HomeMy WebLinkAboutFISCAL AGENT AGREE 11-20-95 (2)FISCAL AGENT AGREEME~
by and between the
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Fiscal Agent
Dated as of 1, 1995
RELATING TO
$
CITY OF TUSTIN
LIMITED OBLIGATION IMPRO~~NT BONDS
REASSESSMENT DISTRICT NO. 95-1
(TUSTIN RANCH)
TABLE OF CONTENTS
ARTICLE I
Pa~¢
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement ............................................................................ 2
Section 1.02. Definitions ......................................................................................................... 2
Section 1.03. Interpretation ..................................................................................................... 8
Section 1.04.. Agreement Constitutes Contract ................................................... ~ ................... 8
ARTICLE .H
THE BONDS
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
Section 2.08.
Section 2.09.
Section 2.10.
Section 2.11.
Authorization of Bonds ......................... '. ........................................................... 9
Terms of Bonds ...................................................... ~ .......................................... 9
Transfer and Exchange of Bonds ..................................................................... 10
Registration Books .......................................................................................... 10
Execution of Bonds ......................................................................................... 10
Authentication of Bonds ................................................................................. 10
Temporary Bonds ............................................................................................ 11
Bonds Mutilated, Lost, Destroyed or Stolen ........................................ : .......... 11
Limited Obligation .......................................................................................... 11
No Acceleration .............................................................................................. 11
Refunding of Bonds ........................................................................................ 11
ARTICLE IH
ISSUANCE OF BONDS
Section 3.011
Section 3.02.
Section 3.03.
Section 3.04.
Issuance of Bonds ........................................................................................... 12
Application of Proceeds of the Bonds ............................................................. 12
Costs of Issuance Fund ................................................................................... 12
Improvement Fund .......................................................................................... 12
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 4.05.
Redemption ..................................................................................................... 14
Notice of Redemption ...................................................................................... 15
Selection of Bonds for Redemption ................................................................ 16
Partial Redemption of Bonds .......................................................................... 16
Effect of Notice of Redemption ...................................................................... 16
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS;
INVESTbffENTS
Section 5.01 Pledge and Assignment
· ................................................................................... 17
Section 5.02. Redemption Fund ............................................................................................ 17
-i-
Section 5.03. Prepayment Account ....... ~ ............................................................................... 18
Section 5.04.' Continuing Costs Account .............................................................................. 18
Section 5.05. Reserve Fund ................................................................................................... 18
Section 5.06. Investment of Moneys ..................................................................................... 19
ARTICLE VI
COLLECTION AND APPLICATION OF
REASSESSMENTS; PARTICULAR COVENANTS
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
Section 6.12.
Collection and Application of Reassessments ................................................ 21
Foreclosure ............................... , .............. ,. ................. .: .................................... 22
No Advances from Available Surplus Funds .................................................. 22
Punctual Payment ...... ........................................................................... . ........... 22
Extension of Payment of Bonds ...................................................................... 22
Against Encumbrances .................. , ................................................................ 22
Power to Issue Bonds and Make Pledge and Assignment .............................. 23
Accounting Records and Financial Statements ............................................... 23
Waiver of Laws ........... i .................................................... 2 .............................. 23
Tax Covenants ................................................................................................. 23
Report to California Debt Advisory Commission ........................................... 24
Further Assurances .......................................................................................... 24
ARTICLE VII
Section 7.01.-
Section 7.02.
Section 7.03.
Section 7204.
Section 7.05.
Section 7.06.
Section 7.07.
Section 7.08.
Section 7.09.
Section 7.10.
Section 7.11.
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS~
Events of Default ............................................................................................ 25
Foreclosure ...................................................................................................... 25
Other Remedies of Bond Owners ................................................................... 25
Application of Reassessments and Other Funds After Default ....................... 26
Fiscal Agent to Represent Bond Owners ........................................................ 26
Bond Owners' Direction of Proceedings ........................................................ 27
Limitation on Bond Owners' Right to Sue ..................................................... 27
Absolute Obligation of City ............................................................................ 27
Termination of Proceedings ............................................................................ 27
Remedies Not Exclusive ................................................................................. 28
No Waiver of Default ...................................... i ............................................... 28
ARTICLE VIII
FISCAL AGENT
Section 8.01.
Section 8.02.
Section 8.03.
Section 8.04.
Section 8.05.
Section 8.06.
Duties and Liabilities of Fiscal Agent ............................................................. 29
Merger or Consolidation ........... ...................................................................... 30
Liability of Fiscal Agent ................................................................................. 30
Right to Rely on Documents ........................................................................... 31
Preservation and Inspection of Documents ..................................................... 31
Compensation and Indemnification ................................................................ 32
ARTICLE IX
MODIFICATION OR AMENDMENT
Section 9.01.
Section 9.02.
Section 9.03.
Section 9.04.
Amendments Permitted ................................................................................... 33
Effect of Supplemental Agreement ................................................................. 34
Endorsement of Bonds; Preparation of New Bonds ....................................... 34
Amendment of Particular Bonds ..................................................................... 34
ARTICLE X
DEFEASANCE
Section 10.01. Discharge o£ Agreement .................................. ~ ............................................. 35
Section 10.02. Discharge of Liability on Bonds .................................................................... 35
Section 10.03. Deposit of Money or Securities with Fiscal Agent ........................................ 36
Section 10.04. Payment of Bonds After Discharge of Agreement ........................................ 36
ARTICLE XI
MISCELLANEOUS
Section 11.01.
Section 11.02.
Section 11.03.
Section 11.04.
Section 11.05.
Section 11.06.
Section. 11.07.
Section 11.08.
Section 11.09.
Section 11.10.
Section 11.11.
Section 11.12.
Section 11.13.
Section 11.14.
Limited Obligation .......................... ' ............................................................... 37
Successor Is Deemed Included in All References to Predecessor ................. 37
Limitation of Rights to Parties and Bond Owners... 37
Waiver of Notice; Requirement of Marled Notice ......................................... 37
Destruction of Bonds ..................................................................................... 37
Severability of Invalid Provisions ................................................................. 37
Notices ........................................................................................................... 38
Evidence of Rights of Bond Owners ............................................................. 38
Disqualified Bonds .. ...................................................................................... 38
Money Held for Particular Bonds .................................................................. 39
FUnds and Accounts ....................................................................................... 39
Payment on Non-Business Days ....................................... ~ ............................ 39
Waiver of Personal Liability .......................................................................... 39
Conflict with Act or Bond Law ..................................................................... 39
Section 11.15. Conclusive Evidence of Regularity ............................................................... 39
Section 11.16. Execution in Several Counterparts ................................................................ 39
Section 11.17. Governing Laws ................ 39
EXH~IT A- Form of Bond .................................................................................................
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (this "Agreement") is made and entered into as
of · 1, 1995 by and between the CITY OF TUSTIN, a general law city and municipal
corporation organized and existing under and by virtue of the laws of the State of California (the
"City"), and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a'
national banking association organized and existing under and by virtue of the laws of the United-
States of America, as fiscal agent (the "Fiscal Agent").
W I TNE S S E TH:
WHEREAS, on , 1995, the City Council of the City passed and adopted
Resolution No. (the""Resolution of Intention") relating to the levy of reassessments and
issuance of refunding bonds pursuant to the Refunding Act of 1984 for 1915 Improvement
Bonds, Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of
California(the "Refunding Law") in and for a portion of the City's Assessment District'No. 85-1
and a portion of the' City's Assessment District No. 86-2 and, by the Resolution of Intention, the
City Council of the City provided that'serial'and/or term bonds would be issued thereunder
pursuant to the provisions of the Improvement Bond Act of 1915, Division 10 of the Streets and
Highways Code of California (the "Bond Law" and, together with the Refunding Law, the "Act")
and reference to the Resolution of Intention is hereby expressly made for further particulars;
WHEREAS, under the provisions of the Act, on ,1.995, the City Council of the
City adopted Resolution No. ~ (the "Resolution of Issuance"), which, among other matters,'
authorized the issuance of refunding improvement bonds of the City designated "City of Tustin
Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch) (the.
"Bonds"), upon the security of the unpaid reassessments and provided that said issuance would :-
be in accordance with the Act and this Agreement, and authorized the execution hereof; ...
WHEREAS, it is in the public interest and for the benefit of the City and the owners of
the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the
disbursement of proceeds of the Bonds, the disposition of the reassessments securing the Bonds
and the administration and payment of the Bonds; and
WHEREAS, the City has determined that all things necessary to cause the Bonds, when
authenticated by the Fiscal Agent and issued as provided in the Act, the Resolution of Issuance
and this Agreement, to be legal, valid and binding and limited obligations in accordance with
their terms, and all things necessary to cause the creation, authorization, execution and delivery
of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject
to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
-1-
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant
to the provisions of the Act and the Resolution of Issuance.
Section 1.02. Definitions. Unless the context otherwise requires, the terms defined in
this Section 1.02 shall for all purposes of this Agreement, of any 'Supplemental Agreement and of
any certificate, opinion or other document herein or therein mentioned, have the meanings herein
specified.
"Act" means, collectively, the Improvement Bond Act of 1915, as amended, being
Division 10 of the California Streets and Highways Code, and the Refunding Act of 1984 for
1915 Improvement Act Bonds, as amended, being Division 11.5 of the California Streets and
Highways Code.
"Agreement" means this Fiscal Agent Agreement, as originally executed or as it may
from time to time be amended or supplemented by any Supplemental Agreement.
"Assessment Consultant" means Muni Financial Services, Inc. or any other consultant
or from of financial consultants appointed by the City and who or each of whom (a) is judged by
the City to have experience with respect to the administration of assessment districts, (b) is in
fact independent and not under the domination of the City, (c) does not have any substantial
interest, direct or indirect, with the City, and (d) is not connected with the City as an officer or
employee of the City, but who may be regularly retained to make reports to the City.
"Assessment District" means the area designated "Reassessment District No. 95-1
CI'u~;tin Ranch)", formed by the City under the Act.
"Auditor" means the auditor/controller of the County, or such other official of the
County who is responsible for. preparing property tax bills.
"Authority" means the Tustin Public Financing Authority, a joint exercise of powers
authority organized and existing under Sections 6500 et seq. of the California Government Code.
"Authority Bonds" means the "Tustin Public Financing Authority Revenue Bonds
Crustin Ranch), Series A."
"Authority Indenture" means the Indenture of Trust, dated as of ,1995, by
and between the Authority and State Street Bank and Trust Company of Calfforma, N.A., as
trustee, as originally executed or as it may from time to time be amended or supplemented in
accordance with its terms.
"Authority Trustee" means State Street Bank and Trust Company of California, N.A.,
as trustee under the Authority Indenture or any successor thereto as trustee thereunder.
"Authorized Representative" means (a) with respect to the City, its City Manager,
Assistant City Manager or Finance Director, or any other Person designated as an Authorized
Representative of the City in a Written Certificate of City filed with the Fiscal Agent, and (b)
with respect to the Fiscal Agent, the Senior Vice President, any Vice President, any Assistant
Vice President or any Trust Officer of the Fiscal Agent, and when used with reference to any act
or document-also means any other Person authorized to perform such act or sign any document
-2-
by or pursuant to a resolution of the Board of Directors of the Fiscal Agent or the by-laws of the
Fiscal Agent.
·
"Bond Counsel" means a firm of nationally recognized bond counsel selected by the
City and' acceptable to the Fiscal Agent.
'"Bond Year" means each twelve-month period beginning on September 3 in each year'
and extending to the next succeeding September 2, both dates inclusive; except that the first
Bond Year shall begin on the Closing Date and end on September 2, 1996.
"Bo!~ds" means' the City of Tustin Limited Obligation Improvement Bonds,~I.
Reassessment District No. 95-1 (Tustin Ranch).
"Bonds (85-1)" means the City of Tus'tin Assessment District No. 85-1 Improvement
Bonds issued pursuant to the Indenture (85-1).
"Bonds (86-2)"'means the City of Tustin Assessment District No. 86-2 Limited
Obligation Improvement Bonds issued pursuant to the Indenture (86-2).
"Business Day" means a day which is not a Saturday, Sunday or legal holiday on which
banking institutions in the State of California, or in any state in which the Office of the Fiscal
Agentis located, are closed.
"City" means the City of Tustin, and any successor thereto.
"Cle~:k" means the Clerk or Deputy Clerk of the City.
"Closing Date" means the date upon which the Bonds are delivered to the Original
Purchaser, being. ,1995.
"Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of-
the Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Bonds, together with applicable proposed,
temporary and final regulations promulgated, and applicable official public guidance published,
under the Code.
"Continuing Costs Account" means the account within the Redemption Fund by that
name established and held by the Fiscal Agent pursuant to Section 5.04.
"Continuing Costs of the Bonds" means the continuing costs of the Bonds, including
the fees, costs and indemnifications due the Fiscal Agent or the City.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds
and the Authority Bonds, including but not limited to printing expenses, rating agency fees, filing
and recording fees, initial fees, expenses and charges of the Fiscal Agent and its counsel,
including the Fiscal Agent's first annual administrative fee, fees, expenses and charges of 'the
Authority Trustee and its counsel, including the Authority Trustee's fa'st annual administrative:
fee, fees, expenses and charges of the Escrow Bank and its counsel, fees, charges and
disbursements of attorneys, financial advisors, accounting fires, consultants and other:
professionals, fees and charges for preparation, execution and safekeeping of the Bonds and the -
Authority Bonds and any other cost, charge or fee in connection with the original issuance of the
Bonds and the Authority Bonds.
-3-
"Costs of Issuance Fund" means the fund by that name established and held by the
Fiscal Agent pursuant to Section 3.03.
"Council" means the City Council, as the legislative body of the City.
"County" means the County of Orange, State of California.
"Dated Date" means the dated date of the Bonds, being
,1995.
"Escrow Agreement" means the Escrow Agreement (95-1), dated as of ' ,1995,
by and between the City and State Street Bank and Trust Company, N.A., as the escrow bank; as
originally executed or as it may from time to time be amended or supplemented in accordance
with its terms.
"Escrow Bank" means State Street Bank and Trust Company, N.A., as the escrow bank'
under the Escrow .Agreement, or any successor thereto as Escrow Bank thereunder.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is traded
on an'established securities market (within the meaning of section 1273 of the Code) and,
otherwise, the term "fair market value" means the acquisitions price in a bona fide arm's length
transaction (as referenced above) ff (a) the investment is a certificate of deposit that is. acquired in
accordance with applicable regulations under the Code, (b)' the investment is an agreement With
specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated
interest rate (for example, a guaranteed investment contract, a forward supply contract or other
investment agreement) that is acquired in accordance with applicable regulations under'the Code,
(c) the investment is a United States Treasury Security--State and Local Government Series that
is acquired in accordance with applicable regulations of the United States Bureau of Public Debt,
or (d) the investment is the Local Agency Investment Fund of the State of California but only if
at all times during which the investment is held in such fund its yield is reasonably expected to
be equal to or greater than the yield on a reasonably comparable direct obligation of the United
States.
"Federal Securities" means any of the following which at the time of investment are
legal investments under the laws of the State of California for the funds proposed to be invested
therein: (a) direct general obligations of the United States of America (including obligations
issued or held in book entry form on the books of the Department of the Treasury of the United
States of America), and (b) obligations of any agency, department or instrumentality of the
United States of America the timely payment of princiPal of and interest on which are fully
guaranteed by the United States of America.
"Fiscal Agent" means State Street Bank and Trust Company of California, N.A., a
national banking association organized and existing under the laws of the United States of
America, or any successor thereto as Fiscal Agent hereunder, appointed as provided herein.
"Fiscal Year" means the period beginning on July 1 o? each year and ending on the next
succeeding J~ne 30, or any other twelve-month period hereafter selected and designated as the
official fiscal year period of the City designated in a Written Certificate of the City delivered to
the Fiscal Agent.
"Improvement Fund" means the fund by that name established and held by the Fiscal
Agent pursuant to Section 3.04.
-4-
"Indenture (85-1)" means the Indenture of Trust, dated as of August 1, 1986, by and
between the City and Citibank, N.A., as trustee, as supplemented and amended, pursuant to
which the Bonds (85-1) were issued, ' ~
"Indenture (86,2)" means the Indenture of Trust, dated as of September 1, 1988, by and
between the City and Citibank, N.A., as supplemented and amended, pursuant to which the
Bonds (86-2) were issued. '"
"Information Ser¥ices" means Financial Information, Inc.'s "Daily Called Bond"
Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor;
Kenny Information Services' Called Bond Service, 55 Broad Street; 28th Floor, New York, New'
York 10004; Moody's Investors Service Municipal and Government," 5250 77 Center Drive,'~
Suite 150, Charlotte, North Carolina 28217, Attention: Municipal News Reports; Standard &
Poor's Corporation "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York
10004; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such services providing information with respect to
called bonds as the City may designate in a Written Certificate of the City delivered to the Fiscal
Agent.
"Interest Payment Dates" means March 2 and September 2 of. each year, commencing
March 2, 1996, so long as any Bonds remain Outstanding.
"Moody's" means Moody's Investors Service, Inc., 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 ff 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. -,
"Office" means the principal corporate trust office of the Fiscal Agent in Los Angeles,
California, 'or such other office as may be specified to the City by the Fiscal Agent in writing.
"Original Purchaser" means the Authority, as the original purchaser of the Bonds. --
"Outstanding," when used as of any particular time with reference to Bond~;, means
(subject to the provisions of Section 11.09) all Bonds theretofore, or thereupon being,
authenticated and delivered bY the Fiscal Agent under this Agreement except:
(a) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal
Agent for cancellation;
(b) Bonds with respect to which all liability of the City shall have been
discharged in accordance with Section 10.02, including Bonds (or portions of Bonds)
disqualified under Section 11.09; 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 Fiscal Agent pursuant to
this Agreement.
"Owner" means, with respect to a Bond, the Person in whose name such Bond is
registered on the Registration Boo'ks.
"Permitted Investments" means the following, but only to the extent that the same are
acquired at Fair Market Value:
(a) Federal Securities;
(b) any of the following direct or indirect obligations of the following agencies of the
United States of America: (i) direct obligations of the Export-Import Bank; (ii) certificates of
beneficial ownership issued by the Farmers Home Administration; (iii) participation certificates
issued by the General Services Administration; (iv) mortgage-backed bonds or pass-through
obligations issued, and guaranteed by the Government National Mortgage Association, the
Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Federal Housing Administration; (v) project notes issued by the United States Department of
Housing and Urban Development; and (vi) public housing notes and bonds guaranteed by the
United States of America;
(c) interest-bearing demand or time deposits (including certificates of deposit) or
deposit accounts in federal or state chartered savings and loan associations or in federal or State
of California banks (including the Fiscal Agent), provided that (i) the unsecured short-term
obligations of such commercial bank' or savings and loan association shall be rated A1 or better
by S&P, or (ii) such demand or time deposits shall be fully insured by the Federal Deposit
Insurance Corporation;
(d) commercial paper rated in the highest short-term rating category by S&P, issued
by corporations which are organized and operating within the United States of America, and
which matures not more than 180 days following the date of investment therein;
(e) bankers acceptances, consisting of bills of exchange or time drafts drawn on and
accepted by a commercial bank whose short-term obligations are rated in the highest short-term
rating category by S&P, which mature not more than 270 days following the date of investment
therein;
(f) obligations the interest on which is excludable from gross income pursuant to
Section 103 of the Tax Code and which are rated A or better by S&P;
(g) obligations issued by any corporation organized and operating within the United
States of America having assets in excess of $500,000,000, which obligations are rated A or
better by S&P;
(h) money market funds which are rated Am or better by S&P;
(i) any investment agreement which is approved in writing by S&P prior to the time
of initial investment; and
·
(j) the Local Agency Investment Fund established pursuant to Section 16429.1 of the
Government Code of the State of California to the extent the Fiscal Agent may deposit and
withdraw funds directly, provided that the Fiscal Agent may restrict such investment if required
to keep moneys available for the purposes of this Agreement.
"Person" means an individual, corporation, fu'm, association, partnership, trust, or other
legal entity or group of entities, including a governmental entity or any agency or political
subdivision thereof.
"Prepayment Account" means the account within the Redemption Fund by that name
established and held by the Fiscal Agent pursuant to Section 5.03. .
"Prior Bonds" means, collectively, the $14,490,000 aggregate principal amount of
Bonds (85-1) that have been converted to a £zxed interest rate pursuant to the Indenture (85-1)
-6-
and the $35,910,000 aggregate principal amount of Bonds (86-2) that have been converted to a
fixed interest rate pursuant to the Indenture (86-2).
"Prior District 85-1" means City of Tustin Assessment District No. 85-1; the
assessments in which were confirmed by Resolution No. 86-81, adopted by the City Council of
the City on June 16, 1986.
"Prior District 86-2" means City of Tustin Assessment District No. 86-2, the
assessments in which were confirmed by Resolution No. 88-81, adopted by the City Council of'
the City on July 18, 1988. '
· ' "Project" means the improvements to be acquired, constructed and installed described in'
the Resolution of Intention.
"ReaSsessments'' means the reassessments levied within the Assessment District by the
Council under the proceedings taken pursuant to the Resolution of Intention.
"Record Date" means: (a) the 15th calendar day of the month preceding each Interest
Payment Date, whether or not such day is a Business Day, and (b) any date established by the
Fiscal Agent pursuant to Section 2.02(c) as a Record Date for the payment of defaulted interest
on the Bonds., if any.
"Redemption Fund" means the fund by that name established and held by the Fiscal
Agent pursuant to Section 5.02.
"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 Fiscal Agent 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 Fiscal Agent
pursuant to Section 5.05.
"Reserve Requirement" means, as of the date of any calculation, [the lesser of (a) ten
percent (10%) of the original aggregate principal amount of the Bonds, or (b) the max/mum
amount of principal of and interest on the Bonds coming due and payable in the current or any
future Bond Year].
"Resolution of Intention" means Resolution No.
,1995.
, adopted by the Council on
"Resolution of Issuance" means Resolution No.
· 1995, authorizing the issuance of the Bonds.
, adopted by the Council on
"S&P" means Standard .& Poor's Ratings Group, a division of McGraw-Hill, Inc.,
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 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 City.
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax - (516) 227-4039 or 4190; Midwest Securities Trust
Company, Capital Structures -.Call Notification, 440 South LaSalle Street, Chicago, Illinois
-7-
60605, Fax - (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division,
1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex - (215)
496.,5058; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other securities depositories as the City may
designate in a Written Certificate of the City delivered to the Fiscal Agent.
"Supplemental Agreement" means any agreement amendatory of or supplemental to
this Agreement, but only if and to the extent that such Supplemental Agreement is specifically
authorized hereunder.
"Treasurer" means the Treasurer of the City, or a designee thereof.
"Written Certificate" and "Written Request" of the City mean, respectively,~ a written
certificate or written request signed in the name of the City by its Authorized Representative.
Any such certificate or request may, but need not, be combined in a single instrument with any
other instrument, opinion or representation, and the two or more so combined shall be read and
construed as a single instrument.
Section 1.03. Interr>retation.
--
(a) Unless the context otherwise indicates, words expressed in the singular shall include
the plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to include the neuter, masculine or feminine gender, as
appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely
for convenience of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; the words "herein,"
"hereof," "hereby," "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or subdivision hereof.
Section 1.04. Aereement Constitutes Contracl. In consideration of the purchase and
acceptance of any and a.[1 of the Bonds issued hereunder by those who shall hold the same from
time to time, this Agreement shall be deemed to be and shall constitute a contract among the
City, the Fiscal Agent and the Owners'of the Bonds. The pledge made in this Agreement and the
provisions, covenants and agreements herein set forth to be performed by or on behalf of the City
shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds.
All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of
equal rank without preference, priority or distinction of any of the Bonds over any other thereof,
except as expressly provided in or permitted by this Agreement.
-8-
ARTICLE II
THE BONDS
Section 2.01. Authorization of Bonds. The City hereby authorizes the issuance Of the
Bonds under and subject to the terms of the Resolution of Issuance and this Agreement, the Act
and other applicable laws of the State of California for the purpose of providing a portion of the ':
moneys to refund the Prior Bonds
Section 2.02. Te, rms of Bonds. (a) The Bonds shall be designated "City of Tustin
Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch)", and
shall be secured .by and payable from the Reassessments and other assets pledged hereunder. The
aggregate principal amount of Bonds that may be issued and Outstanding under this Agreement
shall not exceed $ , except as may be otherwise provided in Section 2.08.
(b) The Bonds Shall be issued in fully registered form without coupons in denominations
of $5,000 .or any integral multiple thereof, so long as no Bond shall have more than one maturity
date. The Bonds shall be dated as of ,1995, shall be issued in the aggregate principal
amount of $ , shall mature on September 2, 2013, and shall bear interest (calculated on
the basis of a 360-day year comprised of twelve 30-day months) at the nominal rate of % per
annum; provided, however, that the actual rate of interest to be borne by the Bonds shall be
adjusted as of each September 1 to be a rate per annum such that the sum of (i) the product of
such rate (expressed as a decimal) times the principal amount of Bonds Outstanding as: of the
close of business on such September 1, plus (ii) the amount to be deposited on the following
September 3 in the Redemption Fund, pursuant to Section 5.02 (a), from amounts transferred by
the Authority Trustee from the Surplus Fund established under the Authority Indenture, is equal ·
to the product of the nominal rate (expressed as a decimal) times the principal amount of Bonds'
Outstanding as of the close of business.on such September 1.
(c) Interest.on the Bonds shall be payable from the Interest Payment Date next preceding
the date of authentication thereof unless (i) a Bond is authenticated on or before an Interest-
Payment Date and after the close of business on the preceding Record Date, in which event it
shall bear interest from such Interest Payment Date, (ii) a Bond is authenticated on or before the
first Record Date, in which event interest thereon shall be payable from ,1995, or
(iii) interest on any 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 been paid in full, payable on
each Interest Payment Date. Interest shall be paid in lawful money of the United States on each
Interest Payment Date to the Persons in whose names the ownership of the Bonds is registered on
the Registration Books at the close of business on the immediately preceding Record Date,
except as provided below. Interest on any Bond which is not punctually paid or duly provided
for on any Interest Payment Date shall be payable to the Person in whose name the ownership of
such Bond is registered on the Registration Books at the. close of business on a special Record
Date to be established by the Fiscal Agent for the payment of such defaulted interest to be fixed
by the Fiscal. Agent, notice of which shall be given to such Owner not less than ten days prior to
such special Record Date. Interest shall be paid by check of the Fiscal Agent mailed by first
class mail, postage prepaid, on each Interest Payment Date to the Bond Owners at their
respective addresses shown on the Registration Books as of the close of business on the
preening Record Date.
(d) The principal of the 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 Fiscal Agent. Payment of principal of any Bond shall be made only upon
presentation and surrender of such Bond at the Office of the Fiscal Agent.
·
-9-
(e) Notwithstanding the foregoing, so long as the ownership of the Bonds is registered in
the name of the Authority Trustee, the payment of principal of, premium, if any, and interest on
the Bonds shall be made to the Authority Trustee in immediately available funds on each
applicable payment date, in an amount equal to the principal, interest and any premium due on
the Bonds on the applicable payment date.
(f) The Bonds shall be subject to redemption as provided in Article IV.
(g) The 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 Fiscal Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the City
shall execute and the Fiscal Agent shall authenticate and shall deliver a new Bond or Bonds for a
like aggregate principal amount, in any authorized denomination. The Fiscal Agent shall require
the Bond Owner requesting such transfer to pay any tax or other governmental charge required to
be paid with respect to such transfer.
The Bonds may be exchanged at the Office of the Fiscal Agent for a like aggregate
principal amount of Bonds of other authorized denominations. The Fiscal Agent shall require the
payment by the Bond Owner requesting such exchange of any tax or other governmental charge
required to be paid with respect to such exchange.
The Fiscal Agent shall not be obligated to make any transfer or exchange of Bonds
pursuant to this Section 2.03 during the period established by the Fiscal Agent for the selection
of Bonds for redemption, or with respect to any Bonds selected for redemption.
Section 2.04. Registration Books. The Fiscal Agent will keep or cause to be kept, ai the
Office of the Fiscal Agent, sufficient records for the registration and transfer of ownership of the
Bonds, which shall be open to inspection during regular business hours and upon 24 hours notice
by the City; and, upon presentation for such purpose, the Fiscal Agent shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on such records, the ownership of the Bonds as hereinbefore provided.
· Section 2.05. Execution of Bonds. The Bonds shall be executed in the name and on
behalf of the City with the facsimile signature of the Treasurer attested by the manual or
facsimile signature of the City Clerk,. The City's seal or a facsimile thereof, may be reproduced,
imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Fiscal Agent for
authentication by it. In case any of the officers who shall have signed or attested any of the
Bonds shall cease to be such officer or officers of the City before the Bonds so signed or attested
shall have been authenticated or delivered by the Fiscal Agent, or issued by the City, such Bonds
may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery
and issue, shall be as binding upon the City as though those who signed and attested the same
had continued to be such officers of the City, and also any Bonds may be signed and attested on
behalf of the City by such Persons as at the actual date of execution of such Bonds shall be the
proper officers of the City although at the nominal date of such Bonds any such Person shall not
have been such officer of the City.
'Section 2.06. Authentication of Bonds. Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in the form set forth in Exhibit A hereto, manually
executed by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the
benefits of this Agreement, and such certificate of or on behalf of the Fiscal Agent shall be
conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this Agreement.
Section 2.07. 'Temporary Bonds. The Bonds may be issued in temporary form
exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be-'
printed, lithographed or typewriUen, shall be of such authorized denominations as may be
determined by the City, shall be in fully registered form without coupons and may contain such
reference to any of the provisions of this Agreement as may be appropriate. Every temporary
Bond shall be executed by the City and authenticated by the Fiscal Agent upon the same
conditions and in substantially the same manner as the definitive Bonds. If the City issues
temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as
practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the
Office of the Fiscal Agent and the Fiscal Agent shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits
under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, 'the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent
shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution
for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated.
Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled by it and 'delivered to,
or upon the order of, the City. If any Bond shall be lost, destroyed or stolen, evidence of such
loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence and
indemnity satisfactory to the Fiscal Agent shall be given, the City, at the expense of the Owner,'
shall execute, and the Fiscal Agent shall thereupon authenticate and deliver, a new Bond of like
tenor in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a replacement Bond, the Fiscal
Agent may pay the same without surrender thereof). The City may require payment by the
Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under
this Section and of the expenses which may be incurred by the City and the Fiscal Agent. Any
Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed
or stolen shall Constitute an original additional contractual obligation on the part of the City
whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement with all other Bonds secured by
this Agreement.
Section 2.09. Limited Obligation. All obligations of the City under this Agreement and
the Bonds shall not be general obligations of the City, but shall be limited obligations, payable
solely from the Reassessments and the assets pledged therefor hereunder. Neither the faith and
credit of the City nor of the State of California or any political subdivision thereof is pledged to
the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds" as provided
in Section 11.01.
Section 2.10. No Acceleration. The principal of the Bonds shall not be subject to"
acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or :'
redemption of Bonds under Article IV hereof, or the defeasance of the Bonds and discharge of
this Agreement under Article X hereof.
Section 2.11. Refundine of Bonds. The Bonds may be refunded by the City under'
Divisions 11 or 11.5 of the Calif6rnia Streets and Highways Code upon the conditions set forth
in prOceedings therefor, all as determined by the Council.
-11-
ARTICLE III
ISSUANCE OF BONDS
Section .3.01. Issuance of Bonds. Concurrent with the execution of this Agreement, the
City shall execute and the Fiscal Agent shall authenticate the Bonds and deliver the Bonds to the
Original Purchaser in the aggregate principal amount of $. .
Section 3.02. Application of Proceeds of the Bonds. On the Closing Date, the
proceeds of the' sale of the Bonds shall be paid to the Fiscal Agent and said amounts, together
with the amounts transferred to the Fiscal Agent from the funds and accounts held under the
Indenture (85-1) and the Indenture (86-2), shall be transferred or deposited by the Fiscal Agent as
follows:
(a) The Fiscal Agent shall deposit the amount of $
Fund, constituting the full amount of the Reserve Requirement.
in the Reserve
(b) The Fiscal Agent shall deposit the amount of $
Fund.
in the Costs of Issuance
(c) The Fiscal Agent shall deposit the amount of $
Fund.
in the Improvement
(d) The Fiscal Agent shall transfer to the Escrow Bank for deposit in the Escrow
Fund established under the Escrow Agreement the amount of $. ,
constituting the remainder of said proceeds.
Section 3.03. Costs of Issuance Fund. There is hereby established a separate fund to be
known as the "Costs of Issuance Fund", which shall be held by the Fiscal Agent in trust. On the
Closing Date there shall be deposited in the Costs of Issuance Fund the amount specified in
Section 3.02(c).
The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Fiscal
Agent from time to time to pay the Costs of Issuance upon submission of a Written Request of
the City stating (a) the Person to whom payment is to be made,' (b) the amount to be paid, (c) the
purpose for which the obligation was incurred, (d) that such payment 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 1, 1996, all amounts remaining in the
Costs of Issuance Fund shall be withdrawn therefrom by the Fiscal Agent and transferred to the
Redemption Fund and the Cost~ of Issuance Fund shall be closed.
Section 3.04. Improvement Fund. There is hereby established a separate fund to be
known as the "Improvement Fund", which shall be held by the Fiscal Agent in trust. On the
Closing Date there shall be deposited in the Improvement Fund the amount specified in Section
3.02(d).
The moneys in the Improvement Fund shall be used and withdrawn by the Fiscal Agent
from time to time to pay the costs of the Project upon submission of a Written Request of the
City stating (a) the Person to whom payment is to be made, (b) the amount to be paid, (c) the
purpose for which the obligation was incurred, (d) that such payment constitutes a cost of the
Project and is a proper charge against the Improvement Fund, and (e) that such amounts have not
been the subject of a prior disbursement from the Improvement Fund; in each case together with
a statement or invoice for each amount requesmd thereunder.
Upon the filing of a Written Certificate of the City stating that the Project has been
completed and that all costs of the Project have been pa. id or are not required to be paid from the
Improvement Fund, the Fiscal Agent shall transfer and apply the amount, ff any, remaining in the
Improvement Fund as directed in said Written Certificate, which directions shall be prepared in',-
accordance with the provisions of Sections 10427 and 10427.1 of the Act, and the Improvement'
Fund shall be closed.
-13-
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption. (a) Optional Redemption. The Bonds shall be subject to
optional redemption in whole br in .part, on any Interest Payment Date on or after September 2,
2004, 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 Date~
Redemption Price_
September 2, 2004 and March 2, 2005
.September 2, 2005 and March 2, 2006
September 2, 2006 and thereafter
102%
101
100
(b) Mandatory Redemption From Reassessment Prepayments. The Bonds shall be
subject to mandatory redemption, in whole or in part, on any Interest Payment Date, from and to
the extent of any prepayment of Reassessments, 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
March 2, 1996 through March 2, 2004
September 2, 2004 and March 2, 2005
September 2, 2005 and March 2, 2006
September 2, 2006 and thereafter
Redemption Price
103%
102
101
100
The Treasurer shall notify the Fiscal Agent of Bonds to be called for redemption upon
prepayment of Reassessments in amounts sufficient therefor, or whenever sufficient surplus
funds are available therefor on the Redemption Fund.
(c) Mandatory Sinking Fund Redemption. The Bonds shall be subject to mandatory
s~king fund redemption, in part, on September 2 in each year, commencing September 2, 1996,
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:
-14-
Sinking Fund
Redemption Date
(September 2)
Principal Amount
to be
Redeemed
1996
1997
.1998
1999
2OOO
2001
2OO4
2OO5
2006
2OO8
2009
2010
2011
2012
2013
(maturity)
If some but not all of the Bonds are redeemed pursuant to Section 4.01(a), the principal
amount of Bonds to be redeemed pursuant to Section 4.01 (c) on any subsequent September 2
shall be reduced, by $5,000 or an integral multiple thereof, as designated by the City in a Written
Certificate of the City fried with the Fiscal Agent; provided, however, that the aggregate amount '*
of such reductions shall not exceed the aggregate amount of Bonds redeemed pursuant to Section.
4.01(a). If some but not all of the Bonds are redeemed pursuant to Section 4.01(b), the principal
amount of Bonds to be subsequently redeemed pursuant to Section 4.01 (c) shall be reduced by
the aggregate principal amount of the Bonds so redeemed pursuant to Section 4.01(b), such
reduction to be allocated (i) if the Fiscal Agent has been notified pursuant to Section 6.01(b) that'
the Reassessment prepayment out of which such redemption is to be made relates to property that
was included in Prior District 85-1, among redemption dates through and including 2011, and (ii)
if the Fiscal Agent has been notified pursuant to Section 6.01(b) that the Reassessment
prepayment out of which such redemption is to be made relates to property that was included in
Prior District 86-2, among redemption dates through and including 2013, as nearly as practicable.
on a pro rata basis in amounts of $5,000 or integral multiples thereof, as determined by the City,
notice of which determination shall be given by the City, to the'Fiscal Agent.
Section 4.02' NotiCe of Redemption. The Fiscal Agent on behalf and at the expense of
the City shall mail (by first class mail) notice of any redemption to the respective Owners of any
Bonds designated for redemption at their respective addresses appearing on the Registration
Books, and (if the Authority Trustee is not the Owner of all of the Bonds) to the Securities
Depositories and to one or more Information Services, at least 30 but not more than sixty 60 days
prior to the date fixed for redemption. Such notice shall state the date of the notice, the
redemption date, the redemption place and the Redemption Price and shall designate the CUSIP
numbers, the Bond numbers (except in the event of redemption of all of the Bonds of a maturity
or maturities in whole) and the maturity or maturities of the Bonds to be redeemed, and shall
require that such Bonds be then surrendered at the Office of the Fiscal Agent for redemption at
the Redemption Price, giving notice also th'at further interest on such Bonds will not accrue from
and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor
any defect in such notice, shall affect the sufficiency of the proceedings for the redemption of the
Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.
-15-
Section 4.03. Selection of Bonds for Redemption. Whenever provision is made in this
Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the
Bonds to be redeemed from all Bonds not previously called for redemption, by lot in any manner
which the Fiscal Agent in its sole discretion shall deem appropriate and fair. 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 City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner
thereof, at the expense of the City, a new Bond or Bonds of authorized denominations equal in
aggregate principal amount representing the unredeemed portion of the Bonds surrendered..
Section 4.05. Effect of Notice of Redemt)tion.' Notice having been mailed as aforesaid,
and moneys for the redemption (including the intdrest to the applicable date fixed for redemption
and including any applicable premium), having been deposited in the Redemption Fund or
Prepayment Account, as applicable, the Bonds shall become due and payable on said date, and,
upon presentation and surrender thereof at the Office of the Fiscal Agent, said Bonds shall be
paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.
If, on said date fixed for redemption, moneys for the redemption of all the Bonds to be
redeemed, together with interest to said 'date, shall be held by the Fiscal Agent so as to be
available therefor on such date, and, ff 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 Fiscal Agent for the
redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be
redeemed.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions
hereof shall be canceled upon surrender thereof and the Fiscal Agent shall deliver a cen. fficate of
destruction t6 the City.
-16-
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS;
INVESTMENTS
Section 5.01. Pledge and Assignment. Subject only to the provisions of this Agreement'
permitting the application thereof for the purposes and on the terms and conditions set forth
herein, al/of the Reassessments (including prepayments thereof), togethei' with interest and any
penalties thereon, and 'any other amounts (including proceeds of the sale of the Bonds) held in
any fund or account established pursuant to this Agreement are hereby pledged by the City to.
secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance'
with their terms, the provisions of this Agreement and the Act.' Said pledge shall constitute a
fa-st lien on and security interest in such assets.
Section 5.02. Redemption Fun0..(a) The Fiscal Agent shall establish, maintain and
hold in trust a special fund designated the "Redemption Fund." The Fiscal Agent shall deposit in
the Redemption Fund the amount specified in Section 3.02(a). Additionally, except as otherwise
provided herein, the Fiscal Agent shall deposit in the Redemption Fund all Reassessments
(including prepayments thereof), together with interest and any penalties thereon,, and any other
amounts required to be deposited therein by this Agreement or the Act. Amounts transferred, on'
September 3 of each year, to the Fiscal Agent by the Authority Trustee from the Surplus Fund
established under the Authority Indenture shall be deposited[, first, in the Reserve Fund if and to
the extent that the amount on deposit therein is less than the Reserve Requirement and, second,]
in the Redemption Fund.
(b) On or before each Interest Payment Date, the Fiscal Agent shall withdraw from the'
Redemption Fund for payment to the Owners of the Bonds the principal, if any, of and interest
then due and payable on the Bonds; including principal due and payable by reason of mandatory
si~king fund redemption of such Bonds pursuant to Section 4.01(c). Five Business Days prior to
each Interest Payment Date, the Fiscal Agent shall determine if the amounts then on deposit in
the Redemption Fund are sufficient to pay the principal, if any, of and interest due on the Bonds"
on such Interest Payment Date. In the event that amounts in the Redemption Fund are
insufficient for such purpose, the Fiscal Agent, on or before such Interest Payment Date, 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 Redemption Fund. Amounts
so withdrawn from the Reserve Fund and deposited in the Redemption Fund shall be applied to
the payment of the Bonds. fi, after the foregoing transfer, there are insufficient funds in the
Redemption Fund to pay the principal, ff any, of and interest on the Bonds, the Fiscal Agent shall
apply the available funds fu'st to the payment of interest on the Bonds, then to the payment of
principal of the Bonds.
(c) The Fiscal Agent shall deliver to the Authority Trustee, on July 1 of each year, a
written notification stating (i) the amount of debt service payable on the Bonds on the following
September 2, (ii) the amount on deposit in the Redemption Fund as of such July 1, and (iii) the
amount, ff any, by which the amount on deposit in the Reserve Fund on such July 1 is less than
the Reserve Requirement. The City shall cause the Authority Trustee to deliver to the Fiscal
Agent, no later than July 15 of each year, a written notification stating the amount that the
Authority Trustee expects to transfer to the Fiscal Agent on the following September 3 from the
Surplus Fund established under the Authority Indenture. The City shall cause the Assessment
Consultant to calculate the portion of such amount allocable to parcels within the Assessment
District that were included in Prior District 85-1 and the portion of such amount allocable to
parcels within the Assessment District that were included in Prior District 86-2.
-17-
Section 5.03. Prepayment Accounl. The Fiscal Agent shall establish and maintain a
special account within the Redemption Fund designated the "Prepayment Account". The Fiscal
Agent shall deposit in the Prepayment Account the proceeds of the prepayment of any
Reassessment. Additionally, the Fiscal Agent shall deposit in the Prepayment Account amounts
received from the City in connection with the City's exercise of its rights to optionally redeem
Bonds pursuant to Section 4.01 (a).
Amounts in the Prepayment Account shall be disbursed therefrom for the payment of the
Redemption Price of Bonds redeemed pursuant to Section 4.01 (a) or Section 4.01(b).
SectiOn 5.04. Continuing Costs Account. The Fiscal Agent shall establish and
maintain a special account within the Redemption Fund designated the "Continuing Costs
Account". The Fiscal Agent shall deposit in the Continuing Costs Account amounts collected for
Continuing Costs of the Bonds..
The moneys in the Continuing Costs Account shall be used and withdrawn by the Fiscal
Agent from time to time to pay the Continuing Costs of the Bonds upon submission of a Written
Request of the City stating (a) the Person to whom payment is to be made, (b) the amount to be
paid, (c) the purpose for which the obligation was incurred, (d) that such payment constitutes a
Continuing Cost of the Bonds and is a proper charge against the Continuing Costs Account, and
(e) that such mounts have not been the subject of a prior disbursement from the Continuing
Costs Account; in each case together with a statement or invoice for each amount requested
thereunder.
Section 5.05. Reserve Fund. (a) The Fiscal Agent shall establish, maintain and hold in
trust a special fund designated the "Reserve Fund". The Fiscal Agent shall deposit in the
Reserve Fund the amount specified in Section 3.02(b). Additional deposits shall be made as
provided in the Act.
The City shall cause the Reserve Fund to be administered in accordance with Part 16 of
the Act; provided that proceeds from redemption or sale of properties, with respect to which
payment of delinquent Re, assessments and interest thereon was made from the Reserve Fund,
shall be credited to the Reserve Fund.
(b) Except as otherwise provided in this Section, all amounts deposited in the Reserve
Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers
to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the
amount then required for payment of the principal of, premium, if any and interest on the Bonds
or, in accordance with the provisions of this Section, for the purpose of redeeming Bonds from
the Redemption Fund.
(c) Transfers shall be made from the Reserve Fund to the Redemption Fund in the event
of a deficiency in the Redemption Fund, in accordance with Section 5.02(b).
(d) Whenever, after the issuance of the Bonds, a Reassessment is prepaid, in whole or in
part, as provided in the Act, the Fiscal Agent, pursuant to a Written Request of the City, shall
transfer from the Reserve Fund to the Prepayment Account an amount, specified in such Written
Request, equal .to the product of the ratio of the original amount of the Reassessment, or portion
thereof, so prepaid to the original amount of all unpaid Reassessments, times the initial Reserve
Requirement.
(e) So long as no Event of Default shall have occurred and be continuing, any amount in
the Reserve Fund in excess of the Reserve Requirement on February 15 and August 15 of each
-18-
year shall be withdrawn from the Reserve Fund by the Fiscal Agent and shall be deposited in the
Redemption Fund.
(f) Prior to July 15, 2010 the City shall cause the Assessment Consultant to cal.culate the
portion (as a percentage) of the amount on deposit in the Reserve Fund allocable to the properties
in the Assessment District that were included in Prior District 85-1 and that, as of such date, have
remaining unpaid ReaSsessments. On August 20, 2011, the Fiscal Agent shall withdraw from the:"
Reserve Fund and deposit in the Redemption Fund such percentage of the amount on deposit in
the Reserve Fund on such date. Said amount shall be applied to the payment of the Bonds on
September 2, 2011.
(g) Whenever the balance in the Reserve Fund is sufficient to retire all the Outstanding'
Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the
Reassessments shall be discontinued and the Reserve Fund liquidated by the Fiscal Agent in
retirement of the Outstanding Bonds, as directed by a Written Request of the City. In the event
that the balance in the Reserve Fund at the time of liquidation exceeds the amount required to
re-tire all of the Outstanding Bonds, the excess shall, after payment of amounts due to the Fiscal
Agent, be transferred tO the City to be used in accordance with the Act.
Section 5.06. Investment of Moneys. Except as otherwise provided herein, ail moneys
in any of the funds or accounts established-pursuant to this Agreement shall be invested by the
Fiscal Agent solely in Permitted Investments, as .directed in writing by the City two Business
Days prior to the making of such investment. All Permitted Investments shall be acquired
subject to any restrictive instructions given to the Fiscal Agent pursuant to Section 6.10 and such
additional limitations or requirements consistent with the foregoing as may be established by the
Written Request of the City. Moneys in all funds and accounts shall be invested in Permitted
Investments maturing not later than the date on which it is estimated that such moneys will be
required for the purposes specified in this Agreement; 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, and
provided, further, that ff 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 City, the Fiscal Agent shall invest any funds
held by it in Permitted Investments described in clause (c) of the definition thereof.
Subject to the provisions of Section 6.10, all interest, profits and other income received
from the investment of moneys in any fund or account established pursuant to this Agreement
shall, prior to the date on which the Improvement Fund is closed pursuant to Section 3.04, be
deposited in the Improvement Fund and shall, thereafter, be deposited in the Redemption' Fund;
provided, however, that all interest or gain from the investment of amounts in the Reserve Fund
shall be retained therein and, provided further, that before any such deposit shall be made, such.
interest, profits and other income shall be available for the payment of any rebate that may be
owed under the Code, as specified in a Written Request of the City delivered to the Fiscal Agent.
Permitted Investments acquired as an investment of moneys in any fund established
under this Agreement shall be credited to such fund. Except as otherwise provided in the
following sentence, all investments of amounts deposited in any fund or account created by or
pursuant to this Agreement, or otherwise containing gross .proceeds of the Bonds (within the
meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date
that valuation is required by this Agreement or the Code) at Fair Market Value. Investment in'
funds or accounts (or portions thereof) that are subject to a yield restriction under applicable
provisions of the Code shall be valued at their present value (within the meaning of section 148
of the Code).
-19-
The Fiscal Agent may act as principal or agent in the making or disposing of any
investment. Upon the Written Request of the City,' the Fiscal Agent shall sell or present for
redemption any Permitted Investments so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to
which such Permitted Investments is credited, and the Fiscal Agent shall not be liable or
responsible for any loss resulting from any investment made or sold pursuant to this Section. For
purposes of 'investment, the Fiscal Agent may commingle moneys in any of the fUnds and
accounts established hereunder.
-20-
ARTICLE VI
COLLECTION AND APPLICATION OF
REASSESSMENTS; PARTICULAR COVENANTS
Section 6.01. Collection and Application of Reassessments. (a) The City shall-
comply with all requirements of the Act, the Resolution of Issuance and this Agreement to assure
the timely collection of the Reassessments, and interest thereon, including, without limitation,
the enforcement of delinquent Reassessments. Any funds received by the City in and for the .-
Assessment District, including, but not limited to, collections of Reassessments (including
prepayments thereof), and interest thereon, upon the secured tax roils, collections of delinquent
Reassessments and interest and penalties thereon, through foreclosure proceedings or otherwise,
and collections of amounts for the Continuing Costs of the Bonds, shall be immediately
transmitted directly to the Fiscal Agent, without deduction, to be deposited into the funds and
accounts herein specified.
(b) The Reassessments and interest thereon, shall be payable and be collected in the same
manner at the same time and in the same installments as the general taxes on real property are
payable, and have the same priority, become delinquent at the same time and in the same
proportionate amounts and bear the same proportionate penalties and interest after delinquency
as do the general taxes on real property. The Reassessments, together with the interest thereon,
shall be payable in annual series corresponding in number to the number of series of Bonds. An
annual proportion of each Reassessment, together with interest thereon, shall be payable in each
year preceding the date of maturity of each of the several series of Bonds in an amount sufficient
to pay such Bonds, and interest thereon, when due. In addition, the City shall, in accordance with
and subject to the limitations contained in Section 8682 and Section 8682.1 of the Act, cause to
be included in the annual assessment roll, an amount estimated to be sufficient to pay the
Continuing Costs of the Bonds for the following annual period.
The Treasurer shall, 'before the final date on which the Auditor will accept the
transmission of the Reassessments for inclusion on the next tax roll, prepare or cause to be
prepared, and shall transmit to the Auditor, such data as the Auditor requires to'include the
installments of such Reassessments, together with interest thereon, and the Continuing Costs of
-the Bonds on the next secured tax roll of the County. Such data shall take into account the
amount expected to be transferred, on the following September 3, to the Fiscal Agent by the
· Authority Trustee from the Surplus Fund established under the Authority Indenture and the
allocation thereof determined by the Assessment Consultant as provided in Section 5.02(c). The
Treasurer is hereby authorized to employ consultants to assist in computing the installments of
the Re. assessments hereunder and in reconciling Reassessments billed to amounts received.
All sums received from the collection of the Reassessments and of the interest and
penalties thereon shall be placed in the Redemption Fund. All amounts collected for the
Continuing Costs of the Bonds shall be placed in the Continuing Costs Account. Any
prepayments of Re. assessments shall be placed in the Prepayment Account; provided, however,
that amounts attributable to the administrative costs of the prepayment of Reassessments shall be
placed in the Continuing Costs Account. Upon the prepayment of any Reassessment, the City
shall cause the Assessment Consultant to determine, and to notify the Fiscal Agent in writing,
whether such prepayment relates to property that was included in Prior District 85-1 or property
that was included in Prior District 86-2.
-21-
Upon receipt of any Reassessments, or interest or penalties thereon, or prepayments of
Reassessments or amounts collected for the Continuing Costs of the Bonds, the City shall, as
soon as practicable, transfer the same to the Fiscal Agent, together with a Written Certificate of
the City that identifies which portion, if any, of the amounts so transferred that constitute
Reassessments, or interest or penalties thereon, or prepayments of Reassessments or amounts
collected for the Continuing Costs of the Bonds.
(c) Any Reassessment may be prepaid at any time by paying, in whole or part, the unpaid
amount thereof less, if available, the amount transferred to the Redemption Fund from the
Reserve Fund pursuant to Section 5.05(d), if any, together with the redemption premium, ff any,
set forth in Section 4.02(b) and interest on such prepaid Reassessment (if not collected in a
Reassessment installment) to the earliest Redemption Date for which notice of redemption may
be given in accordance herewith.
Section 6.02. Foreclosure. The City hereby covenants that it will within 150 days of a
delinquency in the payment of Reassessments, or interest thereon, or amounts to pay the
Continuing Costs of the Bonds, forthwith undertake and diligently prosecute foreclosure
proceedings in the manner prescribed in Section 8830 et seq. of the Act to collect such
delinquent amounts; provided, however, that ff the amount collected is greater than 92.5% of the
installment of the Reassessment and interest thereon, and amounts to pay the Continuing Costs of
the Bonds, to be collected, the City shall not be required to undertake such foreclosure
proceedings, unless it is determined that any single property owner is delinquent in excess of
$25,000 in the payment of such amounts in which case it shall diligently institute, prosecute and
pursue such foreclosure proceedings against such property owner as set forth herein. Upon the
redemption or sale of the real property responsible for such delinquencies, the City shall apply
the net proceeds thereof to: (a) deposit to the Reserve Fund the amount of any delinquency
advanced therefrom pursuant to Section 5.05(a), and (b) the balance, if any, shall be disbursed as
set forth in the judgment of foreclosure or as required by law.
Section 6.03. No Advances from Available Surplus Funds. The City shall not be
Obligated to advance available funds of the City to cure any deficiency which may occur in the
Redemption Fund; provided, however, that said determination shall not prevent the City, in its
sole discretion, from so advancing funds.
Section 6.04. Punctual Payment. The City shall punctually pay or cause to be paid the
. principal, premium, if any, and iriterest to become due in respect of all the Bonds,. in strict
conformity with the terms of the Bonds and of this Agreement, according to the true intent and
meaning thereof, but only out of Re. assessments and other assets pledged for such payment as
provided in this Agreement and received by the City or the Fiscal Agent.
Section 6.05. Extension of Pa_vment of Bonds. The City shall not directly or indirectly
extend or assent to the extension of the maturity of any of the Bonds or the time of payment of
any claims for interest by the purchase of such Bonds or by any other arrangement, and in case
the maturity of any of the Bonds or the time of payment of any such claims for interest shall be
extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder,
to the benefits of this Agreement, except subject to the prior payment in full of the principal of
all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been
so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds
for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to
constitute an extension of maturity of the Bonds.
Section 6.06. Against Encumbrances. The City shall not create, or permit the creation
of, any pledge, lien, charge or other encumbrance upon the Reassessments and other assets
pledged or assigned under this Agreement while any of'the Bonds are Outstanding.
-22-
Section 6.07. Power to Issue Bonds and Make Pledge and Assignment. The City is
duly authorized pursuant to the Act to issue the Bonds and. to enter into this Agreement and to
pledge the Reassessments and other assets purported to be pledged under this Agreement in the
manner and to the extent provided in this Agreement. The Bonds and the provisions of this
Agreement are and will be the legal, valid and binding obligations of the City in accordance with
their terms, and the City and the Fiscal Agent (subject to the provisions of Articles VII and VIII)'~
shall at all times, to the extent permitted by law, defend, preserve and protect said pledge of
Reassessments and other assets and all the rights of the Bond Owners under this Agreement
against all claims.and demands of all Persons whomsoever.
Section 6.08. Accounting Records and Financial Statements. The Fiscal Agent shall
at all times keep, or cause to be kept, proper books of record and account, prepared in accordance
with trust industry standards, in which complete and accurate entries shall be made of all
transactions relating to the proceeds of the Bonds, the Reassessments and all funds and accounts
established pursuant to this Agreement. Such books of record and account shall be available for
inspection by the City, during regular business hours and upon 24 hours' notice and under
reasonable circumstances as agreed to by the Fiscal Agent. The Fiscal Agent shall deliver to the
City a monthly accounting of the funds and accounts it holds under this Fiscal Agent Agreement;
provided, however, that the Fiscal Agent shall not be obligated to deliver such accounting for any
fund or account that has a balance of zero.
Section 6.09. Waiver of Laws. The City shall' not at any time insist upon or plead in
any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law
now or at any time hereafter in force that may affect the covenants and agreements contained in
this Agreement or in the Bonds, and all benefit or advantage of any such law or laws is hereby
expressly waived by the City to the extent permitted by law.
Section 6.10. Tax Covenants. (a)Private Activity Bond Limitation. The City shall
assure that the proceeds of the Bonds are not so used as to cause the Authority Bonds to satisfy
the private business tests of Section 141(b) of the Code or the private loan financing test of
Section 141 (c) of the Code.
·
(b) Rebate Requirement. The City shah take any and all actions necessary to assure
compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings,
if any, to the federal government, to the extent that such section is applicable to the Authority
Bonds.
(c) Federal Guarantee Prohibitior~ The City shall not take any action or permit or suffer
any action to be taken if the result of the same would be to cause any of the Authority Bonds to'
be "Federally guaranteed" within the meaning of Section 149Co) of the Code.
(d) Maintenance of Tax-Exemption. The City shall take all actions necessary to assure
the exclusion of interest on the Authority Bonds from gross income of the Owners of the
Authority Bonds to the same extent as such interest is permitted to be excluded from gross
income under the Code as in effect on the date of issuance of the Authority Bonds.
(e) No Arbitrage. The City. shall not take, or permit or suffer to be taken by the Fiscal"
Agent or otherwise, any action with respect to the proceeds of the Authority Bonds which, if
such action had been reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the date of issuance of the Authority Bonds would have caused the
Authority Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code.
-23-
Section 6.11.. Report to California Debt Advisory Commission. In accordance with
Section 6599.1(c) of the ~alifornia Government Code, the ~ity shall notify the California Debt
Advisory Commission by mail, postage prepaid, within ten days if either (a) the City fails to pay
principal of or interest on the Bonds on any scheduled payment date, or (b) funds representing all
or a portion of the Reserve Requirement are withdrawn from the Reserve Fund to pay principal
of or interest on the Bonds.
The notice given pursuant to this Section shall consist of a letter to the California Debt
Advisory Commission stating (a) the name of the City and the Bonds and the date of sale of the
Bonds, (b) the type of non-payment (draw on Reserve Fund or non-payment of such principal or
interest), (c) the date the draw on the Reserve Fund or such non-payment occurred, and (d) the
amount of the draw on the Reserve Fund or the amount of such non-payment.
Section 6.12. Further Assurances. The City will make, execute and deliver any and all
such further agreements, instruments and assurances as may be reasonably necessary or proper to
carry out the intention or to facilitate the performance of this Agreement and for the better
assuring and confirming unto the Owners of the Bonds of the fights and benefits provided in this
Agreement.
-24-
ARTICLE VII
EVENT~ OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 7.01. Events of Default. The following events shall be Events of Default:
(a) Failure to pa), any installment of principal of any Bonds when and as
the same shall become due and payable, whether at maturity as therein expressed,
by proceedings for redemption or otherwise.
(b) Failure to pay any installment of interest on any.Bonds when and as
the same shall become due and payable.
(c) Failure by the City to observe and perform any of the other covenants,
agreements or conditions on its part in this Agreement or in the Bonds contained,
ff such failure shall have continued for a period of 60 days after written notice
thereof, specifying such failure and requiting the same to be remedied, shall have
been given to the City by the Fiscal Agent or the Owners of not less than 25% in
aggregate principal amount of the Bonds at the time Outstanding; provided,
however, if in the reasonable opinion of the City the failure stated in the notice
can be corrected, but not within such 60 day period,' such failure shall not
constitute an Event of Default if corrective action is instituted by the City within
such 60 day period and the City shall thereafter diligently and in good faith cure
such failure in a reasonable period of time.
(d) 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 any Event of Default shall occur under Section 7.01 then,
and in each and every such case during the continuance of such Event of Default, the Fiscal '
Agent may or at the direction of the Owners of not less than a majority in aggregate principal
amount of the Bonds at the time Outstanding shall, commence foreclosure against any parcels of
real property in the Assessment District with delinquent Re. assessments, or delinquent payments
of interest thereon, or delinquent payments of amounts for the Continuing Costs of the Bonds, as
provided in Section 8830 et. seq. of the Act.
Section 7.03. Other Remedies of Bono Owners. Subject to the provisions of Section
7.07, any Bond Owner shall have the right, for the equal benefit and protection of all Bond
Owners similarly situated:
(a) by mandamus, suit, action or proceeding, to compel the City and its
officers, agents or employees to perform each and every term, provision and
covenant contained in this Agreement and in the Bonds, and to require the
carrying out of any or all such covenants and agreements of the City and the
fult'fllment of all duties imposed upon it by the Act;
(b) by suit, action or proceeding in equity, to enjoin any acts or things
which are unlawful, or the violation of any of the Bond Owners' rights; or
(c) upon the happening of any Event of Default, by suit, action or
proceeding in any court of competent jurisdiction, to require the City and its
officers and employees to account as ff it and they were the trustees of an express
trust.
Section 7.04. Application of Reassessments and Other Funds After DefaulI. If an
Event of Default shall occur and be continuing, all Reassessments, including any penalties, costs,
fees and other charges accruing under the Act, and any other funds then held or thereafter
received by the Fiscal Agent under any of the provisions of this Agreement shall be applied by
the Fiscal Agent as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Fiscal
Agent to protect the interests of the Owners of the Bonds and payment of
reasonable fees, charges and expenses of the Fiscal Agent (including reasonable
fees and disbursements of its counsel) incurred in and about the performance of its
'powers and duties under this Agreement;
(b) To the payment of the principal of and interest then due with respect
to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of
the payment if only partially paid, or surrender thereof if fully paid) subject to the
provisions of this Agreement, as follows:
P_ir.g: 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
~: 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, ff 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 Fiscal Agent to the
Redemption Fund.
Section 7.05. Fiscal Agent to Represent Bond Owners. The Fiscal Agent is hereby
irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding
the same, shall be conclusively deemed to have so appointed the Fiscal Agent) as trustee and tree
and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and
prosecuting on their behalf such rights and remedies as may be available to the Owners under the
provisions of the Bonds, this Agreement, the Act and applicable provisions of any other law.
Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a
right in the Fiscal Agent to represent the Bond Owners, the Fiscal Agent in .its discretion may,
and upon the written request of the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to
protect or enforce itg rights or the rights of such Owners by such appropriate action, suit,
mandamus or other proceedings as it shall deem most effectual to protect and enforce any such
right, at law or in equity, either for the specific performance of any covenant or agreement
contained herein, or in aid of the execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable right or remedy vested in the Fiscal Agent and such
Owners under the Bonds, this Agreement, the Act or any other law. All rights of action under
this Agreement or the Bonds or otherwise may be prosecuted and enforced by the Fiscal Agent
-26-
without thc possession of any of thc Bonds or thc production thereof in any proceeding relating
thereto, and any such suit, action or proceeding instituted by thc Fiscal Agcnt shall be brought in
the name of thc Fiscal Agent for thc benefit and promCtion of thc Owners of such Bonds, subject
to thc provisions of this Agreement.
Section 7.06. Bond Owners' Direction of Proceedings. Anything in this Agreement to
the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding shall have the fight, by an instrument or concurrent instruments in
writing executed and delivered to the Fiscal Agent, and upon indemnification of the Fiscal Agent
to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken
by the Fiscal Agent hereunder, provided that such direction shall not be otherwise than in
accordance With. law and the provisions of this Agreement, and that' the Fiscal Agent shall have
the fight to decline to follow any such direction which in the opinion of the Fiscal Agent would
be unjustly prejudicial to Bond Owners not parties to such direction.
Section 7.07. Limitation on Bond Owners' Right to Sue. No Owner of any Bonds
shall have the right to institute any suit, action or proceeding at law or in equity, for the
protection or enforcement of any right or remedy under this Agreement, the Act or any other
applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Fiscal
Agent written notice of the occurrence of an Event of Default, (b) the Owners of a majority in
aggregate principal amount of the Bonds then Outstanding, shall have made written request upon
the Fiscal Agent to exercise the powers hereinbefore granted or to institute such suit, action or
proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Fiscal
Agent indemnity against the costs, expenses and liabilities to be incurred in compliance with
such request, and (d) the Fiscal Agent shall have refused or omitted to comply with such request
for a period of 60 days after such written request shall have been received by, and said tender of
indemnity shall have been made to, the Fiscal Agent.
-Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any
remedy hereunder or under law; it being understood and intended that no one or more Owners of
Bonds shall have any right in any manner whatever by his or their action to affect, disturb or
prejudice the security of this Agreement or the rights of any other Owners of Bonds, or to
enforce any right under the Bonds, this Agreement, the 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 of the Outstanding Bonds, subject to the
provisions of this Agreement.
· Section 7.08. Absolute Obligation of CID'. Nothing in Section 7.07 or in any other
provision of this Agreement or in the Bonds contained shall affect or impair the obligation of the
City, ' which is absolute and unconditional, to pay the principal of and interest on the Bonds to the
respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption,
as herein provided, but only out of the Reassessments and other assets herein pledged therefor
and received by the City or the Fiscal Agent, or affect or impair the right of such Owners, which
is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in
the Bonds.
Section 7.09. Termination of Proceedings. In case any proceedings taken by the Fiscal
Agent or any one or more Bond Owners on account of any Event of Default shall have been
discontinued or abandoned for any reason or shall have been determined adversely to the Fiscal
Agent or the Bond Owners, then in every such case the City, the Fiscal Agent and the Bond
Owners, subject to any determination in such proceedings, shall be restored to their former
positions and rights hereunder, severally and respectively, and all rights, remedies, powers and
-27-
duties of the City, the Fiscal Agent and the Bond 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 Fiscal Agent or to the Owners of the Bonds is intended to be exclusive of any other
remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be
cumulative and in addition to any other remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.
Section 7.11. No Waiver of Default. No delay or omission of the Fiscal Agent or of
any Owner of the Bonds to exercise any right or power arising upon the occurrence of any
default shall impair any such right or power or shall be construed to be a waiver of any such
default or an acquiescence therein; and every power and remedy given by this Agreement to the
Fiscal Agent or to the Owners of the Bonds may be exercised from time to time and as often as
may be deemed expedient.
-28-
ARTICLE VIII
FISCAL AGENT
Section 8.01. Duties and Liabilities of Fiscal Agent. (a)Duties of Fiscal Agent
Generally. The Fiscal Agent shall, prior to an Event of Default, and after the curing of all Eventsy
of Default which may have occurred, perform such duties and only such duties as are expressly
and specifically set forth in this 'Agreement. The Fiscal Agent shall, during the existence of any.
Event of Default which has not been cured, exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise, as a prudent man'..
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Removal of Fiscal Agent. The City may upon 30 days' prior written notice remove
the Fiscal Agent at any time unless an Event of Default shall have occurred and then be
continuing, and shall remove the Fiscal Agent if at any time requested to do so by an instrument
or concurrent instruments in writing signed by the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in
writing) or if at any time the Fiscal Agent shall cease to be eligible in accordance with subsection
(e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Fiscal Agent or its property shall be appointed, or any public
officer shall take control or charge of the Fiscal Agent or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, in each case by' giving written notice of such
removal to the Fiscal Agent and thereupon shall appoint a successor Fiscal Agent by an
instrument in writing.
(c) Resignation of Fiscal Agent. The Fiscal Agent may at any time resign by giving
written notice of such resignation by first class mail, postage prepaid, to the City, and to the
Bond Owners notice of such resignation at the respective addresses shown on the Registration
Books. Upon receiving such notice of resignation, the City shall promptly appoint a successor
Fiscal Agent by an instrument in writing. The Fiscal Agent shall not be relieved of its duties until
such successor Fiscal Agent has accepted appointment.
(d) Appointment of Successor Fiscal Agent. Any removal or resignation of the Fiscal
Agent and appointment of a successor Fiscal Agent shall become effective upon acceptance of
appointment by the successor Fiscal Agent; provided, however, that under any circumstances the
successor Fiscal Agent shall be qualified as provided in subsection (e) of this Section. If no
qualified successor Fiscal Agent shall have been appointed and have accepted appointment
within 45 days following giving notice of removal or notice of resignation as aforesaid, the
resigning Fiscal Agent or any Bond Owner (on behalf of himself and all other Bond Owners)
may petition any court of competent jurisdiction for the appointment of a successor Fiscal Agent,
and such court may thereupon, after such notice (ff any) as it may deem proper, appoint such
successor Fiscal Agent. Any successor Fiscal Agent appointed under this Agreement shall
signify its acceptance of such appointment by executing and delivering to the City and to its
predecessor Fiscal Agent a written acceptance thereof, and to the predecessor Fiscal Agent an
instrument indemnifying the predecessor Fiscal Agent for any costs or claims arising during the
time the successor Fiscal Agent serves as Fiscal Agent hereunder, and after payment by the City
of all unpaid fees and expenses of the predecessor Fiscal Agent, the such successor Fiscal' Agent,
without any further act, deed or conveyance, shall become vested with all the moneys, estates,
properties, rights, powers, trusts, duties and obligations of such predecessor Fiscal Agent, with
like effect as ff originally named Fiscal Agent herein; but, nevertheless at the Written Request of
the City or the request of the successor Fiscal Agent, such predecessor Fiscal Agent shall execute
and deliver any and all instruments of conveyance or further assurance and do such other things
as may reasonably be required for more fully and certainly vesting in and confirming to such
-29-
successor Fiscal Agent all the right, title and interest of such predecessor Fiscal Agent in and to
any property held by it under this Agreement and shall pay over, transfer, assign and deliver to
the successor Fiscal Agent any money or other property subject to the trusts and conditions
herein set forth. Upon request of the successor Fiscal Agent, the City shall execute and deliver
any and all instruments as may be reasonably required for more fully and certainly vesting in and
confirming to such successor Fiscal Agent all such moneys, estates, properties, rights, powers,
trusts, duties and obligations. Upon acceptance of appointment by a successor Fiscal Agent as
provided in this subsection, the City shall mail or cause the successor Fiscal Agent to mail, by
first class mail postage prepaid, a notice of the succession of such Fiscal Agent to the trusts
hereunder to each rating agency which then maintains a rating on the Bonds and to the Bond
Owners at the addresses shown on the Registration Books. If the City fails to mail such notice
within 15 days after acceptance of appointment by the successor Fiscal Agent, the successor
Fiscal Agent shall cause such notice to be mailed at the expense of the City.
(e) Authority Trustee To Act As Fiscal Ageht Hereunder. Notwithstanding anything
herein to the contrary, so long as the Authority Trustee shall be the owner of the Bonds, no entity
shall be qualified to act as the Fiscal Agent (or to act as any successor Fiscal Agent) except the
Authority Trustee. Upon any resignation or removal of the Authority Trustee in accordance with
the Authority Indenture, such event shall automatically cause the resignation or removal of the
Fiscal Agent hereunder; and upon. the appointment of a successor Authority Trustee in
accordance with the Authority Indenture, such appointment shall automatically constitute the
appointment of a successor Fiscal Agent hereunder. Under no circumstances shall the Fiscal
Agent be removed or resign hereunder unless the Authority Trustee shall be removed or resign as
such under and pursuant to the Authority Indenture.
In the event that the Authority Trustee shall no longer be the owner of the Bonds, the
Fiscal Agent appointed under the provisions of this Section 8.01 in succession to the Fiscal
Agent shall be a trust company or bank having the powers of a trust company, having (or if such
bank or trust company is a member of a bank holding company system, its parent bank holding
company has) a combined capital and surplus of at least one hundred million dollars
($100,000,000), and subject to supervision or examination by federal or state agency. If such
bank or trust company publishes a report of condition at least annually, pursuant to law or to the
requirements of any supervising or examining agency above referred to, then for the purpose of
this subsection the combined capital and surplus of such bank or trust company shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so
published.
In case at any time the Fiscal Agent shall cease to be eligible in accordance with the
provisions of this subsection (e), the Fiscal Agent shall resign immediately in the manner and
with the effect specified in this Section.
Section 8.02. Mer~er or Com;olidation. Any bank or trust company into which the
Fiscal Agent may be merged or converted or with which it may be consolidated or any bank or
trust company resulting from any merger, conversion or consolidation to which it shall be a party
or any bank or trust company to which the Fiscal Agent may sell or transfer all or substantially
all of its corporate trust business, provided such bank or trust company shall be eligible under
subsection (e) of Section 8.01 shall be the successor to such Fiscal Agent, without the execution
or f'fling of any paper or any further act, anything herein to the contrary notwithstanding.
Section 8.'03. Liability of Fiscal Agent. (a) The recitals of facts herein and in the
Bonds contained shall be taken-as statements of the City, and the Fiscal Agent shall not assume
responsibility for the correctness of the same, or make any representations as to the validity 'or
sufficiency of this Agreement or of the Bonds or shall incur any responsibility in respect thereof,
other than as expressly stated herein in connection with the respective duties or obligations
-30-
herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall, however, be
responsible for its representations contained in its certificate of authentication on the Bonds. The
Fiscal Agent makes 'no representations as to the validity or sufficiency of the Agreement or of
any Bonds, or in respect of the security afforded by the Agreement and the Fiscal Agent shall
incur no responsibility in respect thereof. The Fiscal Agent shall be under no responsibility or
duty with respect to: (i) the issuance of the Bonds for value; (ii) the application of the proceeds
thereof except to the extent that such proceeds are received by it in its capacity as Fiscal Agent;'
or (iii) the application of any moneys paid to the City or others in accordance with the
Agreement except as the application of any moneys paid to it in its capacity as Fiscal Agent. The
Fiscal Agent shall not be liable in connection with the performance of its duties hereunder,
except for its own negligence or willful misconduct. The Fiscal Agent shall not be liable for any~
action taken or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it. by the Agreement. The Fiscal Agent may
become the Owner of Bonds with the same rights it would have if it were not Fiscal Agent, and,
to the extent permitted .by law, may act as depository for and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee formed to
protect the rights of Bond Owners, whether or not such committee shall represent the Owners of
a majority in aggregate principal amount of the Bonds then Outstanding.
(b) The Fiscal Agent shall not be liable for any error of judgment made in good faith by
a responsible officer, unless it shall be proved that the Fiscal Agent was negligent in ascertaining
the pertinent facts.
(c) The Fiscal Agent shall not be liable with respect to any action taken or omitted to be
taken by it in good 'faith in accordance with the direction of the Owners of not less 'than a
majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Fiscal Agent, or
exercising any trust or power conferred upon the Fiscal Agent under this Agreement.
Section 8.04. Right to Rely on Documents. The Fiscal Agent shall be protected in
acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or
other paper or document believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Fiscal Agent may consult with counsel, who may be counsel of or to
the City, with regard to legal' questions, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered by it hereunder
in good faith and in accordance therewith; provided, however, the Fiscal Agent shall in no event
delay any payment with respect to the Bonds in anticipation of any such opinion..
Whenever in the administration of the trusts imposed upon it by this Agreement the
Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a'
Written Certificate of the City, and such Written Certificate shall be full wan'ant to the Fiscal
Agent for any action taken or suffered in good faith under the provisions of this Agreement in
reliance upon such Written Certificate, but in its discretion the Fiscal Agent may, in lieu thereof,
accept other evidence of such matter or may require such additional evidence as it may deem
reasonable.
Section 8.05. Preservation and Inspection of Documents. All documents received by
the Fiscal Agent under the provisions of this Agreement shall be retained in its possession and
shall be subject during business hours and upon 24 hours' notice to the inspection of the City, the
Owners and their agents and representatives duly authorized in writing.
-31-
· Section 8.06. Compensation and Indemnification. The City shall pay to the Fiscal
Agent from time to time all reasonable compensation for all services rendered under this
Agreement, and also all reasonable expenses, charges, legal and consulting fees and other
disbursements and those of its attorneys, agents and employees, incurred in and about the
performance.of their powers and duties under this Agreement. The City further agrees, to the
extent permitted by law, to indemnify and save the Fiscal Agent harmless against any liabilities
which it may incur in the exercise and performance of its powers and duties hereunder and under
any related documents, including the enforcement of any remedies and the defense of any suit,
and which are not due to its negligence or its willful misconduct. The duty of the City to
indemnify the Fiscal Agent shall survive the termination and discharge of this Agreement.
-32-
ARTICLE IX
MODIFICATION OR AMENDMENT
Section 9.01. Amendments Permitted. (a) This Agreement and the rights and
obligations of the City, the Owners of the Bonds and the Fiscal Agent may be modified
amended from time to time and at any time by a Supplemental Agreement, which the City and
the Fiscal Agent may enter into with the written consent of the Owners Of a majority in aggregate'
principal amount of all Bonds then.Outstanding, which shall have been filed with the Fiscal
Agent. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or
reduce the amount of principal thereof, or reduce the interest rate borne thereby, or extend the
time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the
aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such
modification or amendment, or (iii) permit the creation of any lien on the Reassessments and
other assets pledged under this Agreement prior to or on a parity with the lien created by this
Agreement. or deprive the Owners of the Bonds of the lien created by this Agreement on such
Reassessments and other assets (except as expresslY provided in this Agreement), without the
consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the
consent of the Bond Owners to approve the Particular form of any Supplemental Agreement, but
it shall be sufficient if such consent shall approve the substance thereof. Promptly after the
execution by the City and the Fiscal Agent of any Supplemental Agreement pursuant to this
subsection (a), the Fiscal Agent shall mail a notice (the form of which shall be furnished to the
Fiscal Agent by the City), by fzrst class mail postage prepaid, setting forth in general terms the
substance of such Supplemental Agreement, to the Owners of the Bonds at the respective
addresses shown on the Registration Books. Any failure to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such Supplemental
Agreement.
This Agreement and the rights and obligations of the City, of the Fiscal Agent and the
Owners of the Bonds may also be modified or amended from time to time and at any time by a
Supplemental Agreement, which the City and the Fiscal Agent may enter into without the
consent of any Bond Owners for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City in this Agreement
contained other covenants and agreements thereafter to be observed, to pledge or
assign additional security .for the Bonds (or any portion thereof), or to surrender
any right or power herein reserved to or conferred upon the City;
(ii) to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission, or of curing or correcting any defective provision
contained in this Agreement;
('iff) to modify, amend or Supplement this Agreement in such manner as
to permit the qualification hereof under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in effect, and to add such other
terms, conditions and provisions as may be permitted by said act or similar federal
statute;
(iv) to modify, amend or supplement this Agreement in such manner as to
cause interest on the Bonds to be excludable from gross income for purposes of
federal income taxation by the United States of America; and
-33-
(v) in any other respect whatsoever as the City may deem necessary or
desirable, provided that such modification or amendment does not materially
adversely affect the interests 'of the Bond Owners hereunder, in the opinion of
Bond Counsel filed with the City and the Fiscal Agent.
Section 9.02. Effect of Su~gtglemental Aereemenl. Upon the execution of any
Supplemental Agreement pursuant ~c~ this Article~ this Agreement shall be deemed to be
modified and amended in accordance therewith, and the respective rights, duties and obligations
under this Agreement of the City, the Fiscal Agent and all Owners of Bonds Outstanding shall
thereafter be d~termined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such Supplemental
Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and
all purposes.
Section 9.03.' Endorsement of Bonds; Prer)aration of New Bonds. Bonds delivered
after the execution of any Supplemental Agreement/)ursuant to this Article may, and ff the City
so determines shall, bear a notation by endorsement or otherwise in form approved by the City
and the Fiscal Agent as to any .modification or amendment provided for in such Supplemental
Agreement, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time
of such execution and presentation of his Bonds for the purpose at the Office of the Fiscal Agent
a suitable notation shall be made on such Bonds. If the Supplemental Agreement shall so
provide, new Bonds so modified as to conform, in the opinion of the City and the Fiscal Agent,
to any modification or amendment contained in such Supplemental Agreement, shall be prepared
and executed by the City and authenticated by the Fiscal Agent, and upon demand of the Owners
of any Bonds then Outstanding shall be exchanged at the Office of the Fiscal Agent, without cost
to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds,
in equal aggregate principal amount of the same interest rate and maturity.
Section 9.04. Amendment of Particular Bond~. The provisions of this Article shall not
prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such
Owner.
-34-
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Agreement. The Bonds may be paid by the City in any of
the following ways, provided that the City also pays or causes to be paid any other sums payable'
hereunder by the City:
(a) by paying or causing to be paid the principal of and interest and
premium (ff any) on the Bonds, as and when the same become due and payable;
·
(b) by depositing with the Fiscal Agent, in trust (pursuant to an escrow
agreement), at or before maturity, money or securities in the necessary amount (as
provided in Section 10.03) to pay or redeem all Bonds then Outstanding; or
(c) by delivering to the Fiscal Agent, for cancellation bY it, all of the
Bonds then Outstanding.
If the City shall also pay or cause to be paid all other sums payable hereunder by the City
including without limitation any compensation due and owing, the Fiscal Agent hereunder, then
and in that case, at the election of the City (evidenced by a Written Certificate of the City, filed
with the Fiscal Agent, signifying the intention of the City to diScharge all such indebtedness and
this Agreement), and notwithstanding that any Bonds shall not have been surrendered for
payment, this Agreement and the. pledge of Reassessments and other assets, made under this
Agreement and all covenants, agreements and other obligations of the City under this Agreement
shall cease, terminate, become void and be completely discharged and satisfied. In such event,
upon the Written Request of the City, and upon receipt of a Written Certificate of an Authorized
Representative of the City and an opinion of Bond Counsel acceptable to the Fiscal Agent, each
to the effect' that all conditions precedent herein provided for relating to the discharge and
satisfaction of the obligations of the City have been satisfied, the. Fiscal Agent shall cause an
accounting for such period or periods as may be requested by the City to be prepared and filed
with the City and shall execute and deliver to the City all such instruments as may be necessary
or desirable to evidence such discharge and satisfaction, and the Fiscal Agent shall pay over,
transfer, assign or deliver all moneys or securities or other property held by it pursuant to this
Agreement, which are not required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption, to the City.
Section 10.02. Discharge of Liability on Bonds. Upon the deposit with tile Fiscal
Agent, in trust, at or before maturity, of money or securities in the necessary amount (as provided
in Section 10.03) to pay or redeem any or all Outstanding Bonds (whether upon or prior to the
maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed
prior to maturity, notice of such redemption shall have been given as provided in Article IV or
provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice,
then all liability of the City in respect of such Bonds shall cease, terminate and be completely
.discharged, and the Owners thereof shall thereafter be entitled only to payment out of such
money or securities deposited with the Fiscal Agent as aforesaid for their payment, subject,
however, to the. provisions of Section 10.04.
The City may at any time surrender to the Fiscal Agent for cancellation by it any Bonds
previously issued and delivered, which the City may have acquired in any manner whatsoever,
and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
-35-
Section'10.03. Deposit of Money or Securities with Fiscal Agent. Whenever in this
Agreement it is provided or permitted that there be deposited with or held in trust by the Fiscal
Agent money or securities in the necessary amount to pay or redeem any Bonds, the money or
securities so to be deposited or held may include money or securities held by the Fiscal Agent in
the funds and accounts established pursuant to this Agreement and shall be--
(a) Lawful money of the United States of America, in an amount equal to
the principal amount of such Bonds and all unpaid interest thereon to maturity,
except that, in the case of Bonds which are to be redeemed prior to maturity and
in respect of which notice of such redemption shall have been given as provided
in Article IV or provision satisfactory to the Fiscal Agent shall have been made
for the giving of such notice, the amount to be deposited or held shall be the
principal amount of such Bonds, premium, if any, and all unpaid interest thereon
to the redemption date; or
(b) Non-callable Federal 'Securities described in clause (a) of the
definition thereof, the principal of and interest on which when due, in the opinion
or report of an independent accountant selected by the City, will provide money
sufficient to pay the principal of, premium, if any, and all unpaid interest to
maturity, otto the redemption date, as the case may be, on the Bonds to be paid or
redeemed, as such principal and interest become due, provided that in the case of
Bonds which are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article IV or provision
satisfactory to the Fiscal. Agent shall have been made for the giving of such
notice;
provided, in each case, that the Fiscal Agent shall have been irrevocably instructed (by the terms
of this Agreement or by Written Request of the City) to apply such funds to the payment of such
principal and interest with respect to such Bonds.
Section 10.04. Payment of Bonds After Discharge of Agreement. Notwithstanding
any provisions of this Agreement, any moneys held by the Fiscal Agent in trust for the payment
of the principal of, premium, if any, or interest on, any Bonds and remaining unclaimed for two
years after the date of deposit of such moneys shall be repaid to the City free from the trusts
created by this Agreement, and all liability of the Fiscal Agent with respect to such moneys shall
thereupon cease; provided, however, that before the repayment of such moneys to the City as
aforesaid, the Fiscal Agent may (at the cost of the City) first mail, by first class mail postage
prePaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown
on the Registration Books, a notice, in such form as may be deemed appropriate by the Fiscal
Agent with respect to the Bonds so payable and not' presented and with respect to the prOvisions
relating to the repayment to the City of the 'moneys held for the payment thereof.
-36-
ARTICLE XI
MISCELLANEOUS
Section 11.01. /~imited Obligation. All obligations of the City under this Agreement
and the Bonds shall not be general obligations of the City, but shall be limited obligations,
payable solely from the Reassessments and the other assets pledged therefor hereunder. Neither
the faith and credit of the City nor of the State of California or any political subdivision thereof is
pledged to the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds"
and are payable solely from and secured solely by the Reassessments and the other assets
pledged hereunder. Notwithstanding any other provision of this Agreement, the City is not'
obligated to advance available funds from the City treasury to cure any deficiency in the
Redemption Fund.
Section 11.02. Successor Is Deemed Included in All References to l're0ecessor.
Whenever in this Agreement either the City or the Fiscal Agent is named or referred to, such
reference shall be deemed to include the successors or assigns thereof, and all the covenants and
agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind
and inure to the benefit of the respective successors and assigns thereof whether so expressed or
not.
Section 11.03. Limitation of Rights to Parties and Bond Owners. Nothing in this
Agreement or in the Bonds expressed or implied is intended or-shall be construed to give to any
Person other than the Fiscal Agent, the City and 'the Owners of the Bonds, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any covenant, condition or
provision therein or herein contained; and all such covenants, conditions and provisions are and
shall be held to be for the sole and exclusive benefit of the Fiscal Agent, the City and the Owners
of the Bonds.
Section 11.04. Waiver of Notice: Requirement of Mailed Notice. Whenever in this
Agreement the giving of notice by mail or otherwise is required, the giving of such notice may
be waived in writing by the Person entitled to receive such notice and in .any such case the giving
or receipt of such notice shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. Whenever in this Agreement any notice shall be required to be given
by mail, such requirement shall be satisfied by the deposit of such notice in the United States
mail, postage prepaid, by first class mail.
Section 11.05. Destruction of Bonds. Whenever in this Agreement provision is made
for the cancellation by the Fiscal Agent and the delivery to the City of any Bonds, the Fiscal
Agent may, upon the Written Request of the City, in lieu of such cancellation and delivery,
destroy such Bonds (in the presence of an officer of the City, ff the City shall so require) as may
be allowed by law, and deliver a certificate of such destruction to the City.
Section 11.06. Severabilitv of Invalid Provisions. If any one or more'of the provisions
contained in this Agreement or in/he Bonds shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions contained in this Agreement and such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, and this Agreement shall
be construed as ff such invalid or illegal or unenforceable provision had never been contained
herein. The City hereby declares that it would have entered into this Agreement and each and
every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of
the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs,
sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.
-37-
Section 11.07. Notices. All notices or communications herein required or permitted to
be given to the City or the Fiscal Agent shall be in writing and shall be deemed to have been
sufficiently given or served for all purposes by being delivered or sent by telecopy or by being
deposited, postage prepaid, ina post office letter box, addressed as follows:
If to the City:
City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Finance Director
If to the Fiscal Agent:'
State Street Bank and Trust Company
of California, N.A.
725 South Figueroa Street, Suite 3100
Los Angeles, California 90017
Attention: Corporate Trust Department
Section 11.08. Evidence of Rights of Bond Owners. Any request, consent or other
instrument required or permitted by this Agreement to be signed and executed by Bond Owners
may be in any number of concurrent instruments of substantially similar tenor and shall be
signed or executed by such Bond Owners in Person or by an agent or agents duly appointed in
writing: Proof of the execution of any such request, consent or other instrument or of a writing
appointing any such agent, or of the holding by any Person of Bonds transferable by delivery,
shall be sufficient for any purpose of this Agreement and shall be conclusive in favor of the
Fiscal Agent and the City ff made in the manner provided in this Section.
The fact and date of the execution by any PersOn of any such request, consent or other
instrument or writing may be proved by the certificate of any notary public or other officer of
any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that
the Person signing such request, consent or other instrument acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public
or other officer.
The ownership of Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind
every future Owner of the same Bond and the Owner of every Bond issued, in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the Fiscal Agent or the
City in accordance therewith or reliance'thereon.
Section 11.09. Dist~ualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this Agreement, Bonds which are known by the Fiscal Agent to be owned or
held by or for the account of the City, or by any other obligor on the Bonds, or by any Person
(other than the Authority or the Authority Trustee) directly or indirectly controlling or controlled
by, or under direct or indirect common control with, the City or any other obligor on the Bonds,
shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination. Bonds so owned which have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section ff the pledgee shall establish to the satisfaction of
the Fiscal Agent the pledgee's right to vote such Bonds and that the pledgee is not a Person
directly or indirectly controlling or controlled by, or under direct or indirect common control
with, the City or any other obligor on the Bonds. In case of a dispute as to such right, any
-38-
decision by thc Fiscal Agent. taken upon the advice of counsel shall bc full protection to the
Fiscal Agent.
Section 11.10. Money Held for Particular Bonds. The money held by the Fiscal Agent
for the payment of the interest, principal or premium due on any date with respect to particular
Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such
date and pending such payment, be set aside on its books and held in trust by it for the Owners of
the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any
liability for interest thereon.
Section 11.11. Funds and Accounts. Any fund or account required by this Agreement
to be established and maintained by the Fiscal Agent may be established and maintained in the
accounting records of the Fiscal Agent, either as a fund or an account, and may, for the purposes
of such records, any 'audits thereof and any reports or statements with respect thereto, be treated
either as a fund or as an account; but all such records with respect to all such funds and accounts
shall at all times be maintained in accordance with industry standards to the extent practicable,
and with due regard for the requirements of Section 6.08 and for the protection of the security of
the Bonds and the rights of every Owner thereof. The Fiscal Agent may establish such funds and
accounts as it deems necessary or appropriate to perform its obligations hereunder.
Section 11.12. Payment 9n Non-Business Days. In the event any payment is required
to be made hereunder on a day which is not a Business-Day, such payment shall be made on the
next succeeding Business Day with the same effect as if made on such non-Business Day.
Section 11.13. Waiver of Personal Liability. No member, officer, agent or employee
of the City shall be individually or personally liable for the payment of the principal of or
premium or interest on the Bonds or be subject to'any personal liability or accountability by
reason of the iSSuance thereof; but nothing herein contained shall relieve any such officer, agent
or employee from the performance of any official duty provided by law or by this Agreement.
Section 11.14. Conflict with Act or Bond Law. In the event of any conflict between
any provision of this Agreement and any provision of the Act or the Bond Law, the provision of
the Act or the Bond Law, respectively, shall prevail over the provision of this Agreement.
Section 11.15. Conclusive Evidence of Reeularity. Bonds issued pursuant to this
Agreement shall constitute evidence of the regularity o~ all proceedings under the Act relative to.
their issuance and the levy of the Reassessments.
Section 11.16. Execution in Several Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all purposes be deemed'to
be an original; and all such counterparts, or as many of them as the City and the Fiscal Agent
shall preserve undestroyed, shall together constitute but one and the same instrument.
Section 11.17. Governing Laws. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
-39-
IN WITNESS WHEREOF, the City has caused this Agreement to be signed in its name
by its officer thereunto duly authorized, and the Fiscal Agent, in token of its acceptance of the
trusts created hereunder, has caused this Agreement to be signed in its corporate name by its
officer thereunto duly authorized, all as of the day and year first above written.
CITY OF TUSTIN
By: ..
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, NA., as
Fiscal Agent
By:
-40-
EXHIBIT A
FORM OF BOND
NO. _
CITY OF TUSTIN
Limited Obligation Improvement Bond
Reassessment District No. 95-1
(Tustin Ranch)
NOMINAL INTEREST RATE
MATURITY DATE
DATED DATE
REGISTERED OWNER:
PKINCIPAL AMOUNT:
Under and by virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds,
Division 11.5 of the Streets and Highways Code of California (the "Act"), the City of Tustin,
County of Orange, State of California (the "City"), will, out of the redemption fund for the
payment of the bonds issued upon the unpaid portion of reassessments made for the refunding
bonds more fully described in proceedings taken pursuant to Resolution No.__ adopted by the
City Council of the City on ,1995, pay 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, except as provided below, the nominal Rate of
Interest identified above in like lawful money from the date hereof payable semiannually on
March 2 and September 2 in each year, commencing March 2, 1996, (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, in which event it shall bear interest from such
Interest Payment Date, or unless this Bond is authenticated on or prior to February.15, 1996, 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
made available for payment). The Principal Amount hereof is payable upon surrender hereof
upon maturity or earlier redemption at the principal corporate trust office (the "rrust Office") of
State Street Bank and Trust Company of California, N.A., as fiscal agent (the "Fiscal Agent"), in
Los Angeles, California. Interest hereon is payable by check of the Fiscal Agent marled by first
class marl 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 Fiscal Agent as of the close of
business on the fifteenth calendar day of the month preceding such Interest Payment Date.
This Bond shall not be entitled to any benefit under the Act, the Resolution authorizing
the issuance of the bonds, adopted by the City Council of the City on ,1995 (the
"Resolution of Issuance") or the Fiscal Agent Agreement, dated as of ,1995 (the
"Agreement"), by and between the City and the Fiscal Agent, executed pursuant to the
Resolution of Issuance, or become valid or obligatory for any purpose, until the certificate of
A-1
authentication hereon shall have been dated and signed by the Fiscal Agent. Capitalized
undefined terms used in this Bond shall have the meanings ascribed thereto in the Agreement.
Notwithstanding anything to the contrary contained herein, or in the Agreement, the actual rate
of interest to be borne by the Bonds (including this Bond) shall be adjusted as of each September
1 to the a rate per annum such that the sum of (i) the product of such rate (expresSed as a
decimal) times the principal amount of Bonds Outstanding as of the close of business on such
September 1, plus (ii) the amount to be deposited, pursuant to the Agreement, on the following
September 3 in the Redemption Fund established under the Agreement from amounts transferred
by the Authority Trustee from the Surplus Fund established under the Authority Indenture, is
equal to the product of the nominal rate (express as a decimal) times the principal amount of
Bonds Outstanding as of the close of business on such September 1.
IN WITNESS WHEREOF, said City has caused this Bond to be signed in its name and
on its behalf by the facsimile signatures of its Treasurer and City Clerk, and has caused its
corporate seal to be reproduced in facsimile hereon all as .of the Dated Date identified above.
CITY .OF TUSTIN
By
Treasurer
(SEAL)
Attest:
By.
City Clerk
A-2
(FORM OF REVERSE OF BOND)
This Bond is one of several annual series of Limited Obligation Improvement Bonds,
Reassessment District No. 95-1 (Tusfin Ranch) (the "Bonds") of like date, tenor and effect, but'
differing in amounts, maturities and interest rates, issued by said City under the Act and the
Agreement for the purpose of providing means for paying for the refunding of the Prior Bonds
as more particularly described in said proceedings, and is secured by the moneys in the
redemption fund (as may be'limited by the Agreement) and by the unpaid portion of said.
reassessments made for the payment of said refunding, and, including principal and interest, is.
payable exclusively out of said fund.
Reference is hereby made to the Agreement and all agreements supplemental thereto for a
description of the rights thereunder, of the owners of the Bonds, of the nature and extent of the
Reassessments (as that term is defined in the Agreement), of the fights, duties and immunities of
the Fiscal Agent and of the rights and obligations of the City thereunder; and all of the terms of
the Agreement are hereby incorporated herein and constitute a contract between the City and the
Registered Owner hereof, and to all of the provisions of which Agreement the Registered Owner
hereof, by acceptance hereof, assents and agrees.
The Bonds shall be subject to optional redemption, in whole or in part, by lot, on any
Interest Payment Date on or after September 2, 2004, 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:
Reclemption Dates
. Redemr>tion Price
September 2, 2004 and March 2, 2005
September 2, 2005 and March 2, 2006
September 2, 2006 and thereafter
102%
101
100
The Bonds shall be subject to mandatory redemption, in whole or in part, by lot, on any
Interest Payment Date, from and to the extent of any prepayments of principal of the
Reassessments as more particularly set forth in the Agreement, 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
R~demption Price
March 2, 1996 through March 2, 2005
September 2, 2004 and March 2, 2005
September 2, 2005 and March 2, 2006
September 2, 2006 and thereafter
103%
102
101
100
The Bonds shall be subject to mandatory sinking fund redemption, in part, by lot, on
September 2'in each year, commencing September 2, 1996, 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 specified in the Agreement.
The Fiscal Agent on behalf and at the expense of the City shall mail (by first class mail)
notice of any redemption to the respective owners of any Bonds designated for redemption, at
their respective addresses appearing on the Registration Books maintained by the Fiscal Agent, at
A-3
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 Bonds or the cessation of the accrual of interest thereon.
The redemption price of the Bonds to be redeemed shall be paid only upon presentation and
surrender thereof at the Trust Office of the Fiscal Agent. From and after the date fixed for
redemption of any Bonds, interest on such Bonds will cease to accrue.
The 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 Agreement, fully registered Bonds may be exchanged at the Trust
Office of the Fiscal Agent for a like aggregate principal amount and maturity of fully registered
Bonds of other authorized denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney
duly authorized in writing, at the Trust Office of the Fiscal Agent, but only in the manner,
subject to the limitations and upon payment of the charges provided in the Agreement, and upon
surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or
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 City and the
Fiscal Agent may treat the Registered Owner hereof as the absolute owner hereof for all
purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary.
The Agreement and the rights and obligations of the City and of the owners of the Bonds
and of the Fiscal Agent may be modified or amended from time to time and at any time in the
manner, to the extent, and upon the terms provided in the Agreement; provided that no such
modification or amendment shall (a) extend the maturity of or reduce the interest rate on any
Bond or the amount of principal thereof without the express written consent of the owner of such
Bond, (b) reduce the percentage of Bonds required for the written consent to any such
amendment or modification, or (c) permit the creation of any lien on the Reassessments and other
assets pledged under the Agreement, or deprive the Bonds owners of the lien created under the
Agreement on the Reassessments and such other assets, without the consent of the owners of all
outstanding Bonds.
The Bonds are Limited Obligation Bonds because, under the Agreement, the City is not
obligated to advance funds from the City treasury to cure any deficiency which may occur in the
redemption fund for the Bonds; provided, however, the City is not prevented, in its sole
discretion, from so advancing funds.
A-4
[FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHEN'~CATION]
This is one of the Bonds described in the within-mentioned Agreement and registered on
the RegiStration Books.
Date:
State Street Bank and Trust Company of
California, N.A., as Fiscal Agent
By
Authorized Signatory
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 Fiscal Agent with full power of substitution in
the promises.
Dated:
Signature Guaranteed:
i',lote: Signature(s) must be guaranteed by an eligible
guarantor.
Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within Bond in every particular without alteration or
enlargement or any change whatsoever.
A-6