HomeMy WebLinkAboutCC RES 96-09 RESOLUTION NO. 96-9
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $46,000,000 AGGREGATE PRINCIPAL AMOUNT
OF CITY OF TUSTIN LIMITED OBLIGATION
IMPROVEMENT. BONDS; REASSESSMENT DISTRICT
NO. 95-1 (TUSTIN RANCH), APPROVING THE
EXECUTION AND DELIVERY OF A FISCAL AGENT
AGREEMENT, AN ESCROW AGREEMENT, A BOND
PURCHASE AGREEMENT AND A CONTINUING
DISCLOSURE AGREEMENT AND THE PREPARATION
OF AN OFFICIAL STATEMENT AND OTHER MATTERS
RELATED THERETO AND RESCINDING RESOLUTION
NO. 95-117
Reassessment District No. 95-1 (Tustin Ranch)
WHEREAS, the City Council (the "City Council") of the City of Tustin (the "City"), by
Resolution No. 86-81, adopted on June 16, 1986, resolved ks intention to form City of Tustin
Assessment District No. 85-1 ("District 85-t") and to issue bonds to represent unpaid
assessments therein;
WHEREAS, the City Council, by Resolution No. 86-81, adopted on June 16, 1986,
confirmed said assessments;
WHEREAS, pursuant to Resolution No. 86-102 of the City Council, adopted on August
18, 1986, an Indenture of Trust, dated as of August 1, 1986 (the "85-1 Indenture"), by and
between the City and Citibank, N. A., as trustee, and the Improvement Bond Act of 1915, being
Division 10 of the California Streets and Highways Code (the "Bond Law"), the City issued City
of Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount .of $50,650,000;
WHEREAS, the City Council, by Resolution No. 88-61, adopted on June 13, 1988,
resolved its intention to form City of Tustin Assessment District No. 86-2 ("District 86-2") and
to issue bonds to represent unpaid assessments therein;
WHEREAS, the City Council, by Resolution No. 88-81, adopted on July 18, 1988,
confirmed said assessments;
WHEREAS, pursuant to Resolution No. 88-97 of the City Council, adopted on
September 6, 1988, an Indenture of Trust, dated as of September 1, 1988 (the "86-2 Indenture"),
by and between the City and Citibank, N. A., as trustee, and the Bond Law, the City issued City
of Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2
Bonds") in the original principal amount of $81,400,000;
WHEREAS, State Street Bank and Trust Company, N.A. (the "Trustee") iS the successor
trustee under the 85-1 Indenture and the 86-2 Indenture;
WHEREAS, certain savings and efficiencies may be obtained by refunding the
$14,490,000 aggregate principal amount of 85-1 Bonds that have been convened to fixed interest
rates pursuant to the 85-1 Indenture (the "Fixed 85-1 Bonds") and the $35,910,000 aggregate
principal amount of 86-2 Bonds that have been converted to fixed interest rates pursuant to the
86-2 Indenture (the "Fixed 86-2 Bonds" and, together with the Fixed 85-1 Bonds, the "Prior
Bonds");
WHEREAS, the City Council, by a Resolution entitled "A Resolution of the City ·
Council of the City of Tustin of Intention to Levy Reassessments and to Issue Refunding Bonds
Upon the Security Thereof', adopted on November 20, 1995 (the "Resolution of Intention"), has
conducted reassessment and refunding proceedings under the Refunding Act of 1984 for 1915
Improvement Act Bonds, Division 11.5 (commbncing with Section 9500) of the California
Streets and Highways Code for the City's Reassessment District 95-1 (Tustin Ranch) (the
"District") to which proceedings reference is hereby made for further particulars;
WHEREAS, there is on file with the Treasurer of the City a list of all reassessments
within the District which remain unpaid (the "List of Unpaid Reassessments"), to which list
reference is made for further particulars;
WHEREAS, the City desires to refund the Prior Bonds;
WHEREAS, in order to provide the moneys required to refund the Prior Bonds, the City
desires to authorize the issuance of the City of Tustin Limited Obligation Improvem~-nt Bonds,
Reassessment District No. 95-1 (Tustin Ranch) (the "Bonds"), in an aggregate principal amount
of not to exceed $46,000,000; ~ -
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued and
secured and to secure the. payment of the principal thereof, premium, if any, and interest thereon, :,.
the City proposes to enter into aFlscal Agent Agreement with State Street Bank and Trust
Company of California, N.A., at fiscal agent (the "Fiscal Agent") (such Fiscal Agent Agreement,
in the form presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Fiscal Agent Agreement");
WHEREAS, in order to provide for the defeasance and redemption of the Prior Bonds,
the City proposes to enter into an Escrow Agreement (95-1) with State Street Bank and Trust
Company, N.A. as escrow bank (such Escrow Agreement in the form presented to this meeting,
with such changes, insertions and omissions as are made pursuant to this Resolution being
referred to herein as the "Escrow Agreement");
WHEREAS, the Tustin Public Financing Authority (the "Authority") intends to issue its
Revenue Bonds (Tustin Ranch), Series A (the "Authority Bonds") and use a portion of the
proceeds of the sale thereof to purchase the Bonds from the City;
WHEREAS, the Authority has presented the City with a proposal, in the form of a Bond
Purchase Agreement, to purchase the Bonds (such Bond Purchase Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made pursuant to
this Resolution, being referred to herein as the "Bond Purchase Agre.ement");
WHEREAS, PaineWebber Incorporated, as underwriter (the "Underwriter") has
submitted to the Authority a proposed form of an agreement to purchase the Authority Bonds;
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934
("Rule 15c2-12") requires that, in order to be able to purchase or sell the Authority Bonds, the
Underwriter must have reasonably determined that. an obligated person has undertaken in a
written agreement or contract for the benefit of the holders of the Authority Bonds to provide
disclosure of certain financial information and certain material events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the City desires to enter
into a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement") with the
Authority Trustee;
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Fiscal Agent Agreement; ·
(b) the Escrow Agreement; ~,
(c) the Bond Purchase Agreement; .
(d) the Continuing Disclosure Agreement; and
(e) the Preliminary Official Statement to be used in connection with the offering and sale
of the Authority Bonds, which contains certain information about the City, the FisCal Agent
Agreement, the Bonds, the District and the proceedings relating thereto (such Preliminary
Official Statement in the form presented to this meeting, with such Changes, insertions and
omissions as are made pursuant to this Resolution, being referred to herein as the "P~:eliminary
Official Statement"); and
WHEREAS, the City desires to proceed to issue and sell the Bonds and to authorize the
execution of such documents and the performance of such' acts as may be:necessary or desirable
to effect the offering, sale and issuance of the Bonds;
NOW, THEREFORE, BE iT RESOLVED by the City Council the City of Tustin as
follows:
Section 1. The reassessments now remaining unpaid are as shown on the List of Unpaid
Reassessments, which list is hereby approved and incorporated herein by this reference. The
total amount of the unpaid reassessments is not to exceed $46,000,000. For a particular
description of the lots, pieces and parcels of land bearing the respective reassessment numbers
set forth in the List of Unpaid Reassessments, reference is hereby made to the reassessment and
to the reassessment diagram, and any amendments thereto approved by the City Council, all as
recorded in the office of the Director of Public Works of the City, as the Superintendent of
Streets of the City, after confirmation thereof by the City Council.
Section 2. Subject to the provisions of Section 3 hereof, the issuance of the Bonds, in the
aggregate principal amount of not to exceed $46,000,000, on the terms and conditions set forth
in, and subject to the limitations specified in, the Fiscal Agent Agreement, is hereby authorized
and approve& The Bonds shall be dated, shall bear interest at the rates, shall mature on the
dates, shall be issued in the form, and shall be as otherwise provided in the Fiscal Agent
Agreement, as the same shall be completed as provided in this Resolution.
Section 3. The Fiscal Agent Agreement, in substantially the form submitted to this
meeting .and made a part hereof as though set forth herein, be and the same is hereby approved.
The Mayor of the City, or such other member of the City Council as the Mayor may designate,
the City Manager of the City and the Director of Finance/Treasurer of the City (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name of the
City, to execute and deliver the Fiscal Agent Agreement in the form submitted to this meeting,
with such changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the execution
of the Fiscal Agent Agreement by such Authorized Officer; provided, however, that such
changes, insertions and omissions shall not authorize an aggregate principal amount of Bonds in
excess of $46,000,000, shall not result in a final maturity date of the Bonds later than September
2, 2013 and shall not result in a true interest cost on the Bonds in excess of 7.0%.
Section 4. The Escrow Agreement, in substantially the form submitted to this meeting
and made a part hereof as though set forth in full herein, be and the same is hereby approvedo
The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the
name of the City, to execute and deliver the Escrow Agreement in the form presented to this
meeting, with such changes, insertions and omissions as the Authorized Officer executing the
same may require or approve, such requirement o.1: approval to be conclusively evidenced by the
execution of the Escrow Agreement by such Authorized Officer.
Section 5. The Bond Purchase Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the City, to execute and deliver the Bond Purchase Agreement in the form
presented to this meeting, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer.
Section 6. The Continuing Disclosure Agreement, in substantially the form submitted to
this meeting and made a pan hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the City, to execute and deliver the Continuing Disclosure Agreement in the
form presented to this meeting, with such changes, insertions and omissions as the Authorized
Officer executing the same may. require or approve, such requirement or approval to be
conclusively evidenced by the execution of the Continuing Disclosure Agreement by such
Authorized Officer.
Section 7. The Preliminary Official Statement, in substantially the form presented to this
meeting and made a part hereof as though set forth in full herein, with such changes therein as
may be approved by an Authorized Officer, be and the same is hereby approved, and the use of
the Preliminary Official Statement in connection with the offering and sale of the Authority
Bonds is hereby authorized and approved. The Authorized Officers are, and each of them is,
hereby authorized and directed, for and in the name of the City, to certify to PaineWebber
Incorporated, the underwriter of the Authority BondS, that the Preliminary Official Statement has
been "deemed final" for purposes of Rule 15c2-12 promulgated by the Securities and Exchange
Commission.
Section 8. The preparation and delivery of a final Official Statement (the "Official
f sale
Statement"), and its use in connection with the 0 fering and of the Authority Bonds, be and
the same is hereby authorized and approved. The Official Statement shall be in substantially the
form of the Preliminary Official Statement with such changes, insertions and omissions as may
be approved by an Authorized Officer, such approval to be conclusively evidenced by the
execution and delivery thereof. The Authorized Officers are, and each of them is, hereby
authorized and directed to execute the final Official Statement, and any amendment or
supplement thereto, for and in the name of the City.
Section 9. The Authorized Officers are hereby authorized and directed to investigate, or
cause to be investigated, the availability and economic viability of bond insurance for the Bonds
and/or the Authority Bonds and, if such insurance is determined to be cost effective, to select a
bond insurer and to negotiate the terms of such bond insurance.
Section 10. The Authorized Officers are, and each of them hereby is, authorized and
directed to execute and deliver any and all documents and instruments and to do and cause to be
done any and all acts and things necessary or proper for carrying out the issuance of the Bonds
and the transactions. contemplated by the Fiscal Agent Agreement, the Escrow Agreement, the
Bond Purchase Agreement, the Continuing Disclosure Agreement, the Official Statement and
this Resolution.
Section 11. All actions heretofore taken by the officers and employees of the City with
respect to the District, the reassessments, the refunding of the Prior Bonds or the issuance and
sale of the Bonds, or in connection with or related to any of the agreements or documents
referenced herein, are hereby approved, confirmed and ratified.
Section 12. Resolution No. 95-117, adopted by the City Council on November 20, 1995,
is hereby rescinded, repealed and annulled and shah be of no further force and effect.
Section 13. This Resolution shall take effect immediately upon its adoption.
APPROVED and ADOPTED by the City Council of the City of Tustin on January 15,
1996. .,
Potts,"SVlayor
ATTEST:
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
I, Pamela Stoker, City Clerk of the City of Tustin, California hereby certify that the
foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meeting of the
City Council of said City duly and regularly held at the regular meeting place thereof on January
15, 1996, of which meeting all of the members of-said City Council had due notice and at which
a majority thereof were present; and thai at .said.... meeting said Resolution was adopted by the
following vote:
AYES: COUNCIL MEMBERS: POTTS, WORLEY, DOYLE, SALTARELLI, THOMAS
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
An agenda of said meeting was posted at least 72 hours before said meeting at 300
Centennial Way, Tustin, California, a location freely accessible to members of the public, and a
brief general description of said Resolution appeared on said agenda.
I further certify that I have ~ef/illy c. ompared the same with the original minutes of said
meeting on file and of record in~my Office; that the foregoing Resolution is a full, true and correct
copy of the original Resolution adopted at said meeting and entered in said minutes; and that said
Resolution has not been amended, modified or rescinded since the date of its adoption, and the
same is now in full force and effect.
Dated: January 15 , 1996
"'l~'h/nela Sioier, ~?li~, Clerk
FISCAL AGENT AGREEMENT
by and between the
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Fiscal Agent
Dated as of 1, 1995
RELATING TO
CITY OF TUSTIN
LIMITED OBLIGATION IMPROVEMENT BONDS
REASSESSMENT DISTRICT NO. 95-1
(TUSTIN RANCH)
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Page
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 II
THE BONDS
Section 2.01. Authorization of Bonds ..................................................................................... 9
Section 2.02. Terms of Bonds ................................................................................................. 9
Section 2.03. Transfer and Exchange of Bonds .................................................................... 10
Section 2.04. Registration Books .......................................................................................... 10
Section 2.05. Execution of Bonds ......................................................................................... 10
Section 2.06. Authentication of Bonds ................................................................................. 10
Section 2.07. Temporary Bonds ............................................................................................ 11
Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen ................................................... 11
Section 2.09. Limited Obligation .......................................................................................... 11
Section 2.10. No Acceleration .............................................................................................. I 1
Section 2. ] 1. Refunding of Bonds ........................................................................................ 11
ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance of Bonds ........................................................................................... 12
Section 3.02. Application of Proceeds of the Bonds ............................................................. 12
Section 3.03. Costs of Issuance Fund ................................................................................... 12
Section 3.04. Improvement Fund .......................................................................................... 12
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption ..................................................................................................... 14
Section 4.02. Notice of Redemption ..................................................................................... 15
Section 4.03. Selection of Bonds for Redemption ................................................................ 16
Section 4.04. Partial Redemption of Bonds .......................................................................... 16
Section 4.05. Effect of Notice of Redemption ...................................................................... 16
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS;
INVESTMENTS
Section 5.01. Pledge and Assignment ................................................................................... 17
Section 5.02. Redemption Fund ............................................................................................ 17
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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. Collection and Application of Reassessments ................................................ 21
Section 6.02. Foreclosure ...................................................................................................... 22
Section 6.03. No Advances from Available Surplus Funds .................................................. 22
Section 6.04. Punctual Payment ............................................................................................ 22
Section 6.05. Extension of Payment of Bonds ...................................................................... 22
Section 6.06. Against Encumbrances .................................................................................... 22
Section 6.07. Power to Issue Bonds and Make Pledge and Assignment .............................. 23
Section 6.08. Accounting Records and Financial Statements ............................................... 23
Section 6.09. Waiver of Laws ............................................................................................... 23
Section 6.10. Tax Covenants ................................................................................................. 23
Section 6.11. Report to California Debt Advisory Commission ........................................... 24
Section 6.12. Further Assurances .......................................................................................... 24
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 7.01. Events of Default ............................................................................................ 25
Section 7.02. Foreclosure ...................................................................................................... 25
Section 7.03. Other Remedies of Bond Owners ................................................................... 25
Section 7.04. Application of Reassessments and Other Funds After Default ....................... 26
Section 7.05. Fiscal Agent to Represent Bond Owners ........................................................ 26
Section 7.06. Bond Owners' Direction of Proceedings ........................................................ 27
Section 7.07. Limitation on Bond Owners' Right to Sue ..................................................... 27
Section 7.08. Absolute Obligation of City ............................................................................ 27
Section 7.09. Termination of Proceedings ............................................................................ 27
Section 7.10. Remedies Not Exclusive ................................................................................. 28
Section 7.11. No Waiver of Default ...................................................................................... 28
ARTICLE VIII
FISCAL AGENT
Section 8.01. Duties and Liabilities of Fiscal Agent ............................................................. 29
Section 8.02. Merger or Consolidation ................................................................................. 30
Section 8.03. Liability of Fiscal Agent ................................................................................. 30
Section 8.04. Right to Rely on Documents ........................................................................... 31
Section 8.05. Preservation and Inspection of Documents ..................................................... 31
Section 8.06. Compensation and Indemnification ................................................................ 32
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ARTICLE IX
MODIFICATION OR AMENDMENT
Section 9.U1. Amendments Permitted ................................................................................... 33
Section 9.02. Effect of Supplemental Agreement ................................................................. 34
Section 9.03. Endorsement of Bonds; Preparation of New Bonds ....................................... 34
Section 9.04. Amendment of Particular Bonds ..................................................................... 34
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of 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. Limited Obligation ..........................................................................
Section 11.02. Successor Is Deemed Included in All References to Predecessor ..
Section 11.03. Limitation of Rights to Parties and Bond Owners ..........................
Section 11.04. Waiver of Notice; Requirement of Mailed Notice .........................
Section 11.05. Destruction of Bonds ......................................................................
Section 11.06. Severability of Invalid Provisions ..................................................
Section 11.07. Notices ............................................................................................
Section 11.08. Evidence of Rights of Bond Owners ..............................................
Section 11.09. Disqualified Bonds .........................................................................
Section 11.10. Money Held for Particular Bonds ...................................................
Section 11.11. Funds and Accounts ........................................................................
Section 11.12. Payment on Non-Business Days .....................................................
Section 11.13. Waiver of Personal Liability ...........................................................
Section 11.14. Conflict with Act or Bond Law ......................................................
Section 11.15. Conclusive Evidence of Regularity ................................................
Section 11.16. Execution in Several Counterparts .................................................
Section l 1.17. Governing Laws ..............................................................................
EXHIBIT A -Form of Bond ....................................................................................
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............. A-1
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FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (this "Agreement") is made and entered into as
of 1, 1995 by and between the CITY OF TUSTIN, a general law city and municipal
corporation organized and existing under and by virtue of the laws of the State of California (the
"City"), and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a
national banking association organized and existing under and by virtue of the laws of the United
States of America, as fiscal agent (the "Fiscal Agent").
WITNESSETH:
WHEREAS, on 1995, the City Council of the City passed and adopted
Resolution No. (the "Resolution of Intention") relating to the levy of reassessments and
issuance of refunding bonds pursuant to the. Refunding Act of 1984 for 1915 Improvement
Bonds, Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of
California (the "Refunding Law") in and for a portion of the City's Assessment District No. 85-1
and a portion of the City's Assessment District No. 86-2 and, by the Resolution of Intention, the
City Council of the City provided that serial and/or term bonds would be issued thereunder
pursuant to the provisions of the Improvement Bond Act of 1915, Division 10 of the Streets and
Highways Code of California (the "Bond Law" and, together with the Refunding Law, the "Act")
and reference to the Resolution of Intention is hereby expressly made for further particulars;
WHEREAS, under the provisions of the Act, on , 1995, the City Council of the
City adopted Resolution No. (the "Resolution of Issuance"), which, among other matters,
authorized the issuance of refunding improvement bonds of the City designated "City of Tustin
Limited Obligation 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:
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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 firm 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, duect 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
(Tustin 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
(Tustin 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 California, N.A., as
trustee, as originally executed or as it may from time to time be amended or supplemented in
accordance with its terms.
"Authority Trustee" means State Street Bank and Trust Company of California, N.A.,
as trustee under the Authority Indenture or any successor thereto as trustee thereunder.
"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
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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 .
"Bonds" means the City of Tustin Limited Obligation Improvement Bonds,
Reassessment District No. 95-1 (Tustin Ranch).
"Bonds (85-1)" means the City of Tustin Assessment District No. 85-1 Improvement
Bonds issued pursuant to the Indenture (85-1).
"Bonds (86-2)" means the City of Tustin Assessment District No. 86-2 Limited
Obligation Improvement Bonds issued pursuant to the Indenture (86-2).
"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
Agent is located, are closed.
"City" means the City of Tustin, and any successor thereto.
"Clerk" means the Clerk or Depury 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 fast annual administrative
fee, fees, expenses and charges of the Escrow Bank and its counsel, fees, charges and
disbursements of attorneys, financial advisors, accounting firms, consultants and other
professionals, fees and charges for preparation, execution and safekeeping of 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.
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"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) if (a) the investment is a certificate of deposit that is acquired in
accordance with applicable regulations under the Code, (b) the investment is an agreement with
specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated
interest rate (for example, a guaranteed investment contract, a forward supply contract or other
investment agreement) that is acquired in accordance with applicable regulations under the Code,
(c) the investment is a United States Treasury Security--State and Local Government Series that
is acquired in accordance with applicable regulations of the United States Bureau of Public Debt,
or (d) the investment is the Local Agency Investment Fund of the State of Califomia 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 duect 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 of each year and ending on the next
succeeding June 30, or any other twelve-month period hereafter selected and designated as the
official fiscal year period of the Ciry 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.
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"Indenture (85-I)" 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 Services" 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 Mazch 2 and September 2 of each yeaz, 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 if such corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any
other nationally recognized securities rating agency selected by the City.
"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 Bonds, 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 Books.
"Permitted Investments" means the following, but only to the extent that the same are
acquired at Fair Market Value:
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(a) Federal Securities;
(b) any of the following direct or indirect obligations of the following agencies of the
United States of America: (i) duect 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 A 1 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 dtrectly, 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, firm, association, partnership, trust, or other
legal entity or group of entities, including a governmental entity or any agency or political
subdivision thereof.
"Prepayment Account" means the account within the Redemption Fund by that name
established and held by the Fiscal Agent pursuant to Section 5.03.
"Prior Bonds" means, collectively, the $14,490,000 aggregate principal amount of
Bonds (85-1) that have been converted to a fixed interest rate pursuant to the Indenture (85-1)
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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 maximum
amount of principal of and interest on the Bonds coming due and payable in the current or any
future Bond Yeaz].
"Resolution of Intention" means Resolution No. ,adopted by the Council on
, 1995.
"Resolution of Issuance" means Resolution No. ,adopted by the Council on
1995, authorizing the issuance of the Bonds.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., a
corporation duly organized and existing under and by virtue of the laws of the State of New
York, and its successors and assigns, except that if such 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. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include
the plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to include the neuter, masculine or feminine gender, as
appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely
for convenience of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; the words "herein,"
"hereof," "hereby," "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or subdivision hereof.
Section 1.04. Agreement Constitutes Contract. In consideration of the purchase and
acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from
time to time, this Agreement shall be deemed to be and shall constitute a contract among the
City, the Fiscal Agent and the Owners of the Bonds. 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.
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ARTICLE II
THE BONDS
Section 2.01. Authorization of Bonds. The City hereby authorizes the issuance of the
Bonds under and subject to the terms of 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. Terms 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
preceding 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.
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(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. Rggistration Books. The Fiscal Agent will keep or cause to be kept, at 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 Ciry, 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
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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. TemRorarv Bonds. The Bonds may be issued in temporary form
exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be
printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the City, shall be in fully registered form without coupons and may contain such
reference to any of the provisions of this Agreement as may be appropriate. Every temporary
Bond shall be executed by the City and authenticated by the Fiscal Agent upon the same
conditions and in substantially the same manner as the definitive Bonds. If the City issues
temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as
practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the
Office of the Fiscal Agent and the Fiscal Agent shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits
under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.08. 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. Refunding of Bonds. The Bonds may be refunded by the City under
Divisions 11 or 11.5 of the California Streets and Highways Code upon the conditions set forth
in proceedings therefor, all as deternned by the Council.
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AKTICLE 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. Aoolication 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 $ in the Reserve
Fund, constituting the full amount of the Reserve Requirement.
Fund.
Fund.
(b) The Fiscal Agent shall deposit the amount of $ in the Costs of Issuance
(c) The Fiscal Agent shall deposit the amount of $ 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 Costs 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
-12-
been the subject of a prior disbursement from the Improvement Fund; in each case together with
a statement or invoice for each amount requested 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 paid or are not required to be paid from the
Improvement Fund, the Fiscal Agent shall transfer and apply the amount, if 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.
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ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redem tom. (a) Optional Redemption. The Bonds shall be subject to
optional redemption in whole or 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 Dates Redemption Price
September 2, 2004 and March 2, 2005 102%
September 2, 2005 and March 2, 2006 101
September 2, 2006 and thereafter 100
(b) Mairdato~y 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 Redemption Price
March 2, 1996 through March 2, 2004 103%
September 2, 2004 and March 2, 2005 102
September 2, 2005 and March 2, 2006 101
September 2, 2006 and thereafter 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
sinking 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:
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Sinking Fund
Redemption Date
(September 21
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 (maturity)
Principal Amount
to be
Redeemed
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 filed 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(x). 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 fast 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 that further interest on such Bonds will not accrue from
and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor
any defect in such notice, shall affect the sufficiency of the proceedings for the redemption of the
Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.
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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 Redemp,~.ion. Notice having been mailed as aforesaid,
and moneys for the redemption (including the interest to the applicable date fixed for redemption
and including any applicable premium), having been deposited in the 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, if notice of redemption thereof shall have been mailed as
aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to
accrue and become payable. All moneys held by or on behalf of the 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 certificate of
destruction to the City.
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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, all of the Reassessments (including prepayments thereof), together 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
first lien on and security interest in such assets.
Section 5.02. Redemption Fund. (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
sinking 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. If, after the foregoing transfer, there are insufficient funds in the
Redemption Fund to pay the principal, if any, of and interest on the Bonds, the Fiscal Agent shall
apply the available funds first 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, if 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.
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Section 5.03. Pre~v_ment Account. 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 amounts have not been the subject of a prior disbursement from the Continuing
Costs Account; in each case together with a statement or invoice for each amount requested
thereunder.
Section 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 Reassessments 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
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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 calculate 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
retire 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, all 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 if such Permitted Investments may be redeemed at par so as to be available
on each Interest Payment Date, any amount in the Reserve Fund may be invested in such
redeemable Permitted Investments maturing on any date on or prior to the final maturity date of
the Bonds. Absent timely written direction from the 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).
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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.
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ARTICLE VI
COLLECTION AND APPLICATION OF
REASSESSMENTS; PARTICULAR COVENANTS
Section 6.01. Collection and Annlication 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 rolls, 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 Reassessments 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 Reassessments 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.
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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, if 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 if 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 interest 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 Reassessments 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 Payment of Bonds. The City shall not directly or indirectly
extend or assent to the extension of the maturity of any of the Bonds or the time of payment of
any claims for interest by the purchase of such Bonds or by any other arrangement, and in case
the maturity of any of the Bonds or the time of payment of any such claims for interest shall be
extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder,
to the benefits of this Agreement, except subject to the prior payment in full of the principal of
all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been
so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds
for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to
constitute an extension of maturity of the Bonds.
Section 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.
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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 shall 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 Prohibition. The City shall not take any action or permit or suffer
any action to be taken if the result of the same would be to cause any of the Authority Bonds to
be "Federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Maintenance of Tax-Exemption. The City shall take all actions necessary to assure
the exclusion of interest on the 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.
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Section 6.11. Reoort to California Debt Advisorv Commission. In accordance with
Section 6599.1(c) of the California Government Code, the City 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 rights and benefits provided in this
Agreement.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 7.01. Events of Default. The following events shall be Events of Default:
(a) Failure to pay any installment of principal of any Bonds when and as
the same shall become due and payable, whether at maturity as therein expressed,
by proceedings for redemption or otherwise.
(b) Failure to pay any installment of interest on any Bonds when and as
the same shall become due and payable.
(c) Failure by the City to observe and perform any of the other covenants,
agreements or conditions on its part in this Agreement or in the Bonds contained,
if such failure shall have continued for a period of 60 days after written notice
thereof, specifying such failure and requiring the same to be remedied, shall have
been given to the City by the Fiscal Agent or the Owners of not less than 25% in
aggregate principal amount of the Bonds at the time Outstanding; provided,
however, if in the reasonable opinion of the City the failure stated in the notice
can be corrected, but not within such 60 day period, such failure shall not
constitute an Event of Default if corrective action is instituted by the City within
such 60 day period and the City shall thereafter diligently and in good faith cure
such failure in a reasonable period of time.
(d) 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 du•ection 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 Reassessments, 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 Bond 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
fulfillment of all duties imposed upon it by the Act;
(b) by suit, action or proceeding in equity, to enjoin any acts or things
which are unlawful, or the violation of any 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 if it and they were the trustees of an express
trust.
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Section 7.04. Aoolication of Reassessments and Other Funds After Default. If an
Event of Default shall occur and be continuing, all Reassessments, including any penalties, costs,
fees and other charges accruing under the Act, and any 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:
Fir t: 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
S c n To the payment to the Persons entitled thereto of the
unpaid principal of any Bonds which shall have become due, whether at
maturity or by call for redemption, with interest on the overdue principal
at the rate borne by the respective Bonds on the date of maturity or
redemption, and, if the amount available shall not be sufficient to pay in
full all the Bonds, together with such interest, then to the payment thereof
ratably, according to the amounts of principal due on such date to the
Persons entitled thereto, without any discrimination or preference.
(c) Any remaining funds shall be transferred by the 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 true
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 its 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
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without the possession of any of the Bonds or the production thereof in any proceeding relating
thereto, and any such suit, action or proceeding instituted by the Fiscal Agent shall be brought in
the name of the Fiscal Agent for the benefit and protection of the Owners of such Bonds, subject
to the provisions of this Agreement.
Section 7.06. fond 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 right, by an instrument or concurrent instruments in
writing executed and delivered to the Fiscal Agent, and upon indemnification of the Fiscal Agent
to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken
by the Fiscal Agent hereunder, provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Agreement, and that the Fiscal Agent shall have
the right to decline to follow any such direction which in the opinion of the Fiscal Agent would
be unjustly prejudicial to Bond Owners not parties to such direction.
Section 7.07. Limitation on Rond 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 Citv. 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. germination of Proceedings. In case any proceedings taken by the Fiscal
Agent or any one or more Bond Owners on account of any Event of Default shall have been
discontinued or abandoned for any reason or shall have been determined adversely to the Fiscal
Agent or the Bond Owners, then in every such case the City, the Fiscal Agent and the Bond
Owners, subject to any determination in such proceedings, shall be restored to their former
positions and rights hereunder, severally and respectively, and all rights, remedies, powers and
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duties of the City, the Fiscal Agent and the Bond Owners shall continue as though no such
proceedings had been taken.
Section 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.
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ARTICLE VIII
FISCAL AGENT
Section 8.01. Duties and Liabilities of Fiscal Agent. (a) Duties of Fisca[ Agent
Generally. The Fiscal Agent shall, prior to an Event of Default, and after the curing of all Events
of Default which may have occurred, perform such duties and only such duties as are expressly
and specifically set forth in this Agreement. The Fiscal Agent shall, during the existence of any
Event of Default which has not been cured, exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Removal of Fiscal Agent. The City may upon 30 days' prior written notice remove
the Fiscal Agent at any time unless an Event of Default shall have occurred and then be
continuing, and shall remove the Fiscal Agent if at any time requested to do so by an instrument
or concurrent instruments in writing signed by the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in
writing) or if at any time the Fiscal Agent shall cease to be eligible in accordance with subsection
(e) of this Section, or shall become incapable of acting, or shall be adjudged a banlQUpt 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 (if any) as it may deem proper, appoint such
successor Fiscal Agent. Any successor Fiscal Agent appointed under this Agreement shall
signify its acceptance of such appointment by executing and delivering to the City and to its
predecessor Fiscal Agent a written acceptance thereof, and to the predecessor Fiscal Agent an
instrument indemnifying the predecessor Fiscal Agent for any costs or claims arising during the
time the successor Fiscal Agent serves as Fiscal Agent hereunder, and after payment by the City
of all unpaid fees and expenses of the predecessor Fiscal Agent, the such successor Fiscal Agent,
without any further act, deed or conveyance, shall become vested with all the moneys, estates,
properties, rights, powers, trusts, duties and obligations of such predecessor Fiscal Agent, with
like effect as if originally named Fiscal Agent herein; but, nevertheless at the Written Request of
the City or the request of the successor Fiscal Agent, 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
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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 snail 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 Agent 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. Merger or Consolidation. Any bank or trust company into which the
Fiscal Agent may be merged or converted or with which it may be consolidated or any bank or
trust company resulting from any merger, conversion or consolidation to which it shall be a party
or any bank or trust company to which the Fiscal Agent may sell or transfer all or substantially
all of its corporate trust business, provided such bank or trust company shall be eligible under
subsection (e) of Section 8.01 shall be the successor to such Fiscal Agent, without the execution
or filing of any paper or any further act, anything herein to the contrary notwithstanding.
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
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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 warrant to the Fiscal
Agent for any action taken or suffered in good faith under the provisions of this Agreement in
reliance upon such Written Certificate, but in its discretion the Fiscal Agent may, in lieu thereof,
accept other evidence of such matter or may require such additional evidence as it may deem
reasonable.
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.
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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.
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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 or
amended from time to time and at any time by a Supplemental Agreement, which the City and
the Fiscal Agent may enter into with the written consent of the Owners of a majority in aggregate
principal amount of all Bonds then Outstanding, 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 fast 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;
(iii) 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
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(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 Snonlemental Agreement. Upon the execution of any
Supplemental Agreement pursuant to this Article, this Agreement shall be deemed to be
modified and amended in accordance therewith, and the respective rights, duties and obligations
under this Agreement of the City, the Fiscal Agent and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such Supplemental
Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and
all purposes.
Section 9.03. Fndorsement of Bonds: Preparation of New Bonds. Bonds delivered
after the execution of any Supplemental Agreement pursuant to this Article may, and if the City
so determines shall, bear a notation by endorsement or otherwise in form approved by the City
and the Fiscal Agent as to any modification or amendment provided for in such Supplemental
Agreement, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time
of such execution and presentation of his Bonds for the purpose at the Office of the Fiscal Agent
a suitable notation shall be made on such Bonds. If the Supplemental Agreement shall so
provide, new Bonds so modified as to conform, in the opinion of the City and the Fiscal Agent,
to any modification or amendment contained in such Supplemental Agreement, shall be prepared
and executed by the City and authenticated by the Fiscal Agent, and upon demand of the Owners
of any Bonds then Outstanding shall be exchanged at the Office of the Fiscal Agent, without cost
to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds,
in equal aggregate principal amount of the same interest rate and maturity.
Section 9.04. Amendment of Particular Bonds. The provisions of this Article shall not
prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such
Owner.
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ARTICLE 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 (if any) on the Bonds, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust (pursuant to an escrow
agreement), at or before maturity, money or securities in the necessary amount (as
provided in Section 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 the 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.
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Section 10.03. D~tZ4Slt of Mon~v 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, or to the redemption date, as the case may be, on the Bonds to be paid or
redeemed, as such principal and interest become due, provided that in the case of
Bonds which are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article IV or provision
satisfactory to the Fiscal Agent shall have been made for the giving of such
notice;
provided, in each case, that the Fiscal Agent shall have been irrevocably instructed (by the terms
of this Agreement or by Written Request of the City) to apply such funds to the payment of such
principal and interest with respect to such Bonds.
Section 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.
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ARTICLE XI
MISCELLANEOUS
Section 11.01. Limited Obligation. All obligations of the City under this Agreement
and the Bonds shall not be general obligations of the City, but shall be limited obligations,
payable solely from the Reassessments and the other assets pledged therefor hereunder. Neither
the faith and credit of the City nor of the State of California or any political subdivision thereof is
pledged to the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds"
and are payable solely from and secured solely by the Reassessments and the other assets
pledged hereunder. Notwithstanding any other provision of this Agreement, the City is not
obligated to advance available funds from the City treasury to cure any deficiency in the
Redemption Fund.
Section 11.02. Successor Is Deemed Included in All References to Predecessor.
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 Ciry 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, if the City shall so require) as may
be allowed by law, and deliver a certificate of such destruction to the City.
Section 11.06. Severability of Invalid Provisions. If any one or more of the provisions
contained in this Agreement or in the Bonds shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions contained in this Agreement and such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, and this Agreement shall
be construed as if such invalid or illegal or unenforceable provision had never been contained
herein. The City hereby declares that it would have entered into this Agreement and each and
every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of
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.
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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, in a 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 if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such request, consent or other
instrument or writing may be proved by the certificate of any notary public or other officer of
any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that
the Person signing such request, consent or other instrument acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public
or other officer.
The ownership of Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind
every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the Fiscal Agent or the
City in accordance therewith or reliance thereon.
Section 11.09. Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this 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 if the pledgee shall establish to the satisfaction of
the Fiscal Agent the pledgee's right to vote such Bonds and that the pledgee is not a Person
directly or indirectly controlling or controlled by, or under direct or indirect common control
with, the City or any other obligor on the Bonds. In case of a dispute as to such right, any
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decision by the Fiscal Agent taken upon the advice of counsel shall be 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 on Non-Business Davs. 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 Reg lu arit_v. Bonds issued pursuant to this
Agreement shall constitute evidence of the regularity of all proceedings under the Act relative to
their issuance and the levy of the Reassessments.
Section 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. (~overnin~,Laws. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the City has caused this Agreement to be signed in its name
by its officer thereunto duly authorized, and the Fiscal Agent, in token of its acceptance of the
trusts created hereunder, has caused this Agreement to be signed in its corporate name by its
officer thereunto duly authorized, all as of the day and year first above written.
CITY OF TUSTIN
By:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, NA., as
Fiscal Agent
By:
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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:
PRINCIPAL AMOUNT:
Under and by virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds.
Division 11.5 of the Streets and Highways Code of California (the "Act"), the City of Tustin,
County of Orange, State of California (the "City"), will, out of the redemption fund for the
payment of the bonds issued upon the unpaid portion of reassessments made for the refunding
bonds more fully described in proceedings taken pursuant to Resolution No. _ adopted by the
City Council of the City on , 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 "Trust 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 mailed by first
class mail on each Interest Payment Date to the Registered Owner hereof at the address of the
Registered Owner as it appears on the Registration Books of the 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 (Tustin 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 rights, 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 aze 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:
Redemption Dates Redemption Price
September 2, 2004 and Mazch 2, 2005 102%
September 2, 2005 and Mazch 2, 2006 101
September 2, 2006 and thereafter 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 Redemption Price
March 2, 1996 through March 2, 2005 103%
September 2, 2004 and March 2, 2005 102
September 2, 2005 and March 2, 2006 101
September 2, 2006 and thereafter 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.
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[FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Agreement and registered on
the Registration Books.
Date:
By
State Street Bank and Trust Company of
California, N.A., as Fiscal Agent
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 premises.
Dated:
Signature Guaranteed:
Note: 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
ESCROW AGREEMENT (95-1)
by and between the
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY, N.A.,
as Escrow Bank
Dated as of .1995
Reassessment District No. 95-1 (Tustin Ranch)
TABLE OF CONTENTS
~~
Section 1. Definitions .......................................................................................... 1
Section 2. The Escrow Funds .............................................................................. 1
Section 3. Use and Investment of Moneys .......................................................... 2
Section 4. Payment of Prior Bonds ..................................................................... 3
Section 5. Irrevocable Instructions to Mail Notices ............................................ 4
Section 6. Performance of Duties ....................................................................... 4
Section 7. Escrow Bank's Authority to Make Investments ................................ 4
Section 8. Indemnity ........................................................................................... 4
Section 9. Responsibilities of Escrow Bank ....................................................... 5
Section 10. Amendments ...................................................................................... 5
Section 11. Term ................................................................................................... 6
Section 12. Compensation ..................................................................................... 6
Section 13. Severability ........................................................................................ 6
Section 14. Counterparts ....................................................................................... 6
Section 15. Governing Law .................................................................................. 6
Section 16. Assignment ......................................................................................... 7
EXHIBIT 1- United States Treasury Securities -Fixed 85-1 Bonds ................... l-1
EXHIBIT 2 -United States Treasury Securities -Fixed 86-2 Bonds ..................2-1
i
ESCROW AGREEMENT (95-1)
THIS ESCROW AGREEMENT (95-1) (this "Agreement"), is entered into as of
1995, by and between the City of Tustin (the "City") and State Street Bank and
Trust Company, N.A., as escrow bank (the "Escrow Bank").
WITNESSETH:
WHEREAS, pursuant to an Indenture of Trust, dated as of August 1, 1986 (the "85-1
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount of $50,650,000;
WHEREAS, pursuant to an Indenture of Trust, dated as of September 1, 1988 (the "86-2
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2 Bonds")
in the original principal amount of $81,400,000;
WHEREAS, State Street Bank and Trust Company, N.A., is the successor trustee under
the 85-1 Indenture and under the 86-2 Indenture;
WHEREAS, the City has determined that certain savings and efficiencies may be
obtained by refunding the outstanding $ aggregate principal amount of 85-1 Bonds
that have been converted to a fixed interest rate pursuant to the 85-1 Indenture (the "Fixed 85-1
Bonds") and the outstanding $ aggregate principal amount of 86-2 Bonds that have
been converted to a fixed interest rate pursuant to the 86-2 Indenture (the "Fixed 85-2 Bonds"
and, together with the Fixed 85-1 Bonds, the "Prior Bonds");
WHEREAS, in order to provide a portion of the moneys required to refund the Prior
Bonds, the City has authorized the issuance of the City of Tustin Limited Obligation
Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch) (the "Bonds"), in an
aggregate principal amount of $ ;
WHEREAS, the City has determined apply a portion of the proceeds of the Bonds,
together with other available moneys, to pay, when due, the interest on the outstanding Prior
Bonds on March 2, 1996 and to redeem the outstanding Prior Bonds on March 2, 1996 (the
"Redemption Date") at a redemption price (the "Redemption Price") equal to 102.5% of the
principal amount of such outstanding Prior Bonds; and
WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and the
City has determined to provide for the call for redemption on the Redemption Date of the Prior
Bonds outstanding on the Redemption Date;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City and the Escrow Bank agree as follows:
Section 1. Definitions. The term "Federal Securities" shall mean United States of
America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the
full faith and credit of the United States of America are pledged for the payment of interest and
principal, which are not subject to redemption except by the owners thereof prior to maturity
(including any such securities issued or held in book-entry form on the books of the Department
of the Treasury of the United States of America).
Section 2. The 85-1 Escrow Fund. (a) There is hereby established a fund (the "85-1
Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Bank, which the
Escrow Bank shall keep separate and apart from all other funds of the City and the Escrow Bank
and which shall be applied solely as provided in this Agreement. Pending application as
provided in this Agreement, amounts on deposit in the 85-1 Escrow Fund are hereby pledged and
assigned solely to the payment of (i) the accrued interest on the Fixed 85-1 Bonds coming due on
the Redemption Date, and (ii) the Redemption Price of the Fixed 85-1 Bonds on the Redemption
Date, which amounts shall be held in trust by the Escrow Bank for the owners of the Fixed 85-1
Bonds.
(b) Upon the issuance and delivery of the Bonds, there shall be deposited in the 85-1
Escrow Fund the following:
(i) $ transferred from the Fund established under the 85-1
Indenture;
(ii) $ transferred from the Fund established under the 85-1
Indenture;
(iii) $ transferred from the Fund established under the 85-1
Indenture; and
(iv) $ received from the proceeds of the sale of the Bonds.
(c) The City acknowledges that, upon the deposit of moneys pursuant to Section 2(b), the
moneys on deposit in the 85-1 Escrow Fund will, based upon the certification provided for in
Section 4(a) hereof, be at least equal to an amount sufficient to purchase the aggregate principal
amount of the Federal Securities set forth in Exhibit 1 hereto (the "Exhibit 1 Securities"), which
principal, together with all interest due or to become due on such Exhibit 1 Securities, and any
uninvested cash held by the Escrow Bank in the 85-1 Escrow Fund, will be sufficient to make the
payments required by Section 5(a) hereof.
Section 3. The 86-2 Escrow Fund. (a) There is hereby established a fund (the "86-2
Escrow Fund" and, together with the 85-1 Escrow Fund, the "Escrow Funds") to be held as an
irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and
apart from all other funds of the City and the Escrow Bank and which shall be applied solely as
provided in this Agreement. Pending application as provided in this Agreement, amounts on
deposit in the 86-2 Escrow Fund are hereby pledged and assigned solely to the payment of (i) the
accrued interest on the Fixed 86-2 Bonds coming due on the Redemption Date, and (ii) the
Redemption Price of the Fixed 86-2 Bonds on the Redemption Date, which amounts shall be
held in trust by the Escrow Bank for the owners of the Fixed 86-2 Bonds.
(b) Upon the issuance and delivery of the Bonds, there shall be deposited in the 86-2
Escrow Fund the following:
(i) $ transferred from the
Indenture;
(ii) $ transferred from the
Indenture;
(iii) $ transferred from the
Indenture; and
Fund established under the 86-2
Fund established under the 86-2
Fund established under the 86-2
2
(iv) $ received from the proceeds of the sale of the Bonds.
(c) The City acknowledges that, upon the deposit of moneys pursuant to Section 3(b), the
moneys on deposit in the 86-2 Escrow Fund will, based upon the certification provided for in
Section 4(b) hereof, be at least equal to an amount sufficient to purchase the aggregate principal
amount of the Federal Securities set forth in Exhibit 2 hereto (the "Exhibit 2 Securities"), which
principal, together with all interest due or to become due on such Exhibit 2 Securities, and any
uninvested cash held by the Escrow Bank in the 86-2 Escrow Fund, will be sufficient to make the
payments required by Section 5(b) hereof.
Section 4. Use and Investment of Moneys. (a) The Escrow Bank hereby acknowledges
receipt of the moneys described in Section 2(b) hereof and agrees to invest $ of
such moneys in the Exhibit 1 Securities upon receipt of certification by a nationally recognized
firm of independent certified public accountants that the Exhibit 1 Securities will mature in such
principal amounts and earn interest in such amounts and, in each case, at such times, so that
sufficient moneys will be available from maturing principal and interest on the Exhibit 1
Securities, together with any uninvested moneys then held by the Escrow Bank in the 85-1
Escrow Fund, to make all payments required by Section 5(a) hereof. Except as provided in
Section 4(c) or Section 4(d) hereof, the balance of the moneys described in Section 2(b) hereof
shall be held uninvested in the 85-1 Escrow Fund.
(b) The Escrow Bank hereby acknowledges receipt of the moneys described in
Section 3(b) hereof and agrees to invest $ of such moneys in the Exhibit 2
Securities upon receipt of certification by a nationally recognized firm of independent certified
public accountants that the Exhibit 2 Securities will mature in such principal amounts and earn
interest in such amounts and, in each case, at such times, so that sufficient moneys will be
available from maturing principal and interest on the Exhibit 2 Securities, together with any
uninvested moneys then held by the Escrow Bank in the 86-2 Escrow Fund, to make all
payments required by Section 5(b) hereof. Except as provided in Section 4(c) or Section 4(d)
hereof, the balance of the moneys described in Section 3(b) hereof shall be held uninvested in the
86-2 Escrow Fund.
(c) Upon the written request of the City, but subject to the conditions and limitations
herein set forth, the Escrow Bank shall purchase substitute Federal Securities for the Federal
Securities then held in an Escrow Fund with the proceeds derived from the sale, transfer,
redemption or other disposition of Federal Securities then on deposit in such Escrow Fund and
any uninvested money then held by the Escrow Bank in such Escrow Fund in accordance with
the provisions of this Section 4(c). Such sale, transfer, redemption or other disposition of
Federal Securities then on deposit in an Escrow Fund and substitution of other Federal Securities
shall be effected by the Escrow Bank upon the written request of the City but only by a
simultaneous transaction and only upon receipt of: (i) certification by a nationally recognized
firm of independent certified public accountants that the Federal Securities to be substituted,
together with the Federal Securities which will continue to be held in such Escrow Fund, will
mature in such principal amounts and earn interest in such amounts and, in each case, at such
times so that sufficient moneys will be available from maturing principal and interest on such
Federal Securities held in such Escrow Fund, together with any uninvested moneys, to make all
payments required by Section 5(a) or Section 5(b) hereof, as applicable, which have not
previously been made, and (ii) receipt by the Escrow Bank of an opinion of counsel of
recognized standing in the field of law relating to municipal bonds to the effect that the sale,
transfer, redemption or other disposition and substitution of Federal Securities will not adversely
affect the exclusion of interest on any Bonds or Prior Bonds from gross income for purposes of
federal income taxation.
3
(d) Upon the written request of the City, but subject to the conditions and limitations
herein set forth, the Escrow Bank will apply any moneys received from the maturing principal of
or interest or other investment income on any Federal Securities held in an Escrow Fund, or the
proceeds from any sale, transfer, redemption or other disposition of Federal Securities held in an
Escrow Fund pursuant to Section 4(c) not required for the purposes of said Section, as follows:
(i) to the extent such moneys will not be required at any time for the purpose of making a
payment required by Section 5 hereof, as certified by a nationally recognized firm of independent
certified public accountants delivered to the Escrow Bank, such moneys shall be paid over to the
City upon the written request of the City as received by the Escrow Bank, free and clear of any
trust, lien, pledge or assignment securing the Prior Bonds or otherwise existing hereunder, and
(ii) to the extent such moneys will be required for such purpose at a later date, shall, to the extent
practicable, be invested or reinvested in Federal Securities maturing at times and in amounts
sufficient to make such payment required by Section 5 hereof (provided that the amount of the
funds to be realized from time to time from such investment or reinvestment shall be certified by
a nationally recognized firm of independent certified public accountants delivered to the Escrow
Bank by the City and provided that the City shall deliver to the Escrow Bank an opinion of
counsel of recognized standing in the field of law relating to municipal bonds to the effect that
such investment or reinvestment will not adversely affect the exclusion of interest on any Bonds
or Prior Bonds from gross income for purposes of federal income taxation) and interest earned
from such investments or reinvestments shall be paid over to the City, upon the written request of
the City, as received by the Escrow Bank, free and clear of any trust, lien, pledge or assignment
securing the Prior Bonds or otherwise existing hereunder.
(e) All Federal Securities purchased pursuant to this Agreement shall be deposited in and
held for the credit of the appropriate Escrow Fund. Except as provided in this Section 4, no
moneys or Federal Securities deposited with the Escrow Bank pursuant to this Agreement nor
principal of, or interest payments or other investment income on, any such Federal Securities
shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment
of the interest and Redemption Price with respect to the Fixed 85-1 Bonds or the Fixed 86-2
Bonds, as applicable, as provided by Section 5 hereof.
(fJ The owners of the Fixed 85-1 Bonds shall have a lien on the moneys and Federal
Securities in the 85-1 Escrow Fund until such moneys and Federal Securities are used and
applied as provided in this Agreement. The owners of the Fixed 86-2 Bonds shall have a lien on
the moneys and Federal Securities in the 86-2 Escrow Fund until such moneys and Federal
Securities are used and applied as provided in this Agreement.
(g) The Escrow Bank shall not be held liable for investment losses resulting from
compliance with the provisions of this Agreement.
Section 5. Payment of Prior Bonds. (a) From the maturing principal of the Federal
Securities held in the 85-1 Escrow Fund and the investment income and other earnings thereon
and any uninvested money then held in the 85-1 Escrow Fund, the Escrow Bank shall transfer
and apply the amounts at the times as follows:
(i) On March 2, 1996, the Escrow Bank shall pay the interest on the Fixed 85-1 Bonds
then due in accordance with the terms of the 85-1 Indenture; and
(ii) On the Redemption Date, the Escrow Bank shall pay the Redemption Price of the
Fixed 85-1 Bonds in accordance with the terms of the 85-1 Indenture.
To the extent that the amount on deposit in the 85-1 Escrow Fund on the Redemption
Date is in excess of the amount necessary to make the required payments with respect to the
Fixed 85-1 Bonds, as shown in the then applicable escrow verification of the nationally
4
recognized firm of independent certified public accountants, such excess shall be transferred to
the Redemption Fund established under the Fiscal Agent Agreement, dated as of ,
1995 (the "Fiscal Agent Agreement"), by and between the City and State Street Bank and Trust
Company of California, N.A. as trustee, relating to the Bonds.
(b) From the maturing principal of the Federal Securities held in the 86-2 Escrow Fund
and the investment income and other earnings thereon and any uninvested money then held in the
86-2 Escrow Fund, the Escrow Bank shall transfer and apply the amounts at the times as follows:
(i) On March 2, 1996, the Escrow Bank shall pay the interest on the Fixed 86-2 Bonds
then due in accordance with the terms of the 86-2 Indenture; and
(ii) On the Redemption Date, the Escrow Bank shall pay the Redemption Price of the
Fixed 86-2 Bonds in accordance with the terms of the 86-2 Indenture.
To the extent that the amount on deposit in the 86-2 Escrow Fund on the Redemption
Date is in excess of the amount necessary to make the required payments with respect to the
Fixed 86-2 Bonds, as shown in the then applicable escrow verification of the nationally
recognized firm of independent certified public accountants, such excess shall be transferred to
the Redemption Fund established under the Fiscal Agent Agreement.
Section 6. Irrevocable Instructions to Mail Notices. (a) The City hereby irrevocably
designates the Fixed 85-1 Bonds for prior redemption on the Redemption Date as indicated in
Section 5(a) hereof, and hereby irrevocably instructs the Escrow Bank, as trustee under the 85-1
Indenture, to give the mailed notice of redemption with respect thereto, as provided in
Section 3.06 of the 85-1 Indenture.
(b) The City hereby irrevocably designates the Fixed 86-2 Bonds for prior redemption on
the Redemption Date as indicated in Section 5(b) hereof, and hereby irrevocably instructs the
Escrow Bank, as trustee under the 86-2 Indenture, to give the mailed notice of redemption with
respect thereto, as provided in Section 3.07 of the 86-2 Indenture.
Section 7. Performance of Duties. The Escrow Bank agrees to perform only the duties
set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided
are in a form satisfactory to it.
Section 8. Escrow Bank's Authority to Make Investments. The Escrow Bank shall
have no power or duty to invest any funds held under this Agreement except as provided in
Section 4 hereof. The Escrow Bank shall have no power or duty to transfer or otherwise dispose
of the moneys held hereunder except as provided in this Agreement
Section 9. Indemnity. To the extent permitted by law, the City hereby assumes liability
for, and hereby agrees (whether or not any of the transactions contemplated hereby are
consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective
successors, assigns, agents, employees and servants, from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature
which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time
(whether or not also indemnified against the same by the City or any other person under any
other agreement or instrument, but without double indemnity) in any way relating to or arising
out of the execution, delivery and performance of this Agreement, the establishment hereunder of
the Escrow Funds, the acceptance of the funds and securities deposited therein, the purchase of
any securities to be purchased pursuant thereto, the retention of such securities or the proceeds
thereof and any payment, transfer or other application of moneys or securities by the Escrow
5
Bank in accordance with the provisions of this Agreement; provided, however, that the City shall
not be required to indemnify the Escrow Bank against the Escrow Bank's own negligence or
willful misconduct or the negligence or willful misconduct of the Escrow Bank's respective
successors, assigns, agents and employees or the material breach by the Escrow Bank of the
terms of this Agreement. In no event shall the City or the Escrow Bank be liable to any person
by reason of the transactions contemplated hereby other than to each other as set forth in this
Section. The indemnities contained in this Section shall survive the termination of this
Agreement.
Section 10. Rte, ponsibilities of Escrow Bank. The Escrow Bank and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in
tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the
establishment of the Escrow Funds, the acceptance of the moneys or any securities deposited
therein, the purchase of the securities to be purchased pursuant hereto, the retention of such
securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held
hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other
application of moneys or securities by the Escrow Bank in accordance with the provisions of this
Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error
of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained
in the "Whereas" clauses herein shall be taken as the statements of the City, and the Escrow
Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no
representation as to the sufficiency of the securities to be purchased pursuant hereto and any
uninvested moneys to accomplish the redemption of the Prior Bonds or to the validity of this
Agreement as to the City and, except as otherwise provided herein, the Escrow Bank shall incur
no liability in respect thereof. The Escrow Bank shall not be liable in connection with the
performance of its duties under this Agreement except for its own negligence and willful
misconduct, and the duties and obligations of the Escrow Bank shall be determined by the
express provisions of this Agreement.
The Escrow Bank may consult with counsel, who may or may not be counsel to the City,
and in reliance upon the written opinion of such counsel shall have full and complete
authorization and protection in respect of any action taken, suffered or omitted by it in good faith
in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a
matter be proved or established prior to taking, suffering, or omitting any action under this
Agreement, such matter (except the matters set forth herein as specifically requiring a certificate
of a nationally recognized firm of independent certified public accountants or an opinion of
counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to
be conclusively established by a written certification of the City. Whenever the Escrow Bank
shall deem it necessary or desirable that a matter specifically requiring a certificate of a
nationally recognized firm of independent certified public accountants or an opinion of counsel
of recognized standing in the field of law relating to municipal bonds be proved or established
prior to taking, suffering, or omitting any such action, such matter may be established only by a
certificate signed by a nationally recognized firm of certified public accountants or such opinion
of counsel of recognized standing in the field of law relating to municipal bonds.
Section 11. Amendments. The City and the Escrow Bank may, without the consent of,
or notice to, the owners of the Prior Bonds, amend this Agreement or enter into such agreements
supplemental to this Agreement as shall not adversely affect the rights of such owners and as
shall not be inconsistent with the terms and provisions of this Agreement or of the 85-1 Indenture
or 86-2 Indenture, as applicable, for any one or more of the following purposes: (i) to cure any
ambiguity or formal defect or omission in this Agreement, (ii) to grant to, or confer upon, the
Escrow Bank for the benefit of the owners of the Prior Bonds any additional rights, remedies,
powers or authority that may lawfully be granted to, or conferred upon, such owners or the
Escrow Bank, and (iii) to include under this Agreement additional funds, securities or properties.
6
The Escrow Bank shall be entitled to rely conclusively upon an opinion of counsel of recognized
standing in the field of law relating to municipal bonds with respect to compliance with this
Section, including the extent, if any, to which any change, modification, addition or elimination
affects the rights of the owners of the Prior Bonds or that any instrument executed hereunder
complies with the conditions and provisions of this Section.
Section 12. Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the date upon which the Prior Bonds have been paid in accordance with this
Agreement and the 85-1 Indenture or 86-2 Indenture, as applicable.
Section 13. Compensation. The City shall from time to time, on demand, pay the
Escrow Bank the agreed upon compensation for its services to be rendered hereunder and
reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of
its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be
entitled to any lien whatsoever on any moneys or obligations in either Escrow Fund for the
payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank
under this Agreement or otherwise.
Section 14. Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the City or the Escrow Bank to be performed should be determined
by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be
null and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
Section 15. Counterparts. This Agreement may be executed in several counterparts, all
or any of which shall be regarded for all purposes as an original but all of which shall constitute
and be but one and the same instrument.
Section 16. Governing Law. This Agreement shall be construed under the laws of the
State of California.
7
Section 17. Assignment This Agreement shall not be assigned by the Escrow Bank or
any successor thereto without the prior written consent of the City.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
STATE STREET BANK AND TRUST
COMPANY, N.A., as Escrow Bank
By:
Authorized Officer
CITY OF TUSTIN
By:
EXHIBIT 1
UNITED STATES TREASURY SECURITIES
fixed 85-1 Bonds
Tvoe
Principal Interest Accrued
m n Rate Price In r
Purchase
Price
Exhibit 1-1
EXHIBIT 2
UNITED STATES TREASURY SECURITIES
FIXED 86-2 BONDS
Tvoe
Principal Interest Accrued
Am n Rate Price In r
Purchase
Price
Exhibit 2-1
BOND PURCHASE AGREEMENT
by and between the
CITY OF TUSTIN
and the
TUSTIN PUBLIC FINANCING AUTHORITY
Dated as of , 1995
TABLE OF CONTENTS
Pace
Section 1. Definitions ............................................................................................................. 2
Section 2. Purchase and Sale of Assessment Bonds ............................................................... 2
Section 3. Representations and Warranties of the City .......................................................... 3
Section 4. Conditions to the Obligations of the Authority ..................................................... 4
Section 5. Expenses ............................................................................................................ .... 9
Section 6. Indemnification .................................................................................................. .... 9
Section 7. Benefits; Survival .............................................................................................. .... 9
Section 8. Counterparts ....................................................................................................... .. 10
Section 9. Governing Law .................................................................................................. .. 10
EXHIBIT A -Maturity Schedule ......................................................................................... A-1
BOND PURCHASE AGREEMENT
THIS BOND PURCHASE AGREEMENT, is entered into as of , 1995, by
and between the Tustin Public Financing Authority (the "Authority") and the City of Tustin (the
ity ).
WITNESSETH:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and
existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of
Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), and is
authorized pursuant to Article 4 of the Act to borrow money for the purpose of financing the
acquisition of bonds, notes and other obligations to provide financing or refinancing for public
capital improvements of local agencies within the State of California (the "State");
WHEREAS, pursuant to an Indenture of Trust, dated as of August 1, 1986 (the "85-1
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount of $50,650,000;
WHEREAS, pursuant to an Indenture of Trust, dated as of September 1, 1988 (the "86-2
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2 Bonds")
in the original principal amount of $81,400,000;
WHEREAS, the City has determined that certain savings and efficiencies may be
obtained by refunding the outstanding $ aggregate principal amount of 85-1 Bonds
that have been converted to a fixed interest rate pursuant to the 85-1 Indenture and the
outstanding $ aggregate principal amount of 86-2 Bonds that have been converted to
a fixed interest rate pursuant to the 86-2 Indenture (collectively, the "Prior Bonds");
WHEREAS, in order to provide a portion of the moneys required to refund the Prior
Bonds, the City has authorized the issuance, pursuant to a Fiscal Agent Agreement, dated as of
1995 (the "Fiscal Agent Agreement"), by and between the City and State Street
Bank and Trust Company of California, N.A., as fiscal agent (the Fiscal Agent"), of the City of
Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch)
(the "Assessment Bonds"), in the aggregate principal amount of $
WHEREAS, the Authority desires to assist the City in refinancing the public
improvements financed with the Prior Bonds by purchasing the Assessment Bonds from the City;
WHEREAS, in order to provide the funds necessary to purchase the Assessment Bonds
from the City, the Authority has authorized the issuance, pursuant to an Indenture of Trust, dated
as of , 1995 (the "Indenture"), by and between the Authority and State Street
Bank and Trust Company of California, N.A., as trustee (the "Trustee"), of the 'I~stin Public
Financing Authority Revenue Bonds (Tustin Ranch), Series A (the "Authority Bonds"), in the
aggregate principal amount of $ ;
WHEREAS, the Authority and the City have found and determined that the sale of the
Assessment Bonds to the Authority will result in substantial public benefits to the City, namely,
the interest savings with respect to the Assessment Bonds to be achieved by reason of the credit
rating to be assigned to the Authority Bonds; and
WHEREAS, the Authority and the City desire to enter into this Agreement providing for
the sale of the Assessment Bonds by the City to the Authority and containing the other
agreements herein set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
Authority and the City agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Fiscal Agent Agreement.
Section 2. Purchase and Sale of Assessment Bonds. (a) Upon the terms and conditions
and upon the basis of the representations, warranties and agreements hereinafter set forth, the
City hereby agrees to sell to the Authority, and the Authority hereby agrees to purchase from the
City, all (but not less than all) of the $ aggregate principal amount of the
Assessment Bonds. The Assessment Bonds will mature on the dates and in the amounts and will
bear interest at the rates shown in Exhibit A hereto.
(b) The Assessment Bonds and interest thereon will be payable from annual assessments
levied and collected in accordance with the Fiscal Agent Agreement and the proceedings relating
thereto. The Assessment Bonds shall be substantially in the form described in, and shall be
executed, delivered and secured under and pursuant to, and shall be payable and subject to
redemption as provided in, the Fiscal Agent Agreement. The proceeds of the Assessment Bonds
will be used by the City to (i) refund the Prior Bonds pursuant to an Escrow Agreement (95-1),
dated as of , 1995 (the "Escrow Agreement"), by and between the City and State
Street Bank and Trust Company, N.A., as escrow bank (the "Escrow Bank"), and (ii) fund the
Reserve Fund established under the Fiscal Agent Agreement .The Fiscal Agent Agreement, the
Escrow Agreement and this Bond Purchase Agreement are collectively referred to as the "Legal
Documents".
(c) The City hereby ratifies, confirms and approves the Preliminary Official Statement
of the Authority, dated 1995, relating to the Bonds, which contains certain
information about the City, the City's Reassessment District No. 95-1 (Tustin Ranch) (the
"District"), the Fiscal Agent Agreement and the Assessment Bonds (which, together with the
cover page and all appendices thereto, is referred to herein as the "Preliminary Official
Statement"), which Preliminary Official Statement the City deemed final and so certified as of its
date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as
amended ("Rule 15c2-12"), except for information permitted to be omitted therefrom by Rule
15c2-12. The City hereby agrees to assist the Authority in the preparation of a final official
statement (the "Official Statement"), consisting of the Preliminary Official Statement, with such
changes as may be made thereto with the approval of the Authority, the City and PaineWebber
Incorporated, as underwriter of the Authority Bonds (the "Underwriter"), so that the Authority
may deliver or cause to be delivered to the Underwriter, no later than the earlier of the day prior
to the Closing Date (as hereinafter defined) or seven business days after the date the Underwriter
agrees to purchase the Authority Bonds, copies of the Official Statement in such reasonable
quantity as the Underwriter shall request. The City hereby approves of the use and distribution
by the Underwriter of the Official Statement in connection with the offer and sale of the
Authority Bonds.
(d) The aggregate purchase price for the Assessment Bonds shall be $ ,
which shall be payable solely from proceeds of sale of the Authority Bonds.
(e) At 8:00 a.m., California time, on , 1995, or at such other tune or on
such other date as the Authority, the City and the Underwriter may mutually agree upon (the
"Closing Date"), at the offices of Jones Hall Hill & White, A Professional Law Corporation, in
-2-
San Francisco, California, the City will deliver or cause to be delivered to the Authority, the
Assessment Bonds in the form of a separate single fully registered certificate (which may be
typewritten) for each maturity date, registered in the name of the Trustee, as assignee of the
Authority, duly executed and authenticated, and the other documents mentioned herein. The
Authority will accept such delivery and pay the purchase price of the Assessment Bonds as
provided in subparagraph (d) above in immediately available funds (such delivery and payment
being herein referred to as the "Closing").
Section 3. Representations and Warranties of the Citv. The City represents and
warrants to the Authority that:
(a) The City is a municipal corporation and political subdivision, duly organized and
existing under the laws of the State, and has, and on the Closing Date will have, full legal right,
power and authority (i) to enter into the Legal Documents, (ii) to adopt Resolution No._,
Resolution No._ and Resolution No._ relating to the Assessment Bonds (collectively, the
"Resolutions"), (iii) to issue, sell and deliver the Assessment Bonds to the Authority as provided
herein, and (iv) to carry out and consummate the transactions contemplated by the Legal
Documents, the Resolutions and the Official Statement;
(b) The City has complied, and will on the Closing Date be in compliance in all respects,
with the Resolutions;
(c) By official action of the City, the City has duly adopted the Resolutions, has duly
authorized and approved the execution and delivery of, and the performance by the City of the
obligations contained in, the Legal Documents and the Assessment Bonds, and has duly
authorized and approved the consummation by it of all other transactions contemplated by the
Official Statement;
(d) The execution and delivery of this the Legal Documents and the Assessment Bonds
and the adoption of the Resolutions, and compliance with the provisions of each thereof, and the
carrying out and consummation of the transactions contemplated by the Official Statement, will
not conflict with or constitute a breach of or a default under any applicable law or administrative
regulation of the State or the United States, or any applicable judgment, decree, agreement or
other instrument to which the City is a party or is otherwise subject;
(e) At the time of the City's execution hereof and at all times subsequent thereto up to
and including the Closing Date, with respect to information describing the City, the Legal
Documents, the Resolutions, the District and the proceedings conducted by the City relating
thereto, the Official Statement does not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
(f) Except as described in the Official Statement, there is no action, suit, proceeding or
investigation before or by any court, public board or body pending or, to the knowledge of the
City, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation,
organization, existence or powers of the City or the titles of its members and officers to their
respective offices, (ii) enjoin or restrain the issuance, sale and delivery of the Assessment Bonds,
the levy and receipt of the assessments which secure the Assessment Bonds, or the pledge
thereof, (iii) in any way question or affect any of the rights, powers, duties or obligations of the
City with respect to the moneys pledged or to be pledged to pay the principal of, premium, if
any, or interest on the Assessment Bonds, or (iv) in any way question or affect any authority for
the issuance of the Assessment Bonds, or the validity or enforceability of the Assessment Bonds,
the Legal Documents or the proceedings relating thereto;
-3-
(g) The City will furnish such information, execute such instruments and take such other
action in cooperation with the Authority as the Authority may reasonably request to qualify the
Authority Bonds for offer and sale under the Blue Sky or other securities laws and regulations of
such states and other jurisdictions of the United States as the Authority may designate, and will
assist, if necessary therefor, in the continuance of such qualifications in effect as long as required
for the distribution of the Authority Bonds; provided, however, that the City shall not be required
to qualify as a foreign corporation or to file any general consent to service of process under the
laws of any state; and
(h) Any certificate signed by any official of the City authorized to do so shall be deemed
a representation and warranty by the City as to the statements made therein.
Section 4. C'~ncditions to the Obligations of the Authority. The Authority has entered
into this Bond Purchase Agreement in reliance upon the representations, warranties and
agreements of the City contained herein and to be contained in the documents and instruments to
be delivered on the Closing Date, and upon the performance by the City of its obligations
hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Authority's
obligations under this Agreement to purchase, to accept delivery of and to pay for the
Assessment Bonds shall be subject to the performance by the City of its obligations to be
performed hereunder and under such documents and instruments at or prior to the Closing Date,
and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct on the date hereof and on and as of the Closing Date, as if made on the
Closing Date;
(b) On the Closing Date, the Legal Documents shall be in full force and effect and shall
not have been amended, modified or supplemented, and the Official Statement shall not have
been amended, modified or supplemented, except in either case as may have been agreed to by
both the Authority and the Underwriter;
(c) As of the Closing Date, all official action of the City relating to the District, the
Assessment Bonds and the refunding of the Prior Bonds shall be in full force and effect, and
there shall have been taken all such actions as, in the opinion of Jones Hall Hill & White, A
Professional Law Corporation, bond counsel ("Bond Counsel"), shall be necessary or appropriate
in connection therewith, with the issuance of the Authority Bonds and the Assessment Bonds,
and with the transactions contemplated by the Legal Documents, all as described in the Official
Statement;
(d) Between the date hereof and the Closing Date, the market price or marketability, at
the initial offering price or prices set forth in the Official Statement, of the Authority Bonds shall
not have been materially adversely affected, in the reasonable judgment of the Underwriter, by
reason of any of the following:
(i) an amendment to the Constitution of the United States or the constitution of
the State shall have been past or legislation enacted (or resolution passed) by or
introduced or pending legislation amended in the Congress or recommended for passage
by the President of the United States, the Speaker of the House of Representatives, the
President Pro Tempore of the Senate, the Chairman or ranking minority member of the
Committee of Ways and Means of the House of Representatives or the Chairman or
ranking minority member of the Committee on Finance of the Senate, or a decision
rendered by a court established under Article III of the Constitution of the United States
or by the Tax Court of the United States, or an order, ruling, regulation (final, temporary
or proposed) or press release issued or made (A) by or on behalf of the Treasury
-4-
Department of the United States or the Internal Revenue Service, with the purpose or
effect, directly or indirectly, of imposing federal income taxation upon such interest as
would be received by the owners of the Authority Bonds, (B) by or on behalf of the State
or the California Franchise Tax Board, with the purpose or effect, directly or indirectly,
of imposing California personal income taxation upon such interest as would be received
by the owners of the Authority Bonds, or (C) by or on behalf of the Treasury Department
of the United States or the Internal Revenue Service or by or on behalf of the State or the
California Franchise Tax Board, with the purpose or effect, directly or indirectly, of
changing the federal or State income tax rates, respectively;
(ii) the declaration of war or engagement in major military hostilities by the
United States or the occurrences of any other national emergency or calamity relating to
the effective operation of the government of the United States;
(iii) the declaration of a general banking moratorium by federal, New York or
California authorities, or the general suspension of trading on any national securities
exchange;
(iv) the imposition by the New York Stock Exchange or other national securities
exchange or any governmental authority, of any material restrictions not now in force
with respect to the Authority Bonds or obligations of the general character of the Bonds,
or the material increase of any such restrictions now in force;
(v) an amendment to the Constitution of the United States or the constitution of
the State shall have been past or legislation enacted (or resolution passed) by or
introduced or pending legislation amended in the Congress or recommended for passage
by the President of the United States, or an order, decree or injunction issued by any court
of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed) or
press release issued or made by or on behalf of the Securities and Exchange Commission,
or any other governmental agency having jurisdiction of the subject matter, to the effect
that obligations of the general character of the Authority Bonds, or the Authority Bonds,
including any or all underlying arrangements, are not exempt from registration under the
Securities Act of 1933, as amended, or that the Fiscal Agent Agreement or the Indenture
is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or
that the execution, offering or sale of obligations of the general character of the Authority
Bonds, or of the Authority Bonds, including any or all underlying arrangements, as
contemplated hereby or by the Official Statement, otherwise is or would be in violation of
the federal securities laws as amended and then in effect;
(vi) the withdrawal or downgrading of any rating of the Authority Bonds by a
national rating agency;
(vii) any event occurring, or information becoming known which, in the
judgment of the Underwriter, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official
Statement contains any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
(e) On the Closing Date, the Authority Bonds shall have been issued and delivered to the
Underwriter and all of the conditions to closing contained in the [Purchase Contract], dated
1995 (the "Purchase Contract"), by and between the Authority and the Underwriter
shall have either been satisfied or waived.
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(f) At or prior to the Closing Date, the Authority and the Underwriter shall have
received the following documents, in each case satisfactory in form and substance to the
Authority and the Underwriter:
(i) Two copies of the Legal Documents, each duly executed and delivered by the
respective parties thereto, with only such amendments, modifications or supplements as
may have been agreed to in writing by the Authority and the Underwriter;
(ii) The approving opinion, dated the Closing Date and addressed to the City, of
Bond Counsel approving, without qualification, the validity of the Assessment Bonds,
and a letter of such counsel, dated the Closing Date and addressed to the Authority and
the Underwriter to the effect that such opinion may be relied upon by the Authority and
the Underwriter to the same extent as if such opinion were addressed to it;
(iii) Copies of the Resolutions, certified by the City Clerk;
(iv) The opinion of the City Attorney, dated the Closing Date and addressed to
the Authority and the Underwriter, to the effect that (A) the City is a municipal
corporation and political subdivision, duly organized and existing under the laws of the
State, (B) the Resolutions were duly adopted at meetings of the City Council which were
called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout, (C) to the best knowledge of such counsel
after reasonable investigation, there is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body, pending or threatened against or
affecting the City, to restrain or enjoin the collection of assessments under the
Resolutions and the Fiscal Agent Agreement or in any way contesting or affecting the
validity of the Assessment Bonds or the Legal Documents, (D) the execution and delivery
of the Legal Documents[ and the Official Statement], the adoption of the Resolutions, and
compliance by the City with the provisions of the foregoing, under the circumstances
contemplated thereby, do not and will not in any material respect conflict with or
constitute on the part of the City a breach or default under any agreement or other
instrument to which the City is a party or by which it is bound or any existing law,
regulation, court order or consent decree to which the City is subject, (E) [the Official
Statement has been duly authorized, executed and delivered, and ]the Legal Documents
have been duly authorized, executed and delivered by the City and, assuming due
authorization, execution and delivery by the other parties thereto, constitute legal, valid
and binding agreements of the City enforceable in accordance with their respective terms,
subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement
of creditors' rights generally and the application of equitable principles if equitable
remedies are sought, (F) except as described in the Official Statement, no authorization,
approval, consent, or other order of the State or any other governmental authority or
agency within the State having jurisdiction over the City is required for the valid
authorization, execution, delivery and performance by the City of the Legal Documents
or the Official Statement or for the adoption of the Resolutions which has not been
obtained, and (G) the information contained in the Official Statement describing the City,
the Legal Documents, the Resolutions, the District and the proceedings conducted by the
City relating thereto (except for any financial or statistical data or forecasts, estimates,
projections, assumptions or expressions of opinion, as to which no opinion need be
expressed), as of the date hereof and the Closing Date, does not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstance under which they
were made, not misleading;
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(v) The opinion, dated the Closing Date and addressed to the City, the
Underwriter and the Authority of counsel to the Fiscal Agent, to the effect that (A) the
Fiscal Agent has been duly organized and is in good standing as a [national banking
association] under the laws of the [United States], having full power and authority to
enter into and to perform its duties as Fiscal Agent under the Fiscal Agent Agreement,
(B) the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent
Agreement, (C) the Fiscal Agent Agreement constitutes the legally valid and binding
agreement of the Fiscal Agent, enforceable against the Fiscal Agent in accordance with
its terms, (D) the Assessment Bonds have been validly authenticated and delivered by the
Fiscal Agent, (E) no authorization, approval, consent, or other order of any other
governmental authority or agency having jurisdiction over the Fiscal Agent is required
for the valid authorization, execution, delivery and performance by the Fiscal Agent of
the Fiscal Agent Agreement, and (F) the execution and delivery of the Fiscal Agent
Agreement and compliance by the Fiscal Agent with the provisions thereof, under the
circumstances contemplated thereby, do not and will not in any material respect conflict
with or constitute on the part of the Fiscal Agent a breach or default under any agreement
or other instrument to which the Fiscal Agent is a party or by which it is bound or any
existing law, regulation, court order or consent decree to which the Fiscal Agent is
subject;
(vi) A certificate, dated the Closing Date, signed by a duly authorized official of
the City, in form and substance satisfactory to the Authority and the Underwriter, to the
effect that the representations and warranties of the City contained in this Bond Purchase
Agreement are true and correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date;
(vii) A certificate, dated the date of Closing, signed by a duly authorized official
of the Fiscal Agent, satisfactory in form and substance to the Authority and the
Underwriter, to the effect that (A) the Fiscal Agent is a [national banking association]
duly organized and validly existing and in good standing under and by virtue of the laws
of the [United States], having the full power and being qualified to enter into and perform
its duties under the Fiscal Agent Agreement, (B) the Fiscal Agent is duly authorized to
enter into the Fiscal Agent Agreement and to authenticate the Assessment Bonds, (C) the
Assessment Bonds have been duly authenticated by the Fiscal Agent, (D) the execution
and delivery of the Fiscal Agent Agreement and compliance with the provisions on the
Fiscal Agent's part contained therein, will not conflict with or constitute a breach of or
default under any law, administrative regulation, judgment, decree, loan agreement,
indenture, bond, note, resolution, agreement or other instrument to which the Fiscal
Agent is a party or is otherwise subject, nor will any such execution, delivery, adoption or
compliance result in the creation or imposition of any lien, charge or other security
interest or encumbrance of any nature whatsoever upon any of the properties or assets
held by the Fiscal Agent pursuant to the lien created by the Fiscal Agent Agreement
under the terms of any such law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or other instrument, except as
provided by the Fiscal Agent Agreement, and (E) there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, governmental agency,
public board or body pending against the Fiscal Agent, nor, to the best of its knowledge,
is any such action or other proceeding threatened against the Fiscal Agent, affecting the
existence of the Fiscal Agent, or the titles of its officers to their respective offices or
seeking to prohibit, restrain or enjoin the execution and delivery of the Assessment Bonds
or the collection of the assessments securing the Assessment Bonds, or the pledge
thereof, or in any way contesting or affecting the validity or enforceability of the Fiscal
Agent Agreement, or contesting the powers of the Fiscal Agent or its authority to enter
into, adopt or perform its obligations under the Fiscal Agent Agreement;
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(viii) A certificate, dated the date of Closing, signed by a duly authorized official
of the Escrow Bank, satisfactory in form and substance to the Authority and the
Underwriter, to the effect that (A) the Escrow Bank is a national banking association
organized and existing under and by virtue of the laws of the United States, having the
full power and being qualified to enter into and perform its duties under the Escrow
Agreement, (B) the Escrow Bank is duly authorized to enter into the Escrow Agreement,
(C) the execution and delivery of the Escrow Agreement and compliance with the
provisions on the Escrow Bank's part contained therein, will not conflict with or
constitute a breach of or default under any law, administrative regulation, judgment,
decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument
to which the Escrow Bank is a party or is otherwise subject, nor will any such execution,
delivery, adoption or compliance result in the creation or imposition of any lien, charge
or other security interest or encumbrance of any nature whatsoever upon any of the
properties or assets held by the Escrow Bank pursuant to the lien created by the Escrow
Agreement under the terms of any such law, administrative regulation, judgment, decree,
loan agreement, indenture, bond, note, resolution, agreement or other instrument, except
as provided by the Escrow Agreement, and (D) there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, governmental agency,
public board or body pending against the Escrow Bank, nor, to the best of its knowledge,
is any such action or other proceeding threatened against the Escrow Bank, affecting the
existence of the Escrow Bank, or the titles of its officers to their respective offices or
seeking to prohibit, restrain or enjoin the execution and delivery of the Escrow
Agreement, or in any way contesting or affecting the validity or enforceability of the
Escrow Agreement, or contesting the powers of the Escrow Bank or its authority to enter
into, adopt or perform its obligations under the Escrow Agreement;
(ix) Two certified copies of the general resolution of the Fiscal Agent authorizing
the execution and delivery of the Fiscal Agent Agreement by the Fiscal Agent;
(x) Two certified copies of the general resolution of the Escrow Bank authorizing
the execution and delivery of the Escrow Agreement by the Escrow Bank;
(xi) A letter addressed to the City, the Underwriter and the Authority, dated the
date of the Closing, from ,Certified Public Accountants, verifying the
accuracy of the mathematical computations concerning the adequacy of the maturing
principal amounts of and interest earned on the government obligations, together with
other escrowed moneys, to be deposited with the Escrow Bank under the Escrow
Agreement to pay when due at the stated maturity or call for redemption the principal of
and interest and premium, if any, on the Prior Bonds; and
(xii) Such additional legal opinions, certificates, proceedings, instruments or
evidences thereof and other documents as the Authority, the Underwriter or Bond
Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof
and as of the Closing Date, of the representations of the City herein and of the statements
and information contained in the Official Statement, and the due performance or
satisfaction by the Fiscal Agent and the City at or prior to the Closing of all agreements
then to be performed and all conditions then to be satisfied by any of them in connection
with the transactions contemplated hereby and by the Legal Documents.
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with
the provisions hereof if, but only if, they are in form and substance satisfactory to the Authority,
but the approval of the Authority shall not be unreasonably withheld. Receipt of, and payment
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for, the Assessment Bonds shall constitute evidence of the satisfactory nature of such as to the
Authority. The performance of any and all obligations of the City hereunder and the
performance of any and all conditions contained herein for the benefit of the Authority may be
waived by the Authority in its sole discretion.
If the City shall be unable to satisfy the conditions to the obligations of the Authority to
purchase, accept delivery of and pay for the Assessment Bonds contained in this Bond Purchase
Agreement, or if the obligations of the Authority to purchase, accept delivery of and pay for the
Assessment Bonds shall be terminated for any reason permitted by this Bond Purchase
Agreement, this Bond Purchase Agreement shall terminate, and neither the Authority nor the
City shall be under further obligation hereunder, except that the respective obligations of the City
and the Authority set forth in Section 5 and Section 6 hereof shall continue in full force and
effect.
Section 5. Expenses. The Authority shall be under no obligation to pay, and the City
shall pay (a) the cost of the preparation of the Authority Bonds, (b) the fees and disbursements of
Bond Counsel, (c) the fees and disbursements of accountants, advisers and of any other experts
or consultants retained by the City, and (d) any other expenses incident to the performance of the
City's obligations hereunder.
Section 6. Indemnification. To the extent permitted by law, the City shall indemnify
and hold harmless the Authority, and its officers, directors, employees and agents, against any
and all losses, claims, damages, liabilities, costs and expenses (including without limitation fees
and disbursements of counsel and other expenses) incurred by them or any of them in connection
with investigating or defending any loss, claim, damages, liability or any suit, action or
proceeding, joint or several, to which they or any of them may become subject, insofar as such
losses, claims, damages, liabilities, costs and expenses (or any suit, action or proceeding in
respect thereof) arise out of or are based upon the issuance and sale of the Assessment Bonds by
the City or any untrue statement or alleged untrue statement of a material fact contained in the
Official Statement or in any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact relating to the City, the Legal Documents, the
Resolutions, the District or the proceedings conducted by the City relating thereto, which is
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. This indemnity shall be in addition
to any liability which the City may otherwise have. Additionally, to the extent permitted by law,
the City shall indemnify and hold harmless the Authority against any and all losses, claims,
damages, liabilities, costs and expenses (including without limitation fees and disbursements of
counsel and other expenses) incurred by it in connection with its indemnification of the Trustee
in accordance with the Indenture.
Section 7. Benefits: Survival. This Bond Purchase Agreement is made solely for the
benefit of the City, the Authority and the Underwriter, and no other person shall acquire or have
any right hereunder or by virtue hereof. All of the City's representations, warranties and
agreements contained in this Bond Purchase Agreement shall remain operative and in full force
and effect regardless of (a) any investigations made by or on behalf of the Authority, or (b)
delivery of and payment for the Assessment. Bonds pursuant to this Agreement. The agreements
contained in this Section and in Section 6 shall survive any termination of this Bond Purchase
Agreement.
Section 8. Counterparts. This Bond Purchase Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same instrument.
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Section 9. Governing Law. The validity, interpretation and performance of this Bond
Purchase Agreement shall be governed by the laws of the State.
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IN WITNESS WHEREOF, the Authority and the City have each caused this Bond
Purchase Agreement to be executed by their duly authorized officers all as of the date first above
written.
TUSTIN PUBLIC FINANCING
AUTHORITY
By
CITY OF TUSTIN
By
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EXHIBIT A
Maturity Date Principal Interest Maturity Date Principal Interest
September 2) Am un Rate September 2) Amount Rate
CONTINUING DISCLOSURE AGREEMENT
by and between
CITY OF TUSTIN
and
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., as Trustee
Dated as of .1995
TUSTIN PUBLIC FINANCING AUTHORITY
REVENUE BONDS
(TUSTIN RANCH)
SERIES A
CONTINUING DLSCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement") is
made and entered into as of , 1995, by and between STATE STREET BANK AND
TRUST COMPANY OF CALIFORNIA, N.A., a national banking association organized and
existing under the laws of the United States, as Trustee (the "Trustee"), and 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");
WITNESSETH:
WHEREAS, pursuant to the Fiscal Agent Agreement, dated as of , 1995 (the
"Fiscal Agent Agreement"), by and between the City and State Street Bank and Trust Company
of California, N.A., as Fiscal Agent (the "Fiscal Agent"), the City has issued its Limited
Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch) (the
"Assessment Bonds") in the aggregate principal amount of $ ;
WHEREAS, pursuant to the Indenture of Trust, dated as of , 1995 (the
"Indenture"), by and between the Tustin Public Financing Authority (the "Authority") and the
Trustee, the Authority has issued its Revenue Bonds (Tustin Ranch), Series A (the "Bonds") in
the aggregate principal amount of $ ;
WHEREAS, a portion of the proceeds of the Bonds have been used to purchase the
Assessment Bonds;
WHEREAS, the Bonds are payable solely from the payments of the principal of,
premium, if any, and interest on the Assessment Bonds; and
WHEREAS, this Disclosure Agreement is being executed and delivered by the City and
the Trustee for the benefit of the holders and beneficial owners of the Bonds and in order to assist
the underwriters of the Bonds in complying with Securities and Exchange Commission Rule
15c2-12(b)(5);
NOW, THEREFORE, for and in consideration of the mutual premises and covenants
herein contained, the parties hereto agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Indenture or, if not defined therein, in the Fiscal Agent Agreement. In
addition, the following capitalized terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the City pursuant to, and as
described in, Sections 2 and 3 of this Disclosure Agreement.
"Disclosure Representative" means the [Finance Director] of the City or his or her
designee, or such other officer or employee as the City shall designate in writing to the Trustee
from time to time.
"Dissemination Agent" means the Trustee, acting in its capacity as Dissemination Agent
hereunder, or any successor Dissemination Agent designated in writing by the City and which
has filed with the Trustee a written acceptance of such designation.
"Listed Events" means any of the events listed in Section 4(a) of this Disclosure
Agreement.
"National Repository" means any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.
Bonds.
"Official Statement" means the Official Statement, dated , 1995, relating to the
"Participating Underwriter" means any of the original underwriters of the Bonds
required to comply with the Rule in connection with offering of the Bonds.
"Repository" means each National Repository and each State Repository.
"Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" means any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by the
Securities and Exchange Commission. As of the date of this Disclosure Agreement, there is no
State Repository.
Section 2. Provision of Annual Reports. (a) The City shall, or shall cause the
Dissemination Agent to, provide to each Repository an Annual Report which is consistent with
the requirements of Section 3 of this Disclosure Agreement, not later than eight (8) months after
the end of the City's fiscal year (which currently would be March 1), commencing with the
report for the 1995/96 fiscal year. The Annual Report may be submitted as a single document or
as separate documents comprising a package, and may include by reference other information as
provided in Section 3 of this Disclosure Agreement; provided, however, that the audited financial
statements of the City may be submitted separately from the balance of the Annual Report, and
later than the date required above for the filing of the Annual Report if not available by that date.
If the City's fiscal year changes, it shall give notice of such change in the same manner as for a
Listed Event under Section 4(f).
(b) Not later than fifteen (15) business days prior to the date specified in subsection
(a) for providing the Annual Report to Repositories, the City shall provide the Annual Report to
the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). If by
such date, the Trustee has not received a copy of the Annual Report, the Trustee shall contact the
City and the Dissemination Agent to determine if the City is in compliance with the first
sentence of this subsection (b).
(c) If the Trustee is unable to verify that an Annual Report has been provided to
Repositories by the date required in subsection (a), the Trustee shall send a notice to the
Municipal Securities Rulemaking Board and the appropriate State Repository, if any, in
substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository, if any; and
(ii) file a report with the City and (if the Dissemination Agent is not the
Trustee) the Trustee certifying that the Annual Report has been provided pursuant to this
Disclosure Agreement, stating the date it was provided and listing all the Repositories to
which it was provided.
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Section 3. ('intent of Annual Reports. The City's Annual Report shall contain or
incorporate by reference the following:
(a) The City's audited financial statements prepared in accordance with generally
accepted accounting principles as promulgated to apply to governmental entities from time to
time by the Governmental Accounting Standards Board. If the City's audited financial
statements are not available by the time the Annual Report is required to be filed pursuant to
Section 2(a), the Annual Report shall contain unaudited financial statements in a format similar
to that used for the City's audited financial statements, and the audited financial statements shall
be filed in the same manner as the Annual Report when they become available.
(b) The following information:
(i) The principal amount of Bonds Outstanding as of September 30 of the
prior calendaz year.
(ii) The balance in the Reserve Account, and a statement of the Reserve
Requirement (as such term is defined in the Indenture) as of September 30 of the prior
calendar yeaz.
(iii) The principal amount of Assessment Bonds outstanding as of September
30 of the prior calendar yeaz.
(iv) The balance in the Improvement Fund established under the Fiscal Agent
Agreement as of September 30 of the prior calendaz year, and a statement as to whether
or not such amount will be sufficient to pay the costs of the improvements intended to be
paid therefrom.
(v) The balance in the Reserve Fund established under the Fiscal Agent
Agreement, and a statement of the Reserve Requirement (as such term is defined in the
Fiscal Agent Agreement) as of September 30 of the prior calendaz yeaz.
(vi) The total assessed value of all parcels within the Assessment District on
which the Reassessments aze levied, as shown on the assessment roll of the Orange
County Assessor last equalized prior to September 30 of the prior calendaz year, and a
statement of assessed value-to-lien ratios therefor, either by individual parcel or by
categories (e.g. "below 3:1", " 3:1 to 4:1" etc.).
(vii) The Reassessment delinquency rate for the Assessment District, as shown
on the assessment roll of the Orange County Assessor last equalized prior to September
30 of the prior calendar year, the number of parcels within the Assessment District
delinquent in payment of Reassessments, as shown on the assessment roll of the Orange
County Assessor last equalized prior to September 30 of the prior calendar year, the
amount of each delinquency, the length of time delinquent and the date on which
foreclosure was commenced, or similar information pertaining to delinquencies deemed
appropriate by the City; provided, however, that parcels with delinquencies of [$2,000] or
less may be grouped together and such information may be provided by category.
(viii) The status of foreclosure proceedings and a summary of the results of any
foreclosure sales as of September 30 of the prior calendar year.
(ix) The identity of any property owner representing more than 5% of the
Reassessment levy delinquent in payment of Reassessments, as shown on the assessment
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roll of the Orange County Assessor last equalized prior to September 30 of the prior
calendar year.
(x) Aland ownership summary listing property owners responsible for more
than 5% of the Reassessment levy, as shown on the assessment roll of the Orange County
Assessor last equalized prior to September 30 of the prior calendar year.
(xi) The number of building permits issued by the City for new construction
within the Assessment District during the one year period ending onSeptember 30 of the
prior calendar year.
(c) In addition to any of the information expressly required to be provided under
paragraphs (a) and (b) of this Section, the City shall provide such further information, if any, as
may be necessary to make the specifically required statements, in the light of the circumstances
under which they are made, not misleading.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The City shall clearly identify each
such other document so included by reference.
Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this
Section 4, the City shall give, or cause to be given, notice of the occurrence of any of the
following events with respect to the Bonds, if material:
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults.
(iii) Unscheduled draws on debt service reserves reflecting financial
difficulties.
(iv) Unscheduled draws on credit enhancements reflecting financial
difficulties.
(v) Substitution of credit or liquidity providers, or their failure to
perform.
(vi) Adverse tax opinions or events affecting the tax-exempt status of
the security.
(vii) Modifications to rights of security holders.
(viii) Contingent or unscheduled bond calls.
(ix) Defeasances.
(x) Release, substitution, or sale of property securing repayment of
the securities.
(xi) Rating changes.
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(b) The Trustee shall, within one (1) business day of obtaining actual knowledge of
the occurrence of any of the Listed Events, contact the Disclosure Representative, inform such
person of the event, and request that the City promptly notify the Trustee in writing whether or
not to report the event pursuant to subsection (f).
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event,
whether because of a notice from the Trustee pursuant to subsection (b) or otherwise, the City
shall as soon as possible determine if such event would be material under applicable Federal
securities law.
(d) If the City determines that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law, the City shall promptly notify the Trustee in
writing. Such notice shall instruct the Trustee to report the occurrence pursuant to subsection (f).
(e) If in response to a request under subsection (b), the City determines that the Listed
Event would not be material under applicable Federal securities law, the City shall so notify the
Trustee in writing and instruct the Trustee not to report the occurrence pursuant to subsection (f).
(f) If the Trustee has been instructed by the City to report the occurrence of a Listed
Event, the Trustee shall file a notice of such occurrence with the Municipal Securities
Rulemaking Board and each State Repository. Notwithstanding the foregoing, notice of Listed
Events described in subsections (a)(viii) and (ix) need not be given under this subsection any
earlier than the notice (if any) of the underlying event is given to holders of affected Bonds
pursuant to the Indenture.
Section 5. Termination of Re oR rting Obligation. The City's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
City shall give notice of such termination in the same manner as for a Listed Event under Section
4(f).
Section 6. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement,
and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the
Trustee shall be the Dissemination Agent.
Section 7. Amendment: Waiver. Notwithstanding any other provision of this
Disclosure Agreement, the City and the Trustee may amend this Disclosure Agreement (and the
Trustee shall agree to any amendment so requested by the City), and any provision of this
Disclosure Agreement may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to Sections 2(a), 3 or 4(a) it may only be made in
connection with a change in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature, or status of an obligated person with respect to
the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion
of nationally recognized bond counsel, have complied with the requirements of the Rule at the
time of the primary offering of the Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver (i) is approved by holders of the Bonds in the
manner provided in the Indenture for amendments to the Indenture with the consent of holders,
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..
or (ii) does not, in the opinion of the Trustee or nationally recognized bond counsel, materially
impair the interests of holders.
If the annual financial information or operating data to be provided in the Annual Report
is amended pursuant to the provisions hereof, the first annual financial information containing
the amended operating data or financial information shall explain, in narrative form, the reasons
for the amendment and the impact of the change in the type of operating data or financial
information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in which
the change is made shall present a comparison between the financial statements or information
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The comparison shall include a qualitative discussion of the
differences in the accounting principles and the impact of the change in the accounting principles
on the presentation of the financial statements or information, in order to provide information to
investors to enable them to evaluate the ability of the City to meet its obligations. To the extent
reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Repositories in the same manner as for a Listed Event
under Section 4(f).
Section 8. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the City from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Agreement. If the City chooses to include
any information in any Annual Report or notice of occurrence of a Listed Event in addition to
that which is specifically required by this Disclosure Agreement, the City shall have no
obligation under this Disclosure Agreement to update such information or include it in any future
Annual Report or notice of occurrence of a Listed Event.
Section 9. Default. In the event of a failure of the City or the Trustee to comply with
any provision of this Disclosure Agreement, the Trustee may (and, at the written direction of any
Participating Underwriter or the holders of at least 25% aggregate principal amount of
Outstanding Bonds, shall), or any holder or beneficial owner of the Bonds may, take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by
court order, to cause the City or Trustee, as the case may be, to comply with its obligations under
this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an
Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in
the event of any failure of the City or the Trustee to comply with this Disclosure Agreement shall
be an action to compel performance.
Section 10. Duties. Immunities and Liabilities of Trustee and Dissemination Agent.
Article VIII of the Indenture is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Indenture: The
Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination
Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement.
Section 11. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit
of the City, the Trustee, the Dissemination Agent, the Participating Underwriters and holders and
beneficial owners from time to time of the Bonds, and shall create no rights in any other person
or entity.
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Section 12. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement
as of the date first above written.
CITY OF TUSTIN
By:
ATTEST:
City Clerk
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., as
Trustee
BY=
Authorized Officer
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EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO
FILE ANNUAL REPORT
Name of Issuer:
Name of Bond Issue:
Date of Issuance:
NOTICE IS HEREBY GIVEN that the City of Tustin (the "City") has not provided an
Annual Report with respect to the above-named Bonds as required by Section of the
Indenture of Trust, dated as of 1, 1995, by and between State Street Bank and Trust
Company of California, N.A. (the "Trustee") and the City. [The City anticipates that the Annual
Report will be filed by .]
Dated:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.,
on behalf of the City of Tustin
cc: City of Tustin
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