: LA01 \2534\10160.3 3 94691.13