HomeMy WebLinkAbout2012-06-26 CC Item No. 11 & PFA Item No. 02CITY OF LAKE ELSINORE
JOINT REPORT TO CITY COUNCIL
AND PUBLIC FINANCING AUTHQ12lTl
TO: HONORABLE MAYOR
AND
HONORABLE CHAIRMAN
AND MEMBERS PUBLIC FINANCING x ` W
L
FROM: THOMAS P. EVANS
INTERIM CITY MANAGER
DATE: JUNE 25, 2012
SUBJECT: 1. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE
BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2005 -5 (VILLAGES AT WASSON CANYON),
AUTHORIZING THE ISSUANCE OF CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2005 -5 (VILLAGES AT
WASSON CANYON) SPECIAL TALC BONDS, 2012 SERIES A,
APPROVING THE ISSUANCE OF THE LAKE ELSINORE PUBLIC
FINANCING AUTHORITY LOCAL AGENCY REVENUE REFUNDING
BONDS (WASSON CANYON) 2012 SERIES A, AND THE
EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT,
A COMMITMENT AGREEMENT AND PURCHASE CONTRACT, A
PURCHASE CONTRACT AND A CONTINUING DISCLOSURE
AGREEMENT;
2. A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY
APPROVING ISSUANCE O LAKE O. PUBLIC
FINANCING AUTHORITY O x AGENCY REVENUE
REFUNDING BONDS (WASSON CANYON 2012 SERIES A IN
THE AGGREGATE i • i x AMOUNT
TERMS $4,000,000 PURSUANT TO AN INDENTURE OF TRUST,
AUTHORIZING THE SALE OF SUCH BONDS UPON CERTAIN
AND CONDITIONS, x i ! . O AN OFFICIAL
STATEMENT, APPROVING THE EXECUTION OF COMMITMENT
AGREEMENT x D PURCHASE O . x FOR ■
x x 0
ilfiim x x r x
gm
Resolutions Re Bonds
June 26, 2012
Pa 2
PURCHASE OF LOCAL OBLIGATIONS OF THE CITY OF LAKE
ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON) AND TAKING OTHER
ACTIONS RELATED THERETO
Recommendation
Cit Adopt Cit Resolution No. 2012-033 authorizin issuance • bonds and bond
documents; and
PFA Adopt PFA Resolution No. 2012-001 authorizin issuance • bonds and bond
documents.
On October 23, 2007, the Public Finance Authorit ( PFA ) issued its Local A
Revenue Bonds (Villa at Wasson Can 2008 Series B ( the "2008 Bonds" in the
principal amount of $3,265,000. The proceeds from this bond issuance were used for
public improvements and other public fees related to the Villa pro Debt service
on the PFA's 2008 Bonds is provided b wa of a special tax. While special tax funds
have been set aside to redeem the bonds in the future, the entire principal amount
remains outstandin
An opportunit exists to refund the PFA's 2008 Bonds that will substantiall reduce the
annual debt service obli Accordin staff re that the Cit and the PFA
consider refundin the outstandin PFA's 2008 Bonds.
Discussion
The Cit Finance Team has determined it is currentl feasible to refinance the PFA's
2008 Bonds at an annual savin in excess of 15%. For the 190 parcels in Communit
Facilities District 2005-5 (Villa at Wasson Can this represents an avera
annual savin of approximatel $195 per parcel ( actual savin will var amon the
parcels dependin on the current tax rate The 2008 Bonds have an interest rate of
6.875%. We anticipate, based on current market conditions, that the proposed 2012
Bonds will have an avera interest rate of approximatel 5%. The exact interest rate
will not be known until the proposed 2012 Bonds are priced and sold. Upon approval b
the Cit Council and PFA, the expected closin date should be the third week of Jul
The estimated savin is well in excess of the "rule of thumb" in the finance industr to
proceed with refundin of 3% savings.
Resolutions Re Bonds
June 26, 2012
Pa 3
The proposed 2102 Bonds will be sized in an amount necessar to refinance the PFA's
2008 Bonds and no new mone is included. Additionall the final maturit date of the
2012 Bonds will be the same as the 2008 Bonds, that is, 2026. Also like the PFA's
2008 Bonds, the proposed 2012 Bonds would be issued • the Authorit
Epm I I I � � � I I I � � � i � i � I � I � q i ;;1 1 � • •s
Approval of the attached Resolutions will authorize the execution of the followin
financin documents:
1. Purchase Contract
2. Escrow A
3. Indenture
4. Fiscal A A
5. Continuin Disclosure A
6. Preliminar Official Statement
As provided in the attached Resolutions, these financin documents are on file with the
Cit Clerk's Office and have been made available for public review.
Leal Review
Bond Counsel has reviewed the related financin documents and approved them as to
form.
Fiscal Impact
None.
Pa 3
• 1 • 1 1
t - i OF OF t
ELSINORE, CALIFORNIA, ACTING AS t TIVE BODY OF
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO.
(VILLAGES AT t O CANYON), t O r
ISSU L ELSINO COMMUNITY F
DISTRICT O (VILLAGES AT t O CANYON) P t
TAX BONDS, 0 SERIES t APPROVING ISSUANCE
LAKE •® PUBLIC FINANCING AUTHORITY O t AGENCY
REVENUE REFUNDING rO D (WASSON t O 0 SERIES t
AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT
AGREEMENT, t COMMITMENT AGREEMENT t r PURCHASE
CONTRACT, PURCHASE O -t AND t CONTINUING
DISCLOSURE AGREEMENT
- -.
WHEREAS, the City Council (the "Council ") of the City of Lake Elsinore (the
"City has previously formed the City of Lake Elsinore Community Facilities District No.
2005 -5 (Villages at Wasson Canyon) (the "District ") pursuant to the Mello -Roos
Community Facilities Act of 1982, as amended, (the "Act "); and
WHEREAS, the City previously authorized the issuance of $3,205,000 aggregate
principal amount of City of Lake Elsinore Community Facilities District No. 2005 -5
(Villages at Wasson Canyon) Special Tax Bonds, 2008 Series A (the "Prior Bonds "),
which were purchased by the Lake Elsinore Public Financing Authority (the "Authority "),
for the purpose of financing the purchase, construction, expansion or rehabilitation of
certain real and other tangible property with an estimated useful life of five years or
longer, including public infrastructure facilities which the City or the District is authorized
by law to construct, own or operate, which are necessary to meet increased demands
placed upon the City as a result of development or rehabilitation occurring within the
District (the " Facilities "); and
WHEREAS, the Authority previously issued its Local Agency Revenue Bonds
(Wasson Canyon) 2008 Series B (the "Prior Authority Bonds "), the proceeds of which
will be used to purchase the Prior Bonds; and
WHEREAS, the City desires to authorize the issuance of not -to- exceed
$4,000,000 aggregate principal amount of City of Lake Elsinore Community Facilities
District No. 2005 -5 (Tillages at Wasson Canyon) Special Tax Bonds, 2012 Series A (the
"Bonds "), to be purchased by the Authority, for the purpose of refinancing the purchase,
construction, expansion or rehabilitation of the Facilities; and
WHEREAS, the Authority intends to issue its Local Agency Revenue Refunding
Bonds (Wasson Canyon) 2012 Series A (the "Authority Bonds "), the proceeds of which
will be used to purchase the Bonds; and
77776159.2
Page 4
Cit Council Resolution No. 2012-033
Pa 2 of 3
WHEREAS, proposed forms of a Fiscal A A a Commitment
A and Purchase Contract, a Purchase Contract and a Continuin Disclosure
A have been presented to the Cit Council and are on file with the Cit Clerk;
NOW, THEREFORE, the Cit Council of the Cit of Lake Elsinore, California,
actin as the le bod of Cit of Lake Elsinore Communit Facilities District No.
2005-5 (Villa at Wasson Can does hereb resolve as follows:
Section 1. The Cit Council, as the le bod of the District, hereb
authorizes the issuance of the Bonds in the a principal amount not to exceed
$41000,000.
Section 2. The Cit Council, as the le bod of the District, hereb
approves the Fiscal A A in substantiall the form on file with the Cit
Clerk. The Ma the Cit Mana the Director of Administrative Services, and an
desi of an of them ( each, a "Responsible Officer" are hereb authorized to
execute the Fiscal A A in substantiall the form presented hereto, with
such revisions, amendments and completions as shall be approved b an Responsible
Officer, with the advice of Bond Counsel, such approval to be conclusivel evidenced b
the execution and deliver thereof b an Responsible Officer.
Section 3. The Cit Council, as the le bod of the District, hereb
approves the Continuin Disclosure A in substantiall the form on file with the
Cit Clerk. An Responsible Officer is hereb authorized to execute the Continuin
Disclosure A in substantiall the form presented hereto, with such revisions,
amendments and completions as shall be approved b an Responsible Officer, with
the advice of Bond Counsel, such approval to be conclusivel evidenced b the
execution and deliver thereof b an Responsible Officer.
Section 4. The Cit Council, actin on its behalf and as the le bod of
the District, hereb approves the Commitment A and Purchase Contract, in
substantiall the form on file with the Cit Clerk. An Responsible Officer is hereb
authorized to execute the Commitment A and Purchase Contracts, in
substantiall the form presented hereto, with such revisions, amendments and
completions as shall be approved b an Responsible Officer, with the advice of Bond
Counsel, such approval to be conclusivel evidenced b the execution and deliver
thereof b an Responsible Officer, provided that, the Bonds shall bear interest at a rate
not to exceed 5.5%.
Section 5. The Cit Council, actin on its behalf and as the le bod of
the District, hereb approves the sale of the Authorit Bonds to the Underwriter
pursuant to and in accordance with the Purchase Contract, in substantiall the form on
file with the Cit Clerk. An Responsible Officer is hereb authorized to execute the
Purchase Contract, with such revisions, amendments and completions as shall be
77776159.2
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Cit Council Resolution No. 2012-033
Pa 3 of 3
approved b an Responsible Officer, with the advice • Bond Counsel, such approval
to be conclusivel evidenced b the execution and deliver thereof b an Responsible
Officer.
Section 6. Pursuant to Section 53344.1 of the Act, the Council hereb reserves
to itself, in its sole discretion, the ri and authorit b subse resolution to allow
an owner of propert within the District, subject to the provisions of Section 53344.1 of
the Act and those conditions as it ma impose, and an applicable prepa
penalties as prescribed in the bond indenture or comparable instrument or document, to
tender to the District treasurer or fiscal a in full pa or part pa of an
installment of the special taxes or the interest or penalties thereon which ma be due or
delin but for which a bill has been received, an bond or other obli secured
thereb the bond or other obli to be taken at par and credit to be g iven for the
accrued interest shown thereb computed to the date of tender.
Section 7. The Cit Mana the Director of Administrative Services, the Cit
Clerk and all other officers of the Cit are hereb authorized and directed, for and in the
name and on behalf of the Cit and the District, to do an and all thin and take an
and all other actions, includin the publication of an notices necessar or desirable in
connection with the sale of the Bonds and execution and deliver of an and all
assi certificates, re a notices, consents, instruments of
conve warrants and other documents, which the or an of them, deem
necessar or advisable in order to consummate the lawful issuance and sale of the
Bonds and the consummation of the transactions as described herein.
Section 8. This Resolution shall take effect from and after the date of its
passa and adoption.
PASSED, APPROVED AND ADOPTED at a re meetin of the Cit Council
of the Cit of Lake Elsinore, California, this 26 da of June, 2012.
7*s)'RIAN TISDALE, MAYOR
ATTEST:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
CITY OF LAKE ELSINORE
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WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority ") is a
joint exercise of powers authority duly organized and existing under and pursuant to that
certain Joint Exercise Powers Agreement by and between the city of Lake Elsinore and
the Redevelopment Agency of the city of Lake Elsinore (the "Agency "), under the
provisions of Articles 1 through 4 (commencing with Section 0500) of chapter 5 of
Division 7 of Title 1 of the Government Code of the state of California (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 and
refinancing for capital improvements of member entities of the Authority; and
WHEREAS, the city council of the City of Lake Elsinore, as the legislative body
of the City of Lake Elsinore community Facilities District No. 2005 -5 (Villages at
Wasson Canyon) (the "District "), previously authorized the issuance of City of Lake
Elsinore Community Facilities District No. 2005 -5 (villages at Wasson Canyon) Special
Tax Bonds, 2008 Series A for the purpose of financing the purchase, construction,
expansion or rehabilitation of certain real and other tangible property with an estimated
useful life of five years or longer, including public infrastructure facilities which the city
or the District is authorized by law to construct, own or operate, which are necessary to
meet increased demands placed upon the City as a result of development or
rehabilitation occurring within the District (the "Facilities "); and
WHEREAS, for the purpose of assisting the City and the District in financing the
Facilities, the Authority issued its Local Agency Revenue Bonds (Wasson canyon) 2008
Series B (the "Prior Bonds "); and
WHEREAS, the city Council of the city of Lake Elsinore, as the legislative body
of the District, has authorized the issuance of city of Lake Elsinore Community Facilities
District No. 2005 -5 (Villages at Wasson Canyon) Special Tax Bonds, 2012 series A (the
"Local Obligations ") for the purpose of refinancing the purchase, construction,
expansion or rehabilitation of the Facilities; and
77776156.2
9 M
Public Finance Authorit Resolution No. 2012-00
Pa 2 of 4 1
WAEREAS, for the purpose of assistin the Cit and the District in refinancin(-
the Facilities, the Authorit has determined to authorize the issuance of its Local A
Revenue Refundin Bonds ( Wasson Can 2012 Series A ( the "Bonds" and
WHEREAS, the Authorit intends; to use a portion of the proceeds of the Bond!
to purchase the Local Obli pursuant to a Commitment A and Purchas(
Contract ( the "Commitment A and ® Contract" to be entered int(
between the Authorit and the District and to refund the Prior Bonds;
NOW, THEREFORE, the Board of Directors of the Lake Elsinore Publi(
Financin Authorit does hereb resolve as follows:
Section 1. The fore recitals are true and correct and the Authorit hereb
so finds and determines.
Section 2. The Authorit hereb approves the issuance of the Bonds in the
a principal amount not to exceed $4,000,000, pursuant to the Indenture of
Trust ( the "Indenture" in substantiall the form on file with the Secretar of the
Authorit and presented to the Board at this meetin An one of the Chairman, the
Executive Director and the Secretar of the Authorit and each of them, and an
desi of an of them (collectivel the "Authorized Officers" is hereb authorized
and directed, for and in the name and on behalf of the Authorit to execute and deliver
the Indenture, with such insertions and chan as ma be approved b the Authorized
Officer executin the same, subject to the provisions of this Resolution, such approval
to be conclusivel evidenced b such execution and deliver
Section 3. The Authorit hereb authorizes the sale of the Bonds to the
Underwriter pursuant to and in accordance with the Purchase Contract, in substantiall
the form on file with the Secretar of the Authorit and presented to the Board at this
meetin An one of the Authorized Officers is hereb authorized and directed, for and
in the name and on behalf of the Authorit to execute and deliver the Purchase
Contract, with such insertions and chan as ma be approved b the Authorized
Officer executin the same, sub to the provisions of this Resolution, such approval
to be conclusivel evidenced b such execution and deliver The underwriter's
discount for the Bonds specified in the Purchase Contract shall not exceed 2.0%,
exclusive of ori issue discount. The Bonds shall bear interest at a rate or rates not
to exceed 5.5% per annum. The maturit date of the Bonds shall not extend be 40
y ears from their issuance date.
Section 4. The Authorit hereb approves the form of the Preliminar Official
Statement ( the "Preliminar Official Statement"), in substantiall the form on file with
the Authorit Secretar with such chan and modifications as shall be necessar or
appropriate for completion to the satisfaction of the Executive Director of the Authorit
and approval b Fulbri & Jaworski L.L.P., the Authorit Disclosure Counsel. The
Executive Director is authorized and directed, on behalf of the Authorit to deem the
77776156.2
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Public Finance Authorit Resolution No. 2012-001
Pa 3 of 4
Preliminar Official Statement "final" pursuant to Rule 15c2-12 under the Securities and
Exchan Act of 1934. The Authorit further approves distribution of the Preliminar
Official Statement b the Underwriter to persons who ma be interested in purchasin
the Bonds. The Board hereb approves the final Official Statement describin the
Bonds. Distribution of the final Official Statement b the Underwriter is hereb
approved. The Executive Director, subject to approval b the Authorit Disclosure
Counsel is hereb authorized and directed to approve an chan in or additions to
the final form of the Official Statement to conform to the re of the Purchase
Contract and the Indenture, as applicable.
Section 5. The Authorit hereb approves the purchase of the Local
Obli pursuant to the Commitment A and Purchase Contract in
substantiall the form on file with the Secretar of the Authorit and presented to the
Board at this meetin An one of the Authorized Officers is hereb authorized and
directed, for and in the name and on behalf of the Authorit to execute and deliver the
Commitment A and Purchase Contract, with such insertions and chan as
ma be approved b the Authorized Officer executin the same, sub to the
provisions of this Resolution, such approval to be conclusivel evidenced b such
execution and deliver
Section 6. The Authorit hereb approves the Escrow A in
substantiall the form on file with the Secretar of the Authorit and presented to the
Board at this meetin An one of the Authorized Officers is hereb authorized and
directed, for and in the name and on behalf of the Authorit to execute and deliver the
Escrow A with such insertions and chan as ma be approved b the
Authorized Officer executin the same, subject to the provisions of this Resolution, such
approval to be conclusivel evidenced b such execution and deliver
Section 7. An one of the Authorized Officers is hereb authorized and
directed, for and in the name and on behalf of the Authorit to evaluate and select one
or more municipal bond insurers for all or an portion of the Bonds and to execute and
deliver such contracts and a with such bond insurers as ma be approved b
the Authorized Officer executin the same, sub to the provisions of this Resolution,
such approval to be conclusivel evidenced b such execution and deliver
Section 8. The Authorized Officers, the other officers and emplo of the
Authorit the members of the Authorit Board of Directors, Bond Counsel, Disclosure
Counsel and the other consultants to and a of the Authorit are each hereb
authorized and directed to do all thin and take all actions necessar or desirable to
effectuate the transactions contemplated b this Resolution, and to execute such other
assi a certificates, receipts, endorsements, orders, opinions and
other documents in connection with such transactions, includin without limitation,
closin documents in connection with the issuance of the Bonds, and all actions
heretofore taken b the officers, emplo and a of the Authorit in connection
77776156.2
K
Public Finance Authorit Resolution No. 2012-001
Pa 4 of 4
with the issuance of the Bonds are hereb ratified, approved and confirmed in eve
respect. I
Section 9. This Resolution shall become effective immediatel upon adoption.
PASSED, APPROVED AND ADOPTED at a re meetin of the Board ol
Directors of the Lake Elsinore Public Financin Authorit this 26 da of June, 2012.
MELISSA A. MELENDEZ
CHAIR
ATTEST:
11614 gem] owl a 0
77776156.2
IF, I
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by and between the
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of
UNION BANK, N.A.,
as Prior Bonds Trustee and
as Escrow Agent
Dated as of 1, 2012
Pertaining to the Defeasance of
All of the Currently Outstanding
Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds (Villages at Wasson Canyon) 2008 Series B
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This Escrow A made and entered into as of 1, 2012, b and between
the LAKE ELSINORE PUBLIC FINANCING AUTHORITY, a joint exercise of powers a
or and existin under, and b virtue of the laws of the State of California (the
"Authorit and UNION BANK, N.A., a national bankin association or and existin
under the laws of the United States of America, as Escrow A and as Prior Bonds Trustee (the
"Escrow A
WITNESSETH:
WHEREAS, the Authorit has previousl issued its $3,265,000 Local A Revenue
Bonds (Villa at Wasson Can 2008 Series B (the "Prior Bonds") pursuant to an Indenture
of Trust, dated as of March 1. 2008 (the "Prior Bonds Indenture"), between the Authorit and
Union Bank, N.A., as trustee thereunder (the "Prior Bonds Trustee") and
WHEREAS,, the Authorit has approved the issuance of its Local A Revenue
Refundin Bonds (Villa at Wasson Can 2012 Series A (the "Bonds") a portion of the
proceeds of which are to be used, to with certain other available funds, to defease all of the
Prior Bonds
NOW, THEREFORE, in consideration of the mutual premises contained herein and
other valuable consideration, the receipt and sufficienc of which are hereb acknowled the
parties hereto a as follows:
SECTION 1. As used herein, the followin terms shall have the followin meanin
"Code" means the Internal Revenue Code of 1986.
"Escrow Fund" means the Escrow Fund established and held b the Escrow A
pursuant to Section 3 hereof.
"Escrow Re means an amount sufficient to pa principal of and interest on
the Prior Bonds on the Redemption Date.
"Redemption Date" means 2012 the date on which the Prior Bonds are to
be redeemed.
SECTION 2. The Authorit hereb appoints Union Bank, N.A. as Escrow A
under this A for the benefit of the holders of the Prior Bonds. The Escrow A
hereb accepts the duties and obli of Escrow A under this A and a that
the irrevocable instructions to the Escrow A herein provided are in a form satisfactor to it.
The applicable and necessar provisions of the Prior Bonds Indenture, includin particularl the
redemption provisions thereof, are incorporated herein b reference. Reference herein to, or
citation herein of, an provisions of the Prior Bonds Indenture shall be deemed to incorporate the
same as a part hereof in the same manner and with the same effect as if the same were full set
forth herein.
77775841.1
Pa 12
SECTION 3. Pursuant to this A there is created and established with the
Escrow A a special and irrevocable trust fund desi the Escrow Fund, to be held b the
Escrow A separate and apart from all other funds and accounts, and used onl for the
purposes and in the manner provided in this A
SECTION 4. The Authorit herewith deposits, or causes to be deposited, with the
Escrow A into the Escrow Fund, to be held in *irrevocable trust b the Escrow A and to
be applied solel as provided in this A the sum of $ , as follows:
{i) from the proceeds of the Bonds, the sum of $ ; and
(ii) from mone held b the Prior Bonds Trustee pursuant to the Prior Bonds
Indenture, the sum of $ - 0
SECTION 5. The Escrow A acknowled receipt of the mone described in
Section 4. The Escrow A a to retain the amount of $ in cash in the Escrow
Fund. Such amounts shall be applied b the Escrow A to the pa of the Escrow
Re for the e and ratable benefit of the holders of the Prior Bonds.
SECTION 6. The Authorit hereb directs and the Escrow A hereb a that
the Escrow A will take all the actions re to be taken b it hereunder, in order to
effectuate this A The liabilit of the Escrow A for the pa of the Escrow
Re shall be limited to the application, in accordance with this A of the
monies available for such purposes in the Escrow Fund.
SECTION 7, The Authorit irrevocabl instructs the Escrow A to pa to the
Prior Bonds Trustee,, on the Redemption Date, from amounts held in the Escrow Fund, the
amount e to the redemption price of the $ a principal amount of the Prior
Bonds called for redemption on the Redemption Date, plus interest accrued thereon to the
Redemption Date in the amount of $ 0
SECTION 8. The trust hereb created shall be irrevocable and the holders of the
Prior Bonds shall have an express lien limited to all mone in the Escrow Fund, includin the
interest earnin thereon, until paid out, used and applied in accordance with this A
SECTION 9. This A is made pursuant to and in furtherance of the Prior
Bonds Indenture and for the benefit of the Authorit and the holders from time to time of the
Prior Bonds and it shall not be repealed, revoked, altered, amended or supplemented without the
written consent of all such holders and the written consent of the Escrow A and the
Authorit provided, however, that the Authorit and the Escrow A ma without the consent
of, or notice to, such holders enter into such amendments or supplements as shall not be
inconsistent with the terms and provisions of this A for an one or more of the
followin purposes:
(a) to cure an ambi or formal defect or omission in this
A
77775841.1
2
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(b) to g rant to, or confer upon, the Escrow A for the benefit of th
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holders of the Prior Bonds, an additional ri remedies, powers or a th
ma lawfull be anted to, or conferred upon, such holders or the Escrow Ae
g r g n
and
(c) to transfer to the Escrow A and make subject to this
A additional funds, securities or properties.
The Escrow A and Prior Bonds Trustee shall be entitled to conclusivel rel upon an
un opinion of nationall reco bond counsel with respect to compliance with this
Section, includin the extent, if an to which an chan modification or addition affects the
ri of the holders of the Prior Bonds, or that an instrument executed hereunder complies with
the conditions and provisions of this Section.
SECTION 10. In consideration of the services rendered b the Escrow A under
this A the Authorit a to and shall pa to the Escrow A its fees, plus
expenses, includin all reasonable expenses, char counsel fees and other disbursements
incurred b it or b its attorne a and emplo in and about the performance of their
powers and duties hereunder, and the Escrow A shall have no lien whatsoever upon an of
the mone in the Escrow Fund for the pa of such proper fees and expenses.
SECTION 11. The Escrow A at the time actin hereunder ma at an time resi
and be dischar from the trusts hereb created b g ivin g not less than 60 da written notice
to the Authorit and the Prior Bonds Trustee, specif the date when such resi will take
effect in the same manner as a notice is to be mailed pursuant to Section 9 hereof, but no such
resi shall take effect unless a successor Escrow A shall have been appointed b the
holders of the Prior Bonds or b the Authorit as hereinafter provided and such successor
Escrow A shall have accepted such appointment, in which event such resi shall take
effect immediatel upon the appointment and acceptance of a successor Escrow A
The Escrow A ma be removed at an time b an instrument or concurrent
instruments in writin delivered to the Escrow A and to the Authorit and the Prior Bonds
Trustee and si b the holders of a majorit in principal amount of the Prior Bonds.
In the event the Escrow A hereunder shall resi or be removed, or be dissolved, or
shall be in the course of dissolution or li or otherwise become incapable of actin
hereunder, or in the case the Escrow A shall be taken under the control of an public officer
or officers, or of a receiver appointed b a court, a successor Escrow A ma be appointed b
the holders of a majorit in principal amount of the Prior Bonds, b an instrument or concurrent
instruments in writin si b such holders, or b their attorne in fact, dul authorized in
writin provided, nevertheless, that in an such event, the Authorit shall appoint a temporar
Escrow A to fill such vacanc until a successor Escrow A shall be appointed b the
holders of a majorit in principal amount of the Prior Bonds, and an such temporar Escrow
A so appointed b the Authorit shall immediatel and without further act be superseded b
the Escrow A so appointed b such holders.
77775841.1
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In the event that no appointment of a successor Escrow A or a temporar successor
Escrow A shall have been made b such holders or the Authorit pursuant to the fore
provisions of this Section within 60 da after written notice of the removal or resi of the
Escrow A has been g iven to the Authorit the holder of an of the Prior Bonds or an
retirin Escrow A ma appl to an court of competent jurisdiction for the appointment of a
successor Escrow A and such court ma thereupon, after such notice, if an as it shall deem
proper, appoint a successor Escrow A
No successor Escrow A shall be appointed unless such successor Escrow A shall
be a corporation or institution with trust powers or under the financial institution laws of
the United States or an state, and shall have at the time of appointment capital and surplus of
not less than $505000,000. For purpose of this Section 13, a corporation or institution with trust
powers or under the financial institution laws of the United States or an state shall be
deemed to have combined capital and surplus of at least $50,000,000 if it has a combined capital
surplus of at least $20,000,000 and is a wholl subsidiar of a corporation havin a
combined capital and surplus of at least $50,000,000.
Ever successor Escrow A appointed hereunder shall execute, acknowled and
deliver to its predecessor and to the Authorit an instrument in writin acceptin such
appointment hereunder and thereupon such successor Escrow A without an further act,
deed or conve shall become full vested with all the ri immunities,, powers, trust,
duties and obli of its predecessor but such predecessor shall, nevertheless, on the written
re of such successor Escrow A or the Authorit execute and deliver an instrument
transferrin to such successor Escrow A all the estates, properties, ri powers and trusts
of such predecessor hereunder and ever predecessor Escrow A shall deliver all mone
held b it to its successor. Should an transfer, assi or instrument in writin from the
Authorit be re b an successor Escrow A for more full and certainl vestin in
such successor Escrow A the estates, ri powers and duties hereb vested or intended to
be vested in the predecessor Escrow A an such transfer, assi and instrument in
writin shall, on re be executed, acknowled and delivered b the Authorit
An corporation or association into which the Escrow A or an successor to it in the
trusts created b this A ma be mer or converted or with which it or an successor
to it ma be consolidated, or an corporation resultin from an mer conversion,
consolidation or reor to which the Escrow A or an successor to it shall be a part
or an successor to a substantial portion of the Escrow A corporate trust business, shall, if
it meets the q ualifications set forth in the fifth para of this Section, be the successor Escrow
A under this A without the execution or filin of an paper or an other act on the
part of an of the parties hereto, an herein to the contrar notwithstandin The liabilit of
the Escrow A to make pa re in the A shall be limited to the mone in
the Escrow Fund.
SECTION 12. The Escrow A shall have no power or dut to invest an funds held
under this A except as provided in Sections 5 and 6 hereof. The Escrow A shall
have no power or dut to transfer or otherwise dispose of the mone held hereunder except as
provided in this A
77775841.1
M
9 �_
SECTION 13. To the extent permitted b law, the Authorit hereb assumes liabilit
for, and hereb a (whether or not an of the transactions contemplated hereb are
consummated) to indemnif protect, save and keep harmless the Escrow A and its
successors, assi a emplo and servants, from and a an and all liabilities,
obli losses, dama penalties, claims, actions,, suits, costs, expenses and disbursements
(includin reasonable le fees and disbursements) of whatsoever kind and nature which ma be
imposed on, incurred b or asserted a the Escrow A at an time (whether or not also
indemnified a the same b the Authorit or an other person under an other a or
instrumen but without double indemnit in an wa relatin to or arisin out of the execution,
deliver and performance of this Agreement, the establishment hereunder of the Escrow Fund,
the acceptance of the funds and securities deposited therein, the purchase of an securities to be
purchased pursuant thereto, the retention of such securities or the proceeds thereof and an
pa transfer or other application of mone or securities b the Escrow A in
accordance with the provisions of this A The Authorit shall not be re to
indemnif the Escrow A a the Escrow A own ne or willful misconduct
or the ne or willful misconduct of the Escrow A successors, assi a and
emplo or the material breach b the Escrow A of the terms of this A In no
event shall the Authorit or the Escrow A be liable to an person b reason of the
transactions contemplated hereb other than to each other as set forth in this Section. The
indemnities contained in this Section shall survive the termination of this A and the
resi or removal of the Escrow A
SECTION 14. The recitals of fact contained in the "Whereas" clauses herein shall be
taken as the statements of the Authorit and the Escrow A assumes no responsibilit for the
correctness thereof. The Escrow A makes no representation as to the sufficienc of the
mone to accomplish the redemption of the Prior Bonds pursuant to the Prior Bonds Indenture
or to the validit of this A as to the Authorit and, except as otherwise provided herein,
the Escrow A shall incur no liabilit in respect thereof. The Escrow A shall not be liable
in connection with the performance of its duties under this A except for its own
ne or willful misconduct, and the duties and obli of the Escrow A shall be
determined b the express provisions of this A The Escrow A ma consult with
counsel, who ma or ma not be counsel to the Authorit and in reliance upon the written
opinion of such counsel shall have full and complete authorization and protection in respect of
an action taken, suffered or omitted b it in g ood faith in accordance therewith. Whenever the
Escrow A shall deem it necessar or desirable that a matter be proved or established prior to
takin sufferin or omittin an action under this A such matter (except the matters
set forth herein as specificall re a certificate of a nationall reco firm of
independent certified public accountants or an opinion of nationall reco bond counsel)
ma be deemed to be conclusivel established b a written certification of the Authorit
Whenever the Escrow A shall deem it necessar or desirable that a matter specificall
re a certificate of a nationall reco firm of independent certified public accountants
or an opinion of nationall reco bond counsel be proved or established prior to takin
sufferin or omittin an such action, such matter ma be established onl b such a certificate
or such an opinion. The Escrow A shall incur no liabilit for losses arisin from an
investment made pursuant to this A
77775841.1
5
9�
No provision of this A shall re the Escrow A to expend or risk its own
funds or otherwise incur an financial liabilit in the -performance or exercise of an of its duties
hereunder,, or in the exercise of its ri or powers.
An compan into which the Escrow A ma be mer or converted or with which it
ma be consolidated or an compan resultin from an mer conversion or consolidation to
which it shall be a part or an compan to which the Escrow A ma sell or transfer all or
substantiall all of its corporate trust business shall be the- successor to the Escrow A without
the execution or filin of an paper or further act, an herein to the contrar
notwithstandin
SECTION 15. This A shall terminate upon pa of all Prior Bonds on the
Redemption Date. Upon such termination, all mone remainin in the Escrow Fund after
pa of all fees and expenses of the Escrow A shall be released to the Authorit
SECTION 16. This A is made in the State of California under the
Constitution and laws of the State of California and is to so be construed.
SECTION 17. If an one or more of the covenants or a provided in this
A on the part of the Authorit or the Escrow A to be performed should be
determined b a court of competent jurisdiction to be contrar to law, such covenant or
a shall be deemed and construed to be severable from the remainin covenants and
a herein contained and shall in no wa affect the validit of the remainin provisions
of this A
All the covenants, promises and a in this A contained b or on behalf
of the Authorit or b or on behalf of the Escrow A shall bind and inure to the benefit of
their respective successors and assi whether so expressed or not.
SECTION 18. This A ma be executed in several counterparts, all or an of
which shall be re for all purposes as one ori and shall constitute and be but one and
the same instrument.
R
Pa 17
IN WITNESS WHEREOF,, the parties, hereto have caused this Escrow A to be
executed b their dul authorized officers as of the date first-above written.
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
so
Executive Director
UNION BANK, N.A.,
as Escrow A and as Prior Bonds Trustee
M
Authorized Officer
77775841.1
9
9�
r i , nis Continuin Disclosure A (the "Disclosure A dated as of
L 2012 is executed and delivered b the Cit of Lake Elsinore Communit
Facilities District No. 2005-5 (Villa at Wasson Can (the "District") and Union Bank,
N.A., as Dissemination A (the "Dissemination A in connection with the issuance of
the $ Lake Elsinore Public Financin Authorit Local A Revenue Refunidn
Bonds (Villa at Wasson Can 2012 Series A (the "Bonds"). The Bonds are bein issued
pursuant to provisions of an Indenture of Trust, dated as of L 2012 (the "Indenture"),
b and between the Lake Elsinore Public Financin Authorit (the "Authorit and Union Bank,
N.A. (the "Trustee"). The District and the Dissemination A covenant and a as follows:
SECTION 1. Purpose of the Disclosure A This Disclosure A is bein
executed and delivered b the District and the Dissemination A for the benefit of the
Beneficial Owners of the Bonds and in order to assist the Participatin Underwriter in compl
with S.E.C. Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
appl to an capitalized term used in this Disclosure A unless otherwise defined in this
Section, the followin capitalized terms shall have the followin meanin
"Annual Report" shall mean an Annual Report provided b the District pursuant to,, and
as described in, Sections 3 and 4 of this Disclosure A
"Beneficial Owner" shall mean an person which (a) has the power, directl or indirectl
to vote or consent with respect to,, or to dispose of ownership of, an Bonds (includin persons
holdin Bonds throu nominees, depositories or other intermediaries), or (b) is treated as the
owner of an Bonds for federal income tax purposes.
"Disclosure Representative" shall mean the Cit Mana of the Cit or his or her
desi or such other officer or employee as the District shall desi in writin to the
Dissemination A from time to time.
"Dissemination A shall mean Union Bank of California, N.A., actin in its capacit
as Dissemination A hereunder, or an successor Dissemination A desi in writin
b the District.
"Listed Events" shall mean an of the events listed in Section 5(a) of this Disclosure
A
"MSRB" shall mean the Municipal Securities Rulemakin Board established pursuant to
Section 15B(b)(1) of the Securities Exchan Act of 1934 or an other entit desi or
authorized b the Securities and Exchan Commission to receive reports pursuant to the Rule.
Until otherwise desi b the MSRB or the Securities and Exchan Commission, filin
with the MSRB are to be made throu the Electronic Municipal Marketplace Access (EMMA)
website of the MSRB, currentl located at http://e mma.msrb.or
77772971.1
"Participatin Underwriter" shall mean an of the ori underwriters of the Bonds
re to compl with the Rule in connection with offerin of the Bonds.
"Rule" shall mean Rule 15c2-12(b)(5) adopted b the Securities and Exchan
Commission under the Securities Exchan Act of 1934, as the same ma be amended from time
to time.
"State" shall mean the State of California.
SECTION 3. Provision of Annual Re
(a) The District shall, or shall cause the Dissemination A to,, not later than
225 da after the end of the Cit fiscal y ear, commencin with fiscal y ear endin June 30,
2012, provide to the MSRB and the Participatin Underwriter an Annual Report which is
consistent with the re of Section 4 of this Disclosure A The Annual Report
ma be submitted as a sin document or as separate documents comprisin a packa and ma
include b reference other information as provided in Section 4 of this Disclosure A
(b) Not later than fifteen (15) Business Da prior to the date specified in
subsection (a) for providin the Annual Report to the MSRB, the District shall provide the
Annual Report to the Dissemination A If b such date, the Dissemination A has not
received a cop of the Annual Report, the Dissemination A shall contact the District to
determine if the District is in compliance with the first sentence of this subsection (b). The
District shall provide a written certification with each Annual Report furnished to the
Dissemination A to the effect that such Annual Report constitutes the Annual Report
re to be furnished b it hereunder. The Dissemination A ma conclusivel rel upon
such certification of the District and shall have no dut or obli to review such Annual
Report.
(c If the Dissemination A is unable to verif that an Annual Report has
been provided to the MSRB b the date re in subsection (a), the Dissemination A shall
send a notice to the MSRB in substantiall the form attached as Exhibit A.
(d) The Dissemination A shall, to the extent information is known to it,
file a report with the Authorit and (if the Dissemination A is not the Trustee) the Trustee
certif that the Annual Report has been provided pursuant to this Disclosure A
statin the date it was provided.
SECTION 4. Content of Annual Re ports. The District's Annual Report shall contain or
include b reference the followin ( as of June 30 next precedin the Annual Report date or the
most recent readil available information
(a The principal amount of the Bonds outstandin
(b) The balance of the Reserve Account and the Reserve Re
77772971.1
9�
( c ) A table showin value-to-lien ratios (either individuall of in cate
such as "below 3:1," "3:1 to 4:1," "4:1 to 5 : etc.) for all parcels subject to special taxes in the
District based on the ratio of assessed valuation of such parcels to all overlappin direct debt.
(d) The status of the pa of special taxes for the properties within the
District which were due and pa durin the precedin fiscal y ear (the "Special Taxes"
includin as to delin parcels:
(1) the number of parcels delin in the pa of Special Taxes
( 2 ) the a amount of the delin Special Taxes;
(3) as to an parcel for which the delin Special Taxes represents
more than 5% of the a Special Taxes within the District
(ii) the assessor's parcel number
(iii) the identit of the owner(s) of such parcel based on the
Assessor's Roll or Count delin report received b the Cit
whichever is more current
(iv) the a amount of delin propert taxes,
assessments (both fixed lien and annual) and Special Taxes and the
accrued penalties and interest on such a amount and
(4) the assessment delin rate for such precedin fiscal y ear.
(e) The status of an j udicial foreclosure proceedin initiated b the District
as a result of the delin in the pa of Special Taxes and the summar of the results of
foreclosure sales, if available.
(f) As to an parcel for which the annual special tax lev represents more
than 5% of the a special tax lev within the District:
(1) names of the owners of such parcels as shown on the Assessor's
Roll or Count delin report received b the Cit whichever
is more current
(2) percenta of the special tax lev allocated to such parcels
(3) Developed Propert or Undeveloped Propert status (as such terms
are defined in the RMA) of such parcels
( 4 ) si amendments to applicable District g ranted land use
entitlements
(5) status of an si conditions of approval of development
imposed b the District as to an undeveloped parcel and
77772971.1
t
Pa 21
(6) status of an si le administrative or Judicial
challen to the development of an undeveloped parcels or to the
use or continuin use of an parcel known to the District.
( The audited financial statements for the Cit for the precedin fiscal y ear
(or if not available at the time of filin the unaudited financial statements). The audited
financial statements shall be prepared in accordance with g enerall y accepted accountin
principles as prescribed for g overnmental units b the Governmental Accountin Standards
Board provided, however, that the Cit ma from time to time, if re b federal or state
le re modif the basis upon which its financial statements are prepared.
(h) The principal amount of prepa of the Special Tax with respect to
the District for the precedin fiscal y ear.
An or all of the items listed above ma be included b specific reference to other documents,
includin official statements of debt issues of the Cit or related public entities, which are
available to the public on the MSRB's Internet Web site or filed with the Securities and
Exchan Commission.
SECTION 5. ' Reporting of Listed Events.
(a Pursuant to the provisions of this section, upon the occurrence of an of
the followin events (in each case to the extent applicable) With respect to the Bonds, the District
shall g ive, or cause to be g iven b so notif the Dissemination A in writin and
instructin the Dissemination A to g ive, notice of the occurrence of such event, in each case,
pursuant to Section 5(c) hereof:
1. principal or interest pa delin
2. non-pa related defaults, if material-,
3. modifications to the ri of the Bondholders, if material
4. optional, contin or unscheduled calls, if material, and tender offers
5. defeasances
C. ratin chan
7. adverse tax opinions or the issuance b the Internal Revenue Service of
proposed or final determinations of taxabilit Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the Bonds or other material events affectin the
tax status of the Bonds
8. unscheduled draws on the debt service reserves reflectin financial
difficulties;
77772971.1
11
9. unscheduled draws on the credit enhancements reflectin financial
difficulties
10. substitution of the credit or li providers or their failure to perform
release,, substitution or sale of propert securin repa of the Bonds,
if material
12. bankruptc insolvenc receivership or similar proceedin of the
Authorit which shall occur as described below
13. appointment of a successor or additional trustee or the chan of name of
a trustee, if material, or
14. the consummation of a mer consolidation, or ac involvin the
Authorit or the sale of all or substantiall all of the assets of the
Authorit other than in the ordinar course of business, the entr into a
definitive a to undertake such an action or the termination of a
definitive a relatin to an such actions, other than pursuant to its
terms, if material.
For these purposes, an event described in item 12 of this Section 5(a) is considered to
occur when an of the followin occur: the appointment of a receiver, fiscal a or similar
officer for the Authorit in a proceedin under the United States Bankruptc Code or in an
other proceedin under state or federal law in which a court or g overnmental authorit has
assumed jurisdiction over substantiall all of the assets or business of the Authorit or if such
jurisdiction has been assumed b leavin the existin g overnin g bod and officials or officers in
possession but subject to the supervision and orders of a court or g overnmental authorit or the
entr of an order confirmin a plan of reor arran or li b a court or
g overnmental authorit havin supervision or jurisdiction over substantiall all of the assets or
business of the Authorit
(b) Upon receipt of notice from the District and instruction b the District to
report the occurrence of an Listed Event, the Dissemination A shall provide notice thereof
to the MSRB in accordance with Section 5(c) hereof. In the event the Dissemination A shall
obtain actual knowled of the occurrence of an of the Listed Events, the Dissemination A
shall, immediatel after obtainin such knowled contact the Disclosure Representative,
inform such person of the event, and re that the District promptl notif the Dissemination
promptl
A in writin whether or not to report the event pursuant to Section 5(c). For purposes of this
Disclosure A "actual knowled of the occurrence of such Listed Event shall mean
actual knowled b the Dissemination A if other than the Trustee, and if the Dissemination
A is the Trustee, then b the officer at the corporate trust office of the Trustee with re
responsibilit for the administration of matters related to the Indenture. The Dissemination
A shall have no responsibilit to determine the materialit if applicable, of an of the Listed
Events.
(c) The District, or the Dissemination A if the Dissemination A has
been instructed b the District to report the occurrence of a Listed Event, shall file a notice of
77772971.1
9s
such occurrence with the MSRB in a timel manner not more than ten business da after the
occurrence of the event.
SECTION 6. Termination of Reportin Obli The District's obli under this
Disclosure A shall terminate upon the le defeasance, prior redemption or pa in
full of all of the Bonds. If such termination occurs prior to the final maturit of the Bonds, the
District shall g ive notice of such termination in the same manner as for a Listed Event under
Section 5(c).
SECTION 7. Dissemination A The District ma from time to time, appoint or
en a Dissemination A to assist it in carr out its obli under this Disclosure
A and ma dischar an such Dissemination A with or without appointin a
successor Dissemination A The Dissemination A shall not be responsible in an
manner for the content of an notice or report prepared b the District pursuant to this Disclosure
A The initial Dissemination A shall be Union Bank of California, N.A. The
Dissemination A ma resi b providin thirt da written notice to the District. The
Dissemination A shall not be responsible for the content of an report or notice prepared b
the District. The Dissemination A shall have no dut to prepare an information report nor
shall the Dissemination A be responsible for filin an report not provided to it b the
District in a timel manner and in a form suitable for filin
SECTION 8. Amendment; Waiver. Notwithstandin an other provision of this
Disclosure A the District and the Dissemination A ma amend this Disclosure
A (and the Dissemination A shall a to an amendment so re b the
District) provided, the Dissemination A shall not be obli to enter into an such
amendment that modifies or increases its duties or obli hereunder, and an provision of
this Disclosure A ma be waived, provided that the followin conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or
5(a), it ma onl be made in connection with a chan in circumstances that arises from a chan
in le re chan in law, or chan in the identit nature or status of an obli
person with respect to the Bonds, or the t of business conducted
(b) The undertakin as amended or takin into account such waiver, would,
in the opinion of nationall reco bond counsel, have complied with the re of the
Rule at the time of the ori issuance of the Bonds, after takin into account an amendments
or interpretations of the Rule, as well as an chan in circumstances and
(c) The amendment or waiver either (i) is approved b the Holders of the
Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the
consent of Holders, or (ii) does not, in the opinion of nationall reco bond counsel,
materiall impair the interests of the Holders or Beneficial Owners of the Bonds.
In the event of an amendment or waiver of a provision of this Disclosure A the
District shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
77772971.1 6
Pa 24
the t (or, in the case of a chan of accountin principles,, on the presentation) of financial
information or operating data bein presented b the District.
SECTION 9. Additional Information. Nothin in this Disclosure A shall be
deemed to prevent the District from disseminatin an other information, usin the means of
dissemination set forth in this Disclosure A or an other means of communication, or
includin an other information in an Annual Report or notice of occurrence of a Listed Event,
in addition to that which is re b this Disclosure A If the District chooses to
include an information in an Annual Report or notice of occurrence of a Listed Event in
addition to that which is specificall re b this Disclosure A the District shall
have no obli under this Disclosure A to update such information or include it in
an future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Filings with the MSRB. All financial information, operatin data,
financial statements, notices, and other documents provided to the MSRB in accordance with this
Disclosure A shall be provided in an electronic format prescribed b the MSRB and
shall be accompanied b identif information as prescribed b the MSRB.
SECTION 11. Default. In the event of a failure of the District or the Dissemination
A to compl with an provision of this Disclosure A an Holder or Beneficial
Owner of the Bonds ma take such actions as ma be necessar and appropriate, includin
seekin mandate or specific performance b court order, to cause the District or Dissemination
A as the case ma be, to compl with its obli under this Disclosure A A
default under this Disclosure A shall not be deemed an Event of Default under the
Indenture, and the sole remed under this Disclosure A in the event of an failure of the
District or the Dissemination A to compl with this Disclosure A shall be an action
to compel performance.
SECTION 12. Duties, Immunities and Liabilities of Dissemination Aizent. Article VI of
the Indenture pertainin to the Trustee is hereb made applicable to this Disclosure A
as if this Disclosure A were (solel for this purpose) contained in the Indenture and the
Dissemination A shall be entitled to the protections, limitations from liabilit and
indemnities afforded the Trustee thereunder. The Dissemination A shall have onl such
duties as are specificall set forth in this Disclosure A and the District a to
indemnif and save the Dissemination A its officers, directors, emplo and a
harmless a an loss, expense and liabilities which the ma incur arisin out of or in the
exercise or performance of its powers and duties hereunder, includin the costs and expenses
(includin attorne fees) of defendin a an claim of liabilit but excludin liabilities due
to the Dissemination A ne or willful misconduct. The Dissemination A shall
be paid compensation b the District for its services provided hereunder in accordance with its
schedule of fees as amended from time to time and all expenses, le fees and advances made or
incurred b the Dissemination A in the performance of its duties hereunder. The
Dissemination A shall have no dut or obli to review an information provided to it
hereunder and shall not be deemed to be actin in an fiduciar capacit for the District, the
Bondholders, or an other part The Dissemination A shall not have an liabilit to the
Bondholders or an other party for an monetar dama or financial liabilit of an kind
whatsoever related to or arisin from this Disclosure A The obli of the District
77772971.1 7
9�
under this Section shall survive resi or removal of the Dissemination A and pa
of the Bonds.
SECTION 13. Notices. An notices or communications to or amon an of the parties
to this Disclosure A ma be g iven as follows:
To the District: Cit of Lake Elsinore Communit Facilities District
No. 2005-5 (Villa at Wasson Can
c/o Cit of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Attn: Cit Mana
To the Dissemination A Union Bank, N.A.
120 South San Pedro Street, 4" Floor
Los An California 90012
Attn: Corporate Trust Department
An person ma b written notice to the other persons listed above, desi a different address
or telephone number(s) to which subse notices or communications should be sent.
SECTION 14. Beneficiaries. This Disclosure A shall inure solel to the benefit
of the District, the Dissemination A the Participatin Underwriter and Holders and
Beneficial Owners from time to time of the Bonds, and shall create no ri in an other person
or entit
77772971.1
9=
SECTION 15. Counterparts. This Disclosure A ma be executed in several
counterparts, each of which shall be an ori and all of which shall constitute but one and the
same instrument.
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
010
Ma on behalf of the District
UNION BANK,
as Dissemination A
M
Authorized Officer
77772971.1,
IW44
Name of Obli Part Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can
Name of Bond Issue: Lake Elsinore Public Financin Authorit
Local A Revenue Refundin Bonds (Villa at Wasson
Can 2012 Series A
Date of Issuance: , 2012
NOTICE IS HEREBY GIVEN that the Cit has not provided an Annual Report with
respect to the above-named Bonds as re b the Continuin Disclosure A dated as
of L 2012, with respect to the Bonds. [The District anticipates that the Annual
Report will be filed b .]
Dated:
UNION BANK, N.A.,
as Dissemination A
on behalf of District
cc: Authorit
77772971.1
110103 Mote) 0A MM no
b and between the
=25 MUM
M44
UNION BANK,, N.A.,
as Trustee
Dated as of I !1 2012
Relatin to
Lake Elsinore Public Financin Authorit
Local A Revenue Refundin Bonds (Villa at Wasson Can 2012 Series A
77772968.1,
• r _ •
MWIM
ARTICLE I DEFINITIONS AUTHORIZATION AND PURPOSE OF BONDS
EQUAL SECURITY ........................................................................................ 2
Section 1.01 Definitions ............................................................................................ 2
Section 1.02 Rules of Construction ......................................................................... 10
Section 1.03 Authorization and Purpose of Bonds ..................... .............................10
Section E Securit ..................................................................................... 10
ARTICLE 11 ISSUANCE OF THE BONDS ....................................................................... 10
Section 2.01
Terms of the Bonds ............................................................................. 10
Section 2.02
Redemption of Bonds ......................................................................... 12
Section 2.03
Form of the Bonds ..............................................................................
14
Section 2.04
Execution of Bonds .............................................................................
15
Section 2.05
Transfer of Bonds ...............................................................................
15
Section 2.06
Exchan of Bonds .............................................................................
15
Section 2.07
Re Books ..............................................................................
15
Section 2.08
Bonds Mutilated, Los Destro or Stolen ......... .............................16
Section 2.09
CUSIP Numbers .................................................................................
16
Section 2.
Use of Securities Depositor ..............................................................
16
S ection 2.
Temporar Bonds ...............................................................................
18
Section 3.01
Issuance of Bonds ...............................................................................
18
Section 3.02
Application of Proceeds of Sale of Bonds and Other Amounts .........18
Section 3.03
Bond Purchase Fund ...........................................................................
18
Section 3.04
Costs of Issuance Fund .......................................................................
19
Section 3.05
Validit of Bonds ................................................................................
19
ARTICLE IV REVENUES FLOW OF FUNDS ................................................................... 19
Section 4.01 Pled of Revenues Assi of Ri ........... .............................19
Section 4.02 Receipt, Deposit and Applications of Revenues .......................
Section 4.03 Cash Flow Mana Fund ............................... .............................
Section 4.04 Redemption Fund ................................................................................ 22
Section 4.05 Residual Fund ..................................................................................... 22
Section Investments ......................................................................................... 23
Section 4.07 Valuation and Disposition of Investments ............. .............................
ARTICLE V COVENANTS OF THE AUTHORITY ............................ .............................
Section 5.01 Punctual Pa ............................................................................... 24
Section 5.02 Extension of Pa of Bonds ............................ .............................
Section 5.03 A Encumbrances ....................................................................... 24
9�1
TABLE OF CONTENTS
(continued)
P
Section 5.04 Power to Issue Bonds and Make Pled and Assi ..................25
Section 5.05 Accountin Records and Financial Statements ..... .............................25
Section 5.06 No Parit Debt .................................................................................... 25
Section 5.07 Tax Covenants Relatin to Bonds ......................... .............................25
Section 5.08 District Bonds ................................................. ** ......... **** ... ... 0029
Section 5.09 Further Assurances ............................................................................. 29
Section5. Immunit ............................................................................................. 29
Section 5. No Acceleration .................................................................................. 29
ARTICLE VI THE TRUSTEE .............................................................................................. 21
Section 6.01
Appointment of Trustee ...................................................................... 29
Section 6.02
Acceptance of Trusts ..........................................................................
30
Section 6.03
Fees, Char and Expenses of Trustee .................
.............................32
Section 6.04
Notice to Bond Owners of Default ........................
.............................32
Section 6.05
Intervention b Trustee .......................................................................
32
Section 6.06
Removal of Trustee .............................................................................
32
Section 6.07
Resi b Trustee .......................................................................
32
Section 6.08
Appointment of Successor Trustee ........................
.............................33
Section 6.09
Mer or Consolidation .....................................................................
33
Section 6.10
Concernin an Successor Trustee .......................
..............................3 3
Section 6.11
Appointment to Co-Trustee ................................................................
33
Section 6.12
Indemnification Limited Liabilit of Trustee
....... .............................34
looms 11111111 Invit"i'111
Section 7.01 Amendment Hereof ............................................................................ 34
Section 7.02 Effect of Supplemental Indenture ......................... ..............................3 5
Section 7.03 Endorsement or Replacement of Bonds After Amendment ...............36
Section 7.04 Amendment b Mutual Consent ......................................................... 36
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ................................................. 36
Section 8.01 Events of Default ................................................................................ 36
Section 8.02 Remedies Upon Event of Default ......................... ..............................3 7
Section 8.03 Application of Revenues and Other Funds After Default ..................3 7
Section 8.04 Power of Trustee to Control Proceedin ............. ..............................3 8
Section 8.05 Appointment of Receivers .................................................................. 38
Section8.06 Non-Waiver ........................................................................................ 38
Section 8.07 Ri to Institute Suit, Action or Proceedin ......... .............................39
Section 8.08 Termination of Proceedin ................................................................ 39
ARTICLE IT MISCELLANEOUS ....................................................................................... 40
Section 9.01 Limited Liabilit of Authorit ............................... .............................40
it
Pa 31
EXHIBITA — FORM OF BOND .............................................................................................. A- I
ill
TABLE OF CONTENTS
(continued)
Pale
Section 9.02
Benefits of Indenture Limited to Parties ................ .............................40
Section 9.03
Dischar of Indenture .......................................................................
40
Section 9.04
Is Deemed Included in All References to Predecessor
.......................41
Section 9.05
Content of Certificates ........................................................................
41
Section 9.06
Execution of Documents b Bond Owners ........... .............................41
Section 9.07
Dis Bonds ............................................................................. 42
Section 9.08
Waiver of Personal Liabilit ............................................................... 42
Section 9.09
Partial Invalidit ity ........................... o. ...... .... ....... .......... *.#*$**42
Section 9.10
Destruction of Canceled Bonds ............................. .............................43
Section 9.11
Funds and Accounts ............................................................................ 43
Section 9.12
Pa on Business Da ................................................................. 43
Section9.13
Notices ................................................................................................ 43
Section 9.14
Unclaimed Mone ............................................................................. 44
Section9.15
Governin Law ................................................................................... 44
Section 9.16
Execution of Counterparts .................................................................. 44
EXHIBITA — FORM OF BOND .............................................................................................. A- I
ill
THIS INDENTURE OF TRUST ( this "Indenture") is made and entered into as of
1 , 2012 b and between the LAKE ELSINORE PUBLIC FINANCING AUTHORITY,
a joint powers authorit or and existin under the laws of the State of California (the
"Authorit and UNION BANK, N.A., a national bankin association or and existin
under the laws of the United States of America havin a corporate trust office in Los An
California, and bein q ualified to accept and administer the trusts hereb created (the "Trustee")
LAA
WHEREAS, the Authorit is a joint powers authorit dul or and existin under
and pursuant to that certain Joint Exercise of Powers A dated Jul 25, 1989, b and
between the Cit of Lake Elsinore (the "Cit and the Redevelopment A of the Cit of
Lake Elsinore (the "A and under the provisions of Articles I throu 4 (commencin
with Section 6500) of Chapter 5 of Division 7 of Title I of the Government Code of the State of
California (the "Act"), and is authorized pursuant to Article 4 of the Act (the "Bond Law") to
borrow mone for the purpose of financin the ac of bonds, notes and other obli
of, or for the purpose of makin loans to, the Cit the A and an associate member to
provide financin for public capital improvements of the Cit the A and an associate
member and
WHEREAS, for the purpose of fundin certain public facilities, the Authorit previousl
issued its Local A Revenue Bonds (Villa at Wasson Can 2008 Series B (the "2008
Bonds") and
WHEREAS, for the purpose of refundin the 2008 Bonds, the Authorit desires to
provide for the issuance of its Local A Revenue Refundin Bonds (Villa at Wasson
Can 2012 Series A (the "Bonds") and
WHEREAS, in order to provide for the authentication and deliver of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued and to
secure the pa of the principal thereof, premium (if an and interest thereon, the Authorit
has authorized the execution and deliver of this Indenture and
WHEREAS, the Authorit has found and determined, and hereb affirms, that all acts
and proceedin re b law necessar to make the Bonds, when executed b the Authorit
authenticated and delivered b the Trustee and dul issued, the valid, bindin and le special
obli of the Authorit and to constitute this Indenture a valid and bindin a for
the uses and purposes herein set forth in accordance with its terms, have been done and taken,
and the execution and deliver of this Indenture have been in all respects dul authorized.-
NOW, THEREFORE, THIS INDENTURE WITNESSETH,, that in order to secure the
pa of the principal of and the interest and premium (if an on all Bonds at an time issued
and Outstandin under this Indenture, accordin to their tenor, and to secure the performance and
observance of all the covenants and conditions therein and herein set forth,, and to declare the
terms and conditions upon and subject to which the Bonds are to be issued and repaid, and in
consideration of the premises and of the mutual covenants herein contained and of the purchase
77772968.1
9�
and acceptance of the Bonds b the Owners thereof, and for other valuable consideration, the
receipt and sufficienc of which is hereb acknowled the Authorit does hereb covenant
and a with the Trustee, for the benefit of the respective Owners from time to time of the
Bonds, as follows:
shb
1 R Y� M. 9 bow W114 192 1
o il 101 3M K
M W1 XKU 9 9
Section 1.01 Definitions. Unless the context otherwise re the terms defined in
this Section 1.01 shall for all purposes of this Indenture of an Supplemental Indenture and of
the Bonds and of an certificate, opinion, re or other documents herein mentioned have the
meanin herein specified.
"Act" means Articles I throu 4 (commencin with Section 6500) of Chapter 5,
Division 7. Title I of the Government Code of the State,, as in existence on the Closin Date or
as thereafter amended from time to time.
"Additional District Bonds" means Additional Bonds as such term is defined in the Fiscal
A A
"A means the Redevelopment A of the Cit of Lake Elsinore, a public bod
corporate and politic or under the laws of the State, and an successor thereto.
"Annual Debt Service" means, for each Bond Year,, the sum of (a) the interest pa on
the Outstandin Bonds in such Bond Year, and (b) the principal amount of the Outstandin
Bonds scheduled to be paid in such Bond Year.
"Authorit means the Lake Elsinore Public Financin Authorit a joint powers
authorit dul or and existin under the Joint Exercise of Powers A dated
Jul 25, 1989, b and between the Cit and the A to with an amendments thereof
and supplements thereto and under the laws of the State.
"Authorit Representative" means the Chairman, Vice Chairman, Executive Director or
Treasurer of the Authorit or an other authorized representative of the Authorit as evidenced
b a certificate of the Chairman or Executive Director.
"Board" means the Board of Directors of the Authorit
"Bond Counsel" means Fulbri & Jaworski L.L.P., or an attorne or firm of attorne
appointed b or acceptable to the Authorit of nationall experience in the field of
municipal law whose opinions are g enerall y accepted b purchasers of municipal bonds or notes.
"Bond Fund" means the fund b that name established and held b the Trustee pursuant
to Section 4.02(b) hereof.
77772968.1 2
Pa 34
"Bond Law" means the Marks-Roos Local Bond Poolin Act of 1985, constitutin
Article 4 of the Act (commencin with Section 6584), as in existence on the Closin Date or as
thereafter amended from time to time.
"Bond Purchase Fund" means the fund established pursuant to Section 3.03 hereof.
"Bond Year" means each twelve-month period be on September 2 of each y ear
and endin September I of the followin y ear, except that the first Bond Year shall be on the
Closin Date and end on September 1, 2012.
"Bonds" means the Lake Elsinore Public Financin Authorit Local A Revenue
Refundin Bonds (Villa at Wasson Can 2012 Series A, authorized b and at an time
Outstandin pursuant to, the Bond Law and this Indenture.
"Business Da means a da of the y ear, other than a Saturda or Sunda on which
banks in Los An California, and San Francisco, California, are not re or authorized to
remain closed and on which the New York Stock Exchan is not closed.
"Cash Flow Mana Fund" means the fund b that name established b Section
4.03(a) hereof.
"Cash Flow Mana Fund Re means, as of an calculation date, an
amount e to 15% of the Maximum Annual Debt Service.
"Certificate" or "Written Re of the Authorit means, a written certificate or written
re si in the name of the Authorit b an Authorit Representative. An such certificate
or re ma but need not, be combined in a sin instrument with an other instrument,
opinion or representation,, and the two or more so combined shall be read and construed as a
sin instrument.
"Cit means the Cit of Lake Elsinore, a political subdivision or and existin
under the laws of the State.
"Closin Date" means the date of deliver of the Bonds to the ori purchasers
thereof.
"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 ma be amended to appl to
obli issued on the date of issuance of the Bonds, to with applicable proposed,
temporar and final re promul and applicable official public g uidance published,
under the Code.
"Corporate Trust Office" means the corporate trust office of the Trustee at the address set
forth in Section 9.13 and such office as the Trustee ma desi in writin to the Authorit
from time to time.
"Costs of Issuance" means all expenses incurred in connection with the authorization,
issuance, sale and deliver of the Bonds, the purchase of the District Bonds, includin but not
77772968.1 3
I Pa 35
limited to all compensation, fees and expenses (includin but not limited to fees and expenses for
le counsel) of the Authorit the Trustee and the developer, compensation to an financial
consultants or underwriters, le fees and expenses, filin and recordin costs,, ratin a
fees,, costs of preparation and reproduction of documents and costs of printin
"Costs of Issuance Fund" means the fund established and held b the Trustee pursuant to
Section 3.04 hereof.
"District" means Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can
"District Bonds" means the Cit of Lake Elsinore Communit Facilities District No.
2005-5 (Villa at Wasson Can Special Tax Bonds,, 2012 Series A.
"DTC" means The Depositor Trust Compan New York, New York, and its successors
and assi
"Escrow A means Union Bank, N.A., as escrow a under the Escrow A
"Escrow A means the Escrow A dated as of 1, 2012, b and
between the Authorit and the Escrow A
"Escrow Fund" means the fund b that name created under the Escrow A
"Event of Default" means an of the events described in Section 8.01 hereof.
"Excess Investment Earnin means the amount of excess investment earnin
determined to be subject to rebate to the United States of America with respect to the investment
of the g ross proceeds of the Bonds, determined pursuant to Section 148(f) of the Code.
"Fair Market Value" means the price at which a willin bu would purchase the
investment from a willin seller in a bona fide, arm's len transaction (determined as of the
date the contract to purchase or sell the investment becomes bindin if the investment is traded
on an established securities market (within the meanin of Section 1273 of the Code) and,
otherwise, the term "Fair Market Value" means the ac price in a bona fide, arm's len
transaction (as referenced above) if (i) the investment is a certificate of deposit that is ac in
accordance with applicable re under the Code, (ii) the investment is an a with
specificall ne withdrawal or reinvestment provisions and a specificall ne
interest rate (for example, a g uaranteed investment contract, a forward suppl contract or other
investment a that is ac in accordance with applicable re under the Code,
(iii) the investment is a United States Treasur Securit and Local Government Series that
is ac in accordance with applicable re of the United States Bureau of Public Debt,
or (iv) an commin investment fund in which the Cit and related parties do not own more
than a ten percent (10%) beneficial interest therein if the return paid b the fund is without
re to the source of the investment.
77772968.1 4
9�
"Federal Securities" means an of the followin which are non-callable and which at the
time of investment are le investments under the laws of the State of California for funds held
b the Trustee, as shall be certified b the Authorit to the Trustee:
direct g eneral obli of the United States of America { includin g obli
issued or held in book-entr form on the books of the United States Department of
the Treasur and obli the pa of principal of and interest on which
are directl or indirectl g uaranteed b the United States of America, includin
without limitation, such of the fore which are commonl referred to as
".stripped" obli and coupons and
(2) an of the followin obli of the followin a of the United States of
America: (a) direct obli of the Export-Import Bank, (b) certificates of
beneficial ownership issued b the Farmers Home Administration, ( c )
participation certificates issued b the General Services Administration, ( d )
mort bonds or pass-throu obli issued and g uaranteed b the
Government National Mort Association, (e) project notes issued b the
United States Department of Housin and Urban Development, and (f) public
housin notes and bonds g uaranteed b the United States of America or refunded
municipal obli the timel pa of principal of and interest on are full
g uaranteed b the United States of America.
"Fiscal A means Union Bank, N.A., as fiscal a under the Fiscal A
A
"Fiscal A A means the Fiscal A A dated as of 1,
2012, b and between the District and Union Bank, N.A., as said a ma be amended
from time to time in accordance with its terms.
"Fiscal Year" means an twelve-month period extendin from Jul I in one calendar y ear
to June 30 of the succeedin calendar y ear, both dates inclusive, or an other twelve-month
period selected and desi b the Authorit as its official fiscal y ear period and certified to
the Trustee in writin b an Authorit Representative.
"Indenture" means this Indenture of Trust, as ori executed or as it ma from time
to time be supplemented, modified or amended b an Supplemental Indenture pursuant to the
provisions hereof.
"Independent Accountant" means an certified public accountant or firm of certified
public accountants appointed and paid b the Authorit and who, or each of whom (a) is in fact
independent and not under domination of the Authorit or the Cit (b) does not have an
substantial interes direct or indirect, in the Authorit or the Cit and (c) is not connected with
the Authorit or the Cit as an officer or emplo of the Authorit or the Cit but who ma be
re retained to make annual or other audits of the books of or reports to the Authorit or
the Cit
"Information Services" Electronic Municipal Market Access S ( referred to as
"EMMA" a facilit of the Municipal Securities Rulemakin Board, at www.emma.msrb.or
77772968.1 5
9r
and, in accordance with then current g uidelines of the Securities and Exchan Commission,
such other addresses and/or such other services providin information with respect to the
redemption of bonds as the Authorit ma desi in a Written Re of the Authorit
delivered to the Trustee.
"Interest Account" means the account b that name established and held b the Trustee
pursuant to Section 4.02(c)(i) hereof.
"Interest Pa Date" means March I and September I in each y ear, be
September 1, 2012, and continuin thereafter so lon as an Bonds remain Outstandin
"Letter of Representations" means the letter of the Authorit and the Trustee delivered to
and accepted b DTC (or such other applicable Securities Depositor on or prior to the issuance
of the Bonds in book-entr form settin forth the basis on which DTC (or such other applicable
Securities Depositor serves as depositor for the Bonds issued in book-entr form, as
ori executed or as it ma be supplemented or revised or replaced b a letter to a substitute
Securities Depositor
"Maximum Annual Debt Service" means, as of the date of calculation, the maximum
amount obtained b totalin for the current or an future Bond Year, the sum of: (a) the
principal amount of all such Outstandin Bonds maturin in such Bond Year and (b) the interest
which would be due durin such Bond Year on the a principal amount of such Bonds
which would be Outstandin in such period if such Bonds are retired as scheduled, but deductin
and excludin from such a principal amount the a principal amount of such
Bonds no lon Outstandin
"Mood means Mood Investors Service, and its successors and assi
"Outstandin when used as of an particular time with reference to Bonds, means all
Bonds theretofore executed, issued and delivered b the Authorit under this Indenture except:
(a) Bonds theretofore canceled b the Trustee or surrendered to the Trustee for cancellation (b)
Bonds paid or deemed to have been paid within the meanin of Section 9.03 and (c) Bonds in
lieu of or in substitution for which other Bonds shall have been executed, issued and delivered
pursuant to this Indenture or an Supplemental Indenture.
"Owner" or "Bond Owner," when used with respect to an Bond, means the person in
whose name the ownership of such Bond shall be re on the Re Books.
"Permitted Investments" means an of the followin which at the time of investment are
le investments under the laws of the State for the mone proposed to be invested therein (the
Trustee entitled to rel on written investment direction of the Authorit as a determination that
such investment is a legal investment), but onl to the extent that the same are ac at Fair
Market Value:
(a) Federal Securities
(b) bonds, debentures, notes or other evidence of indebtedness issued or
g uaranteed b an of the followin federal a and provided such obli are
77772968.1
R
Pa 38
backed b the full faith and credit of the United States of America (stripped securities are
onl permitted if the have been stripped b the a itself): (i) direct obli or
full g uaranteed certificates of beneficial ownership of the U.S. Export-Import Bank (ii)
ce rtificates of beneficial ownership of the Farmers Home Administration (iii) obli
erti I
of the Federal Financin Bank (iv) debentures of the Federal Housin Administration
(v) participation certificates of the General Services Administration (vi) g uaranteed
mort g a g e-backed bonds or g uaranteed pass-throu obli of the Government
National Mort Association (vii) g uaranteed Title XI financin of the U.S. Maritime
Administration and (viii) project notes, local authorit bonds, new communities
debentures and U.S. public housin notes and bonds of the U.S. Department of Housin
and Urban Development
( c ) bonds, debentures, notes or other evidence of indebtedness issued or
g uaranteed b an of the followin non-full faith and credit U.S. g overnment a
( stripped securities are onl permitted if the have been stripped b the Authorit itself) :
( 1 ) senior debt obli of the Federal Home Loan Bank S ( ii ) participation
certificates and senior debt obli of the Federal Home Loan Mort Corporation
( iii ) mort securities and senior debt obli of the Federal National
Mort Association ( excludin g stripped mort securities which are valued g reater
than par on the portion of unpaid principal ( iv ) senior debt obli of the Student
Loan Marketin Association ( v ) obli ( but onl the interest component of stripped
obli of the Resolution Fundin Corporation and ( vi ) consolidated s
bonds and notes of the Farm Credit S
(d) mone market funds (includin funds of the Trustee or its affiliates)
re under the Federal Investment Compan Act of 1940, whose shares are
re under the Federal Securities Act of 1933, and havin a ratin b S&P of
"AAAm-G,," "AA,,A,.m," or 44,4ukm and, if rated b Mood s, rated '"Aaa," "Aal" or
"Aa2 11)
(e) certificates of deposit secured at all times b collateral described in (a) or
(b) above, which have a maturit of one y ear or less, which are issued b commercial
banks,, savin and loan associations or mutual savin banks, and such collateral must be
held b a third part and the Trustee must have a perfected first securit 'interest in such
collateral
(f) certificates of deposit, savin accounts, deposit accounts or mone
market deposits (includin those of the Trustee and its affiliates) which are full insured
b the Federal Deposit Insurance Corporation
( investment a includin g uaranteed investment contracts,
forward purchase a and Reserve Account put a which are g eneral
obli of an entit whose lon term debt obli or claims pa abilit
respectivel is rated in one of the two hi ratin cate b Mood or S&P
(h) commercial paper rated,, at the time of purchase, "Prime-l" b Mood
and "A -1 " or better b S&P
77772968.1
h
(i) bonds or notes issued b an state or municipalit which are rated b
Mood and S&P in one of the two hi ratin cate assi b such a
0) federal funds or bankers acceptances with a maximum term of one y ear of
an bank which has an unsecured, uninsured and un • obli ratin of
"Prime- V or "A3 " or better b Mood and "A- V or "A" or better
( k) repurchase a which provide for the transfer of securities from a
dealer bank or securities firm (seller/borrower) to the Trustee and the transfer of cash
from the Trustee to the dealer bank or securities firm with an a that the dealer
bank or securities firm will repa the cash plus a y ield to the Trustee in exchan for the
securities at a specified date, which satisf the followin criteria:
( i ) repurchase a must be between the Trustee and (A) a
primar dealer on the Federal Reserve reportin dealer list which falls under the
jurisdiction of the Securities Investors Protection Corporation which are rated "A"
or better b Mood and S&P, or (B) a bank rated "A" or better b Mood and
S&P
(ii) the written repurchase a contract must include the
followin (A) securities acceptable for transfer, which ma be direct U.S.
g overnment obli or federal a obli backed b the full faith and
credit of the U.S. g overnment ; (B) the term of the repurchase a ma be
up to 30 da (C) the collateral must be delivered to the Trustee or a third part
actin as a for the Trustee simultaneous with pa (perfection b
possession of certificated securities) (D) the Trustee must have a perfected first
priorit securit interest in the collateral (E) the collateral must be free and clear
of third-part liens and, in the case of a broker which falls under the jurisdiction
of the Securities Investors Protection Corporation, are not subject to a repurchase
a or a reverse repurchase a (F) failure to maintain the re
collateral percenta after a two-da restoration period, will re the Trustee
to li the collateral and (G) the securities must be valued weekl marked-
to-market at current market price plus accrued interest and the value of collateral
must be e to 104% of the amount of cash transferred b the Trustee to the
dealer bank or securities firm under the repurchase a plus accrued
interest (unless the securities used as collateral are obli of the Federal
National Mort Association or the Federal Home Loan Mort Corporation,
in which case the collateral must be e to 105% of the amount of cash
transferred b the Trustee to the dealer bank or securities firm under the
repurchase a plus accrued interest). If the value of securities held as
collateral falls below 104% of the value of the cash transferred b the Trustee,
then additional cash and/or acceptable securities must be transferred and
(iii) a le opinion must be delivered to the Trustee to the effect that
the repurchase a meets g uidelines under state law for le investment of
public funds and
77772968.1
L 6*J
(1) the Local A Investment Fund of the State of California, created
pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee
is authorized to re such investment in its name.
"Principal Account" means the account b that name established and held b the Trustee
pursuant to Section 4.02(c)(ii) hereof.
"Rebate Account" means the account established and held b the Trustee pursuant to
Section 4.02(c)(v) hereof.
"Record Date" means, with respect to an Interest Pa Date, the fifteenth ( 15th )
calendar da of the month precedin such Interest Pa Date.
"Redemption Fund" means the fiord b such name established and held b the Trustee
pursuant to Section 4.04 hereof.
"Redemption Revenues" means (a) amounts received from the redemption of the District
Bonds from amounts constitutin prepa of Special Taxes, (b amounts received from the
optional redemption of the District Bonds, and (c) amounts received from the special mandator
redemption and mandator redemption of the District Bonds.
"Re Books" means the records maintained b the Trustee pursuant to Section
2.07 for the re and transfer of ownership of the Bonds.
"Reserve Account" means the account b that name established and held b the Trustee
pursuant to Section 4.02(c)(iii) hereof.
"Reserve Re means, as of an calculation date, an amount e to the least of
(i) ten percent (10 %0) of the proceeds of the Bonds (within the meanin of section 148 of the
Code) (ii) 125% of avera Annual Debt Service or (iii) Maximum Annual Debt Service.
"Residual Fund" means the fixed b that name established and held b the Trustee
pursuant to Section 4.05(a) hereof.
"Revenue Fund" means the fund b that name established and held b the Trustee
pursuant to Section 4.02(a) hereof.
"Revenues" means: (a) all amounts received b the Authorit from the District as
principal of or interest on the District Bonds (b) all mone deposited and held from time to
time b the Trustee in the funds and accounts established hereunder for the Bonds, other than the
Rebate Account, the Redemption Fund and the Residual Fund-, and (c) income and g ains with
respect to the investment of amounts on deposit in the funds and accounts established hereunder
for the Bonds, other than the Rebate Account, the Redemption Fund and the Residual Fund.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., its
successors and assi
77772968.1 9
Pa 41
"Securities Depositories" means DT, 55 Water Street, New York 10041, Attention:
Call Notification Department, Fax-(212) 855-7232 and, in accordance with then current
gu idelines of the Securities and Exchan Commission, such other addresses and/or such other
ul
securities depositories as the Authorit ma desi in a Certificate of the Authorit delivered
to the Trustee.
"State" means the State of California.
"Supplemental Indenture" means an indenture, a or other instrument hereafter
dul executed b the Authorit and the Trustee in accordance with the provisions of Section 7.01
hereof.
"Tax Re means temporar and permanent re promul under or
with respect to Section 103 and Sections 141 throu 150, inclusive, of the Code.
- "Trustee" means Union Bank of California,, N.A., and its successors and assi and an
other corporation or association which ma at an time be substituted in its place as provided in
Article VI hereof.
Section 1.02 Rules of Construction. All references in this Indenture to "Articles,"
"Sections" and other subdivisions are to the correspondin Articles, Sections or subdivisions of
this Indenture,, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Indenture as a whole and not to an particular Article, Section or subdivision hereof.
Section 1.03 Authorization and Purpose of Bonds. The Authorit has reviewed all
proceedin heretofore taken relative to the authorization of the Bonds and has found, as a result
of such review, and hereb finds and determines that all thin conditions, and acts re b
law to exis happen and be performed precedent to and in the issuance of the Bonds do exist,
have happened and have been performed in due time, form and manner as re b law, and
the Authorit is now authorized under the Bond Law and each and ever re of law, to
issue the Bonds in the manner and form provided in this Indenture. Accordin the Authorit
hereb authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture for the
purpose of providin funds to pa for Bonds of the District.
Section 1.04 E Securit In consideration of the acceptance of the Bonds b the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract amon the
Authorit the Trustee and the Owners from time to time of the Bonds and the covenants and
a herein set forth to be performed on behalf of the Authorit shall be for the e and
proportionate benefit, securit and protection of all Owners of Bonds without preference, priorit
or distinction as to securit or otherwise of an of the Bonds over an of the others b reason of
the number or date thereof or the time of sale,, execution or deliver thereof, or otherwise for an
cause whatsoever, except as expressl provided therein or herein.
77772968.1 10
Pa 42
F41113' _ 9 14 4 O
under Section 2.01 Terms of the Bonds. The Bonds authorized to be issued b the Authorit
and subject • Law and the terms of this " • shall be • i • . f •
aw
Elsinore Public Financing Agenc Refunding (Villages
original Wasson Can 2012 Series A" which shall be issued in the aggregate principal
amount
i
The principal of and interest and premium (if any) on the Bonds shall be payable in
lawful money of the United States of America.
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 initially registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York, and shall be evidenced by one Bond for each
of the maturities in the principal amounts set forth below, and DTC is hereby appointed
depository for the Bonds, and registered ownership may not thereafter be transferred except as
set forth in Section 2.05 hereof. The Bonds shall be dated as of the Closing Date, shall mature in
the following amounts and shall bear interest (calculated on the basis of a 360-day year of twelve
30 -day months) at the following rates:
Maturity Date Principal Interest
September 1 Amount Rate
Interest on the Bonds shall be payable on each Interest Payment Date to the person whose
name appears on the Registration Boobs as the Owner thereof as of the Record Date immediately
preceding each such Interest Payment Date, such interest to be paid by check of the Trustee
mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owner at the
address of such Owner as it appears on the Registration Books as of the preceding Record Date;
provided, however, that at the written request of the Owner of at least $1,000,000 in aggregate
principal amount of Outstanding Bonds filed with the Trustee prior to any Record Date, interest
on such Bonds shall be paid to such Owner on each succeeding Interest Payment Date by wire
77772968.1 11
transfer of immediatel available funds to an account in the continental United States desi
in such written re An such written re shall remain in effect until rescinded in writin
b the Owner. Principal of and premium ( if an on an Bond shall be paid upon presentation
and surrender thereof, at maturit or the prior redemption thereof, at the Corporate Trust Office
of the Trustee. The principal of and interest and premium ( if an on the Bonds shall be pa
in lawful mone of the United States of America.
Each Bond shall bear interest from the Interest Pa Date next precedin the date of
authentication thereof, unless (a) it is authenticated on or before the Interest Pa Date and
after the close of business on the precedin record date, in which event it shall bear interest from
such Interest Pa Date or (b) it is authenticated on or before Au 15, 2012, in which
event it shall bear interest from the Closin Date or (c interest with respect to an outstandin
Bond is in defaul such Bond shall bear interest from the Interest Pa Date to which interest
has previousl paid in full or made available for pa thereon pa on each Interest
Pa Date.
Section 2.02 Redemption of Bonds.
(a) Optional Redemption. The Bonds are subject to redemption prior to
maturit at the option of the Authorit on an date on or after , as a whole or in part
from such maturities as selected b the Authorit and b lot within a maturit from an
available source of funds at the redemption price e to the principal amount of Bonds to be
redeemed,, to with accrued interest thereon to the date fixed for redemption, without
premium.
(b) Mandato Sinking Pa Redemption. The Bonds maturin
September 1, 20 are subject to mandator redemption in part b lot, on September I in each
y ear, commencin September 1, 20 , from mandator sinkin pa made b the
Authorit into the Principal Account of the Bond Fund, at a redemption price e to the
principal amount thereof to be redeemed, without premium, plus accrued interest thereon to the
date of redemption in the a principal amounts and on September I in the respective
y ears as set forth in the followin schedules provided, however, that (i) in lieu of redemption
thereof, such Bonds ma be purchased b the Authorit and tendered to the Trustee, and (ii) if
some but not all of such Bonds have been redeemed pursuant to the redemption provisions
described in subsections (a) above or (c) or (d) below, the total amount of all future mandator
sinkin pa will be reduced b the a principal amount of such Bonds so redeemed,
to be allocated amon such mandator sinkin pa on a pro rata basis (as nearl as
practicable) in inte multiples of $5,000, as determined b the Authorit
Sinkin Fund
Redemption Date
(September 1)
W&AT14116111
Principal Amount
to be Redeemed
12
Sinkin Fund
Redemption Date
(September 1)
Principal Amount
to be Redeemed
Pa 44
( c ) Special Mandator Redemption From Prep of Special Taxes and
from Residual Funds. The Bonds shall also be subject to mandator redemption prior to maturit
on an date on or after September 1, 20 . in whole or in part from such maturities as selected
b the Authorit and b lot within a maturit from the redemption of District Bonds from
amounts constitutin prepa of Special Taxes, from amounts transferred from the Residual
Fund under the Fiscal A A and from amounts transferred b the Authorit to the
District from the Residual Fund under the Indenture at the followin redemption prices
(expressed as a percenta of the principal amount of Bonds to be redeemed) to with
accrued interest thereon to the redemption date.
Redemption Dates Redemption Prices
( d ) Mandator Redemption. The Bonds are subject to mandator redemption
on an date to which timel notice of redemption ma be g iven, in inte multiples of $5,,000
e to the principal amount of District Bonds from the deposit of fees with the District b a
public a which has accepted facilities servin an area of the District, and from insurance or
condemnation proceeds relatin to the District Bonds, without premium, plus accrued interest to
the redemption date, from such maturities as selected b the Authorit and b lot within a
maturit
(e) Notice of Redemption. The Trustee on behalf and at the expense of the
Authorit shall mail (b first class mail) notice of an redemption to the respective Owners of
an Bonds desi for redemption at their respective addresses appearin on the Re
Books,, to the Securities Depositories and to one or more Information Services, at least thirt (30)
but not more than sixt (60) da prior to the date fixed for redemption. Neither failure to
receive an such notice so mailed nor an defect therein shall affect the validit of the
proceedin for the redemption of such Bonds or the cessation of the accrual of interest thereon.
Such notice shall state the date of the notice,, the redemption date, and the redemption price and
shall desi the CUSIP numbers, the Bond numbers (but onl if less than all of the
Outstandin Bonds are to be redeemed) and the maturit of the Bonds to be redeemed, and shall
re that such Bonds be then surrendered at the Corporate Trust Office of the Trustee for
77772968.1 13
Pa 45
redemption at the redemption price, g ivin g notice also that further interest on such Bonds will
not accrue from and after the redemption date.
(f) In addition to the fore notice, further notice shall be g iven b the
Trustee in said form b first class mail to an Bond Owner whose Bond has been called for
redemption but who has failed to tender his Bond for pa b the date which is sixt da
after the redemption date, but no defect in said further notice nor an failure to g ive all or an
portion of such further notice shall in an manner defeat the effectiveness of a call for
redemption.
( Upon the pa of the redemption price of Bonds bein redeemed, each
check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the
CUSIP number identif b issue and maturit the Bonds bein redeemed with the proceeds
of such check or other transfer.
(h) Partial Redemption of Bonds. In the event onl a portion of an Bond is
called for redemption, then upon surrender of such Bond the Authorit shall execute and the
Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authorit a
new Bond or Bonds of the same series and maturit date, of authorized denominations in
a principal amount e to the unredeemed portion of the Bond to be redeemed.
(i) Effect of Redemption. From and after the date fixed for redemption, if
funds available for the pa of the principal of and interest (and premium, if an on the
Bonds so called for redemption shall have been dul provided, such Bonds so called shall cease
to be entitled to an benefit under this Indenture other than the ri to receive pa of the
redemption price, and no interest shall accrue thereon from and after the redemption date
specified in such notice. All Bonds redeemed pursuant to this Section 2.02 shall be canceled and
destro
(j) Purchase in Lieu of Redemption. In lieu of redemption of an Bond,
amounts on deposit in the Revenue Fund ma also be used and withdrawn b the Trustee at an
time, upon the Written Re of the Authorit for the purchase of such Bonds at public or
private sale as and when and at such prices (includin brokera and other char but
excludin accrued interest, which is pa from the Interest Account) as the Authorit ma in
its discretion determine in accordance with all applicable laws and in accordance with the
priorit afforded the relative Bond under the Indenture.
(k) Authority Notice. Notwithstandin an provisions in the Indenture to the
contrar upon an optional redemption or mandator redemption from Special Taxes in part, the
Authorit shall deliver a Written Certificate to the Trustee at least sixt (60) da prior to the
proposed redemption date or such later date as shall be acceptable to the Trustee so statin that
the remainin pa of principal and interest on the District Bonds, to with other
Revenues will be sufficient on a timel basis to pa debt service on the Bonds. The Authorit
shall certif in such Written Certificate that sufficient mone for purposes of such redemption
are or will be on deposit in the Redemption Fund, and is re to deliver such mone to the
Trustee to with other Revenues, if an then to be delivered to the Trustee, which mone
are re to be identified to the Trustee in the Written Certificate delivered with the Revenues.
77772968.1 14
Section 2.03 Form of the Bonds. The Bonds, the form of Trustee's certificate of
authentication,, and the form of assi to appear thereon, shall be substantiall in the form
set forth in Exhibit A attached hereto and b this reference incorporated herein, with necessar or
appropriate variations, omissions and insertions, as permitted or re b this Indenture.
Section 2.04 Execution of Bonds. The Bonds shall be si in the name and on
behalf of the Authorit with the manual or facsimile si of its Chairperson or Executive
Director and attested with the manual or facsimile si g nature of its Secretar or an assistant dul
appointed b the Board, under the printed seal of the Authorit and shall be delivered to the
Trustee for authentication b it. In case an officer of the Authorit who shall have si an
of the Bonds shall cease to be such officer before the Bonds so si shall have been
authenticated or delivered b the Trustee or issued b the Authorit such Bonds ma
nevertheless be authenticated, delivered and issued and, upon such authentication, deliver and
issue, shall be as bindin upon the Authorit as thou the individual who si the same had
continued to be such officer of the Authorit Also, an Bond ma be si on behalf of the
Authorit b an individual who on the actual date of the execution of such Bond shall be the
proper officer althou on the nominal date of such Bond such individual shall not have been
such officer.
Onl such of the Bonds as shall bear thereon a certificate of authentication in
substantiall the form set forth in Exhibit A manuall executed b the Trustee, shall be valid or
obli for an purpose or entitled to the benefits of this Indenture, and such certificate of the
Trustee shall be conclusive evidence that the Bonds so authenticated have been dul
authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
Section 2.05 Transfer of Bonds. Subject to Section 2.10, an Bond ma in
accordance with its terms, be transferred, upon the Re Books, b the person in whose
name it is re in person or b his dul authorized attorne upon surrender of such Bond
for cancellation,, accompanied b deliver of a written instrument of transfer in a form acceptable
to the Trustee,, dul executed. Whenever an Bond or Bonds shall be surrendered for transfer,
the Authorit shall execute and the Trustee shall authenticate and deliver to the transferee a new
Bond or Bonds of like maturit and a principal amount of authorized denominations.
The Trustee ma re pa b the Bondowner re such transfer or exchan of an
tax or other g overnmental char re to be paid with respect to such transfer or exchan
The Trustee shall not be re to transfer, pursuant to this Section, either (a) all Bonds durin
the period established b the Trustee for the selection of Bonds for redemption, or (b) an Bonds
selected for redemption pursuant to Section 2.02. The cost of printin Bonds and an services
rendered or expenses incurred b the Trustee in connection with an transfer shall be paid b the
Authorit
Section 2.06 Exchan of Bonds. The Bonds of an series ma be exchan at the
Corporate Trust Office of the Trustee for a like a principal amount of Bonds of the same
series of other authorized denominations and of the same maturit The Trustee shall not be
re to exchan pursuant to this Section, either (a) all Bonds durin the period established
b the Trustee for the selection of Bonds for redemption, or (b) an Bonds selected for
redemption pursuant to Section 2.02. The cost of printin Bonds and an service rendered or
expenses incurred b the Trustee in connection with an exchan shall be paid b the Authorit
77772968.1 15
Pa 47
Section 2.07 Re Books. The Trustee will keep or cause to be kept at its
Corporate Trust Office sufficient records for the re and transfer of the Bonds which
shall at all reasonable times durin re business hours be open to inspection b the Authorit
with reasonable prior notice and, upon presentation for such purpose, the Trustee shall, under
such reasonable re as it ma prescribe, re or transfer or cause to be re or
transferred,, on said records Bonds as hereinbefore provided.
Section 2.08 Bonds Mutilated, Lost, Destro or Stolen. If an Bond shall become
mutilated, the Authorit at the expense of the Owner of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like series, tenor and authorized
denomination in exchan and substitution for the Bond so mutilated, but onl upon surrender to
the Trustee of the Bond so mutilated. Ever mutilated Bond so surrendered to the Trustee shall
be cancelled b it and destro If an Bond hereunder shall be lost, destro or stolen,
evidence of such loss,, destruction or theft ma be submitted to the Trustee and the Authorit and,
if such evidence be satisfactor to the Trustee and the Authorit and indemnit for the Trustee
and the Authorit satisfactor to the Trustee shall be g iven, the Authorit at the expense of the
Bond Owner, shall execute,, and the Trustee shall thereupon authenticate and deliver, a new Bond
of like series and tenor in lieu of and in substitution for the Bond so lost, destro or stolen ( or
if an such Bond shall have matured or shall have been called for redemption, instead of issuin
a substitute Bond the Trustee ma pa the same without surrender thereof upon receipt of
indemnit satisfactor to the Trustee). The Authorit ma re pa of a fee for preparin
and authenticatin each new Bond issued under this Section and of expenses which ma be
incurred b the Authorit and the Trustee. An Bond issued under the provisions of this Section
2.08, in lieu of an Bond alle to be lost, destro or stolen shall constitute an ori
contractual obli on the part of the Authorit whether or not the Bond alle to be lost,
destro or stolen be at an time enforceable b an and shall be e and
proportionatel entitled to the benefits of this Indenture with all other Bonds secured b this
Indenture.
Section 2.09 CUSIP Numbers. The Trustee and the Authorit shall not be liable for
an defect or inaccurac in the CUSIP number that appears on an Bond or in an redemption
notice. The Trustee ma in its discretion, include in an redemption notice a statement to the
effect that the CUSIP numbers on the Bonds have been assi b an independent service and
are included in such notice solel for the convenience of the Owners and that neither the Trustee,
or the Authorit shall be liable for an inaccuracies in such numbers.
Section 2.10 Use of Securities Depositor
(a) The Bonds shall be initiall re as provided in Section 2.01.
Re ownership of the Bonds, or an portion thereof, ma not thereafter be transferred
except:
(i) to an successor of Cede & Co., as nominee of DTC, as its
nominee, or to an substitute depositor desi pursuant to clause (ii) of this Section (a
"substitute depositor provided, that an successor of Cede & Co., as nominee of DTC or a
substitute depositor shall be q ualified under an applicable laws to provide the services
proposed to be provided b it
77772968.1 16
9�0*
(ii) to an substitute depositor upon (1) the resi of ITC or its
successor (or an substitute depositor or its successor) from its functions as depositor or (2) a
determination b the Authorit to substitute another depositor for ITC (or its successor)
because ITC or its successor (or an substitute depositor or its successor) is no lon able to
carr out its functions as depositor provided, that an such substitute depositor shall be
q ualified under an applicable laws to provide the services proposed to be provided b it or
(iii) to an person as provided below, upon (1) the resi of ITC
or its successor (or substitute depositor or its successor) from its functions as depositor or (2)
a determination b the Authorit to remove ITC or its successor (or an substitute depositor or
its successor) from its functions as depositor
(b) In the case of an transfer pursuant to clause (i) or clause (ii) of subsection
(a) hereof, upon receipt of the Outstandin Bonds b the Trustee, to with a Written
Re of the Authorit to the Trustee, a new Bond for each maturit shall be authenticated and
delivered in the a principal amount of the Bonds then Outstandin re in the
name of such successor or such substitute depositor or their nominees, as the case ma be, all
as specified in such Written Re of the Authorit
( c) In the case of an transfer pursuant to clause (iii) of subsection (a) hereof
upon receipt of the Outstandin Bonds b the Trustee, to with a Written Re of the
Authorit to the Trustee, new Bonds shall be authenticated and delivered in such denominations
numbered in the manner determined b the Trustee and re in the names of such persons
as are re in such a Written Re of the Authorit subject to the limitations of Section
2.01 hereof, provided, the Trustee shall not be re to deliver such new Bonds within a
period less than sixt (60) da from the date of receipt of such a Written Re of the
Authorit After an transfer pursuant to this subsection, the Bonds shall be transferred pursuant
to Section 2.05.
(d) The authorit and the Trustee shall be entitled to treat the person in whose
name an Bond is re as the Owner thereof for all purposes of the Indenture and an
applicable laws, notwithstandin an notice to the contrar received b the Trustee or the
Authorit and the Authorit and the Trustee shall have no responsibilit for transmittin
pa to, communication with, notif or otherwise dealin with an beneficial owners of
the Bonds,, and neither the Authorit nor the Trustee will have an responsibilit or obli
le or otherwise, to the beneficial owners or to an other part includin ITC or its successor
(or substitute depositor or its successor), except for the Owner of an Bonds.
(e) So lon as the Outstandin Bonds are re in the name of Cede &
Co. or its re assi the Authorit and the Trustee shall cooperate with Cede & Co., as
sole re Owner, or its re assi in effectin pa of the principal of and
interest on the Bonds b arran for pa in such manner that funds for such pa are
properl identified and are made immediatel available on the date the are due.
( f) Notwithstandin an to the contrar contained herein, so lon J; as the
Bonds are re as provided in this Section 2. 10, pa of principal of and interest on the
77772968.1 17
Bonds shall be made in accordance with the Letter of Representations delivered to DTC with
respect to the Bonds.
Section 2.11 Temporar Bonds. The Bonds ma be initiall delivered in temporar
form exchan for definitive Bonds when read for deliver which temporar Bonds shall
be printed, litho or t shall be of such denominations as ma be determined b
the Trustee, shall be in full re form and shall contain such reference to an of the
provisions hereof as -ma be appropriate. Ever temporar Bond shall be authenticated and
delivered b the Trustee upon the same conditions and terms and in substantiall the same
manner as definitive Bonds. If the Trustee authenticates and delivers temporar Bonds, it will
re and authenticate definitive Bonds, and in that case, upon demand of the Owner of an
temporar Bonds, such definitive Bonds shall be exchan b the Trustee at its Corporate Trust
Office, without cost to such Owner for temporar Bonds upon surrender of such temporar
Bonds,, and until so exchan such temporar Bonds shall be entitled to the same benefit,
protection and securit hereunder as the definitive Bonds executed and delivered hereunder. All
temporar Bonds surrendered pursuant to the provisions of this Section shall be canceled b the
Trustee and shall not be redelivered.
Section 3.01 Issuance of Bonds. Upon the execution and deliver of this Indenture,
the Authorit shall execute and deliver the Bonds in the a principal amount of
Dollars ($ ) to the Trustee for authentication and deliver to the
ori purchaser thereof upon the Written Re of the Authorit
Section 3.02 Application of Proceeds of Sale of Bonds and Other Amounts. Upon
the receipt of pa for the Bonds on the Closin Date, the Trustee shall appl the proceeds of
sale thereof in the amount of $ (bein the principal amount of $ less an
ori issue discount of $ less an underwriter's discount of $ alon
with other available mone in the amount of $ . as follows:
(a) The Trustee shall deposit the amount of $ in the Bond
Purchase Fund, which amount constitutes the purchase price of the District Bonds.
( b )
Account.
(c)
Issuance Fund.
(d)
Mana Fund.
The Trustee shall deposit the amount of $
The Trustee shall deposit the amount of $
The Trustee shall deposit the amount of $
in the Reserve
in the Costs of
in the Cash Flow
Section 3.03 Bond Purchase Fund. The Trustee shall establish and maintain a
separate fund to be known as the "Bond Purchase Fund" into which shall be deposited a portion
of the proceeds of the sale of the Bonds in the amount set forth in Section 3.02(a). The Trustee
77772968.1 18
shall disburse all amounts in the Bond Purchase Fund on the Closing Date to purchase the
District Bonds. The Trustee shall transfer to the Escrow Agent for deposit in the
Escrow Fund and transfer the remaining funds in the Bond Purchase Fund to the Fiscal Agent for
deposit pursuant to the Fiscal Agent Agreement. Following the disbursement of all amounts to
purchase the District Bonds, the Trustee shall close the Bond Purchase Fund.
Section 3.04 Costs of Issuance Fund. There is hereby established a fund to be held by
the Trustee known as the "Costs of Issuance Fund" into which shall be deposited a portion of the
Bond proceeds as set forth in Section 3.02(c). The moneys in the Costs of Issuance Fund shall
be used to pay Costs of Issuance from time to time upon receipt of a Written Request of the
Authority. Can the date which is one hundred twenty (120) days following the Closing Date or
upon the earlier receipt by the Trustee of a written Request of the Authority stating that all Costs
of Issuance have been paid, the Trustee shall transfer all remaining amounts in the Costs of
Issuance Fund to the Revenue Fund. The Authority may at any time file a Written Request of
the Authority requesting that the Trustee retain a specified amount in the Costs of Issuance Fund
and transfer to the Revenue Fund all remaining amounts, and the Trustee shall comply with such
request.
Section 3.05 Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be affected in any way of any proceedings taken by the District with respect to
the application of the proceeds of the sale of the District Bonds, and the recital contained in the
Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of their
validity and of the regularity of their issuance.
ARTICLE Iv
REVENUES; FLOW OF FUNDS
Section 4.01 Pledge of Revenues; Assignment of Rights. The Bonds shall be secured
by a first lien on and pledge (which shall be effected in the manner and to the extent hereinafter
provided) of all of the Revenues and Redemption Revenues and a first pledge of all of the
moneys in the Bond Fund, the Revenue Fund, the Redemption Fund and the Cash Flow
Management Fund, including all amounts derived from the investment of such moneys. The
Bonds shall be equally secured by a pledge, charge and first lien upon the Revenues and
Redemption Revenues and such moneys without priority for number, date of Bonds, date of
execution or date of delivery; and the payment of the interest on and principal of the Bonds and
any premiums upon the redemption of any thereof shall be and are secured by an exclusive
pledge, charge and first lien upon the Revenues and Redemption Revenues and such moneys.
So long as any of the Bonds are Outstanding, the Revenues and Redemption Revenues
and such other money shall not be used for any other purpose except as described hereunder for
the payment of the Bonds; except that out of the Revenues and Redemption Revenues there may
be apportioned such sums, for such purposes, as are expressly permitted by Section 4.02 and
Section 4.05, respectively.
The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the
Owners from time to time of the Bonds, all of the Revenues and all of the right, title and interest
77772968.1 19
Page 51
of the Authorit in the District Bonds. The Trustee shall be entitled to and shall receive all of the
Revenues,, and an Revenues collected or received b the Authorit shall be deemed to be held,
and to have been collected or received,, b the Authorit as the a of the Trustee and shall
forthwith be paid b the Authorit to the Trustee. The assi to the Trustee is solel in its
capacit as Trustee under this Indenture and in acceptin such assi and takin an actions
with respect to the District Bonds, the Trustee shall be entitled to all the indemnities, protections,
immunities and limitations from liabilit afforded it as Trustee under this Indenture. The Trustee
also shall be entitled to and, subject to the provisions hereof, shall take all steps, actions and
proceedin reasonabl necessar in its jud to enforce, either jointl with the Authorit or
separatel all of the ri of the Authorit and all of the obli of the District under the
District Bonds.
Section 4.02 Receipt, Deposit and Applications of Revenues.
(a) Deposit of Revenues; Revenue Fund. All Revenues (excludin
Redemption Revenues) shall be promptl deposited b the Trustee upon receipt thereof in a
special fund desi as the "Revenue Fund" which the Trustee shall establish, maintain and
hold in trust hereunder.
( b ) Deposit of Revenues; Bond Fund: The Trustee shall establish, maintain
and hold in trust a fund, entitled "Bond Fund." Within such fund, the Trustee shall establish,
maintain and hold in trust separate special accounts entitled "Interest Account" and "Principal
Account" and the "Reserve Account." On or before each Interest Pa Date, the Trustee
shall transfer from the Revenue Fund for deposit into the Bond Fund the followin amounts, in
the priorit set forth in Subsection (e) below.
(c) Application of Revenues; Bond Fund. On or before each Interest Pa
Date the Trustee shall transfer from the Revenue Fund and deposit into the Bond Fund and the
followin respective special accounts therein, the followin amounts in the followin order of
priorit the re of each such special account (includin the makin up of an
deficiencies in an such account resultin from lack of Revenues sufficient to make an earlier
re deposit) at the time of deposit to be satisfied before an transfer is made to an account
subse in priorit
(i) Interest Account. On or before each Interest Pa Date,, the
Trustee shall deposit in the Interest Account an amount re to cause the a amount
on deposit in the Interest Account to e the amount of interest becomin due and pa on
such Interest Pa Date on all Outstandin Bonds. No deposit need be made into the Interest
Account if the amount contained therein is at least e to the interest becomin due and
pa upon all Outstandin Bonds on such Interest Pa Date. All mone in the Interest
Account shall be used and withdrawn b the Trustee solel for the purpose of pa the interest
on the Bonds as it shall become due and pa (includin accrued interest on an Bonds
redeemed prior to maturit
(ii) Principal Account. On or before each date on which the principal
of the Bonds shall be pa the Trustee shall deposit in the Principal Account an amount
re to cause the a amount on deposit in the Principal Account to e the
77772968.1 20
Pa 52
ag amount of principal (includin sinkin fund pa comin due and pa on
such date on the Bonds pursuant to Section 2.01. All mone in the Principal Account shall be
used and withdrawn b the Trustee solel for the purpose of pa the principal of the Bonds
(includin sinkin fimd pa
(iii) Reserve Account. All amounts on deposit in the Revenue Fund on
or before each Interest Pa Date,, to the extent not re to pa an interest on or
principal of an Outstandin Bonds then havin come due and pa shall be credited to the
replenishment of the Reserve Account in an amount sufficient to maintain the Reserve
Re therein.
The Authorit shall deposit from the repa of the District Bonds, and, to the extent
necessar and to the extent permitted b law, from available surplus revenues with respect to
other series of bonds issued b the Authorit relatin to communit facilities districts, and
maintain an amount of mone e to the Reserve Re in the Reserve Account at all
times while the Bonds are Outstandin Amounts in the Reserve Account will be used to pa
debt service on the Bonds to the extent other mone (includin amounts in the Cash Flow
Mana Fund) are not available therefor. Earnin on amounts in the Reserve Account in
excess of the Reserve Re shall be deposited into the Revenue Fund, if and to the extent
such earnin are not re to be retained in the Reserve Account to meet the Reserve
Re Upon redemption of the Bonds, amounts on deposit in the Reserve Account shall
be reduced (to an amount not less than the Reserve Re and the excess mone shall be
transferred to the Redemption Account and used for the redemption of the Bonds. Amounts in
the Reserve Account ma be used to pa the final y ear's debt service on the Bonds.
(iv) Surplus. All remainin amounts on September 2 (or the next
Business Da to the 'extent September 2 is not a Business Da of each y ear, commencin
September 2, 2012, on deposit in the Revenue Fund shall be transferred to the Residual Fund.
(v) Rebate Account. The Trustee shall deposit in the Rebate Account
which account is hereb established as a separate account to be held b the Trustee) from time to
time, as set forth in this Indenture, an amount determined b the Authorit to be subject to rebate
to the United States of America in accordance with Section 5.07(h). Amounts in the Rebate
Account shall be applied and disbursed b the Trustee solel for the purposes and at the times set
forth in written re of the Authorit filed with the Trustee pursuant to Section 5.07(h). The
Trustee shall not be responsible for calculatin rebate amounts or for the ade or correctness
of an rebate report or rebate calculations. The Trustee shall be deemed conclusivel to have
complied with the provisions of the Indenture and an other a relatin to the Bonds
re calculation and pa of rebate if it follows the directions of the Authorit and it
shall have no independent dut to review such calculations or enforce the compliance with such
rebate re b the Authorit
Section 4.03 Cash Flow Mana Fund.
(a) Establishment of Cash Flow Management Fund. There is hereb
established as a separate fund to be held b the Trustee, the "Cash Flow Mana Fund," to
the credit of which a deposit shall be made as re b Section 4.05 hereof or such other
77772968.1 21
9�
le available funds deposited b the Authorit from surplus revenues of another series of
local a revenue bonds issued b the Authorit Mone in the Cash Flow Mana
Fund shall be held in trust b the Trustee for the benefit of the Owners of the Bonds, and shall be
disbursed as provided below.
(b) Disbursement. Mone in the Cash Flow Mana Fund shall be used
(prior to an draw on the Reserve Account) solel for the purpose of pa the principal of,
includin sinkin fund pa and interest on an Bonds when due in the event that the
mone in the Interest Account or the Principal Account are insufficient therefor. If the amounts
in the Interest Account or the Principal Account are insufficient to pay the principal of, includin
sinkin fund pa or interest on an Bonds when due, the Trustee shall withdraw from the
Cash Flow Mana Fund for deposit in the Interest Account or the Principal Account
mone necessar for such purposes.
In connection with an redemption of the Bonds, or a partial defeasance of the Bonds in
accordance with Section 2.02 hereof, amounts in the Cash Flow Mana Fund ma be
applied to such redemption or partial defeasance so lon as the amount on deposit in the Cash
Flow Mana Fund followin such redemption or partial defeasance e the Cash Flow
Mana Fund Re To the extent that the Cash Flow Mana Fund is at the
Cash Flow Mana Fund Re as of the first da of the final Bond Year for the
Bonds, amounts in the Cash Flow Mana Fund ma be applied to pay the principal of and
interest due on the Bonds in the final Bond Year for such issue. Mone in the Cash Flow
Mana Fund in excess of the Cash Flow Mana Fund Re not transferred in
accordance with the precedin provisions of this para shall be withdrawn from the Cash
Flow Mana Fund on September 2 of each y ear and transferred to the Residual Fund.
Section 4.04 Redemption Fund. There is hereb established as a separate fund to be
held b the Trustee, the "Redemption Fund," to the credit of which the Authorit shall deposit,
immediatel upon receipt, all Redemption Revenues. Mone in the Redemption Fund shall be
held in trust b the Trustee for the benefit of the Authorit and the Owners of the Bonds, and
shall be used and withdrawn b the Trustee to redeem Bonds pursuant to Sections 2.02(a),
2.02(c) and 2.02(4) hereof on the applicable date thereof.
Section 4.05 Residual Fund.
(a) Establishment of Residual Fund. There is hereb established as a separate
fund to be held b the Trustee, the "Residual Fund," to the credit of which a deposit shall be
made as re b Section 4.02(c) and Section 4.03(b) hereof. Mone in the Residual
Fund shall be held in trust b the Trustee for the benefit of the Authorit and shall be disbursed
as provided below. The amounts in the Residual Fund are not pled to the repa of the
Bonds.
(b) Disbursement. On September 2 of each y ear commencin September 2,
2012, the Trustee shall transfer an amounts in the Residual Fund for the followin purposes in
the followin order of priorit
77772968.1 22
9�
(1) to the Cash Flow Mana Fund an amount, if an re to
restore the amount on deposit in the Cash Flow Mana Fund to the Cash Flow
Mana Fund Re
(ii) to the trustee with respect to an other series of local a
revenue bonds issued b the Authorit related to communit facilities districts an amount
re to replenish an reserve account to its reserve re with respect to such series of
bonds
(iii) to the trustee with respect to an other series of local a
revenue bonds issued b the Authorit related to communit facilities districts, an amount
re to replenish an cash flow mana fund to its cash flow mana fund
re with respect to such series of bonds
(iv) to the Fiscal A for deposit in the Special Mandator
Redemption Account of the Redemption Fund or an e account for redemption of the
District Bonds or such Additional District Bonds (in proportion to the outstandin principal
amount with respect to the District Bonds and an Additional District Bonds or such other fair
allocation determined b the Authorit unless the Trustee has received written direction from
the Authorit to expend such remainin funds held in the Residual Fund for an lawful purposes
of the Authorit includin but not limited to, pa or reimbursin the pa of the costs and
expenses incurred b the Cit or the Authorit in administerin the Bonds and the District
Bonds, pa costs of public capital improvements or reducin the Special Taxes, which are to
be levied in the current or the succeedin Fiscal Year upon the properties which are subject to
the Special Taxes within the District.
Section 4.06 Investments. All mone in an of the funds or accounts established with
the Trustee pursuant to this Indenture shall be invested b the Trustee solel in Permitted
Investments pursuant to the Written Re of the Authorit g iven to the Trustee at least two ( 2 )
Business Da in advance of the makin of such investments. Each such written direction shall
contain the representation of the Authorit that the investments identified therein constitute
Permitted Investments hereunder upon which the Trustee ma conclusivel rel In the absence
of an such direction from the Authorit the Trustee shall invest an such mone in clause ( d )
of the definition of Permitted Investments. Obli purchased as an investment of mone in
an funds shall be deemed to be part of such fund or account.
All interest or g ain derived from the investment of amounts in an of the funds or
accounts established hereunder shall be deposited in the fund or account from which such
investment was made. For purposes of ac an investments hereunder, the Trustee ma
commin funds held b it hereunder upon the Written Re of the Authorit The Trustee
or its affiliate ma (but shall not be obli to) act as principal or a in the ac or
disposition of an investment and shall be entitled to its customar fees therefor. The Trustee is
re to sell or present for redemption,, an Permitted Investment it purchases whenever it
shall be necessar to provide monies to meet an re pa transfer, withdrawal or
disbursement from the fund to which such permitted investment is created. The Trustee shall
incur no liabilit for losses arisin from an investments made pursuant to this Section.
77772968.1 23
Pa 55
The ne Authorit acknowled that to the extent re of the Comptroller of the
Currenc or other applicable re entit g rant the Authorit the ri to receive brokera
confirmations of securit transactions as the occur, the Authorit specificall waives receipt of
such confirmations to the extent permitted b law. The Trustee will furnish to the Authorit
periodic cash transaction statements which include detail for all investment transactions made b
the Trustee hereunder.
The Trustee ma purchase or sell to itself or an affiliate, as principal or a
investments authorized b this Section. The Trustee ma act as purchaser or a in the makin
or disposin of an investment. Such investments, if re shall be re in the name
of the Trustee for the benefit of the Owners and held b the Trustee.
The Trustee or an of its affiliates ma act as sponsor, advisor or mana or provide
administrative services in connection with an Permitted Investments.
Section 4.07 Valuation and Disposition of Investments. Except as otherwise
provided in the next sentence, all investments of amounts deposited in an fund, or account
created b or pursuant to this A or otherwise containin g ross proceeds of the Bonds
(within the meanin of section 148 of the Code) shall be ac disposed of, and valued (as of
the date that valuation is re b this A or the Code) at Fair Market Value.
Investments in funds or accounts (or portions thereof) that are subject to a y ield restriction under
the applicable provisions of the Code shall be valued at their present value (within the meanin
of section 148 of the Code).
COVENANTS OF THE AUTHORITY
Section 5.01 Punctual Pa The Authorit shall punctuall pa or cause to be
paid the principal, interest and premium (if an to become due in respect of all the Bonds, in
strict conformit with the terms of the Bonds and of this Indenture, accordin to the true intent
and meanin thereof, but onl out of Revenues and other assets pled for such payment as
provided in this Indenture.
Section 5.02 Extension of Pa of Bonds. The Authorit shall not directl or
indirectl extend or assent to the extension of the maturit of an of the Bonds or the time of
pa of an claims for interest b the purchase of such Bonds or b an other arran
and in case the maturit of an of the Bonds or the time of pa of an such claims for
interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of an
default hereunder, to the benefits of this Indenture,, except subject to the prior pa in full of
the principal of all of the Bonds then Outstandin and of all claims for interest thereon which
shall not have been so extended. Nothin in this Section shall be deemed to limit the ri of the
Authorit to issue Bonds for the purpose of refundin an Outstandin Bonds, and such issuance
shall not be deemed to constitute an extension of maturit of the Bonds.
Section 5.03 A Encumbrances. The Authorit shall not create, or permit the
creation of, an pled lien, char or other encumbrance upon the Revenues and other assets
77772968.1 24
pled or assi under this Indenture while an of the Bonds are Outstandin except the
pled and assi created b this Indenture. Subject to this limitation, the Authorit
expressl reserves the ri to enter into one or more other indentures for an of its corporate
purposes, includin but not limited to,, the purchase of Additional District Bonds and other
pro under the Bond Law, and reserves the ri to issue other obli for such
purposes.
Section 5.04 Power to Issue Bonds and Make Pled and Assi The
Authorit is dul authorized pursuant to law to issue the Bonds and to enter into this Indenture
and to pled and assi the Revenues, the District Bonds and other assets purported to be
pled and assi respectivel under this Indenture in the manner and to the extent provided
in this Indenture. The Bonds and the provisions of this Indenture are and will be the le valid
and bindin special obli of the Authorit in accordance with their terms and priorit of
pa and the Authorit and the Trustee, subject to the provisions of this Indenture, shall at
all times, to the extent permitted b law, defend, preserve and protect said pled and assi
of Revenues and other assets and all the ri of the Bond Owners under this Indenture a
all claims and demands of all persons whomsoever.
Section 5.05 Accountin Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
industr standards, in which complete and accurate entries shall be made of all transactions made
b the Trustee relatin to the proceeds of Bonds, the Revenues and all funds and accounts
established b the Trustee pursuant to this Indenture. Such books of record and account shall be
av ailable for inspection b the Authorit durin re business hours with reasonable prior
vai
notice.
Not later than 45 da followin each Interest Pa Date,, the Trustee shall prepare
and file with the Authorit a report settin forth: (i) amounts withdrawn from and deposited into
each fund and account maintained b the Trustee under the Indenture (ii) the balance on deposit
in each fund and account as of the date for which such report is prepared and (iii) a brief
description of all obli held as investments in each fund and account. Copies of such
reports ma be mailed to an owner of at least 50% a principal amount of Bonds
Outstandin upon the owner's written re at a cost not to exceed the Trustee's actual costs
of duplication and mailin Said reports ma be in the form of the Trustee's re semiannual
statements.
Section 5.06 No Parit Debt. Except for the Bonds, or bonds issued for the purpose of
refundin the Bonds, the Authorit covenants that no additional bonds, notes or other
indebtedness shall be issued or incurred which are pa out of the Revenues in whole or in
part.
Section 5.07 Tax Covenants Relatin to Bonds.
(a) Special Definitions. When used in this Section, the followin terms have
the followin meanin
(i) "Bonds" means, unless otherwise q ualified, the Bonds.
77772968.1
25
Pa 57
01) "Code" means the Internal Revenue Code of 1986, as amended.
(iii) "Computation Date" has the meanin set forth in section 1.148 -
1(b) of the Tax Re
(iv) "Gross Proceeds" means an proceeds as defined in section 1.148 -
1(b) of the Tax Re (referrin to sales, investment and transferred proceeds), and an
replacement proceeds as defined in section 1.148 -1(c) of the Tax Re of the Bonds.
(v) "Investment" has the meanin set forth in section 1.148 -1(b) of the
Tax Re
(vi) "Nonpurpose Investment" means an investment propert as
defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and
that is not ac to carr out the g overnmental purposes of that series of Bonds.
(vii) "Rebate Amount" has the meanin set forth in section 1.148 -1(b)
of the Tax Re
(viii) "Tax Re means the United States Treasur Re
promul pursuant to sections 103 and 141 throu 150 of the Code, or section 103 of the
1954 Code, as applicable.
(ix) "Yield" of an Investment has the meanin set forth in section
1.148 -5 of the Tax Re and of an issue of g overnmental obli has the meanin
set forth in section 1.148 -4 of the Tax Re
(b) Not to Cause Interest to Become Taxable. The Authorit covenants that it
shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or an
other amounts (or an propert the ac construction or improvement of which is to be
financed directl or indirectl with Gross Proceeds) in a manner that if made or omitted,
respectivel could cause the interest on an Bond to fail to be excluded pursuant to Section
103(a) of the Code from the g ross income, of the owner thereof for federal income tax purposes.
Without limitin the g eneralit y of the fore unless and until the Trustee receives a written
opinion of Bond Counsel to the effect that failure to compl with such covenant will not
adversel affect such exclusion of the interest on an Bond from the g ross income of the owner
thereof for federal income tax purposes, the Authorit shall compl with each of the specific
covenants in this Section.
(c) Private Use and Private Payments. Except as would not cause an Bond
to become a "private activit bond" within the meanin of section 141 of the Code and the Tax
Re the Authorit shall take all actions necessar to assure that the District or Cit or
other public a at all times prior to the final cancellation of the last of the Bonds to be
retired:
(i) exclusivel owns, operates and possesses all propert the
ac construction or improvement of which is to be financed or refinanced directl or
indirectl with Gross Proceeds of the Bonds and not use or permit the use of such Gross
77772968.1
26
Proceeds (includin throu an contractual arran with terms different than those
applicable to the g eneral public or an propert ac constructed or improved with such
Gross Proceeds in an activit carried on b an person or entit (includin the United States or
an a department and instrumentalit thereof) other than a state or local g overnment,
unless such use is solel as a member of the g eneral public and
(ii) does not directl or indirectl impose or accept an char or other
pa b an person or entit (other than a state or local g overnment) who is treated as usin
an Gross Proceeds of the Bonds or an propert the ac q uisition, construction or improvement of
which is to be financed or refinanced directl or indirectl with such Gross Proceeds.
(d) No Private Loan. Except as would not cause an Bond to become a
"private activit bond" within the meanin of section 141 of the Code and the Tax Re
and rulin thereunder, the Authorit shall not use or permit the use of Gross Proceeds of the
Bonds to make or finance loans to an person or entit other than a state or local g overnment.
For purposes of the fore covenant, such Gross Proceeds are considered to be "loaned" to a
person or entit if: (i) propert ac constructed or improved with such Gross Proceeds is
sold or leased to such person or entit in a transaction that creates a debt for federal income tax
purposes (ii) capacit in or service from such propert is committed to such person or entit
under a take-or-pa output or similar contract or arran or (iii) indirect benefits of such
Gross Proceeds, or burdens and benefits of ownership of an propert ac constructed or
improved with such Gross Proceeds, are otherwise transferred in a transaction that is the
economic e of a loan.
(e) Not to Invest at Higher Yield. Except as would not cause the Bonds to
become "arbitra bonds" within the meanin of section 148 of the Code and the Tax
Re and rulin thereunder, the Authorit shall not (and shall not permit an person to),
at an time prior to the final cancellation of the last Bond to be retired, directl or indirectl
invest Gross Proceeds in an Investment, if as a result of such investment the Yield of an
Investment ac with Gross Proceeds, whether then held or previousl disposed of, would
materiall exceed the Yield of the Bonds within the meanin of said section 148.
(f) Not Federall Except to the extent permitted b section
149(b) of the Code and the Tax Re and rulin thereunder, the Authorit shall not take
or omit to take (and shall not permit an person to take or omit to take) an action that would
cause an Bond to be "federall g uaranteed" within the meanin of section 149(b) of the Code
and the Tax Re and rulin thereunder.
( Information R eport. The Authorit shall timel file an information
re b section 149(e) of the Code with respect to Bonds with the Secretar of the Treasur
on Form 8038-G or such other form and in such place as the Secretar ma prescribe.
(h) Rebate of Arbitra Profits. Except to the extent otherwise provided in
section 148(f) of the Code and the Tax Re
(i) The Authorit shall account for all Gross Proceeds (includin all
receipts, expenditures and investments thereof) on its books of account separatel and apart from
77772968.1 27
Pa 59
all other funds (and receipts, expenditures and investments thereof) and shall retain all records of
accountin for at least six y ears after the da on which the last Bond is dischar However, to
the extent permitted b law, the Authorit ma commin Gross Proceeds of Bonds with its
other monies, provided that it separatel accounts for each receipt and expenditure of Gross
Proceeds and the obli ac therewith.
(ii) Not less fre than each Computation Date, the Authorit
shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the
Code and the Tax Re and rulin thereunder. The Authorit shall maintain a cop of
the calculation with its official transcript of proceedin relatin to the issuance of the Bonds
until six y ears after the final Computation Date.
(iii) In order to assure the excludabilit pursuant to section 103(a) of
the Code of the interest on the Bonds from the g ross income of the owners thereof for federal
income tax purposes, the Authorit shall pa to the United States the amount that when added to
the future value of previous rebate pa made for the Bonds e (i) in the case of the
Final Computation Date as defined in section 1.148-3(e)(2) of the Tax Re one hundred
percent (100%) of the Rebate Amount on such date and (ii) in the case of an other
Computation Date,, ninet percent (90%) of the Rebate Amount on such date. Upon the Written
Re of the Authorit the Trustee shall pay over to the Authorit amounts in the Rebate
Account for such purpose. In all cases, such rebate pa shall be made b the Authorit at
the times and in the amounts as are or ma be re b section 148(f) of the Code and the Tax
Re and rulin thereunder, and shall be accompanied b Form 8038-T or such other
forms and information as is or ma be re b section 148(f) of the Code and the Tax
Re and rulin thereunder for execution and filin b the Authorit Notwithstandin
the fore and provided that the Authorit takes all steps available to it to cause the provision
of such amounts, the monetar obli of the Authorit under this para (iii) shall be
limited to amounts provided to it for such purpose b the District.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted b section
148 of the Code and the Tax Re and rulin thereunder, the Authorit shall not and
shall not permit an person to,, at an time prior to the final cancellation of the last of the Bonds
to be retired,, enter into an transaction that reduces the amount re to be paid to the United
States pursuant to para (h) of this Section because such transaction results in a smaller
profit or a lar loss than would have resulted if the transaction had been at arm's len and
had the Yields on the Bonds not been relevant to either part
0) Bonds Not Hedge Bonds. The Authorit represents that none of the
Bonds is or will become a "hed bond" within the meanin of section 149 of the Code.
(k) Elections. The Authorit hereb directs and authorizes an Authorit
Representative to make elections permitted or re pursuant to the provisions of the Code or
the Tax Re as such Representative (after consultation with Bond Counsel) deems
necessar or appropriate in connection with the Bonds, in the Tax Certificate as to Arbitra and
the Provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar or
other appropriate certificate, form or document.
77772968.1 28
9�
(1) Closiniz Certificate. The Authorit a to execute and deliver in
connection with the issuance of the Bonds a Tax Certificate as to Arbitra and the Provisions of
Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar document containin
additional representations and covenants pertainin to the exclusion of interest on the Bonds
from the g ross income of the owners thereof for federal income tax purposes, which
representations and covenants are incorporated as thou expressl set forth herein.
. Section 5.08 District Bonds. The Trustee,, as assi of the Authorit ri pursuant
to Section 4.01, shall ( subject to the provisions of this Indenture promptl collect all amounts
due as principal and interest on District Bonds from the District and, subject to the provisions
hereof, shall enforce, and take all steps, actions and proceedin reasonabl necessar for the
enforcement of all of the ri of the Authorit thereunder and for the enforcement of all of the
obli of the Districts thereunder.
Section 5.09 Further Assurances. The Authorit shall cause to be collected and paid
to the Trustee all Revenues as such Revenues become due and pa The Authorit will
adopt, make, execute and deliver an and all such further resolutions, instruments and assurances
as ma be reasonabl necessar or proper to carr out the intention or to facilitate the
performance of this Indenture, and for the better assurin and confirmin unto the Owners of the
Bonds the ri and benefits provided in this Indenture.
Section 5.10 Immunit The Authorit is not entitled to an immunit soverei or
otherwise, from an le proceedin to enforce or collect upon this Indenture or the Bonds. To
the extent that the Authorit has or hereafter ma ac an ri to immunit the Authorit
hereb waives such ri for itself in respect of its obli arisin under this Indenture and
the Bonds.
Section 5.11 No Acceleration. The principal of the Bonds shall not be subject to
acceleration hereunder. Nothin in this Section shall in an wa prohibit the prepa or
redemption of Bonds or the defeasance of the Bonds and dischar of this A
40 0
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115
Section 6.01 Appointment of Trustee. Union Bank, N.A., in Los An California,
is hereb appointed Trustee b the Authorit for the purpose of receivin all mone re to
be deposited with the Trustee hereunder and to allocate, use and appl the same as provided in
this Indenture. The Authorit a that it will maintain a Trustee havin a corporate trust
office in the State, with a combined capital and surplus of at least Sevent Five Million Dollars
($75,,000,,000), and subject to supervision or examination b federal or State authorit so lon as
an Bonds are Outstandin If such bank or trust compan publishes a report of condition at
least annuall pursuant to law or to the re of an supervisin or examinin authorit
above referred to, then for the purpose of this Section 6.01 the combined capital and surplus of
such bank or trust compan shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.
77772968.1 29
ism
i ne Trustee is hereb authorized to pa the principal of and interest and redemptio
premium (if an on the Bonds when dul presented for pa at maturit or on redemptio
or purchase prior to maturit and to cancel all Bonds upon pa thereof The Trustee sh 11
'••• accurate records ! administered by s • of all Bonds paid and disch
Section 6.02 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the
following express terms and conditions:
(a) The Trustee, prior to the occurrence of an Event of Default and after
curing of all Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an Event of Default
hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of
the rights and powers vested in it by this Indenture, and shall use the same degree of care and
skill and diligence in their exercise, as a prudent person would use in the conduct of its own
affairs.
(b) The Trustee may execute any of the trusts or powers hereof and perform
the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be
entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee
may conclusively rely on an opinion of counsel as full and complete protection for any action
taken or suffered by it hereunder.
(c) The Trustee shall not be responsible for any recital herein or in the Bonds,
or for any of the supplements hereto or thereto or instruments of further assurance, or for the
sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and
the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any
covenants, conditions or agreements on the part of the Authority hereunder.
(d) The Trustee may become the Owner of Bonds secured hereby with the
same rights which it would have if not the Trustee; may acquire and dispose of other bonds or
evidences of indebtedness of the Authority with the same rights it would have if it were not the
Trustee; and may act as a depository for and permit any of its officers or directors to act as a
member of, or in any other capacity with respect to, any committee formed to protect the rights
of Owners of Bonds, whether or not such committee shall represent the Owners of the majority
in aggregate principal amount of the Bonds then Outstanding.
(e) The Trustee shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram or other paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or persons. Any action
taken or omitted to be taken by the Trustee pursuant to this Indenture upon the request or
authority or consent of any person who at the time of making such request or giving such
authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future
Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The
Trustee shall not be bound to recognize any person as an Owner of any Bond or to take any
action at his request unless the ownership of such Bond by such person shall be reflected on the
Registration Boobs.
77772968.1 30
( f) As to the existence or non-existence of an fact or as to the sufficienc or
validit of an instrument, paper or proceedin the Trustee shall be entitled to rel upon a
Certificate of the Authorit as sufficient evidence of the facts therein contained and prior to the
occurrence of an Event of Default hereunder of which the Trustee has been g iven notice or is
deemed to have notice,, as provided in Section 6.02(h) hereof, shall also be at libert to accept a
Certificate of the Authorit to the effect that an particular dealin transaction or action is
necessar or expedient, but ma at its discretion secure such further evidence deemed b it to be
necessar or advisable, but shall in no case be bound to secure the same.
( The permissive ri of the Trustee to do thin enumerated in this
Indenture shall not be construed as a dut and it shall not be answerable for other than its
ne or willful misconduct. The immunities and exceptions from liabilit of the Trustee
shall extend to its officers, directors, emplo and a
(h) The Trustee shall not be re to take notice or be deemed to have
notice of an Event of Default hereunder except failure b the Authorit to file with the Trustee
an document re b this Indenture to be so filed subse to the issuance of the Bonds,
unless the Trustee shall be specificall notified in writin of such default b the Authorit or b
the Owners of at least twent percent (25%) in a principal amount of the Bonds
then Outstandin and all notices or other instruments re b this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered at the Corporate Trust Office of the
Trustee,, and in the absence of such notice so delivered the Trustee ma conclusivel assume
there is no Event of Default hereunder except as aforesaid.
(1) At an and all reasonable times the Trustee, and its dul authorized a
attorne experts,, accountants and representatives, shall have the ri (but not the dut full to
inspect all books, papers and records of the Authorit pertainin to the Bonds, and to make
copies of an of such books, papers and records such as ma be desired but which is not
privile b statute or b law.
') The Trustee shall not be re to g ive an bond or suret in respect of
the execution of the said trusts and powers or otherwise in respect of the premises hereof.
(k) Notwithstandin an elsewhere in this Indenture with respect to the
execution of an Bonds, the withdrawal of an cash, the release of an propert or an action
whatsoever within the purview of this Indenture, the Trustee shall have the ri but shall not be
re to demand an showings, certificates, opinions, appraisals or other information, or
corporate action or evidence thereof, as ma be deemed desirable for the purpose of establishin
the ri of the Authorit to the execution of an Bonds, the withdrawal of an cash, or the
takin of an other action b the Trustee.
(1) Before takin the action referred to in Section 8.02, the Trustee ma
re that a satisfactor indemnit bond be furnished for the reimbursement of all expenses to
which it ma be put and to protect it a all liabilit except liabilit which is adjudicated to
have resulted from its ne or willful default in connection with an such action.
77772968.1 31
9�
mone (m) All received a Trustee shall, used or applied • a
.herein d be held in trust for purposes • were received yy need be
segre • other except ! i b
(n) The Trustee shall have no responsibility or liability with respect to any
information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
Section 6.03 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to
payment and reimbursement for reasonable fees for its services rendered hereunder and all
advances, counsel fees (including expenses) and other expenses reasonably and necessarily made
or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of
Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with
right of payment prior to payment of any Bond upon the amounts held hereunder for the
foregoing fees, charges and expenses incurred by it respectively. The Trustee's right to payment
of its fees and expenses shall survive the discharge and payment or defeasance of the Bonds and
termination of the Indenture, and the resignation or removal of the Trustee.
Section 6.04 Notice to Bond owners of Default. If an Event of Default hereunder
occurs with respect to any Bonds of which the Trustee has been given or is deemed to have
notice, as provided in Section 6.02(h) hereof, then the Trustee shall promptly give written notice
thereof by first -class mail to the Owner of each such Bond, unless such Event of Default shall
have been cured before the giving of such notice; provided, however, that unless such Event of
Default consists of the failure by the Authority to make any payment when due, the Trustee may
elect not to give such notice to the Bond Owners if and so long as the Trustee in good faith
determines that such Event of Default does not materially adversely affect the interests of the
Bond Owners or that it is otherwise not in the best interests of the Bond Owners to give such
notice.
Section 6.05 Intervention by Trustee. In any judicial proceeding to which the
Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing
on the interests of Owners of any of the Bonds arising under this Indenture, the Trustee may
intervene on behalf of such Bond Owners, and subject to Section 6.02(1) hereof, shall do so if
requested in writing by the Owners of at least twenty -five percent (25 %) aggregate principal
amount of such Bonds then outstanding.
Section 6.06 Removal of Trustee. The Owners of a majority in aggregate principal
amount of the Outstanding Bonds may at any time, or the Authority may (and the Authority, at
the request of the District shall) so long as no Event of Default shall have occurred and then be
continuing, remove the Trustee initially appointed, and any successor thereto, by an instrument
or concurrent instruments in writing delivered to the Trustee at least thirty (30) days prior to the
effective date of such removal, whereupon the Authority or such Owners, as the case may be,
shall appoint a successor or successors thereto; provided that any such successor shall be a bank
or trust company meeting the requirements set forth in Section 6.01.
Section 6.07 Resignation by Trustee. The Trustee and any successor Trustee may at
any time give thirty (30) days' written notice of its intention to resign as Trustee hereunder, such
77772968.1 32
Page 64
notice to be g iven to the Authorit and the District b re or certified mail. Upon
receivin such notice of resi the Authorit shall promptl appoint a successor Trustee.
Section 6.08 Appointment of Successor Trustee. In the event of the removal or
resi of the Trustee pursuant to Sections 6.06 or 6.07, respectivel with the prior written
consent of the Distric the Authorit shall promptl appoint a successor Trustee. In the event the
Authorit shall for an reason whatsoever fail to appoint a successor Trustee within ninet (90)
da followin the deliver to the Trustee of the instrument described in Section 6.06 or within
ninet (90) da followin the receipt of notice b the Authorit pursuant to Section 6.07, the
Trustee ma appl to a court of competent jurisdiction for the appointment of a successor
Trustee meetin the re of Section 6.01 hereof. An such successor Trustee appointed
b such court shall become the successor Trustee hereunder notwithstandin an action b the
Authorit purportin to appoint a successor Trustee followin the expiration of such 90-da
period.
An resi or removal of the Trustee pursuant to Section 6.06 or Section 6.07 and
appointment of a successor Trustee shall become effective upon written acceptance of
appointment b the successor Trustee. Upon such acceptance, the Authorit shall cause notice
thereof to be g iven b first class mail, posta prepaid, to the Bond Owners at their respective
addresses set forth on the Re Books.
Section 6.09 Mer or Consolidation. An compan into which the Trustee ma be
mer or converted or with which it ma be consolidated or an compan resultin from an
mer conversion or consolidation to which it shall be a part or an compan to which the
Trustee ma sell or transfer all or substantiall all of its corporate trust business, provided that
such compan shall meet the re set forth in Section 6.01, shall be the successor to the
compan
Trustee and vested with all of the title to the trust estate and all of the trusts,, powers, discretionsl
immunities, privile and all other matters as was its predecessor, without the execution or
filin of an paper or further act, an herein to the contrar notwithstandin
Section 6.10 Concernin an Successor Trustee. Ever successor Trustee appointed
hereunder shall execute, acknowled and deliver to its predecessor and also to the Authorit an
instrument in writin acceptin such appointment hereunder and thereupon such successor,
without an further act, deed or conve shall become full vested with all the estates,
properties, ri powers, trusts,, duties and obli of its predecessors but such predecessor
shall, nevertheless, on the re of the Authorit or of the Trustee's successor, execute and
deliver an instrument transferrin to such successor all the estates, properties, ri powers and
trusts of such predecessor hereunder and ever predecessor Trustee shall deliver all securities
and mone held b it as the Trustee hereunder to its successor. Should an instrument in
writin from the Authorit be re b an successor Trustee for more full and certainl
vestin in such successor the estate, ri powers and duties hereb vested or intended to be
vested in the predecessor Trustee, an and all such instruments in writing shall, on re be
executed, acknowled and delivered b the Authorit
Section 6.11 Appointment to Co-Trustee. It is the purpose of this Indenture that there
shall be no violation of an law of an jurisdiction (includin particularl the law of the State)
den or restrictin the ri of bankin corporations or associations to transact business as
77772968.1 33
Trustee in such jurisdiction. It is reco that in the case of liti under this Indenture,,
and in particular in case of the enforcement of the ri of the Trustee on default, or in the case
the Trustee deems that b reason of an present or future law of an j urisdiction it ma not
exercise an of the powers, ri or remedies herein g ranted to the Trustee or hold title to the
properties, in trust, as herein g ranted, or take an other action which ma be desirable or
necessar in connection therewith, it ma be necessar that the Trustee appoint an additional
individual or institution as a separate or co-trustee. The followin provisions of this Section 6.11
are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a separate
or co-trustee, each and ever remed power, ri claim, demand, cause of action, immunit
estate, title, interest and lien expressed or intended b this Indenture to be exercised b or vested
in or conve to the Trustee with respect thereto shall be exercisable b and vested in such
separate or co-trustee but onl to the extent necessar to enable such separate or co-trustee to
exercise such powers, ri and remedies, and ever covenant and obli necessar to the
exercise thereof b such separate or co-trustee shall run to and be enforceable b either of them.
Should an instrument in writin from the Authorit be re b the separate trustee
or co-trustee so appointed b the Trustee for more full and certainl vestin in and confirmin
to it such properties, ri powers, trusts, duties and obli an and all such instruments in
writin shall, on re be executed, acknowled and delivered b the Authorit In case an
separate trustee or co-trustee, or a successor to either, shall become incapable of actin resi or
be removed, all the estates, properties, ri powers, trusts, duties and obli of such
separate trustee or co-trustee, so far as permitted b law, shall vest in and be exercised b the
Trustee until the appointment of a new trustee or successor to such separate trustee or co-trustee.
Section 6.12 Indemnification Limited Liabilit of Trustee. The Authorit further
covenants and a to indemnif and save the Trustee and its officers, directors, a and
emplo harmless a an loss, costs, claims, expense and liabilities which it ma incur
arisin out of or in the exercise and performance of its powers and duties hereunder, includin
the costs and expenses of defendin a an claim of liabilit but excludin an and all
losses, costs, claims, expenses and liabilities which are due to the ne or willful
misconduct of the Trustee, its officers, directors, a or emplo , No provision in this
Indenture shall re the Trustee to risk or expend its own funds or otherwise incur an
financial liabilit hereunder if it is not assured to its satisfaction that repa of such funds or
ade indemnit a such liabilit or risk is not assured to it. The Trustee shall not be
liable for an action taken or omitted to be taken b it in accordance with the direction of the
Owners of a majorit in a principal amount of Bonds Outstandin relatin to the time,
method and place of conductin an proceedin or remed available to the Trustee under this
Indenture. The obli of the Authorit under this para shall survive the resi or
removal of the Trustee under this Indenture or an defeasance of the Bonds.
77772968.1 34
9=10
� �
I � � � 'I � I I] Ma I If -tao
Section 7.01 Amendment Hereof
(a) This Indenture and the ri and obli of the Authorit and of the
Owners of the Bonds ma be modified or amended at an time b a Supplemental Indenture
which shall become bindin upon execution b the Authorit and the Trustee and upon prior
written consent of the Distric without consent of an Bond Owners, to the extent permitted b
law but onl for an one or more of the followin purposes:
(i) to add to the covenants and a of the Authorit contained
in this Indenture, other covenants and a hereafter to be observed, to pled or assi
additional securit for the Bonds (or an portion thereof), or to surrender an ri or power
herein reserved to or conferred upon the Authorit
(ii) to make such provisions for the purpose of curin an ambi
inconsistenc or omission, or of curin or correctin an defective provision, contained in this
Indenture,, or in an other respect whatsoever,, as the Authorit ma deem necessar or desirable,
provided that such modification or amendment does not materiall adversel affect the interests
of the Bond Owners in the opinion of Bond Counsel
(iii) to modif amend or supplement the Indenture in such manner as
to permit the q ualification of this Indenture under the Trust Indenture Act of 1939, as amended,
or an similar federal statute hereafter in effect, and to add such other terms, conditions and
provisions as ma be permitted b said act or similar federal statute or
(iv) to make such additions, deletions or modifications as ma be
necessar or desirable to assure exemption from federal income taxation of interest on the
Bonds.
(b) Except as set forth in the precedin para of this Section 7.01, this
Indenture and the ri and obli of the Authorit and of the Owners of the Bonds ma
onl be modified or amended at an time b a Supplemental Indenture which shall become
bindin when the written consents of the Owners of a ma in a principal amount of
the Bonds then Outstandin are filed With the Trustee. No such modification or amendment shall
(a) extend the maturit of or reduce the interest rate on an Bond or otherwise alter or impair the
obli of the Authorit to pa the principal, interest or premiums (if an at the time and
place and at the rate and in the currenc provided therein of an Bond without the express
written consent of the Owner of such Bond, (b) reduce the percenta of Bonds re for the
written consent to an such amendment or modification, or (c) without its written consent
thereto, modif an of the ri or obli of the Trustee.
(c) The Trustee shall be provided an opinion of Bond Counsel that an such
Supplemental Indenture entered into b the Authorit and the Trustee complies with the
provisions of this Article VII and the Trustee ma conclusivel rel upon such opinion.
77772968.1 35
9�
Section 7.02 Effect of Supplemental Indenture. From and after the time an
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective ri duties and
obli of the parties hereto or thereto and all Owners of Outstandin Bonds, as the case ma
be,, shall thereafter be determined,, exercised and enforced hereunder subject in all respects to
such modification and amendment, and all the terms and conditions of an Supplemental
Indenture shall be deemed to be part of the terms and conditions of this Indenture for an and all
purposes.
Section 7.03 Endorsement or Replacement of Bonds After Amendment. After the
effective date of an action taken as hereinabove provided, the Authorit ma determine that the
Bonds shall bear a notation, b endorsement in form approved b the Authorit as to such
action,, and in that case upon demand of the Owner of an Bond Outstandin at such effective
date and presentation of his Bond for that purpose at the Corporate Trust Office of the Trustee, a
suitable notation as to such action shall be made on such Bond. If the Authorit shall so
determine, new Bonds so modified as, in the opinion of the Authorit shall be necessar to
conform to such Bond Owners' action shall be prepared and executed, and in that case upon
demand of the Owner of an Bond Outstandin at such effective date such new Bonds shall be
exchan at the Corporate Trust Office of the Trustee, without cost to each Bond Owner, for
Bonds then Outstandin upon surrender of such Outstandin Bonds.
Section 7.04 Amendment b Mutual Consent. The provisions of this Article VII
shall not prevent an Bond Owner from acceptin an amendment as to the particular Bond held
b him, provided that due notation thereof is made on such Bond.
ARTICLE VIII
J
Section 8.01 Events of Default. The followin events shall be Events of Default
hereunder:
( a) Default in the due and punctual pa of the principal of an Bond
when and as the same shall become due and pa whether at maturit as therein expressed,
b proceedin for redemption or otherwise.
(b) Default in the due and punctual pa of an installment of interest on
an Bond when and as such interest installment shall become due and pa
( c) Failure b the Authorit to observe and perform an of the covenants,
a or conditions on its part in this Indenture or in the Bonds contained, other than as
referred to in the precedin clauses (a) and (b), for a period of thirt (3 0) da after written
notice,, specif such failure and re that it be remedied has been g iven to the Authorit
b the Trustee, or to the Authorit and the Trustee b the Owners of the Bonds of not less than
twent percent (25%) in the a principal amount of the Bonds at that time
Outstandin provided, however, that if in the reasonable opinion of the Authorit provided to
the Trustee in writin the failure stated in such notice can be corrected, but not Within such
77772968.1 36
I ism
thirt (30) da period, such failure shall not constitute an Event of Default if corrective action is
instituted b the Authorit within such thirt (3 0) da period and dili pursued until such
failure is corrected.
(d) The filin b the Authorit of a petition or answer seekin reor
or arran under the federal bankruptc laws or an other applicable law of the United
States of America, or if a court of competent jurisdiction shall approve a petition, filed with or
wi thout the consent of the Authorit seekin reor under the federal bankruptc laws
or an other applicable law of the United States of America, or if, under the provisions of an
other law for the relief or aid of debtors,, an court of competent jurisdiction shall assume
custod or control of the Authorit or of the whole or an substantial part of its propert
Section 8.02 Remedies Upon Event of Default. Upon the occurrence and durin the
continuance of an Event of Default, the Trustee ma pursue an available remed at law or in
e to enforce the pa of the principal of and interest and premium (if an on the Bonds,
and to enforce an ri of the Trustee under or with respect to this Indenture.
If an Event of Default shall have occurred and be continuin the Trustee ma if
re so to do b the Owners of a majorit in a principal amount of Outstandin
Bonds, and indemnified as provided in Section 6.02(1), the Trustee shall be obli to exercise
such one or more of the ri and powers conferred b this Article VIII, as the Trustee, bein
advised b counsel, shall deem most expedient in the interests of the Bond Owners.
No remed b the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Bond Owners) is intended to be exclusive of an other remed but each and ever such
remed shall be cumulative and shall be in addition to an other remed g iven to the Trustee or
to the Bond Owners hereunder or now or hereafter existin at law or in e
No dela or omission to exercise an ri or power accruin upon an Event of Default
shall impair an such ri or power or shall be construed to be a waiver of an such Event of
Default or ac therein such ri or power ma be exercised from time to time as often
as ma be deemed expedient.
Section 8.03 Application of Revenues and Other Funds After Default. All amounts
received b the Trustee pursuant to an ri g iven or action taken b the Trustee under the
provisions of this Indenture shall be applied b the Trustee in the followin order upon
presentation of the several Bonds, and the stampin thereon of the amount of the pa if onl
partiall paid, or upon the surrender thereof if full paid.
Firs to the pa of the fees, costs and expenses of the Trustee in declarin such
Event of Default and in carr out the provisions of this Article VIII, includin reasonable
compensation to its a attorne and counsel and an outstandin fees and expenses of the
Trustee and
Second, to the pa of the whole amount of interest on and principal of the Bonds
then due and unpaid, with interest on overdue installments of principal and interest to the extent
permitted b law at the net effective rate of interest then borne b the Outstandin Bonds
provided, however, that in the event such amounts shall be insufficient to pa in full the full
77772968.1 37
[ r .6- to
amount of such interest and principal, then such amounts shall be applied in the followin order
of priorit
(a) first, to the pa of all installments of interest on the Bonds then due
(b) second, to the pa of all installments of principal of the Bonds then
due and unpaid,
( c ) third, to the pa of
interest accrued to the redemption date, but
redeemed pursuant to this Indenture, and
the redemption price (includin principal and
excludin an premium) of the Bonds to be
(d) fourth, to the pa of interest on overdue installments of principal and
interest on the Bonds.
Section 8.04 Power of Trustee to Control Proceedin In the event that the Trustee,
upon the happenin of an Event of Default, shall have taken an action, b judicial proceedin
or otherwise,, pursuant to its duties hereunder, whether upon its own discretion or upon the
re of the Owners of at least a majorit in a principal amount of the Bonds then
Outstandin it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise,
settlement or other disposal of such action 'provided, however, that the Trustee shall not, unless
there no lon continues an Event of Default, discontinue, withdraw, compromise or settle, or
otherwise dispose of an liti pendin at law or in e if at the time there has been filed
with it a written re si b the Owners of a majorit in a principal amount of the
Outstandin Bonds, opposin such discontinuance, withdrawal, compromise, settlement or other
disposal of such liti An suit, action or proceedin which an Owner of Bonds shall have
the ri to brin to enforce an ri or remed hereunder ma be brou b the Trustee for the
e benefit and protection of all Owners of Bonds similarl situated and the Trustee is hereb
appointed ( and the successive respective Owners of the Bonds issued hereunder, b takin and
holdin the same, shall be conclusivel deemed so to have appointed it the true and lawful
attorne of the respective Owners of the Bonds for the purpose of brin an such suit,
action or proceedin and to do and perform an and all acts and thin for and on behalf of the
respective Owners of the Bonds as a class or classes, as ma be necessar or advisable in the
opinion of the Trustee as such attorne
Section 8.05 Appointment of Receivers. Upon the occurrence of an Event of Default
hereunder, and upon the filin of a suit or other commencement of judicial proceedin to
enforce the ri of the Trustee and of the Bond Owners under this Indenture, the Trustee shall
be entitled, as a matter of ri to the appointment of a receiver or receivers of the Revenues and
other amounts pled hereunder, pendin such proceedin with such powers as the court
makin such appointment shall confer.
Section 8.06 Non-Waiver. Nothin in this Article VIII or in an other provision of this
Indenture, or in the Bonds, shall affect or impair the obli of the Authorit which is
absolute and unconditional, to pa the interest on and principal of the Bonds to the respective
77772968.1 38
9 „s- 1
Owners a respective dates herein provided, of r Revenues
oth and mon herein w r a
f
A waiver of any default or breach or duty or contract by the Trustee or any Bond owners
shall not affect any subsequent default or breach of duty or contract, or impair any rights or
remedies on any such subsequent default or breach. No delay or omission of the Trustee or any
Owner of any of the Bonds to exercise any right or power accruing upon any default or breach
shall impair any such right or power or shall be construed to be a waiver of any such default or
breach or an acquiescence therein; and every power and remedy conferred upon the Trustee or
Bond owners by the Bond Law or by this Article VIII may be enforced and exercised from time
to time and as often as shall be deemed expedient by the Trustee or the Bond owners, as the case
may be.
Section 8.07 Right to Institute Suit, Action or Proceeding. No owner of any Bond
issued hereunder shall have the right to institute any suit, action or proceeding at law or in
equity, for any remedy under or upon this Indenture, unless (a) such owner shall have previously
given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a
majority in aggregate principal amount of all Bonds then Outstanding shall have made written
request upon the Trustee to exercise the powers hereinbefore granted or to institute such action,
suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity
reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request; (d) the Trustee shall have refused or omitted to comply with such
request for a period of sixty (60) days after such written request shall have been received by, and
said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent
with such written request has been given to the Trustee during such sixty (60) day period by the
Owners of majority in aggregate principal amount of the Bonds then Outstanding.
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; 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 enforce any right under this
Indenture, except in the manner herein provided, and that all proceedings at law or in equity to
enforce any provision of this Indenture shall be instituted, had and maintained in the manner
herein provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any owner of any Bond to receive payment of the principal of and interest
and premium (if any) on such Bond as herein provided or to institute suit for the enforcement of
any such payment, shall not be impaired or affected without the written consent of such owner,
notwithstanding the foregoing provisions of this Section 8.07 or any other provision of this
Indenture.
Section 8.08 Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case, the Authority, the Trustee and the Bond
Owners shall be restored to their former positions and rights hereunder, respectively, with regard
77772968.1 39
Page 71
to the propert subject to this Indenture, and all ri remedies and powers of the Trustee shall
continue as if no such proceedin had been taken.
MISCELLANEOUS
Section 9.01 Limited Liabilit of Authorit Notwithstandin an in this
Indenture contained, the Authorit shall not be re to advance an mone derived from
an source of income other than the Revenues for the pa of the principal of or interest on
the Bonds, or an premiums upon the redemption thereof, or for the performance of an
covenants herein contained (except to the extent an such covenants are expressl pa
hereunder from the Revenues). The Authorit ma however, advance funds for an such
purpose, provided that such funds are derived from a source le available for such purpose
and ma be used b the Authorit for such purpose without incurrin indebtedness.
The Bonds shall be revenue bonds, pa exclusivel from the Revenues and other
funds as in this Indenture provided. The g eneral fund of the Authorit is not liable, and the
credit of the Authorit is not pled for the pa of the interest and premium (if an on or
principal of the Bonds. The Owners of the Bonds shall never have the ri to compel the
forfeiture of an propert of the Authorit The principal of and interest on the Bonds, and an
premiums upon the redemption of an thereof, shall not be a le or e pled char
lien or encumbrance upon an propert of the Authorit or upon an of its income, receipts or
revenues except the Revenues and other funds pled to the pa thereof as in this
Indenture provided.
Section 9.02 Benefits of Indenture Limited to Parties. Nothin in this Indenture,
expressed or implied, is intended to g ive to an person other than the Authorit the District, the
Trustee, and the Owners of the Bonds,, an ri remed or claim under or b reason of this
Indenture. An covenants, stipulations, promises or a in this Indenture contained b
and on behalf of the Authorit shall be for the sole and exclusive benefit of the Trustee, the
District and the Owners of the Bonds.
Section 9.03 Dischar of Indenture. If the Authorit shall pa and dischar an or
all of the Outstandin Bonds in an one or more of the followin wa
( a ) b well and trul pa or causin to be paid the principal of, and the
interest and premium ( if an on, such Bonds as and when the same become due and pa
( b ) b irrevocabl depositin with the Trustee,, in trust, at or before maturit
mone which, alto with the available amounts then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture, is full sufficient to pa such Bonds,
includin all principal, interest and premiums ( if an or
( c ) b irrevocabl depositin with the Trustee or an other fiduciar in trust,
Federal Securities in such amount as an Independent Accountant shall determine will, to
with the interest to accrue thereon and available mone then on deposit in the funds and
accounts established with the Trustee pursuant to this Indenture, be full sufficient to pa and
77772968.1 40
Pa 72
dischar the indebtedness on such Bonds ( includin g all principal, interest and redemption
premiums at or before their respective maturit dates; and if such Bonds are to be redeemed
prior to the maturit thereof, notice of such redemption shall have been mailed pursuant to
Section 2.02 or provision satisfactor to the Trustee shall have been made, for the mailin of
such notice, then, at the Written Re of the Authorit and notwithstandin that an of such
Bonds shall not have been surrendered for pa the pled of the Revenues and other funds
provided for in this Indenture with respect to such Bonds, pled of Revenues and all other
pecuniar obli of the Authorit under this Indenture with -respect to all such Bonds, shall
cease and terminate,, except onl the obli of the Authorit to pa or cause to be paid to the
Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside
for such purpose as aforesaid, and all expenses and costs of the Trustee. An funds held b the
Trustee followin an pa or dischar of the Outstandin Bonds pursuant to this Section
9.03 1
I which are not re for said purposes, shall be paid over to the Authorit
Section 9.04 Is Deemed Included in All References to Predecessor. Whenever in
this Indenture or an Supplemental Indenture the Authorit is named or referred to, such
reference shall be deemed to include the successor to the powers, duties and functions, with
respect to the mana administration and control of the affairs of the Authorit that are
presentl vested in the Authorit and all the covenants, a and provisions contained in
this Indenture b or on behalf of the Authorit shall bind and inure to the benefit of its successors
whether so expressed or not.
Section 9.05 Content of Certificates. Ever certificate with respect to compliance
with a condition or covenant provided for in this Indenture shall include (a) a statement that the
person or persons makin or g ivin g such certificate have read such covenant or condition and the
definitions herein relatin thereto (b) a brief statement as to the nature and scope of the
examination or investi upon which the statements or opinions contained in such certificate
are based (c) a statement that, in the opinion of the si the have made or caused to be
made such examination or investi as is necessar to enable them to express an informed
opinion as to whether or not such covenant or condition has been complied with and (d) a
statement as to whether,, in the opinion of the si such condition or covenant has been
complied with.
An such certificate made or g iven b an officer of the Authorit ma be based, insofar
as it relates to le matters, upon a certificate or opinion of or representations b counsel, unless
such officer knows that the certificate or opinion or representations with respect to the matters
upon which his certificate ma be based, as aforesaid, are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous. An such certificate or
opinion or representation made or g iven b counsel ma be based, insofar as it relates to factual
matters, on information with respect to which is in the possession of the Authorit or upon the
certificate or opinion of or representations b an officer or officers of the Authorit unless such
counsel knows that the certificate or opinion or representations with respect to the matters upon
which his certificate, opinion or representation ma be based, as aforesaid, are erroneous, or in
the exercise of reasonable care should have known that the same were erroneous.
Section 9.06 Execution of Documents b Bond Owners. An re consent or
other instrument re b this Indenture to be si and executed b Bond Owners ma be in
77772968.1 41
Pa 73
an number of concurrent writin of substantiall similar tenor and ma be si or executed
b such Bond Owners in person or b their a g ent or a dul appointed in writin Proof of
the execution of an such re consent or other instrument or of a writin appointin an
such a shall be sufficient for an purpose of this Indenture and shall be conclusive in favor
of the Trustee and of the Authorit if made in the manner provided in this Section 9.06.
The fact and date of the execution b an person of an such re consent or other
instrument or writin ma be proved b the affidavit of a witness of such execution or b the
certificate of an notar public or other officer of an jurisdiction, authorized b the laws thereof
to take acknowled of deeds, certif that the person si such re consent or
other instrument or writin acknowled to him the execution thereof.
The ownership of Bonds shall be proved b the Re Books. An re
consent or vote of the Owner of an Bond shall bind ever future Owner of the same Bond and
the Owner of an Bond issued in exchan therefor or in lieu thereof, in respect of an done
or suffered to be done b the Trustee or the Authorit in pursuance of such re consent or
vote. In lieu of obtainin an demand, re direction, consent or waiver in writin the
Trustee ma call and hold a meetin of the Bond Owners upon such notice and in accordance
with such rules and obli as the Trustee considers fair and reasonable for the purpose of
obtainin an such action.
Section 9.07 Dis Bonds. In determinin whether the Owners of the re
a principal amount of Bonds have concurred in an demand, re direction,, consent
or waiver under this Indenture, Bonds which are owned or held b or for the account of the
District or the Authorit (but excludin Bonds held in an emplo retirement fund) shall be
disre and deemed not to be Outstandin for the purpose of an such determination,
provided, however, that for the purpose of determinin whether the Trustee shall be protected in
rel on an such demand, re direction, consent or waiver, onl Bonds which the Trustee
knows to be so owned or held shall be disre
Section 9.08 Waiver of Personal Liabilit No officer, a or emplo of the
Authorit shall be individuall or personall liable for the pa of the interest on or principal
of the Bonds but nothin herein contained shall relieve an such officer, a or emplo from
the performance of an official dut provided b law.
Section 9.09 Partial Invalidit If an one or more of the covenants or a or
portions thereof, provided in this Indenture on the part of the Authorit ( or of the Trustee to be
performed should be contrar to law, then such covenant or covenants, such a or
a or such portions thereof, shall be null and void and shall be deemed separable from
the remainin covenants and a or portions thereof and shall in no wa affect the
validit of this Indenture or of the Bonds but the Bond Owners shall retain all ri and benefits
accorded to them under the Bond Law or an other applicable provisions of law. The Authorit
hereb declares that it would have entered into this Indenture and each and ever other section,
para subdivision, sentence, clause and phrase hereof and would have authorized the
issuance of the Bonds pursuant hereto irrespective of the fact that an one or more sections,,
para subdivisions, sentences, clauses or phrases of this Indenture or the application
77772968.1 42
Pa 74
thereof to an person or circumstance ma be held to be unconstitutional, unenforceable or
invalid.
Section 9.10 Destruction of Canceled Bonds. Whenever in this Indenture provision is
made for the surrender to the Authorit of an Bonds which have been paid or canceled pursuant
to the provisions of this Indenture, the Trustee shall destro such Bonds.
Section 9.11 Funds and Accounts. An fund or account re b this Indenture to
be established and maintained b the Authorit or the Trustee ma be established and maintained
in the accountin records of the Authorit or the Trustee,, as the case ma be, either as a fund or
an account, and ma for the purpose of such records, an audits thereof and an reports or
statements with respect thereto, be treated either as a fund or as an account. All such records
with respect to all such funds and accounts held b the Authorit shall at all times be maintained
in accordance with g enerall y accepted accountin principles and all such records with respect to
all such funds and accounts held b the Trustee shall be at all times maintained in accordance
with industr practices-, in each case with due re for the protection of the securit of the
Bonds and the ri of ever Owner thereof. An fund or account re b this Indenture to
be established and maintained b the Authorit or the Trustee ma be established and maintained
in the form of multiple funds, accounts or sub-accounts therein.
Section 9.12 Pa on Business Da Whenever in this Indenture an amount is
re to be paid on a da which is not a Business Da such pa shall be re to be
made on the Business Da immediatel followin such da provided that interest shall not
accrue from and after such da
Section 9.13 Notices. An notice, re complaint, demand or other communication
under this Indenture shall be g iven b first class mail or personal deliver to the part entitled
thereto at its address set forth below, or b telecop or other form of telecommunication, at its
number set forth below. Notice shall be effective either (a) upon transmission b telecop or
ev 'Ch
other form of telecommunication, (b) 48 hours after deposit in the United States mail, posta
prepaid, or (c) in the case of personal deliver to an person, upon actual receipt. The Authorit
the District, or the Trustee ma b written notice to the other parties, from time to time modif
the address or number to which communications are to be g iven hereunder.
If to the Authorit Lake Elsinore Public Financin Authorit
130 South Main Street
Lake Elsinore, California 92530
Attention: Executive Director
If to the District: Cit of Lake Elsinore Communit Facilities
District No. 2005-5 (Villa at Wasson Can
c/o Cit of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Attention: Cit Mana
77772968.1
43
9�
If to the Trustee: Union Bank, N.A.
120 South San Pedro Stree 4t' Floor
Los An California 90011
Attention: Corporate Trust Department
Section 9.14 Unclaimed Mone An in this Indenture to the contrar
notwithstandin subject to the laws of the State, an mone held b the Trustee in trust for the
pa and dischar of an of the Bonds which remain unclaimed for two (2) y ears after the
date when such Bonds or an interest thereon have become due and pa either at their stated
maturit dates or b call for earlier redemption, if such mone were held b the Trustee at such
date, or for two (2) y ears after the date of deposit of such mone if deposited with the Trustee
after said date when such Bonds become due and pa shall be repaid b the Trustee to the
Authorit as its absolute propert and free from trus and the Trustee shall thereupon be
released and dischar with respect thereto and the Bond Owners shall look onl to the
Authorit for the pa of such Bonds provided, however, that before bein re to make
an such pa to the Authorit the Trustee shall, at the expense of the Authorit cause to be
mailed to the Owners of all such Bonds,, at their respective addresses appearin on the
Re Books, a notice that said mone remain unclaimed and that, after a date named in
sa id notice, which date shall not be less than thirt ( 3 0) da after the date of mailin of such
al
notice, the balance of such mone then unclaimed will be returned to the Authorit
Section 9.15 Governin Law. This A shall be construed and g overned in
accordance with the laws of the State of California.
Section 9.16 Execution of Counterparts. This Indenture ma be executed in an
number of counterparts, each of which shall for all purposes be deemed to be an ori and all
of which shall to constitute but one and the same instrument.
77772968.1, 44
iam"I&I
IN WITNESS WHEREOF,, the LAKE ELSINORE PUBLIC FINANCING
AUTHORITY has caused this Indenture to be si in its name and UNION BANK, N.A., in
token of its acceptance of the trust created hereunder, has caused this Indenture to be si in its
corporate name b its officer identified below, all as of the da and y ear first above written.
LAKE ELSINORE PUBLIC FINANCINI
AUTHORITY
Executive Director
ATTEST:
Secretar
UNION BANK, N.A., as Trustee
LIM
Authorized Officer
77772968.1
m
9r
t
I !
1
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THI
DEPOSITORY DEFINED IN THE INDENTURE TRUST) ,i
REGISTRATION OF OR PAYMENT AND ANY BONE
ISSUED IS REGISTERED IN THE NAME OF i E & CO. OR IN SUCH OTHER NAMI
AS REQUESTED . AUTHORIZED REPRESENTATIVE OF THE DEPOSITOR)
(AND ` PAYMENT IS MADE i CO. OR TO SUCH OTHER
REQUESTED O i REPRESENTATIVE OF DEPOSITORY),
WRONGFUL TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OF
TO ANY PERSON IS REGISTERED OWNER HEREOF
CEDE i CO., HAS AN INTEREST HEREIN.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
LOCAL AGENCY REVENUE REFUNDING BOND (VILLAGES AT WASSON CANYON)
2012 SERIES A
RATE OF INTEREST MATURITY DATE DATED DA
The LADE ELSINORE PUBLIC FINANCING AUTHORITY, a joint powers authority
organized and existing under the laves of the State of California (the "Authority "), for value
received, hereby promises to pay (but only out of the Revenues and other moneys and securities
hereinafter referred to) to the Registered Owner identified above or registered assigns (the
"Registered Owner "), on the Maturity Date identified above, the Principal Amount identified
above in lawful money of the United States of America, and to pay interest thereon at the Rate of
Interest identified above in like money from the Interest Payment Date (as hereinafter defined)
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 occurs, in which event it shall bear interest from such Interest Payment
Date, or unless this Bond is authenticated on or prior to August 15, 2012, 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), payable semiannually on March 1 and September 1 in each year, commencing
77772968.1 A -1
September 1, 2012 (each, an "Interest Payment Date "), until payment of such Principal Amount
in full. The Principal Amount hereof is payable upon presentation hereof at the corporate trust
office (the "Corporate Trust Office") of Union Bank, N.A., as trustee (the "Trustee ") or such
other place as designated by the Trustee. Interest hereon is payable by check of the Trustee
mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the
address of the Registered Owner as it appears on the Registration Boors of the Trustee as of the
first calendar day of the month in which such Interest Payment Date occurs; except that at the
written request of the owner of at least $1,000,000 in aggregate principal amount of outstanding
Bonds filed with the Trustee prior to the fifteenth calendar day of the month preceding any
Interest Payment Date, interest on such Bonds shall be paid to such owner on such Interest
Payment Date by wire transfer of immediately available funds to an account in the continental
United States designated in such written request. Notwithstanding any other provision herein to
the contrary, so long as this Bond shall be registered in book- entry -only form, the payment of the
principal of, and redemption premium, if any, and interest on, this Bond shall be paid in
immediately available funds in such manner as determined by the Authority, the Trustee and the
Owner.
It is hereby certified that all things, conditions and acts required to exist, to have
happened and to have been performed precedent to and in the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required by the
Constitution and statutes of the State of California and by the Act, and that the amount of this
Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed
by the Constitution or statutes of the State of California or by the Act.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon shall have been
manually signed by the Trustee.
This Bond is one of a duly authorized issue of bonds of the Authority designated the
"Labe Elsinore Public Financing Authority Local Agency Revenue Refunding Bonds (villages
at Wasson Canyon) 2012 Series A" (the "Bonds "), limited in principal amount to $ 1
secured by an Indenture of Trust, dated as of r� I , 2012 (the "Indenture "), by and between
the Authority and the Trustee. Reference is hereby made to the Indenture and all indentures
supplemental thereto for a description of the rights thereunder of the owners of the Bonds, of the
nature and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties
and immunities of the Trustee and of the rights and obligations of the Authority thereunder; and
all of the terms of the Indenture are hereby incorporated herein and constitute a contract between
the Authority and the Registered Owner hereof, and to all of the provisions of which Indenture
the Registered Owner hereof, by acceptance hereof, assents and agrees.
The Bonds are authorized to be issued pursuant to the provisions of the Marks -Roos
Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of
Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act ").
The Bonds are special obligations of the Authority and, as and to the extent set forth in the
Indenture, are payable solely from and secured by a first lien and pledge of the Revenues and
certain other moneys and securities held by the Trustee as provided in the Indenture. All of the
Bonds are equally secured by a first pledge of, and charge and lien upon, all of the Revenues and
77772968.1 A -2
r
i
such other mone and securities, and the Revenues and such other mone and securities
constitute a trust fund for the securit and pa of the principal of and interest and premium
(if an on the Bonds. The full faith and credit of the Authorit is not pled for the pa of
the principal of or interest or redemption premiums (if an on the Bonds. The Bonds are not
secured b a le or e pled of, or char lien or encumbrance upon, an of the
propert of the Authorit or an of its income or receipts, except the Revenues and such other
mone and securities as provided in the Indenture.
The Bonds have been issued to provide funds to be applied b the Authorit to purchase
of bonds of Cit of Lake Elsinore Communit Facilities District No. 2005-5 (Villa at Wasson
Can (the "District Bonds"), as more particularl described in the Indenture.
The Bonds are subject to redemption prior to their maturit date,, at the option of the
Authorit on an date on or after as a whole or in part from such maturities as
selected b the Authorit and b lot within a maturit from an available source of funds at the
redemption price e to the principal amount of the Bonds to be redeemed, to with
accrued interest thereon to the date fixed for redemption,, without premium.
The Bonds maturin September 1, 20 are subject to mandator redemption in part b
lot, on September I in each y ear commencin September 1, 20 , from mandator sinkin
pa made b the Authorit as provided in the Indenture, at a redemption price e to the
principal amount thereof to be redeemed, without premium, plus accrued interest thereon to the
date of redemption in the a principal amounts and on September I in the respective
y ears as set forth in the followin schedules provided, however, that (i) in lieu of redemption
thereof, such Bonds ma be purchased b the Authorit and tendered to the Trustee, and (ii) if
some but not all of such Bonds have been redeemed pursuant to the redemption provisions
described above or below, the total amount of all future mandator sinkin pa will be
reduced b the a principal amount of such Bonds so redeemed, to be allocated amon
such mandator sinkin pa on a pro rata basis (as nearl as practicable) in inte
multiples of $5,000, as determined b the Authorit
77772968.1 A-3
Sinkin Fund
Redemption Date
( September I)
Principal Amount
to be Redeemed
Sinkin Fund
Redemption Date
(September 1 )
YIUMT14C
to be Redeemed
The Bonds shall also be subject to mandator redemption on an date on or after
in whole or in part from such maturities as selected b the Authorit and b lot
within a maturit from the redemption of District Bonds from amounts constitutin prepa
of Special Taxes, from amounts transferred from the Residual Fund under the Fiscal A
A and from amounts transferred b the Authorit to the District from the Residual Fund
under the Indenture at the followin redemption prices (expressed as a percenta of the
principal amount of Bonds to be redeemed) to with accrued interest thereon to the
redemption date.
Redemption Dates Redemption Prices
The Bonds are subject to special mandator redemption on an date to which timel
notice of redemption ma be g iven, in inte multiples of $5,000 e to the principal amount
of District Bonds redeemed from the deposit of fees with the District b a public a which
has accepted facilities servin an area of the District, and from insurance or condemnation
proceeds, without premium, plus accrued interest to the redemption date, from such maturities as
selected b the Authorit and b lot within a maturit
77772968.1 A-4
IN WITNESS WHEREOF the Authorit has caused this Bond to be executed in its name
and on its behalf b the manual si g natures of its Chairman and Secretar all as of the Dated Date
identified above.
LAKE ELSINORE PUBLIC FINANCINI
AUTHORITY
Mil
Chairman
Attest:
77772968.1
Secretar
I r
Pa 82
This 0 i
i -,- nis s one of the Bonds described in the within-mentioned Indenture and re on
the re books of the Trustee.
Dated: 1 2012
UNION BANK N.A.,
as Trustee
Authorized Si
77772968.1
Pa 83
For value received the undersi hereb sells, assi and transfers unto
(Name, Address and Tax Identification or Social Securit Number of Assi
the within Bond and hereb irrevocabl constitute(s) and appoint(s)
attorne to transfer the same on the registration books of the
substitution in the premises.
Si Guaranteed:
Note: Si must be g uaranteed b an
eli g uarantor institution.
77772968.1
Si
Trustee with full power of
Note: The si on this assi
must correspond with the name(s) as written on
the face of the within re Bond in ever
particular without alteration or enlar or
an chan whatsoever.
FISCAL AGENT AGREEMENT
b and between
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
and
UNION BANK,, N.A.
as Fiscal A
Dated as of L 2012
Relatin to:
Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can
Special Tax Bonds, 2012 Series A
77772972.1
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I.I Authority for this —..—.—.—..---..—.--'.........'.'.—.—. 2
1^2 Agreement for Benefit nf Bond Owners ................................................................. 2
2.1 Pri ncipal Des .—.--.--.--.—..—.—...........--..lI
2 .2 Terms qf Bonds ..................................................................................................... lI
2 '3 Redemption '''—''''—''--''—''''''''''''''—''''...........—.—.I3
2 .4 Form of Bonds ...................................................................................................... D5
2-5 Execution of Bonds ............................................................................................... I5
2 .6 Transfer of Bonds ................................................................................................. 16
2 .7 Exchange of Bonds ............................................................................................... l8
2.8 Bond Register .—.......—........--.........—...—'...............—.l6
2.9 Temporary Bonds .---.—....—.—........—..—..—...''...'......--....I7
��IO �oo�� Mut i lated, ���t o��t�l��--...................--..I7
2]1 Limited ---..---.—...—..—.....—..—..''''—.......—..]7
2 .12 Nm Acceleration .................................................................................................... l0
2 .13 Additional Bonds .................................................................................................. l@
3.1
Issuance and Delivery of the Bonds .....................................................................
lg
3.2
Application of Proceeds of Sale of the 2OX2 Bonds .............................................
lg
3 .3
Validity mf Bonds ..................................................................................................
l9
3/4
Special Taxes Recei Fund and Speci Tax Fond ..............................................
20
3.5
Reserved.....—.—.—.'...—.—...—..—.''—.'..'..........--..
20
3.6
Administrative Expense Fund ...........''............''........--...
21
3.7
Improvement Fond.........--.—..—..'''..—......................—.
21
3.8
Costs ufIssuance Fuod......—.--'..—........—..'.......—.—.—....
22
3.9
Delinquency Management Fund ...........................................................................
22
3 .10
Residual Fund .......................................................................................................
23
3.1I
Redemption Fond....--.......—.—.....—'..—..'...'..'''.........—...
24
ARTICLE IV SPECIAL TAX ; BOND FUND ................................................ 24
4`1 Pledge of Special Tax Revenues ........................................................................... 24
4 .2 Bond Fond ...---......'''--'—''''''''''''''''''''''''''''—'''. 25
5.1 Pnoc1o4} Payment .--......---.—''—'—.'..—'..--........—..--. 26
5 .2 Limited —.--..........—.........—....—....—...........—.--..28
5.3 Extension of Time for Payment .—...—.—'—..—....—.—......—....—...-26
5/4 Agai —......--....—....—....—............--.---. 26
9�
TABLE OF CONTENTS
(continued)
Pa
5.8 Protection of Security and Rights of Owners ....................................................... 27
5.7 Compliance with Law, Completion of Facilities.---...--...—..........'.... 27
5.8 Collection of Special Tax Revenues ..................................................................... 27
5/9 Further Assurances ..'..-'''.....—...—.—..—....'—........''''''''.''.. 28
5.10 Tax Covenants ...................................................................................................... 28
5.I1 Covenant 1nForeclose .......—.....----.--...--...—..............—.3I
5.12 Annual Reports 1nCDlAC .......—...—..---.—..---.—...............32
5.13 Continuing Disclosure to Owners ......................................................................... 32
ARTICLE VI ; DISPOSITION OF INVESTMENT PROCEEDS;
6.1 Deposit and Investment of Moneys iu Funds ....................................................... 33
6.2 Limited .............—..—..—....-----.............34
8.3 Liabilit of District ...................................—.—...............34
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS ............. 35
7.1 Events of Default .......--.—.—...—.—..-----...............—..35
7.2 Remedies of Bond Owners ................................................................................... 36
7.3 Application of Special Taxes and Other Funds After Default .............................. 36
7/4 Absolute Obligation of the District ....................................................................... 37
7.5 Termination of Proceedings ....—.—.—.....—.....--................37
7(6 Remedies Not Exclusive ....................................................................................... 37
7.7 No Waiver nfDefault ................ ...—..—...—..--.... ... .............. 37
8] Appointment of Fiscal ...................—.......'.........37
8.2 Liabilit of Fiscal Agent ....'''.....''...''.........'''''''''.....3@
0.3 ynƒozma1soo.................-.............—.—......................../4O
8/4 Notice 1n Fiscal Agent .......................................................................................... 4O
8.5 Compensation, Indemnification ..................................../4U
q] Amendments Perozitted—.--.—...---..--...—....—............—../4}
9.2 Owners' ...........................—................./4I
9.3 Procedure for Amendment with Written Consent of Owners .............................. 42
9/4 Disqualified Bouds..........—...—...—..--.....—.................../42
9.5 Effect of Supplemental Agreement ......—.......—....—............/42
9.6 Endorsement or Replacement of Bonds Issued After Amendments ....................
9.7 Amendatory Endorsement mf Bonds ..................................................................... 43
Pa 87
TABLE OF CONTENTS
(continued)
O.M.
ARTICLE X MISCELLANEOUS ....................................................................................... 43
10.1
Benefits of A Limited to Parties ............................................................ 43
10.2
Successor is Deemed Included in All References to Predecessor ...............
A T- *1
y
10 .3
Dischar of A .......................................................................................
4-3
10.4
Execution of Documents and Proof of Ownership b Owners .............................
10.5
Waiver of Personal Liabilit .................................................................................
45
10.6
Notices to and Demands on District and Fiscal A ............ .............................
10.7
Partial Invalidit ................ .........45
10 .8
Unclaimed Mone ...............................................................................................
46
10 .9
Applicable Law .....................................................................................................
46
10 -10
Conflict with Act ..................................................................................................
46
10.11
Conclusive Evidence of Re ............... ****** ....
10.12
Pa on Business Da ........... 0 ................................. . .................................... 46
10 .13
Counterparts ...................... 0 ................................................. o ......... o ....................... 46
EXHIBIT A — FORM OF BOND •
EXHIBIT B — FORM OF OFFICER'S CERTIFICATE ............................................................. B-1
77772972.1
9�
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (this "A is made and entered
into as of L 2012, b and between the Cit of Lake Elsinore Communit Facilities
District No. 2005-5 (Villa at Wasson Can (the "District"), a communit facilities district
or and existin under and b virtue of the laws of the State of California, and Union
Bank, N.A., a national bankin association or and existin under the laws of the United
States of America,, as fiscal a g ent (the "Fiscal A
WITNESSETH:
WHEREAS, the Cit Council (the "Cit Council") of the Cit of Lake Elsinore
(the "Cit has formed the District under the provisions of the Mello-Roos Communit
Facilities Act of 1982, as amended (Section 53311 et se of the California Government Code)
(the "Act") and Resolution No. 2005-104 of the Cit Council adopted on Au 9, 2005 and
WHEREAS, the Cit Council is authorized under the Act and pursuant to
Ordinance No. 1156 adopted on Au 23, 2005 to lev special taxes to pa for the costs of
facilities provided b the District and
WHEREAS, under the provisions of the Act, on June 28, 2005, the Cit Council,
actin as the le bod of the District, adopted Resolution No. 2005-55, which resolution,
amon other matters,, expressed the intent of the Cit Council to authorize the issuance of one or
more series of bonds (the "Bonds") in the maximum a principal amount as set forth
therein, secured b the special taxes under the Act and
WHEREAS, on , 2012, the Cit Council adopted Resolution No.
(the "Resolution") authorizin the issuance and sale of bonds for the District pursuant
to this A desi "Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can Special Tax Bonds, 2012 Series A" (the "2012 Bonds"), for the
purpose of refinancin the ac rehabilitation and construction of certain public
improvements and capital fees within the District (the "Facilities") and
WHEREAS, it is in the public interest and for the benefit of the Cit the District,
the persons responsible for the pa of special taxes and the owners of the Bonds that the
District enters into this A to provide for the issuance of the Bonds, the disbursement of
proceeds of the Bonds, the disposition of the special taxes securin the Bonds, and the
administration and pa of the Bonds and
WHEREAS, all thin necessar to cause the Bonds, when authenticated b the
Fiscal A and issued as provided in the Act, the Resolution and this A to be le
valid and bindin and limited obli in accordance with their terms, and all thin necessar
to cause the creation authorization execution and deliver of this A and the creation,
authorization, execution and issuance of the Bonds,, subject to the terms hereof, have in all
respects been dul authorized
NOW, THEREFORE, that in order to secure the pa of the principal of,
premium, if an and the interest on all Bonds at an time issued and outstandin under this
77772972.1
A accordin to their tenor, and to secure the performance and observance of all the
covenants and conditions therein and herein set forth, and to declare the terms and conditions
upon and subject to which the Bonds are to be issued and received, and in consideration of the
premises and of the mutual covenants herein contained and of the purchase and acceptance of the
Bonds b the holders thereof, and for other valuable consideration, the receipt of which is hereb
acknowled the District does hereb covenant and a with the Fiscal A for the benefit
of the respective holders from time to time of the Bonds, as follows:
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
1.1 Authorit for this A This A is entered into pursuant to the
provisions of the Act and the Resolution.
1.2 A for Benefit of Bond Owners. The provisions, covenants and
a herein set forth to be performed b or on behalf of the Cit and the District shall be
for the e benefit, protection and securit of the Owners from time to time. In consideration
of the acceptance of the Bonds b the Owners thereof, this A shall be deemed to be and
shall constitute a contract between the District and the Owners; and the covenants and
a herein set forth to be performed b the District shall be, for the e and
proportionate benefit, securit and protection of all Owners of the Bonds without preference,
priorit or distinction as to securit or otherwise of an of the Bonds over an of the others b
reason of the number,, or date thereof or the time of sale, execution or deliver thereof, or
otherwise for an cause whatsoever, except as expressl provided, therein or herein. All of the
Bonds, without re to the time or times of their issuance or maturit shall be of e rank
without preference, priorit or distinction of an of the Bonds over an other thereof, except as
expressl provided in or permitted b this A
The Fiscal A ma become the owner of an of the Bonds in its own or an
other capacit with the same ri it would have if it were not Fiscal A
1.3 Definitions. Unless the context otherwise re the terms defined in this
Section 1.3 shall, for all purposes of this A of an Supplemental A and of
an certificate, opinion or other document herein mentioned, have the meanin herein specified.
All references herein to "Articles," "Sections" and other subdivisions are to the correspondin
Articles, Sections or subdivisions of this A and the words "herein `• hereof,"
"hereunder" and other words of similar import refer to this A as a whole and not to an
particular Article, Section or subdivision hereof.
"Act" means the Mello-Roos Communit Facilities Act of 1982, as amended,
bein Section 53311 et se of the California Government Code.
"Additional Bonds" means bonds issued pursuant to Section 2.13 hereof.
"Administrative Expense Fund" means the fund b that name established b
Section 3.6(a) hereof.
77772972.1 2
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i 1) 1)
"Administrative Expens an or all of the followin the fees and
expenses of the Fiscal A (includin an fees or expenses of its counsel) the expenses of the
Cit or the District (includin fees and expenses of counsel) in carr out their duties
hereunder includin but not limited to, the lev and collection of the Special Taxes
(includin costs associated with foreclosure proceedin or work-outs with propert owners) and
compl with the disclosure provisions of the Act, the Continuin Disclosure A and
this A the costs of the Cit and the District or their desi related to an appeal of the
Special Tax an costs of the Cit and the District (includin fees and expenses of counsel) to
defend the first lien on and pled of the Special Taxes Revenues to the pa of the Bonds or
otherwise in respect of liti relatin to the District or the Bonds or with respect to an other
obli of the District an amounts re to be rebated to the federal g overnment in order
for the District to compl with Section 5. 1 0(h)(iii), includin the fees and expenses of its
counsel the costs of an dissemination a under the continuin disclosure a entered
into b the Cit and the District an allocable share of the salaries of Cit staff directl related
thereto and a proportionate amount of Cit g eneral administrative overhead related thereto and
all other costs and expenses of the Cit the District, or the Fiscal A incurred in connection
with the dischar of their respective duties hereunder, and in the case of the Cit in an wa
related to ' the administration of the District and all actual costs and expenses incurred in
connection with the administration of the Bonds and the Authorit Bonds.
"Agreement" means this Fiscal A A as it ma be amended or
supplemented from time to time b an Supplemental A adopted pursuant to the
provisions hereof.
"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due
on the Outstandin Bonds in such Bond Year, assumin that the Outstandin Bonds are retired as
scheduled,, and (ii) the principal amount of the Outstandin Bonds due in such Bond Year
(includin mandator sinkin pa if an
"Auditor" means the auditor/tax collector of the Count of Riverside.
"Authorit Bonds" means $ Lake Elsinore Public Financin Authorit
Local A Revenue Refundin Bonds (Villa at Wasson Can 2012 Series A or such
other series of local a revenue bonds issued b the Authorit the proceeds of which are
used to ac one or more series of Additional Bonds.
"Authorit Indenture" means the Indenture of Trust, dated as of 1, 2012
between the Lake Elsinore Public Financin Authorit and Union Bank, N.A., as trustee, or such
other indenture of trus fiscal a a trust a or other documents, as the case
ma be, relatin to an issue of Authorit Bonds.
"Authorized Officer" means the Ma Cit Mana Assistant Cit Mana
Director of Administrative Services or Cit Clerk of the Cit or an other officer or emplo
authorized b the Cit Council of the Cit or b an Authorized Officer to undertake the action
referenced in this A as re to be undertaken b an Authorized Officer.
77772972.1 3
9s
"Bond Counsel" means (1) Fulbri & Jaworski L.L.P., or ( ii) an attorne or
firm of attorne acceptable to the District and nationall reco for expertise in renderin
opinions as to the le g alit y and tax-exempt status of securities issued b public entities.
"Bond Fund" means the fund b that name established b Section 4.2(a) hereof.
"Bond Year" means the one- period be on the September 2 in each
y ear and endin on September I in the followin y ear except that the first Bond Year shall be
on the Closin Date and end on the next ensuin September 1.
",Bonds" means collectivel the 2012 Bonds and the Additional Bonds.
"Business 131 means an da other than (i) a Saturda or a Sunda (ii) a da on
which the offices of the Cit are not open for business, or (iii) a da on which bankin
institutions in the state in which the Fiscal A has its principal corporate trust office is
authorized or obli b law or executive order to be closed.
",CDIAC" means the California Debt and Investment Advisor Commission of the
office of the State Treasurer of the State of California or an successor a or bureau thereto.
"City" means the Cit of Lake Elsinore, California.
"Cit Council" means the Cit Council of the Cit
"Cit Manager" means the Cit Mana of the Cit
"Closing Date" means the date upon which there is a ph deliver of the
Bonds in exchan for the amount representin the purchase price of the Bonds b the Ori
Purchaser.
".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 ma be amended to appl
to obli issued on the date of issuance of the Bonds, to with applicable proposed,
temporar and final re promul and applicable official public g uidance published,
under the Code.
"Continuing Disclosure Agreement" shall mean an Continuin Disclosure
A b and between the District and a Dissemination A relatin to the Authorit
Bonds, executed on the Closin Date, as ori executed and as it ma be amended from time
to time in accordance with the terms thereof.
"Corporate Trust Office" means the corporate trust office of the Fiscal A at
Los An California, or such other office desi from time to time b the Fiscal A in
writin to the District.
"Costs of Issuance" means all expenses incurred in connection with the
authorization,, issuance, sale and deliver of the Bonds, includin but not limited to all
compensation, fees and expenses (includin but not limited to fees and expenses for le
77772972.1
El
counsel) of the Cit and the Fiscal A compensation to an financial consultants or
underwriters, le fees and expenses, filin and recordin costs, ratin a fees, costs of
preparation and reproduction of documents and costs of printin
hereof.
",Costs of Issuance Fund" means the fund established pursuant to Section 3.8
" C o un t " means the Count of Riverside, California.
" ' Debt Service" means the scheduled amount of interest and amortization of
principal pa on the Bonds durin the period of computation, excludin amounts scheduled
durin such period which relate to principal which has been retired before the be of such
period.
"Delin Mana Fund" means the fund b that name established b
Section 3.9(a) hereof.
".Delin Management Fund Re means, as of an calculation date,
an amount e to 25% of the Maximum Annual Debt Service.
"Dissemination Agent" means Union Bank, N.A. or such other Dissemination
A as ma be appointed b the Cit pursuant to a Continuin Disclosure A
"District" means the Cit of Lake Elsinore Communit Facilities District No.
2005-5 (Villa at Wasson Can formed pursuant to the Resolution of Formation.
"Facilities" means the public facilities more particularl described in the
Resolution of Formation,, or an portion of the Facilities or an authorized capital fees.
",Fair Market Value" means the price at which a willin bu would purchase the
investment from a willin seller in a bona fide, arm's len transaction (determined as of the
date the contract to purchase or sell the investment becomes bindin if the investment is traded
on an established securities market (within the meanin of Section 1273 of the Code) and,
otherwise,, the term "Fair Market Value" means the ac price in a bona fide arm's len
transaction (as referenced above) if (i) the investment is a certificate of deposit that is ac in
accordance with applicable re under the Code, (ii) the investment is an a with
specificall ne withdrawal or reinvestment provisions and a specificall ne
interest rate (for example, a g uaranteed investment contract, a forward suppl contract or other
investment a that is ac in accordance with applicable re under the Code,
(iii) the investment is a United States Treasur Securit and Local Government Series that
is ac in accordance with applicable re of the United States Bureau of Public Debt,
or (iv) an commin investment fund in which the Cit and related parties do not own more
than a ten percent (10%) beneficial interest therein if the return paid b the fund is without
re to the source of the investment.
"Federal Securities" means an of the followin which are non-callable and
which at the time of investment are le investments under the laws of the State of California
for funds held b the Fiscal A as shall be certified b the District to the Fiscal A
77772972.1 5
9�
(1 direct g eneral obli of the United States of America (includin
obli issued or held in book-entr form on the books of the United
States Department of the Treasur and obli the pa of
principal of and interest on which are directl or indirectl g uaranteed b
the United States of America, includin without limitation, such of the
fore which are commonl referred to as "stripped" obli and
coupons
(2) an of the followin obli of the followin a of the United
States of America: (a) direct obli of the Export-Import Bank, (b
certificates of beneficial ownership issued b the Farmers Home
Administration,, (c) participation certificates issued b the General
Services Administration, (d) mort bonds or pass-throu
obli issued and g uaranteed b the Government National Mort
Association, (e) project notes issued b the United States Department of
Housin and Urban Development, and (f) public housin notes and bonds
g uaranteed b the United States of America or refunded municipal
obli the timel pa of principal of and interest on are full
g uaranteed b the United States of America.
"Fiscal " means the Fiscal A appointed b the District and actin as an
independent fiscal a with the duties and powers herein provided, its successors and assi
and an other corporation or association which ma at an time be substituted in its place, as
provided in Section 8.1.
"Fiscal Year" means the twelve-month period extendin from Jul I in a calendar
y ear to June 30 of the succeedin y ear, both dates inclusive.
(.1mprovement Fund" means the fund b that name established b Section 3.7
"Interest Account" means the account b that name established in the Bond Fund
pursuant to Section 4.2 hereof.
"Interest Payment Date" means March I and September I of each y ear,
commencin September 1, 2012 with respect to the 2012 Bonds.
"Investment Earni " means all interest earned and an g ains and losses on the
investment of mone in an fund or account created b this A
"Legislative B od y " means the Cit Council of the Cit
"Maximum Annual Debt Service" means the lar Annual Debt Service for an
Bond Year after the calculation is made throu the final maturit date of an Outstandin
Bonds.
"Net Taxes" means Special Taxes less Administrative Expenses.
MUM*
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" ' Officer's Certificate" means a written certificate of the District or the Cit si
b an Authorized Officer of the Cit
".Ordinance" means Ordinance No. 1156 adopted b the Le Bod on
Au 23, 2005 authorizin the lev of the Special Taxes within the District, includin an
amendments thereto.
"Original Purchaser" means the Lake Elsinore Public Financin Authorit with
respect to the 2012 Bonds and the initial purchaser with respect to an Additional Bonds.
F
",outstanding,," when used as of an particular time with reference to Bonds,
means (subject to the provisions of Section 9.4) all Bonds except: (i) Bonds theretofore canceled
b the Fiscal A or surrendered to the Fiscal A for cancellation (ii) Bonds paid or
deemed to have been paid within the meanin of Section 10.3 and (iii) Bonds in lieu of or in
substitution for which other Bonds shall have been authorized, executed, issued and delivered b
the District pursuant to this A or an Supplemental A
",Owner" or "Bond Owner" means an person who shall be the re owner
of an Outstandin Bond.
"Participatin Underwriter" means an of the ori underwriter(s) of the
Authorit Bonds re to compl with Rule 15c2-12(b)(5) adopted b the Securities and
Exchan Commission under the Securities and Exchan Act of 1934, as the same ma be
amended from time to time, in connection with the offerin of the Authorit Bonds.
"Permitted Investments" means an of the followin which at the time of
investment are le investments under the laws of the State for the mone proposed to be
invested therein (the Fiscal A is entitled to rel on written investment direction of the
District as a determination that such investment is a le investment), but onl to the extent that
the same are ac at Fair Market Value:
(a) Federal Securities
( b ) bonds, debentures, notes or other evidence of indebtedness issued or
g uaranteed b an of the followin federal a and provided such obli are backed b
the full faith and credit of the United States of America ( stripped securities are onl permitted if
the have been stripped b the a itself): ( i ) direct obli or full g uaranteed
certificates of beneficial ownership of the U.S. Export-Import Bank ( ii ) certificates of beneficial
ownership of the Farmers Home Administration ( iii ) obli of the Federal Financin Bank;
( iv ) debentures of the Federal Housin Administration ( v ) participation certificates of the
General Services Administration ( vi ) g uaranteed mort bonds or g uaranteed pass-
throu obli of the Government National Mort Association ( vii ) g uaranteed Title XI
financin of the U.S. Maritime Administration and ( viii ) project notes, local authorit bonds,
new communities debentures and U.S. public housin notes and bonds of the U.S. Department of
Housin and Urban Development
( c ) bonds, debentures, notes or other evidence of indebtedness issued or
g uaranteed b an of the followin non-full faith and credit U.S. g overnment a ( stripped
77772972.1 7
9EM
securities are onl permitted if the have been stripped b the District itself): (i) senior debt
obli of the Federal Home Loan Bank S (ii) participation certificates and senior debt
obli of the Federal Home Loan Mort Corporation (iii) mort securities
and senior debt obli of the Federal National Mort Association (excludin stripped
mort securities which are valued greater than par on the portion of unpaid -principal) ( iv )
senior debt obli of the Student Loan Marketin Association (v) obli (but onl the
interest component of stripped obli of the Resolution Fundin Corporation and ( vi)
consolidated s bonds and notes of the Farm Credit S
(d) mone market funds (includin funds of the Fiscal A or its affiliates)
re under the Federal Investment Compan Act of 1940, whose shares are re
under the Federal Securities Act of 1933, and havin a ratin b S&P of "AAAm-G," "AAAm,"
or "AtAim," and, if rated b Mood rated "Aaa," "Aal" or "Aa2 11
(e) certificates of deposit secured at all times b collateral described in (a) or
(b) above, which have a maturit of one y ear or less, which are issued b commercial banks,
savin and loan associations or mutual savin banks, and such collateral must be held b a
third part and the Fiscal A must have a perfected first securit interest in such collateral
(f) certificates of deposit, savin accounts, deposit accounts or mone
market deposits (includin those of the Fiscal A and its affiliates) which are full insured b
the Federal Deposit Insurance Corporation
( investment a includin g uaranteed investment contracts,,
forward purchase a and Reserve Account put a which are g eneral
obli of an entit whose lon term debt obli or claims pa abilit respectivel
is rated in one of the two highest ratin cate b Mood or S&P
(h) commercial paper rated, at the time of purchase, "Prime-I" b Mood
and "A - " or better b S&P
(i) bonds or notes issued b an state or municipalit which are rated b
Mood and S&P in one of the two highest ratin cate assi b such a
(j) federal funds or bankers acceptances with a maximum term of one y ear of
an bank which has an unsecured, uninsured and un obli ratin of "Prime-l" or
"A3 or better b Mood and "A -1" or "A" or better b S&P
(k) repurchase a which provide for the transfer of securities from a
dealer bank or securities firm (seller/borrower) to the Fiscal A and the transfer of cash from
the Fiscal A to the dealer bank or securities firm with an a that the dealer bank or
securities firm will repa the cash plus a y ield to the Fiscal A in exchan for the securities
at a specified date, which satisf the followin criteria:
(i) repurchase a must be between the Fiscal A and (A) a
primar dealer on the Federal Reserve reportin dealer list which falls under the jurisdiction of
the Securities Investors Protection Corporation which are rated "A" or better b Mood and
S&P. or (B) a bank rated "A" or better b Mood and S&P
77772972.1 8
�iEFM'v
(ii) the written repurchase a contract must include the
followin (A) securities acceptable for transfer, which ma be direct U.S. g overnment
obli or federal a obli backed b the full faith and credit of the U.S.
g overnment ; (B) the term of the repurchase a ma be up to 30 da (C) the collateral
must be delivered to the Fiscal A or a third part actin as a for the Fiscal A
simultaneous with pa (perfection b possession of certificated securities) (D) the Fiscal
A must have a perfected first priorit securit interest in the collateral (E) the collateral
must be free and clear of third-part liens arid'. in the case of a broker which falls under the
j urisdiction of the Securities Investors Protection Corporation, are not subject to a repurchase
a or a reverse repurchase a (F) failure to maintain the re collateral
percenta after a two-da restoration period, will re the Fiscal A to li the
collateral and (G) the securities must be valued weekl marked-to-market at current market
price plus accrued interest and the value of collateral must be e to 104% of the amount of
cash transferred b the Fiscal A to the dealer bank or securities firm under the repurchase
a plus accrued interest (unless the securities used as collateral are obli of the
Federal National Mort Association or the Federal Home Loan Mort Corporation, in
which case the collateral must be e to 105% of the amount of cash transferred b the Fiscal
A to the dealer bank or securities firm under the repurchase a plus accrued interest).
If the value of securities held as collateral falls below 104% of the value of the cash transferred
b the Fiscal A then additional cash and/or acceptable securities must be transferred and
(iii) a le opinion must be delivered to the Fiscal A to the effect
that the repurchase a meets g uidelines under state law for le investment of public
funds and
(1) the Local A Investment Fund of the State of California, created
pursuant to Section 16429.1 of the California Government Code, to the extent the Fiscal A is
authorized to re such investment in its name.
"Person" means an individual, corporation, firm, association, partnership,, trust,, or
other le entit or g roup of entities, includin a g overnmental entit or an a or political
subdivision thereof,
"Princi Account" means the account b that name established in the Bond
Fund pursuant to Section 4.2 hereof.
"Record Date" means the fifteenth da of the month next precedin the month of
the applicable Interest Pa Date.
hereof.
",Redemption Fund" means the fund b that name established b Section 3.11
"Redemption Revenues" means (a) prepa of the Special Taxes, (b) an
amounts transferred pursuant to the Authorit Indenture for the redemption of Bonds, (c)
amounts transferred from the Residual Fund for the redemption of Bonds, and (d) an amounts
deposited for the Mandator Redemption and Special Mandator Redemption of Bonds pursuant
to Section 2.3 (a)(ii) and (iv) hereof.
77772972.1 9
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0
"Registration Books" means the records maintained b the Fiscal A pursu
to Section 2.8 hereof for the re and transfer of ownership of the Bonds.
"Reserve Account" means the account b that name established pursuant to the
Authorit Indenture.
Rmfflev,
"Residual Fund" means the fund b that name established b Section 3.10(a)
"Resolution" means Resolution No. 2007-181,, adopted b the Le Bod
on October 23,, 2007, as now in effect or as it ma hereafter be amended from time to time, with
respect to the 2012 Bonds, and an resolution adopted b the Le Bod with respect to a
series of Additional Bonds,, as such resolution is in effect or ma be amended from time to time.
"Resolution of Formation" means Resolution No. 2005-104,, adopted b the
Le Bod on Au 9, 2005, as now in effect or as it ma hereafter be amended from
time to time.
",RMA" means the Rate and Method of Apportionment for Cit of Lake Elsinore
Communit Facilities District No. 2005-5 (Villa at Wasson Can
".S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.,, and its successors.
t` c ITA
1 T " Specia l *N ax Fund" means the fund b that name established b Section 3.4
",Special Tax Revenues" means (a) the proceeds of the Special Taxes received b
the District, (b) income and g ains with respect to the investment of amounts on deposit in the
funds and accounts established hereunder for the Bonds except to the extent transferred to or
retained in the Residual Fund hereunder, and (c) proceeds of the redemption or sale of propert
sold as a result of foreclosure of the lien of the Special Taxes. Notwithstandin jz the fore
"Special Tax Revenues" does not include an penalties or interest in excess of the interest
pa on the Bonds collected in connection with delin Special Taxes.
1 T axes" " Specia l r 11 axels" means the special taxes levied within the District pursuant to the
Act, the Ordinance, this A and the RMA.
".State" means the State of California.
" Supplemental S Agreement" means an a the execution of which is
authorized b a resolution which has been dul adopted b the Le Bod of the District
under the Act and which a is amendator of or supplemental to this A but
onl if and to the extent that such a is specificall authorized hereunder.
"Treasurer" means the person who is actin in the capacit as finance director or
administrative services director to the Cit
77772972.1 10
"2012 Bonds" means the Cit of Lake Elsinore Communit Facilities District No.
2005-5 (Villa at Wasson Can Special Tax Bonds, 2012 Series A.
11 A
2.1 Principal Amounts Desi Bonds are hereb authorized to be issued
under and subject to the terms of the Resolution and this A the Act and other
applicable laws of the State of California. Each series of Bonds shall be desi "Cit of
Lake Elsinore Communit Facilities District No. 2005-5 (Villa at Wasson Can Special
Tax Bonds, Series This A constitutes a continuin a of the
District with the Owners from time to time of the Bonds to secure the full pa of the
principal of, premium, if an and interest on all such Bonds subject to the covenants, provisions
and conditions herein contained.
The 2012 Bonds in the a principal amount of and 00/100
Dollars ($ ) are hereb authorized to be issued under and subject to the terms of the
Resolution and this A the Act and other applicable laws of the State of California. The
2012 Bonds shall be desi "Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can Special Tax Bonds, 2012 Series A."
2.2 Terms of Bonds.
(a) Form-, Denominations. The Bonds shall be issued as full re
bonds without coupons in the denomination of $5,000 or an inte multiple thereof. The
Bonds shall be lettered and numbered in a customar manner as determined b the Fiscal A
(b) Date of the Bonds. The Bonds shall be dated the Closin Date.
77772972.1
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I
(c) Maturities, Interest Rates. The 2012 Bonds shall mature on the dates and
shall bear interest at the rates as follows:
Maturit Date Principal
(September Amount Co
(d) Interest. The 2012 Bonds shall bear interest at the rates set forth above
pa on the Interest Pa Dates in each y ear. Interest shall be calculated on the basis of a
360-da y ear composed of twelve 30-da months. Each 2012 Bond shall bear interest from the
Interest Pa Date next precedin the date of authentication thereof unless (i) it is
authenticated after a Record Date and on or before an Interest Pa Date and after the close
of business on the precedin Record Date, in which event it shall bear interest from such Interest
Pa Date, or (ii) it is authenticated on or before Au 15, 2012, in which event it shall
bear interest from the Closin Date, or (iii) interest with respect to an Outstandin 2012 Bond is
in default, in which event interest with respect thereto will be pa from, the date to which
interest has previousl been paid or made available for pa thereon.
(e) Method of Payment. Interest on the Bonds (includin the final interest
pa upon maturit or earlier redemption is pa b check of the Fiscal A mailed on
77772972.1 12
the Interest Pa Dates b first class mail to the re Owner thereof at such re
Owner's address as it appears on the re g istration books maintained b the Fiscal A at the
close of business on the Record Date precedin the Interest Pa Date, or b wire transfer
made on such Interest Pa Date upon instructions of an Owner of $1,000,000 or more in
a principal amount of Bonds.
The principal of the Bonds and an premium on the Bonds are pa in lawful
mone of the United States of America upon surrender of the Bonds at the Corporate Trust
Office of the Fiscal A
All Bonds paid b the Fiscal A pursuant to this Section shall be canceled b
the Fiscal A The Fiscal A shall destro the canceled Bonds.
2.3 Redemption.
(a) Redemption Dates.
( i ) Optional Redemption. The 2012 Bonds are subject to redemption
prior to maturit at the option of the District from an source of funds, as a whole or in part, on
an date on or after , from such maturities as selected b the District and b lot within
a maturit at the redemption prices and schedules applicable to the Authorit Bonds.
Notwithstandin an in this A to the contrar with respect to optional
redemptions related to the Authorit Bonds, the District shall abide b the priorit of redemption
relatin to the Authorit Bonds permitted b the Authorit Indenture.
( ii ) Special Mandator Redemption from Prepa of Special Taxes
and from Residual Funds. The 2012 Bonds shall also be subject to mandator redemption on
an date on or after September 1, 20 in whole or in part from such maturities as selected b
the District and b lot within a maturit from amounts constitutin prepa of Special
Taxes, from amounts transferred from the Residual Fund hereunder and from amounts
transferred b the Authorit to the District from the Residual Fund under the Authorit Indenture
at the followin redemption prices (expressed as a percenta of the principal amount of 2012
Bonds to be redeemed) to with accrued interest thereon to the redemption date:
Redemption Date Redemption Price
( iii ) Mandator Sinkin Pa Redemption. The 2012 Bonds are not
subject to mandator sinkin pa redemption.
77772972.1 13
ZEMMU
(iv) special Mandatory Redemption. The 2012 Bonds are subject to
special mandatory redemption on any date to which timely notice of redemption may be given, in
integral multiples of $5,000 from unused proceeds of the 2012 Bonds after completion or
abandonment of the improvements to be financed with such proceeds, from the deposit of fees
with the District by a public agency which has accepted facilities serving an area of the District,
and from insurance or condemnation proceeds, without premium, plus accrued interest to the
redemption date, from such maturities as selected by the District and by lot within a maturity.
(b) Notice to Fiscal A ent The District shall give the Fiscal Agent written
notice of its intention to redeem Bonds pursuant to subsection (a)(i) not less than sixty (60) days
prior to the applicable redemption date, unless such notice shall be waived by the Fiscal Agent.
Notwithstanding any provisions in this Agreement to the contrary, upon any Optional
Redemption or Special Mandatory Redemption in part, the District shall deliver an officer's
Certificate to the Fiscal Agent at least sixty (60) days prior to the proposed redemption date or
such later date as shall be acceptable to the Fiscal Agent so stating that the remaining payments
of principal and interest on the Bonds will be sufficient on a timely basis to pay debt service on
the Authority Bonds, as demonstrated in a cash flow certificate delivered to the Fiscal Agent
with such officer's Certificate.
The District shall in such officer's Certificate certify to the Fiscal Agent that
sufficient moneys for purposes of such redemption are or will be on deposit in the Redemption
Fund and is required to deliver such moneys to the Fiscal Agent together with other Special Tax
Revenues, if any, then to be delivered to the Fiscal Agent pursuant to this Agreement, which
moneys are required to be identified to the Fiscal Agent in the Officer's Certificate delivered
with the Special Tax Revenues.
(c) Redemption Procedure by iscal Agent The Fiscal Agent shall cause
notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30)
days but not more than sixty (60) days prior to the date fixed for redemption, to the respective
registered owners of any Bonds designated for redemption, at their addresses appearing on the
Bond registration books in the Corporate Trust Office of the Fiscal Agent; but such mailing shall
not be a condition precedent to such redemption and failure to mail or to receive any such notice,
or any defect therein, shall not affect the validity of the proceedings for the redemption of such
Bonds.
Such notice shall state the redemption date and the redemption price and, if less
than all of the then outstanding Bonds are to be called for redemption, shall designate the Bond
numbers of the Bonds to be redeemed or shall state that all Bonds between two stated Bond
numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities
have been called for redemption, shall state as to any Bond called in part the principal amount
thereof to be redeemed, and shall require that such Bonds be then surrendered at the Corporate
Trust Office of the Fiscal Agent for redemption at the said redemption price, and shall state that
further interest on such Bonds will not accrue from and after the redemption date. The cost of
mailing any such redemption notice and any expenses incurred by the Fiscal Agent in connection
therewith shall be paid by the District.
77772972.1 14
Upon the pa of the redemption price of Bonds bein redeemed, each check
or other transfer of funds issued for such purpose shall, to the extent practicable, bear the number
identif b issue and maturit the Bonds bein redeemed with the proceeds of such check or
Atther transfer.
i
Whenever provision s made in this A for the redemption of less than all
of the Bonds or an g iven portion thereof, the Fiscal A shall select the Bonds to be
redeemed,, from all Bonds or such g iven portion thereof not previousl called for redemption,
amon maturities as specified b the District in a written certificate delivered to the Fiscal A
p A
and b lot within a maturit in an manner which the District in its sole discretion shall deem
appropriate and fair. In providin such certificate, the District shall provide for the redemption
of Bonds such that the remainin Debt Service payable on the Bonds shall remain as level as
possible.
Upon surrender of Bonds redeemed in part onl the District shall execute and the
Fiscal A shall authenticate and deliver to the re Owner, at the expense of the District,
a new Bond or Bonds, of the same series and maturit of authorized denominations in a
principal amount e to the unredeemed portion of the Bond or Bonds.
(d) Effect of Redemption. From and after the date fixed for redemption, if
funds available for the pa of the principal of, and interest and an premium on, the Bonds
so called for redemption shall have been deposited in the Bond Fund, such Bonds so called shall
cease to be entitled to an benefit under this A other than the ri to receive pa
of the redemption price, and no interest shall accrue thereon on, or after the redemption date
specified in such notice.
All Bonds redeemed and purchased b the Fiscal A pursuant to this
Section 2.3 shall be canceled b the Fiscal A The Fiscal A shall destro the canceled
Bonds.
(e) Partial Redemption. If in the event onl a portion of an Bond is called
for redemption, then upon surrender of such Bond the Cit will execute, on behalf of the District,
and the Fiscal A will authenticate and deliver to the Bond Owner thereof, at the expense of
the District, a new Bond or Bonds of the same series and maturit date, of authorized
denominations in an a principal amount e to the unredeemed portion of the Bond to
be redeemed.
2.4 Form of Bonds. The Bonds, the form of Fiscal A certificate of
authentication and the form of assi to appear thereon, shall be substantiall in the forms,
respectivel set forth in Exhibit A attached hereto and b this reference incorporated herein,
with necessar or appropriate variations, omissions and insertions, as permitted or re b
this A the Resolution and the Act.
2.5 Execution of Bonds. The Bonds shall be executed on behalf of the District b
the manual or facsimile si of the Ma and Cit Clerk, who are in office on the date of
adoption of this A or at an time thereafter. Unless otherwise provided in an
Supplemental A with respect to the Bonds, the Bonds shall then be delivered to the
77772972.1 15
Fiscal A for authentication. If an officer whose si g nature appears on an Bond ceases to be
such officer before deliver of the Bonds to the owner, such si shall nevertheless be as
effective as if the officer had remained in office until the deliver of the Bonds to the owner.
An Bond ma be si and attested on behalf of the District b such persons as at the actual
date of the execution of such Bond shall be the proper officers of the District althou at the
nominal date of such Bond an such person shall not have been such officer of the District.
Onl such Bonds as shall bear thereon a certificate of authentication in
substantiall the form set forth in Exhibit A, executed and dated b the Fiscal A shall be
valid or obli for an purpose or entitled to the benefits of this A and such
certificate of authentication of the Fiscal A shall be conclusive evidence that the Bonds
re hereunder have been dul authenticated, re and delivered hereunder and are
entitled to the benefits of this A
2.6 Transfer of Bonds. An Bond ma in accordance with its terms, be transferred
upon the books re to be kept pursuant to the provisions of Section 2.8 hereof b the person
in whose name it is re in person or b his dul authorized attorne upon surrender of
such Bond for cancellation, accompanied b deliver of a dul written instrument of transfer in
form approved b the Fiscal A The cost for an services rendered or an expenses incurred
b the Fiscal A in connection with an such transfer shall be paid b the District. The Fiscal
A shall collect from the Owner re such transfer an tax or other g overnmental
char re to be paid with respect to such transfer.
No transfers of Bonds shall be re to be made (i) fifteen (15) da prior to
the date established b the Fiscal A for selection of Bonds for redemption, (ii) with respect
to a Bond after such Bond has been selected for redemption, or (iii) between the 15th da of the
month next precedin an Interest Pa Date and such Interest Pa Date.
2.7 Exchan of Bonds. Bonds ma be exchan at the Corporate Trust Office of
the Fiscal A for a like a principal amount of Bonds of authorized denominations and
of the same maturit The cost for an services rendered or an expenses incurred b the Fiscal
A in connection with an such exchan shall be paid b the District. The Fiscal A shall
collect from the Owner re such exchan an tax or other g overnmental char re
to be paid with respect to such exchan
No exchan of Bonds shall be re to be made (i) fifteen (15) da prior to
the date established b the Fiscal A for selection of Bonds for redemption, (ii) with respect
to a Bond,, after such Bond has been selected for redemption or (iii) between the 15th da of the
month next precedin an Interest Pa Date and such Interest Pa Date.
2.8 Bond Re The Fiscal A will keep or cause to be kept,, at its Corporate
Trust Office sufficient books for the re and transfer of the Bonds which books shall
show the series number, date, amount, rate of interest and last known owner of each Bond and
shall at all times be open to inspection b the District or the Cit durin re business hours
upon reasonable notice and, upon presentation for such purpose, the Fiscal A shall, under
such reasonable re as it ma prescribe, re or transfer or cause to be re or
transferred, on said books, the ownership of the Bonds as hereinbefore provided.
77772972.1 16
The District and the Fiscal A will treat the Owner of an Bond whose name
appears on the Bond re as the absolute Owner of such Bond for an and all purposes, and
the District and the Fiscal A shall not be affected b an notice to the contrar The District
and the Fiscal A ma rel on the address of the Bond Owner as it appears in the Bond
re for an and all purposes.
2.9 Temporar Bonds. The Bonds ma be initiall issued in temporar form
exchan for definitive Bonds when read for deliver The temporar Bonds ma be
printed, litho or t shall be of such authorized denominations as ma be
determined b the District, and ma contain such reference to an of the provisions of this
A as ma be appropriate. Ever temporar Bond shall be executed b the District upon
the same conditions and in substantiall the same manner as the definitive Bonds. If the District
issues temporar Bonds it will execute and furnish definitive Bonds without dela and thereupon
the temporar Bonds shall be surrendered, for cancellation, in exchan for the definitive Bonds
at the Corporate Trust Office of the Fiscal A or at such other location as the Fiscal A
shall desi and the Fiscal A shall authenticate and deliver in exchan for such
temporar Bonds an e a principal amount of definitive Bonds of authorized
denominations. Until so exchan the temporar bonds shall be entitled to the same benefits
under this A as definitive Bonds authenticated and delivered hereunder.
2.10 Bonds Mutilated, Lost, Destro or Stolen. If an Bond shall become
mutilated, the District, at the expense of the Owner of said Bond, shall execute, and the Fiscal
A shall authenticate and deliver,, a new Bond of like tenor and principal amount in exchan
and substitution for the Bond so mutilated, but onl upon surrender to the Fiscal A of the
Bond so mutilated. Ever mutilated Bond, so surrendered to the Fiscal A shall be canceled
b it and destro b the Fiscal A who shall deliver a certificate of destruction thereof to
the District. If an Bond shall be lost, destro or stolen, evidence of such loss, destruction or
theft ma be submitted to the Fiscal A and, if such evidence be satisfactor to it and
indemnit for the District and the Fiscal A satisfactor to the Fiscal A shall be g iven, the
District, at the expense of the Owner, shall execute, and the Fiscal A shall authenticate and
deliver a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond
so lost, destro or stolen. The District ma re pa of a sum not exceedin the actual
cost of preparin each new Bond delivered under this Section and of the expenses which ma be
incurred b the District and the Fiscal A for the preparation, execution, authentication and
deliver An Bond delivered under the provisions of this Section in lieu of an Bond alle to
be lost, destro or stolen shall constitute an ori additional contractual obli on the
part of the District whether or not the Bond so alle to be lost, destro or stolen is at an
time enforceable b an and shall be e and proportionatel entitled to the benefits of
this A With all other Bonds issued pursuant to this A
2.11 Limited Obli All obli of the District under this A and the
Bonds shall be special obli of the District, pa solel from the Special Tax Revenues
and the funds pled therefor hereunder. Neither the faith and credit nor the taxin power of
the District (except to the limited extent set forth herein) or the State of California or an
political subdivision thereof is pled to the pa of the Bonds.
77772972.1 17
2.12 No Acceleration. The principal of the Bonds shall not be subject to acceleration
hereunder. Nothin in this Section shall in an wa prohibit the prepa or redemption of
Bonds under Section 2.3 hereof, or the defeasance of the Bonds and dischar of this A
under Section 10.3 hereof.
2.13 Additional Bonds. The District ma issue bonds pa out of the Special Tax
Revenues on a parit with the 2012 Bonds provided that such Additional Bonds shall be issued
in accordance with the followin
(a) the amount of such Additional Bonds shall not, to with the Bonds
then Outstandin exceed the total amount of bonded indebtedness authorized to be issued b the
District
( b ) the District shall be in compliance with all covenants set forth in this
A and a certificate of the District to that effect shall have been filed with the Cit Clerk
on behalf of the District provided, however, that Additional Bonds ma be issued
notwithstandin that the District is not in compliance with all such covenants so lon as
immediatel followin the issuance of such Additional Bonds, the District will be in compliance
with all such covenants and
( c ) the District shall have received the followin documents, all of such
documents dated or certified, as the case ma be, as of the date of deliver of such Additional
Bonds b the Fiscal Agent (unless the Fiscal Agent shall accept an of such documents bearin a
prior date
(i) An opinion of Bond Counsel and/or counsel to the Cit to the
effect that (a) the District has the ri and power under the Act to execute and deliver the
Supplemental A relatin to such Additional Bonds, and such Supplemental A
has been dul and lawfull adopted, executed and delivered b the District, is in full force and
effect and is valid and bindin upon the District and enforceable in accordance with its terms
(except as enforcement ma be limited b bankruptc insolvenc reor and other
similar laws relatin to the enforcement of creditors' ri (b) this A creates the valid
pled which it purports to create of the Special Tax Revenues and Redemption Revenues,
subject to the application thereof to the purposes and on the conditions permitted b this
A and (c) such Additional Bonds are valid and bindin limited obli of the
Distric enforceable in accordance with their terms (except as enforcement ma be limited b
bankruptc insolvenc reor and other similar laws relatin to the enforcement or
creditors' ri and the terms of this A and entitled to the benefits of this A
and such Additional Bonds have been dul and validl authorized and issued in accordance with
the Act (or other applicable laws) and this A and further opinion of Bond Counsel to
the effect that, assumin compliance b the District with certain tax covenants, the issuance of
the Additional Bonds will not adversel affect the exclusion from g ross income for federal
income tax purposes of interest on an Outstandin Bonds theretofore issued or the exemption
from State of California personal income taxation of interest on an Outstandin Bonds
theretofore issued and
77772972.1 18
(ii) A certificate of an Independent Financial Consultant certif as
of the Closin Date of the Additional Bonds that (a) the ratio of the appraised or assessed (or a
combination thereof) value of the propert included within the District to the amount of an
g overnmental lien which will be on the propert after the issuance of the Additional Bonds,
includin the amount of an assessment bonds or bonds issued under the Act, is not less than 3:1
and (b) the total Net Taxes which could be g enerated b the District b the lev of the Special
Tax at the maximum level allowed under the RMA (subject to Cit policies relatin to
communit facilities districts, the Act and the applicable resolutions of the District) on all then
taxable propert in an Fiscal Year, is at least 1.1 o times Maximum Annual Debt Service on all
Outstandin Bonds (includin Additional Bonds previousl issued and the Additional Bonds
proposed to be issued).
No Additional Bonds shall be issued later than 18 months from the issuance of the
final certificate of occupanc for a new home within the District.
11
R SM ly, OR 12 to] W Le I a 6i 1
3.1 Issuance and Deliver of the Bonds. At an time after the execution of this
A the District ma issue the Bonds in the a principal amount set forth in
Section 2.2 hereof and deliver the Bonds to the Ori Purchaser. The Authorized Officers of
the District are hereb authorized and directed to deliver an and all documents and instruments
necessar to cause the issuance of the Bonds in accordance with the provisions of the Act, the
Resolution and this A and to do and cause to be done an and all acts and thin
necessar or convenient for deliver of the Bonds to the Ori Purchaser, upon pa of the
purchase price for the Bonds.
3.2 Application of Proceeds of Sale of the 2012 Bonds. On the Closin Date, the
proceeds of the sale of the 2012 Bonds in the amount of $ (bein the principal
amount of the 2012 Bonds of $ less the purchase discount of $ )shall be
paid to the Fiscal A and deposited or transferred b the Fiscal A as follows (the Fiscal
A ma establish temporar funds or accounts to record or facilitate an such deposit or
transfer):
(a) The Fiscal A shall deposit the amount of $ in the Costs
of Issuance Fund.
(b) The Fiscal A shall deposit the amount of $ in the
Improvement Fund.
3.3 Validit of Bonds. The validit of the authorization and issuance of the Bonds
shall not be dependent upon the completion of the ac of the Facilities or upon the
performance b an person of his obli with respect to the Facilities.
3.4 Special Taxes Receipt Fund and Special Tax Fund.
1 T axes 11 i ri'll
( a ) Establishment of Specia axes Receipt Fund and Spec ax Fund. The
Cit shall establish and hold for the benefit of the Owners a fund known as the "Special Taxes
77772972.1 19
Pa 107
Receipt Fund." The Cit shall deposit Special Taxes when received in the account established
for the District and immediatel thereafter transfer such amounts to the Fiscal A for deposit
in the "Special Tax Fund," which is hereb established as a separate fund to be held b the Fiscal
A Mone in the Special Tax Fund shall be held b the Fiscal A for the benefit of the
District and the Owners of the Bonds, shall be disbursed as provided below and, pendin an
disbursemen shall be subject to a lien in favor of the Owners of the Bonds.
(b) Disbursements. After depositin an amount of Special Taxes bud for
Administrative Expenses to the Administrative Expense Fund pursuant to a written direction of
the Distric no later than ten (10) Business Da prior to each Interest Pa Date, the Fiscal
A shall withdraw from the Special Tax Fund and transfer to the Bond Fund as follows:
(i) To the Interest Account of the Bond Fund, an amount such that the
balance in the Interest Account shall be e to the installment of interest due on the Bonds on
said Interest Pa Date.
(ii) To the Principal Account of the Bond Fund, an amount such that
the balance in the Principal Account shall at least e the principal pa (includin
mandator sinkin pa if an due on the Bonds on said Interest Pa Date.
Notwithstandin the fore amounts shall be transferred to the Principal
Account or the Interest Account from the Special Tax Fund and immediatel be paid to the
Owners of the Bonds in respect of past due pa on the Bonds.
(c) Investment. Mone in the Special Tax Fund shall be invested and
deposited in accordance with Section 6.1 hereof. Interest earnin and profits resultin from
such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes
thereof.
(d) Disposition of S urplus. On September 2 of each y ear, commencin
September 2, 2012, the Fiscal A shall transfer an amounts remainin in the Special Tax
Fund followin pa of each disbursement re pursuant to subsection (b) above, to the
Residual Fund.
3.5 Reserved,,
3.6 Administrative Expense Fund.
(a) Establishment of Administrative Expense Fund. There is hereb
established as a separate fund to be held b the Fiscal A the "Administrative Expense
Fund," to the credit of which the amount bud and levied for Administrative Expenses shall
be made. Mone in the Administrative Expense Fund shall be held b the Fiscal A for the
benefit of the District, and shall be disbursed as provided below.
(b) Disbursement. Amounts in the Administrative Expense Fund shall be
withdrawn b the Fiscal A and paid to the District or the Cit or its order upon receipt b the
Fiscal A of an Officer's Certificate statin the amount to be withdrawn, that such amount is
to be used to pa an Administrative Expense, and the nature of such Administrative Expense.
77772972.1 20
Annuall at least five (5) da prior to the last da of each Bond Year, the Fiscal
A g ent shall withdraw an amounts then remainin in the Administrative Expense Fund that have
not been allocated to pa Administrative Expenses incurred but not y et paid, and which are not
otherwise encumbered or expected to be needed for the purposes of such fund, and transfer such
amounts to the Special Tax Fund.
(c) Investment. Mone in the Administrative Expense Fund shall be
invested and deposited in accordance With Section 6.1 hereof. Interest earnin and profits
resultin from said investment shall be retained in the Administrative Expense Fund to be used
for the purposes of such fund.
3.7 Improvement Fund.
(a) Establishment of Improvement Fund. There is hereb established as a
separate fund to be held b the Fiscal A the "Improvement Fund," to the credit of which a
deposit shall be made as re b a Supplemental A Mone in the Improvement
Fund shall be held b the Fiscal A for the benefit of the Cit and the District and shall be
disbursed,, except as otherwise provided in subsection (b) of this Section 3.7, for the pa or
reimbursement of costs of Facilities.
( b ) Disbursement. Disbursements from the Improvement Fund shall be made
b the Fiscal A upon receipt of an Officer's Certificate statin that ( 1 ) the conditions to the
release of such funds have been satisfied, ( 2 ) the name of the person to whom pa is due,
( 3 ) the amount to be paid, ( 4 ) the purpose for which the obli to be paid was incurred, and
( 5 ) there has not been filed with or served upon the District notice of an lien, ri to lien or
attachment, stop notice or claim affectin the ri to receive pa of an of the mone
pa to an of the persons named in such certificate or written re which has not been
released or will not be released simultaneousl with the pa of, such obli other than
materialmen's or mechanic's liens accruin b mere operation of law.
The Fiscal A ma conclusivel rel on such Officer's Certificate received as
complete authorization to disburse funds in accordance with this Section 3.7 and shall not be
responsible for the contents of such Officer's Certificate.
( c ) Investment. Mone in the Improvement Fund shall be invested and
deposited b the Fiscal A in accordance with Section 6.1 hereof. Interest earnin and
profits from such investment and deposit shall be retained in the Improvement Fund until all
Facilities have been full funded. Upon closin the Improvement Fund, all amounts remainin
in the Improvement Fund shall be transferred for deposit in the Redemption Fund to be used for
the purposes of such fund.
( d ) Closin of Fund. Upon the filin of an Officer's Certificate executed b
the Treasurer statin that all costs of the Facilities have been paid or are not re to be paid
from the Improvement Fund, the Fiscal A ent shall transfer the amount, if an remainin in the
Improvement Fund to the Redemption Fund for application to the pa of Bonds, and the
Improvement Fund shall be closed.
77772972.1 21
3.8 Costs of Issuance Fund. The Fiscal A shall establish and maintain a
separate fund to be held b the Fiscal A known as the "Costs of Issuance Fund" into which
shall be deposited the amounts set forth in Section 3.2(a) above or as re b a Supplemental
A The mone in the Costs of Issuance Fund shall be used to pa Costs of Issuance
from time to time upon receipt of a Re of the District. On the date which is one hundred
ei (180) da followin the Closin Date, or upon the earlier receipt b the Fiscal A of a
written re of the District statin that all Costs of Issuance have been paid, the Fiscal A
shall transfer all remainin amounts in the Costs of Issuance Fund to be deposited in the one or
more accounts of the Improvement Fund.
3.9 Delin Mana Fund.
(a) Establishment of Delin Management Fund. There is hereb
established as a separate fund to be held b the Fiscal A the "Delin Mana
Fund," to the credit of which a deposit shall be made as re b Section 3.10(b) hereof.
Mone in the Delin Mana Fund shall be held b the Fiscal A for the benefit
of the Owners of the Bonds, and shall be disbursed as provided below.
(b) Disbursement. Mone in the Delin Mana Fund shall be
used solel for the purpose of pa the principal of, includin mandator sinkin pa if
an and interest on the Bonds when due in the event that the mone in the Bond Fund are
insufficient therefor. If the amounts in the Bond Fund are insufficient to pa the principal of,
includin mandator sinkin pa if an or interest on the Bonds when due, the Fiscal
A shall withdraw from the Delin Mana Fund for deposit in the Bond Fund
mone necessar for such purposes.
In connection with an redemption of the Bonds, or a partial defeasance of the
Bonds in accordance with Section 10.3 hereof, amounts in the Delin Mana Fund
ma be applied to such redemption or partial defeasance so lon as the amount on deposit in the
Delin Mana Fund followin such redemption or partial defeasance e the
Delin Mana Fund Re To the extent that the Delin Mana
Fund is at the Delin Mana Fund Re as of the first da of the final Bond
Year for the Bonds, amounts in the Delin Mana Fund ma be applied to pa the
principal of and interest due on the Bonds in the final Bond Year for such issue. Mone in the
Delin Mana Fund in excess of the Delin Mana Fund Re
not transferred in accordance With the precedin provisions of this para shall be withdrawn
from the Delin Mana Fund on September 2 of each y ear and transferred to the
Residual Fund.
(c) Investment. Mone in the Delin Mana Fund shall be
invested and deposited in accordance with Section 6.1 hereof. Interest earnin and profits
resultin from said investment shall be retained in the Delin Mana Fund to be used
for the purposes of such fund.
3.10 Residual Fund.
77772972.1 22
9��l
(a) Establishment of Residual Fund. There is hereb established as a separate
fund to be held b the Fiscal A the "Residual Fund," to the credit of which a deposit shall be
made as re b Sections 3.4(d) and 3.9(b) hereof. Mone in the Residual Fund shall be
held b the Fiscal A for the benefit of the District, and shall be disbursed as provided below.
%1
The amounts in the Residual Fund are not pled to the repa of the Bonds.
(b) Disbursement. On September 2 of each y ear, commencin September 2,
2012, the Fiscal A shall transfer an amounts in the Residual Fund for the followin
purposes in the followin order of priorit
( 1) to the Delin Mana Fund an amount, if an re to
restore the amount on deposit in the Delin Mana Fund to the Delin
Mana Fund Re
(2) to the Administrative Expense Fund an amount determined b the District
to pa Administrative Expenses to the extent that the amounts on deposit in the Administrative
Expense Fund are insufficient to pa Administrative Expenses or
(3) to the Special Mandator Redemption Account of the Redemption Fund
for redemption of the Bonds unless the Fiscal A has received written direction from the
District to expend such remainin funds held in the Residual Fund for an lawful purposes of the
District includin but not limited to, pa costs of public capital improvements or reducin the
Special Taxes which are to be levied in the current or the succeedin Fiscal Year upon the
properties which are subject to the Special Tax.
(c) Investment. Mone in the Residual Fund shall be invested and deposited
in accordance with Section 6.1 hereof. Interest earnin and profits resultin from said
investment shall be retained in the Residual Fund to be used for the purposes of such fund.
3.11 Redemption Fund.
(a) Establishment of the Redemption Fund There is hereb established as a
separate fund to be held b the Fiscal A the "Redemption Fund" (in which there shall be
established and created a Mandator Redemption Account, an Optional Redemption Account
and a Special Mandator Redemption Account), to the credit of which the District or the Cit on
behalf of the District, shall deposit, immediatel upon receipt, all Redemption Revenues received
b the District or the Cit on behalf of the District. Mone in the Redemption Fund shall be
held b the Fiscal A for the benefit of the District and the Owners of the Bonds, shall be
disbursed as provided below and, pendin an disbursement, shall be subject to a lien in favor of
the Owners of the Bonds.
( b ) Disbursement.
(1) All prepa of Special Taxes and amounts transferred from the
Residual Fund for the redemption of Bonds or transferred from the Authorit under the Authorit
Indenture for the redemption of Bonds shall be deposited in the Special Mandator Redemption
Account to be used to redeem Bonds on the next date for which notice of redemption can timel
be g iven.
77772972.1 23
Pa 111
(2 An amounts transferred for the optional redemption of Bonds shall be
deposited into the Optional Redemption Account to be used to redeem Bonds on the next date for
which notice of redem-ption can timel be g iven.
( 3 ) All proceeds of the Bonds after completion or abandonment of the
improvements to be financed from the proceeds of the Bonds and proceeds from insurance or
condemnation proceeds shall be deposited into the Mandator Redemption Account to be used to
redeem Bonds on the next date for which notice of redemption can timel be g iven.
(c) Investment. Mone in the Redemption Fund shall be invested and
deposited in accordance with Section 6.1 hereof. Interest earnin and profits resultin from said
investment shall be retained in the Redemption Fund to be used for the purposes of such fund.
ARTICLE IV
SPECIAL TAX REVENUES BOND FUND
4.1 Pled of Special Tax Revenues. The Bonds shall be secured b a first pled
(which pled shall be effected in the manner and to the extent herein provided) of all of the
Special Tax Revenues and Redemption Revenues and all mone deposited in the Bond Fund
and,, until disbursed,, as provided herein, in the Special Tax Fund, the Redemption Fund and the
Delin Mana Fund. The Special Tax Revenues and all mone deposited into said
funds (except as otherwise provided herein) are hereb dedicated to the pa of the principal
of, and interest and an premium on the Bonds as provided herein and in the Act until all of the
Bonds have been paid and retired or until mone or Federal Securities have been set aside
irrevocabl for that purpose in accordance with Section 10.3 hereof.
Amounts in the Administrative Expense Fund, the Improvement Fund and the
Residual Fund are not pled to the repa of the Bonds. The Facilities ac with the
proceeds of the Bonds are not in an wa pled to pa the Debt Service on the Bonds. An
proceeds of condemnation or destruction of an Facilities financed with the proceeds of the
Bonds are not pled to pa the Debt Service on the Bonds and are free and clear of an lien or
obli imposed hereunder.
4.2 Bond Fund.
(a) Establishment of Bond Fund. There is hereb established as a separate
fund to be held b the Fiscal A known as the "Bond Fund" (in which there shall be
established and created an Interest Account and a Principal Account) to the credit of which
deposits shall be made as re b Section 3.4(b) and Section 3.9 hereof, and an other
amounts re to be deposited therein b this A a Supplemental A or the
Act. Mone in the Bond Fund shall be held b the Fiscal A for the benefit of the Owners of
the Bonds,, shall be disbursed for the pa of the principal of (includin mandator sinkin
pa if an and interest on the Bonds as provided below, and, pendin such disbursement,
shall be subject to a lien in favor of the Owners of the Bonds.
(b) Disbursements. On each Interest Pa Date, the Fiscal A shall
withdraw from the Principal Account and the Interest Account and pa to the Owners of the
Bonds the principal of (includin mandator sinkin pa if an and interest on the Bonds,,
77772972.1 24
10MM
respectivel provided that available amounts in the Principal Account and the Interest Account
shall first be used to pa an past due installments of principal of (includin mandator sinkin
pa if an and interest on the Bonds, respectivel Notwithstandin the fore
amounts transferred to the Principal Account or the Interest Account from the Special Tax Fund
constitutin delin pa of Special Taxes pursuant to Section 3.4(b) hereof shall
immediatel be paid to the Owners of the Bonds in respect of past due pa on the Bonds.
An installment of principal (includin mandator sinkin pa if an or
interest on the Bonds which is not paid when due shall accrue interest at the rate of interest on
the Bonds until paid, and shall be paid whenever funds in the Bond Fund are sufficient therefor.
If at an time the Fiscal A fails to pa principal and interest due on an
scheduled pa date for the Bonds, the Fiscal A shall notif the District and the
Treasurer in writin of such failure, and the Treasurer shall notif the CDIAC of such failure
within 10 da of the failure to make such pa as re b Section 53359(c)(1) of the
Act.
(c) Capitalized Interest Account. There is hereb established a separate
account within the Bond Fund, desi as the "Capitalized Interest Account," to the credit of
which a deposit shall be made as re b Section 3.2(d) hereof or as re b a
Supplemental A Mone in the Capitalized Interest Account shall be held b the
Fiscal A and used and withdrawn solel for the purpose of pa the interest on the
applicable series of Bonds as it shall become due and pa
(d) Investment. Mone in the Bond Fund shall be invested and deposited in
accordance with Section 6.1 hereof. Interest earnin and profits resultin from the investment
and deposit of amounts in the Bond Fund shall be retained in the Bond Fund.
ARTICLE V
OTHER COVENANTS OF THE DISTRICI
5.1 Punctual Pa The District shall punctuall pa or cause to be paid the
principal of, and interest and an premium on, the Bonds when and as due in strict conformit
with the terms of this A and an Supplemental A and it will faithfull observe
and perform all of the conditions, covenants and re of this A and all
Supplemental A and of the Bonds.
5.2 Limited Obli The Bonds are limited obli of the District and are
pa solel from and secured solel b the Special Tax Revenues and the amounts in the
Bond Fund and the Special Tax Fund created hereunder.
5.3 Extension of Time for Pa In order to prevent an accumulation of claims
for interest after maturit the District shall not, directl or indirectl extend or consent to the
extension of the time for the pa of an claim for interest on an of the Bonds and shall not,
directl or indirectl be a part to the approval of an such arran b purchasin or
fundin said claims for interest or in an other manner. In case an such claim for interest shall
be extended or funded, whether or not with the consent of the District, such claim for interest so
extended or funded shall not be entitled, in case of default hereunder, to the benefits of this
77772972.1 25
Pa 113
A except subject to the prior pa in full of the principal of all of the Bonds then
Outstandin and of all claims for interest which shall not have so extended or funded. Nothin
in this section shall be deemed to limit the ri of the District to issue bonds for the purpose of
refundin an outstandin Bonds, and such issuance shall not be deemed to constitute an
extension of maturit of the Bonds.
5.4 A Encumbrances. The District will not encumber, pled or place an
char or lien upon an of the Special Tax Revenues,, or other amounts pled to the Bonds
superior to or on a parit with the pled and lien herein created for the benefit of the Bonds,
except as permitted b this A
5.5 Books and Records. The District will keep, or cause to be kept, proper books of
record and accounts, separate from all other records and accounts of the District, in which
complete and correct entries shall be made of all transactions relatin to the expenditure of
amounts disbursed from the Administrative Expense Fund and the Special Tax Fund and relatin
to the Special Tax Revenues. Such books of record and accounts shall at all times durin
business hours and upon reasonable prior notice be subject to the inspection of the Fiscal A
and the Owners of not less than ten percent (10%) of the principal amount of the Bonds then
Outstandin or their representatives dul authorized in writin
The Fiscal A will keep, or cause to be kept, proper books of record and
accounts,, separate from all other records and accounts of the Fiscal A in which complete
and correct entries shall be made of all transactions relatin to the expenditure of amounts
disbursed from the Bond Fund and the Costs of Issuance Fund. Such books of record and
accounts shall at all times durin business hours and upon reasonable prior notice be subject to
the inspection of the Cit the District and the Owners of not less than ten percent (10%) of the
principal amount of the Bonds then Outstandin or their representatives dul authorized in
writin
5.6 Protection of Securit and Ri of Owners. The District will preserve and
protect the securit of the Bonds and the ri of the Owners, and will warrant and defend their
ri a all claims and demands of all persons. From and after the deliver of an of the
Bonds b the District, the Bonds shall be incontestable b the District. In furtherance of the
fore the District shall not approve an reduction of the Assi Special Taxes as provided
in the RMA which would prohibit the District from lev the Special Taxes in an Fiscal Year
at a level that would g enerate Net Taxes at least e to 110% of annual debt service in such
Fiscal Year for the Bonds.
5.7 Compliance with Law, Completion of Facilities. The District and the Cit will
compl with all applicable provisions of the Act and law in completin the ac q uisition and
construction of the Facilities.
5.8 Collection of Special Tax Revenues. The District shall compl with all
re of the Act so as to assure the timel collection of Special Tax Revenues, includin
without limitation, the enforcement of delin Special Taxes.
77772972.1 26
Pa 114
The Treasurer shall effect the lev of the Special Taxes each Fiscal Year on the
parcels within the District in accordance with the Ordinance, such that the computation of the
lev is complete before the final date on which the Auditor will accept the transmission of the
Special Tax amounts for the parcels within the District for inclusion on the next secured tax roll.
Upon the completion of the computation of the amounts of the lev the Treasurer shall prepare
or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor re to
include the lev of the Special Taxes on the next secured tax roll. The Special Taxes so levied
shall be pa and be collected in the same manner and at the same time and in the same
installments as the g eneral taxes on real propert are pa and have the same priorit
become delin at the same time and in the same proportionate amounts and bear the same
proportionate penalties and interest after delin as do the g eneral taxes on real propert
unless otherwise provided b the District.
In the event that the Treasurer determines to lev all or a portion of the Special
Taxes b means of direct billin of the propert owners of the parcels within the District, the
Treasurer shall, not less than fort (45) da prior to each Interest Pa Date, send bills
to the owners of such real propert located within the District subject to the lev of the Special
Taxes for Special Taxes in an a amount necessar to meet the financial obli of
the District due on the next Interest Pa Date, said bills to specif that the amounts so levied
shall be due and pa not less than thirt (30) da prior to such Interest Pa Date and
shall be delin if not paid when due.
In an event, the Treasurer shall fix and lev the amount of Special Taxes within
the District re (i) for the pa of principal of and interest on an outstandin Bonds of
the District becomin due and pa durin the ensuin y ear (takin into consideration
anticipated delin and (ii) to pa the Administrative Expenses durin such y ear, all in
accordance with the RMA and the Ordinance. The Special Taxes so levied shall not exceed the
authorized amounts as provided in the proceedin pursuant to the Resolution of Formation.
The Treasurer is hereb authorized to emplo consultants to assist in computin
the lev of the Special Taxes hereunder and an reconciliation of amounts levied to amounts
received. The fees and expenses of such consultants and the costs and expenses of the Treasurer
(includin a char for Cit or District staff time) in conductin its duties hereunder shall be an
Administrative Expense hereunder.
5.9 Further Assurances. The District shall adopt, make, execute and deliver an and
all such further resolutions, instruments and assurances as ma be reasonabl necessar or proper
to carr out the intention or to facilitate the performance of this A and for the better
assurin and confirmin unto the Owners of the ri and benefits provided in this A
5.10 Tax Covenants.
(a) Special Definitions. When used in this Section, the followin terms have
the followin meanin
"Code" means the Internal Revenue Code of 1986, as amended.
77772972.1
2♦
Pa 115
Re
"Computation Date" has the meanin set forth in section 1.148 -1(b) of the Tax
"Gross Proceeds" means an proceeds as defined in section 1.148 -1(b) of the Tax
Re (referrin to sales, investment and transferred proceeds), and an replacement
proceeds as defined in section 1.148 -1(c) of the Tax Re of the Bonds.
M!
"Investment" has the meanin set forth in section 1.148-1(b) of the Tax
"No Investment" means an investment propert as defined in section
148(b) of the Code in which Gross Proceeds of the Bonds are invested and that is not ac
to carr out the g overnmental purposes of that series of Bonds.
Re
"Rebate Amount" has the meanin set forth in section 1.148-1(b) of the Tax
"Tax Re means the United States Treasur Re promul
pursuant to sections 103 and 141 throu 150 of the Code, or section 103 of the 1954 Code, as
applicable.
"Yield' of an Investment has the meanin set forth in section 1.148 -5 of the Tax
Re and of an issue of g overnmental obli has the meanin set forth in section
1.148 -4 of the Tax Re
(b) Not to Cause Interest to Become Taxable. The District covenants that it
shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or an
other amounts (or an propert the ac construction or improvement of which is to be
financed directl or indirectl with Gross Proceeds) in a manner that if made or omitted,
respectivel could cause the interest on an Bond to fail to be excluded pursuant to section
103(a) of the Code from the g ross income of the owner thereof for federal income tax purposes.
Without limitin the g eneralit y of the fore unless and until the Fiscal A receives a
written opinion of Bond Counsel to the effect that failure to compl with such covenant will not
adversel affect such exclusion of the interest on an Bond from the g ross income of the owner
thereof for federal income tax purposes, the Cit shall compl with each of the specific
covenants in this Section.
(c) Private Use and Private Payments. Except as would not cause an Bond to
become a "private activit bond" within the meanin of section 141 of the Code and the Tax
Re the District shall take all actions necessar to assure that the District at all times
prior to the final cancellation of the last of the Bonds to be retired:
(i) exclusivel owns, operates and possesses all propert the
ac construction or improvement of which is to be financed or refinanced directl or
indirectl with Gross Proceeds of the Bonds and not use or permit the use of such Gross
Proceeds (includin throu an contractual arran with terms different than those
applicable to the g eneral public) or an propert ac constructed or improved with such
Gross Proceeds in an activit carried on b an person or entit (includin the United States or
77772972.1 28
an a department and instrumentalit thereof) other than a state or local g overnment,
unless such use is solel as a member of the g eneral public and
( ii ) does not directl or indirectl impose or accept an char or other
pa b an person or entit (other than a state or local g overnment) who is treated as usin
an Gross Proceeds of the Bonds or an propert the ac construction or improvement of
which is to be financed or refinanced directl or indirectl with such Gross Proceeds.
(d) No Private Loan. Except as would not cause an Bond to become a
"private activit bond" within the meanin of section 141 of the Code and the Tax Re
and rulin thereunder, the District shall not use or permit the use of Gross Proceeds of the
Bonds to make or finance loans to an person or entit other than a state or local g overnment.
For purposes of the fore covenant, such Gross Proceeds are considered to be "loaned" to a
person or entit if.- (i) propert ac constructed or improved with such Gross Proceeds is
sold or leased to such person or entit in a transaction that creates a debt for federal income tax
purposes (ii) capacit in or service from such propert is committed to such person or entit
under a take-or-pa output or similar contract or arran or (iii) indirect benefits of such
Gross Proceeds, or burdens and benefits of ownership of an propert ac constructed or
improved with such Gross Proceeds, are otherwise transferred in a transaction that is the
economic e of a loan.
(e) Not to Invest at Higher Yield. Except as would not cause the Bonds to
become "arbitra bonds" within the meanin of section 148 of the Code and the Tax
Re and rulin thereunder, the District shall not (and shall not permit an person to),, at
an time prior to the final cancellation of the last Bond to be retired, directl or indirectl invest
Gross Proceeds in an Investment, if as a result of such investment the Yield of an Investment
ac with Gross Proceeds, whether then held or previousl disposed of, would materiall
exceed the Yield of the Bonds within the meanin of said section 148.
(f) Not Federall G uaranteed. Except to the extent permitted b section
149(b) of the Code and the Tax Re and rulin thereunder, the District shall not take or
omit to take (and shall not permit an person to take or omit to take) an action that would cause
an Bond to be "federall g uaranteed" within the meanin of section 149(b) of the Code and the
Tax Re and rulin thereunder.
( Information Report. The District shall timel file an information
re b section 149(e) of the Code with respect to Bonds with the Secretar of the Treasur
on Form 8038-G or such other form and in such place as the Secretar ma prescribe.
(h Rebate of Arbitrage Profits. Except to the extent otherwise provided in
section 148(f) of the Code and the Tax Re
(i) The District shall account for all Gross Proceeds (includin all
receipts, expenditures and investments thereof) on its books of account separatel and apart from
all other funds (and receipts, expenditures and investments thereof) and shall retain all records of
accountin for at least six y ears after the da on which the last Bond is dischar However, to
the extent permitted b law, the District ma commin (and ma allow the Cit to commin
77772972.1 29
Pa 117
Gross Proceeds of Bonds with its other monies, provided that it separatel accounts for each
receipt and expenditure of Gross Proceeds and the obli ac therewith.
(ii) Not less fre than each Computation Date, the District shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and
the Tax Re and rulin thereunder. The District shall maintain a cop of the calculation
with its official transcript of proceedin relatin to the issuance of the Bonds until six y ears
after the final Computation Date.
(iii) In order to assure the excludabilit pursuant to section 103(a) of
the Code of the interest on the Bonds from the g ross income of the owners thereof for federal
income tax purposes, the District shall pa to the United States the amount that when added to
the future value of previous rebate pa made for the Bonds e (i) in the case of the
Final Computation Date as defined in section 1.148-3(e)(2) of the Tax Re one hundred
percent (100%) of the Rebate Amount on such date and (ii) in the case of an other
Computation Date, ninet percent (90%) of the Rebate Amount on such date. In all cases, such
rebate pa shall be made b the District at the times and in the amounts as are or ma be
re b section 148(f) of the Code and the Tax Re and rulin thereunder, and shall
be accompanied b Form 8038-T or such other, forms and information as is or ma be re
b section 148(f) of the Code and the Tax Re and rulin thereunder for execution and
filin b the District.
%_1 -W
(i) Not to Divert Arbitrage Profits. Except to the extent permitted b section
148 of the Code and the Tax Re and rulin thereunder, the District shall not and shall
not permit an person to, at an time prior to the final cancellation of the last of the Bonds to be
retired, enter into an transaction that reduces the amount re to be paid to the United States
pursuant to para (h) of this Section because such transaction results in a smaller profit or a
lar loss than would have resulted if the transaction had been at arm's len and had the
Yields on the Bonds not been relevant to either part
(j) Bonds Not Hedge Bonds.
(i) The District represents that none of the Bonds is or will become a
"hed bond" within the meanin of section 149( of the Code.
(ii) Without limitation of para (i) above: the District believes
(upon appropriate investi (A) that on the date of issuance of the Bonds the District
reasonabl expected that at least 85% of the spendable proceeds of the Bonds will be expended
within the three- period commencin on such date of issuance, and (B) no more than 50% of
the proceeds of the Bonds will be invested in Nonpurpose Investments havin a substantiall
g uaranteed y ield for a period of four y ears or more.
( k ) Elections. The District hereb directs and authorizes an Authorized
Officer to make elections permitted or re pursuant to the provisions of the Code or the Tax
Re as such Representative (after consultation with Bond Counsel) deems necessar or
appropriate in connection with the Bonds, in the Tax Certificate as to Arbitra and the
77772972.1 30
Provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar or other
appropriate certificate, form or document.
(1) Closin Certificate. The District a to execute and deliver in
connection with the issuance of the Bonds a Tax Certificate as to Arbitra and the Provisions of
Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar document containin
additional representations and covenants pertainin to the exclusion of interest on the Bonds
from the g ross 'income of the owners thereof for federal income tax purposes, which
representations and covenants are incorporated as thou expressl set forth herein.
5.11 Covenant to Foreclose. The District will review the public records of the Count
of Riverside, California,, in connection with the collection of the Special Tax not later than Jul I
of each y ear to determine the amount of Special Tax collected in the prior Fiscal Year and with
respect to individual delin if the District determines that an single propert owner
subject to the Special Tax is delin in the pa of Special Taxes in the a of
$11,500 or more or that the delin Special Taxes represent more than 5% of the a
Special Taxes within the District, then the District will send or cause to be sent a notice of
delin (and a demand for immediate pa thereof) to the propert owner within 45
da of such determination, and (if the delin remains uncured) the District will cause
j udicial foreclosure proceedin to be filed in the Superior Court within ninet (90) da of such
determination a all properties for which the Special Taxes remain delin
The Cit Attorne is hereb authorized to emplo counsel to conduct an such
foreclosure proceedin The fees and expenses of an such counsel and costs and expenses of
the Cit Attorne (includin a char for Cit or District staff time) in conductin foreclosure
proceedin shall be an Administrative Expense hereunder.
Notwithstandin an provision of the Act or other law of the State to the contrar
in connection with an foreclosure related to delin Special Taxes:
(a) The Cit or the Fiscal A is hereb expressl authorized to credit bid
at an foreclosure sale, without an re that funds be placed in the Bond Fund or
otherwise be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of
the Act, or such less amount as determined under clause (b) below or otherwise under
Section 53356.6 of the Act.
(b) The District ma permit, in its sole and absolute discretion, propert with
delin Special Tax pa to be sold for less than the amount specified in Section 53356.5
of the Act, if it determines that such sale is in the interest of the Bond Owners. The Bond
Owners, b their acceptance of the Bonds, hereb consent to such sale for such lesser amounts
(as such consent is described in Section 53356.6 of the Act), and hereb release the District and
the Cit and their respective officers and a from an liabilit in connection therewith.
(c) The District is hereb expressl authorized to use amounts in the Special
Tax Fund to pa costs of foreclosure of delin Special Taxes.
(d) The District ma for all or an portion of the Special Taxes levied or
to be levied on an parcel in the District, so lon as the District determines that such for
77772972.1 31
1iMMM01
is not expected to adversel affect its obli to pa principal of and interest on the Bonds
under Section hereof.
5.12 Annual Reports to CDIAC. Not later than October 30 of each y ear,
commencin October 30, 2013, and until the October 30 followin the final maturit of the
Bonds, the Treasurer shall suppl the information re b Section 53359.5(b) or (c) of the
Act to CDIAC (on such forms as CDIAC ma specif and the District.
5.13 Continuin Disclosure to Owners. In addition to its obli under
Section 5.12, the District hereb covenants and a that it will carr out all of its obli
under the Continuin Disclosure A relatin to the Authorit Bonds. Notwithstandin
an other provision of this A failure of the District to compl with the Continuin
Disclosure A shall not be considered a default hereunder-, however, an Participatin
Underwriter or an holder or beneficial owner of the Authorit Bonds ma take such actions as
ma be necessar and appropriate to compel performance b the District of its obli under
this Section 5.13, includin seekin mandate or specific performance b court order.
5.14 Reserve Account Replenishment. The District hereb covenants that to the
extent there is a draw upon the Reserve Account pursuant to the Authorit Indenture as a result
of a delin in the collection of Special Taxes, the District shall cause the Treasurer to effect
the next annual lev of Special Taxes in an amount sufficient to replenish such delin in
addition to those re b Section 5.8 hereof and in addition to amounts that would be levied
if there were no such delin provided, however, the amount of Special Taxes levied shall
not exceed the maximum permitted b the Ordinance and RMA.
ARTICLE VI
INVESTMENTS DISPOSITION OF INVESTMENT PROCEEDS
LIABILITY OF THE DISTRICT
6.1 Deposit and Investment of Mone in Funds. Mone in an find or account
created or established b this A and held b the Fiscal A shall be invested b the
Fiscal A in Permitted Investments, as directed pursuant to an Officer's Certificate filed with
the Fiscal A at least two (2) Business Da in advance of the makin of such investments.
In the absence of an such Officer's Certificate, the Fiscal A shall invest an such mone in
Permitted Investments described in clause (d) of the definition thereof to the extent practicable
which b their terms mature prior to the date on which such mone are re to be paid out
hereunder, or are held uninvested. The Treasurer shall make note of an investment of funds
hereunder in excess of the y ield on the Bonds, so that appropriate actions can be taken to assure
compliance with Section 6.2 hereof.
Mone in an fund or account created or established b this A and held
b the Treasurer shall be invested b the Treasurer in Permitted Investments, which in an event
b their terms mature prior to the date on which such mone are re to be paid out
hereunder. Obli purchased as an investment of mone in an fund shall be deemed to be
part of such fund or account, subject, however, to the re of this A for transfer
of interest earnin and profits resultin from investment of amounts in funds and accounts.
Whenever in this A an mone are re to be transferred b the District to the
77772972.1 32
Fiscal A such transfer ma be accomplished b transferrin a like amount of Permitted
Investments.
The Fiscal A or an affiliate or the Treasurer ma act as principal or a in
the ac or disposition of an investment and shall be entitled to its customar fee
therefor. Neither the Fiscal A nor the Treasurer shall incur an liabilit for losses arisin
from an investments made pursuant to this Section. For purposes of determinin the amount on
deposit in an fund or account held hereunder, all Permitted Investments or investments credited
to such fund or account shall be valued at the cost thereof (excludin accrued interest and
brokera commissions, if an
Except as otherwise provided in the next sentence, all investments of amounts
deposited in an fund, or account created b or pursuant to this A or otherwise
containin g ross proceeds of the Bonds (within the meanin of section 148 of the Code) shall be
ac disposed of, and valued (as of the date that valuation is re b this A or
the Code) at Fair Market Value. Notwithstandin the previous sentence, investments in funds or
accounts (or portions thereof) that are subject to a y ield restriction under the applicable
provisions of the Code shall be valued at their present value (within the meanin of section 148
of the Code). The Fiscal A shall not be liable for verification of the application of such
sections of the Code.
Investments in an and all funds and accounts ma be commin in a separate
fund or funds for purposes of makin holdin and disposin of investments,, notwithstandin
provisions herein for transfer to or holdin in or to the credit of particular funds or accounts of
amounts received or held b the Fiscal A or the Treasurer hereunder, provided that the Fiscal
A or the Treasurer, as applicable, shall at all times account for such investments strictl in
accordance with the funds and accounts to which the are credited and otherwise as provided in
this A
The Fiscal A or the Treasurer, as applicable, shall sell at the hi price
reasonabl obtainable, or present for redemption, an investment securit whenever it shall be
necessar to provide mone to meet an re pa transfer, withdrawal or disbursement
from the fund or account to which such investment securit is credited and neither the Fiscal
A nor the Treasurer shall be liable or responsible for an loss resultin from the ac
or disposition of such investment securit in accordance herewith.
6.2 Limited Obli The District's obli hereunder are limited obli
of the District and are pa solel from and secured solel b the Special Tax Revenues and
the amounts in the Special Tax Fund and the Bond Fund.
6.3 Liabilit of District. The District shall not incur an responsibilit in respect of
the Bonds or this A other than in connection with the duties or obli explicitl
herein or in the Bonds assi to or imposed upon it. The District shall not be liable in
connection with the performance of its duties hereunder, except for its own ne or willful
default. The District shall not be bound to ascertain or in as to the performance or
observance of an of the terms, conditions,, covenants or a of the Fiscal A herein
77772972.1 33
Pa 121
or of an of the documents executed b the Fiscal A in connection with the Bonds, or as to
the existence of a default or event of default thereunder.
In the absence of bad faith,, the District, includin the Treasurer, ma conclusivel
rel as to the truth of the statements and the correctness of the opinions expressed therein,, upon
certificates or opinions furnished to the District and conformin to the re of this
A The District, includin the Treasurer, shall not be liable for an error of jud
made in g ood faith unless it shall be proved that it was ne in ascertainin the pertinent
facts.
No provision of this A shall re the District to expend or risk its own
g eneral funds or otherwise incur an financial liabilit (other than with respect to the Special Tax
Revenues) in the performance of an of its obli hereunder, or in the exercise of an of its
ri or powers, if it shall have reasonable g rounds for believin that repa of such funds
or ade indemnit a such risk or liabilit is not reasonabl assured to it.
The District ma rel and shall be protected in actin or refrainin from actin
upon an notice, resolution, re consent, order, certificate,, report, warrant, bond or other
paper or document believed b it to be g enuine and to have been si or presented b the
proper part or proper parties. The District ma consult with counsel, who ma be the Cit
Attorne with re to le q uestions, and the opinion of such counsel shall be full and
complete authorization and protection in respect of an action taken or suffered b it hereunder
in g ood faith and in accordance therewith.
The District shall not be bound to reco an person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if re and his title thereto
satisfactoril established, if disputed.
Whenever in the administration of its duties under this A the District
shall deem it necessar or desirable that a matter be proved or established prior to takin or
sufferin an action hereunder, such matter (unless other evidence in respect thereof be herein
specificall prescribed) ma in the absence of willful misconduct on the part of the District, be
deemed to be conclusivel proved and established b a certificate of the Fiscal A and such
certificate shall be full warrant to the District for an action taken or suffered under the
provisions of this A or an Supplemental A upon the faith thereof, but in its
discretion the District ma in lieu thereof, accept other evidence of such matter or ma re
such additional evidence as to it ma seem reasonable.
6.4 Emplo of A b District or the Cit In order to perform their
respective duties and obli hereunder, the Cit the District and/or the Treasurer ma
emplo such persons or entities as the deem necessar or advisable. The Cit the District
and/or the Treasurer shall not be liable for an of the acts or omissions of such persons or entities
emplo b them in g ood faith hereunder, and shall be entitled to rel and shall be full
protected in doin so, upon the opinions, calculations, determinations and directions of such
persons or entities.
77772972.1 34
ARTICLE 711
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
7.1 Events of Default. The followin events shall be Events of Default:
( a) Failure to pa an installment of principal of an Bonds when and as the
same shall become due and pa whether at maturit as therein expressed, b proceedin for
redemption or otherwise.
( b ) Failure to pa an installment of interest on an Bonds when and as the
same shall become due and pa
( c ) Failure b the District to observe and perform an of the other covenants,
a or conditions on its part in this A or in the Bonds contained, if such failure
shall have continued for a period of 60 da after written notice thereof, specifyin such failure
and re the same to be remedied, shall have been g iven to the District b the Fiscal A
or the Owners of not less than 25% in a principal amount of the Bonds at the time
Outstandin provided, however, if in the reasonable opinion of the District the failure stated in
the notice can be corrected, but not within such 60 da period, such failure shall not constitute an
Event of Default if corrective action is instituted b the District within such 60 da period and
the District shall thereafter dili and in g ood faith cure such failure in a reasonable period of
time.
(d) Commencement b the District of a voluntar case under Title 11 of the
United States Code or an substitute or successor statute.
(e) Default under a Supplemental A securin the issuance of
Additional Bonds.
7.2 Remedies of Bond Owners. Subject to the provisions of Section 7.8 hereof, an
Bond Owner shall have the ri for the e benefit and protection of all Bond Owners
similarl situated:
(a) b mandamus, suit, action or proceedin to compel the District and its
officers, a or emplo to perform each and ever term, provision and covenant contained
in this A and in the Bonds, and to re the carr out of an or all such covenants
and a of the District and the fulfillment of all duties imposed upon it b the Act
(b) b suit, action or proceedin in e to enjoin an acts or thin which
are unlawful, or the violation of an of the Bond Owners' ri or
(c) upon the happenin of an Event of Default, b suit, action or proceedin
in an court of competent jurisdiction, to re the District and its officers and emplo to
account as if it and the were the trustees of an express trust.
7.3 Application of Special Taxes and Other Funds After Default. If an Event of
Default shall occur and be continuin all Special Taxes, includin an penalties, costs, fees and
other char accruin under the Act, and an other funds then held or thereafter received b the
77772972.1 35
limal-ow
Fiscal A under an of the provisions of this A shall be applied b the Fiscal A
as follows and in the followin order:
(a) To the pa of an expenses necessar in the opinion of the Fiscal
A to protect the interest of the Owners of the Bonds, and pa of reasonable fees,
char and expenses of the Fiscal A (includin reasonable fees and disbursements of its
counsel) incurred in and about the performance of its powers and duties under this A
(b) To the pa of the principal of and interest then due with respect to the
Bonds (upon presentation of the Bonds to be paid, and stampin thereon of the pa if onl
partiall paid, or surrender thereof if full paid) subject to the provisions of this A as
follows:
First: To the pa to the Persons entitled thereto of all installments of interest
then due in the order of the maturit of such installments, and, if the amount available shall not
be sufficient to pa in full an installment or installments maturin on the same date, then to the
pa thereof ratabl accordin to the amounts due thereon, to the Persons entitled thereto,
without an discrimination or preference and
Second: To the pa to the Persons entitled thereto of the unpaid principal of
an Bonds which shall have become due, whether at maturit or b call for redemption, with
interest on the overdue principal at the rate borne b the respective Bonds on the date of maturit
or redemption, and,, if the amount available shall not be sufficient to pa in fall all the Bonds,,
to with such interest, then to the pa thereof ratabl accordin to the amounts of
principal due on such date to the Persons entitled thereto, without an discrimination or
preference.
"We]
(c) An remainin funds shall be transferred b the Fiscal A to the Bond
7.4 Absolute Obli of the District. Nothin in Section 7.7 or in an other
provision of this A or in the Bonds contained shall affect or impair the obli of the
District, which is absolute and unconditional, to pa the principal of and interest on the Bonds to
the respective Owners of the Bonds at their respective dates of maturit or upon call for
redemption, as herein provided, but onl out of the Special Taxes and other mone herein
pled therefor and received b the District or the Fiscal A or affect or impair, the ri of
such Owners, which is also absolute and unconditional, to enforce such pa b virtue of the
contract embodied in the Bonds.
7.5 Termination of Proceedin In case an proceedin taken b an one or more
Bond Owners on account of an Event of Default shall have been discontinued or abandoned for
an reason or shall have been determined adversel to the Bond Owners, then in ever such case
the District and the Bond Owners, subject to an determination in such proceedin shall be
restored to their former positions and ri hereunder, severall and respectivel and all ri
remedies, powers and duties of the Cit and the Bond Owners shall continue as thou no such
proceedin had been taken.
77772972.1 36
7.6 Remedies Not Exclusive. No remed herein conferred upon or reserved to the
Fiscal A or to the Owners of the Bonds is intended to be exclusive of an other remed or
remedies, and each and ever such remed to the extent permitted b law, shall be cumulative
and in addition to an other remed g iven hereunder or now or hereafter existin at law or in
e or otherwise.
7.7 No Waiver of Default. No dela or omission of an Owner of the Bonds to
exercise an ri or power arisin upon the occurrence of an default shall impair an such ri
or power or shall be construed to be a waiver of an such default or ac therein and
ever power and remed g iven b this A to the Owners of the Bonds ma be exercised
from time to time and as often as ma be deemed expedient.
7.8 Actions b Fiscal A as Attorne An suit,, action or proceedin
which an Owner shall have the ri to brin to enforce an ri or remed hereunder ma be
brou b the Fiscal A for the e benefit and protection of all Owners, and the Fiscal
A is hereb appointed (and the successive respective Owners of the Bonds, b takin and
holdin the same, shall be conclusivel deemed so to have appointed it) the true and lawful
attorne of the Owners for the purpose of brin an such suit, action or proceedin
and to do and perform an and all acts and thin for and on behalf of the Owners as a class or
classes, as ma be necessar or advisable in the opinion of the Fiscal A as such attorne
fact.
ARTICLE VIII
THE FISCAL AGENT
8.1 Appointment of Fiscal A Union Bank, N.A., is hereb appointed Fiscal
A and pa a for the Bonds. The Fiscal A undertakes to perform such duties, and
onl such duties, as are specificall set forth in this A and no implied covenants or
obli shall be read into this A a the Fiscal A
An compan into which the Fiscal A ma be mer or converted or with
which it ma be consolidated or an compan resultin from an mer conversion or
consolidation to which it shall be a part or an compan to which the Fiscal A ma sell or
transfer all or substantiall all of its corporate trust business, provided such compan shall be
eli under the followin para of this Section, shall be the successor to such Fiscal A
without the execution or filin of an paper or an further act, an herein to the contrar
notwithstandin
So lon as there is no Event of Default hereunder, the District ma remove the
Fiscal A initiall appointed, and an successor thereto, and ma appoint a successor or
successors thereto, but an such successor shall be a bank or trust compan havin a combined
capital (exclusive of borrowed capital) and surplus of at least Fift Million Dollars
($50,000,000), and subject to supervision or examination b federal or state authorit If such
bank or trust compan publishes a report of condition at least annuall pursuant to law or to the
re of an supervisin or examinin authorit above referred to, then for the purposes
of this Section 8. 1. combined capital and surplus of such bank or trust compan shall be deemed
77772972.1 37
Pa 125
to be its combined capital and surplus as set forth in its most recent report of condition so
published.
The Fiscal A ma at an time resi b g ivin g written notice to the District
and b g ivin g to the Owners notice b mail of such resi Upon receivin notice of such
resi the District shall promptl appoint a successor Fiscal A b an instrument in
writin An resi or removal of the Fiscal A shall become effective upon acceptance
of appointment b the successor Fiscal A
If no appointment of a successor Fiscal A shall be made pursuant to the
fore provisions of this Section 8.1 within fort (45) da after the Fiscal A shall
have g iven to the District written notice or after a vacanc in the office of the Fiscal A shall
have occurred b reason of its inabilit to act, the Fiscal A or an Bond Owner ma appl to
an court of competent jurisdiction to appoint a successor Fiscal A Said court ma
thereupon, after such notice, if an as such court ma deem proper, appoint a successor Fiscal
A
If, b reason of the jud of an court, the Fiscal A is rendered unable to
perform its duties hereunder, all such duties and all of the ri and powers of the Fiscal A
hereunder shall be assumed b and vest in the Treasurer of the Cit in trust for the benefit of the
Owners. The District covenants for the direct benefit of the Owners that the Treasurer in such
case shall be vested with all of the ri and powers of the Fiscal A hereunder, and shall
assume all of the responsibilities and perform all of the duties of the Fiscal A hereunder, in
trust for the benefit of the Owners of the Bonds.
8.2 Liabilit of Fiscal A The recitals of facts, covenants and a herein
and in the Bonds contained shall be taken as statements,, covenants and a of the
District, and the Fiscal A assumes no responsibilit for the correctness of the same, nor
makes an representations as to the validit or sufficienc of this A or of the Bonds, nor
shall incur an responsibilit in respect thereof, other than in connection with the duties or
obli herein or in the Bonds assi to or imposed upon it. The Fiscal A shall not be
liable in connection with the performance of its duties hereunder, except for its own ne
or willful default. The Fiscal A assumes no responsibilit or liabilit for an information,
statement or recital in an offerin memorandum or other disclosure material prepared or
distributed with respect to the issuance of the Bonds.
the Fiscal A ma conclusivel rel as to the truth
In the absence of bad faith,, %_1
of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Fiscal A and conformin to the procedural re of this
A but in the case of an such certificates or opinions b which an provision hereof are
specificall re to be furnished to the Fiscal A the Fiscal A shall be under a dut to
examine the same to determine whether or not the conform to the procedural re of
this A Except as provided above in this para the Fiscal A shall be protected
and shall incur no liabilit in actin or proceedin or in not actin or not proceedin in g ood
faith,, reasonabl and in accordance with the terms of this A upon an resolution, order,
notice, re consent or waiver, certificate, statement,, affidavit, or other paper or document
which it shall in g ood faith reasonabl believe to be g enuine and to have been adopted or si
77772972.1 38
b the proper person or to have been prepared and furnished pursuant to an provision of this
A and the Fiscal A shall not be under an dut to make an investi or
in as to an statements contained or matters referred to in an such instrument.
The Fiscal A shall not be bound to ascertain or in as to the performance
or observance of an of the terms, conditions, covenants or a of the Cit or the District
herein or of an of the documents executed b the Cit or the District in connection with the
Bonds, or as to the existence of a default or event of default thereunder.
The Fiscal A shall not be liable for an error of jud made in g ood faith
b a responsible officer unless it shall be proved that the Fiscal A was ne in
ascertainin the pertinent facts.
No provision of this A shall re the Fiscal A to expend or risk its
own funds or otherwise incur an financial liabilit in the performance of an of its duties
hereunder,, or in the exercise of an of its ri or powers, if it shall have reasonable g rounds for
believin that repa of such funds or ade indemnit a such risk or liabilit is not
reasonabl assured to it.
The Fiscal A shall be under no obli to exercise an of the ri or
powers vested in it b this A at the re or direction of an of the Owners pursuant
to this A unless such Owners shall have offered to the Fiscal A reasonable securit
or indemnit a the costs, expenses and liabilities which mi be incurred b it in
compliance with such re or direction.
The Fiscal A ma become the owner of the Bonds with the same ri it
would have if it were not the Fiscal A
All indemnifications and releases from liabilit g ranted to the Fiscal A
hereunder shall extend to the directors, officers and emplo of the Fiscal A
'T
8.3 Information. The Fiscal A shall provide to the District such information
relatin to the Bonds and the funds and accounts maintained b the Fiscal A hereunder as the
District shall reasonabl re includin but not limited to q uarterl y statements reportin
funds held and transactions b the Fiscal A
4-1
8.4 Notice to Fiscal A The Fiscal A ma rel and shall be protected in
actin or refrainin from actin upon an notice, resolution, re consent, order, certificate,
report, warrant,, Bond or other paper or document believed b it to be g enuine and to have been
si or presented b the proper part or proper parties. The Fiscal A ma consult with
counsel, who ma be counsel to the District, with re to le q uestions, and the opinion of
such counsel shall be full and complete authorization and protection in respect of an action
taken or suffered b it hereunder in g ood faith and in accordance therewith.
The Fiscal A shall not be bound to reco an person as the Owner of a
Bond unless and until such Bond is submitted for inspection, if re and his title thereto
satisfactoril established, if disputed.
77772972.1 39
Whenever in the administration of its duties under this A the Fiscal
A shall deem it necessar or desirable that a matter be proved or established prior to takin
or sufferin an action hereunder such matter ( unless other evidence in respect thereof be herein
specificall prescribed ma in the absence of willful misconduct on the part of the Fiscal
A be deemed to be conclusivel proved and established b a certificate of the District, and
such certificate shall be full warrant to the Fiscal A for an action taken or suffered under
the provisions of this A or an Supplemental A upon the faith thereof, but in
its discretion the Fiscal A ma in lieu thereof, accept other evidence of such matter or ma
re such additional evidence as to it ma seem reasonable.
8.5 Compensation, Indemnification. The District shall pa to the Fiscal A from
time to time reasonable compensation for all services rendered as Fiscal A under this
A and also all reasonable expenses, char counsel fees and other disbursements,
includin those of their attorne a and emplo incurred in and about the performance
of their powers and duties under this A but the Fiscal A shall not have a lien
therefor on an funds at an time held b it under this A The District further a to
the extent permitted b applicable law, to indemnif and save the Fiscal A its officers,
emplo directors and a harmless a an liabilities which it ma incur in the
exercise and performance of its powers and duties hereunder which are not due to its ne
or willful misconduct. The obli of the District under this Section shall survive resi
or removal of the Fiscal A under this A and pa of the Bonds and dischar of
this A but an monetar obli of the District arisin under this Section shall be
limited solel to amounts on deposit in the Administrative Expense Fund.
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
9.1 Amendments Permitted. This A and the ri and obli of the
District and of the Owners of the Bonds ma be modified or amended at an time b a
Supplemental Agreement pursuant to the affirmative vote,, at a meetin of Owners, or with the
written consent without a meetin of the Owners of at least sixt percent (60%) in a
principal amount of the Bonds then Outstandin exclusive of Bonds dis as provided in
Section 9.4 hereof. No such modification or amendment shall (i) extend the maturit of an
Bond or reduce the interest rate thereon, or otherwise alter or impair the obli of the District
to pa the principal of, and the interest and an premium on, an Bond, without the express
consent of the Owner of such Bond, or ( ii) permit the creation b the District of an pled or
lien upon the Special Taxes superior to or on a parit with the pled and lien created for the
benefit of the Bonds (except as otherwise permitted b the Act, the laws of the State of
California or this A or (iii) reduce the percenta of Bonds re for the
amendment hereof. An such amendment ma not modif an of the ri or obli of the
Fiscal A without its written consent.
This A and the ri and obli of the District and of the Owners
ma also be modified or amended at an time b a Supplemental A without the consent
of an Owners, onl to the extent permitted b law and onl for an or more of the followin
77772972.1 40
(a) to add to the covenants and a of the District in this A
contained, other covenants and a thereafter to be observed, or to limit or surrender an
ri or power herein reserved to or conferred upon the District
(b) to make modifications not adversel affectin an Outstandin Bonds of
the District in an material respect
( c) to make such provisions for the purpose of curin an ambi
inconsistenc or omission of curin correctin or supplementin an defective provision
contained in this A or in re to q uestions arisin under this A as the
District and the Fiscal A ma deem necessar or desirable and not inconsistent with this
A and which shall not adversel affect the ri of the Owners of the Bonds
(d) to make such additions, deletions or modifications as ma be necessar or
desirable to assure the exclusion from g ross income for federal income tax purposes of interest
on the Bonds.
( e) To provide for the issuance of Additional Bonds in accordance with the
provisions of this A
9.2 Owners' Meetin The District ma at an time call a meetin of the Owners.
In such event the District is authorized to fix the time and place of said meetin and to provide
for the g ivin g of notice thereof, and to fix and adopt rules and re for the conduct of said
meetin
9.3 Procedure for Amendment with Written Consent of Owners. The District and
the Fiscal A ma at an time adopt a Supplemental A amendin the provisions of
the Bonds or of this A or an Supplemental A to the extent that such
amendment is permitted b Section 9.1 hereof, to take effect when and as provided in this
Section. A cop of such Supplemental A to with a re to Owners for their
consent thereto,, shall be mailed b first class mail b the Fiscal A to each Owner of Bonds
Outstandin but failure to mail copies of such Supplemental A and re shall not
affect the validit of the Supplemental A when assented to as in this Section provided.
Such Supplemental A shall not become effective unless there shall be
filed with the Fiscal A the written consents of the Owners of at least sixt percent (60%) in
a principal amount of the Bonds then Outstandin (exclusive of Bonds dis as
provided in Section 9.4 hereof) and a notice shall have been mailed as hereinafter in this
Section provided. Each such consent shall be effective onl if accompanied b proof of
ownership of the Bonds for which such consent is g iven, which proof shall be such as is
permitted b Section 10.4 hereof. An such consent shall be bindin upon the Owner of the
Bonds g ivin g such consent and on an subse Owner (whether or not such subse
Owner has notice thereof) unless such consent is revoked in writin b the Owner g ivin g such
consent or a subse Owner b filin such revocation with the Fiscal A prior to the date
when the notice hereinafter in this Section provided for has been mailed.
After the Owners of the re percenta of Bonds shall have filed their
consents to the Supplemental A the District shall mail a notice to the Owners in the
77772972.1 41
manner hereinbefore provided in this Section for the mailin of the Supplemental A
statin in substance that the Supplemental A has been consented to b the Owners of
the re percenta of Bonds and will be effective as provided in this Section (but failure to
mail copies of said notice shall not affect the validit of the Supplemental A or consents
thereto). Proof of the mailin of such notice shall be filed with the Fiscal A A record,
consistin of the papers re b this Section 9.3 to be filed with the Fiscal A shall be
proof of the matters therein stated until the contrar is proved. The Supplemental A
shall become effective upon the filin with the Fiscal A of the proof of mailin of such
notice, and the Supplemental A shall be deemed conclusivel bindin (except as
otherwise hereinabove specificall provided in this Article) upon the District and the Owners of
all Bonds at the expiration of sixt (60) da after such filin except in the event of a final
decree of a court of competent, jurisdiction settin aside such consent in a le action or
e proceedin for such purpose commenced within such 60-da period.
9.4 Dis Bonds. Bonds owned or held for the account of the Cit or the
District, exceptin an pension or retirement fund, shall not be deemed Outstandin for the
purpose of an vote, consent or other action or an calculation of Outstandin Bonds provided
for in this Article IX, and shall not be entitled to vote upon, consent to, or take an other action
provided for in this Article IX.
9.5 Effect of Supplemental A From and after the time an Supplemental
A becomes effective pursuant to this Article IX, this A shall be deemed to be
modified and amended in accordance therewith, the respective ri duties and obli
under this A of the District and all Owners of Bonds Outstandin shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of an such Supplemental A shall be
deemed to be part of the terms and conditions of this A for an and all purposes.
9.6 Endorsement or Replacement of Bonds Issued After Amendments. The
District ma determine that Bonds issued and delivered after the effective date of an action
taken as provided in this Article IX shall bear a notation, b endorsement or otherwise, in form
approved b the District, as to such action. In that case, upon demand of the Owner of an Bond
Outstandin at such effective date and presentation of his Bond for that purpose at the Corporate
Trust Office of the Fiscal A or at such other office as the District ma select and desi
for that purpose, a suitable notation shall be made on such Bond. The District ma determine
that new Bonds, so modified as in the opinion of the District is necessar to conform to such
Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the
Owner of an Bonds then Outstandin such new Bonds shall be exchan at the Corporate
Trust Office of the Fiscal A without cost to an Owner, for Bonds then Outstandin upon
surrender of such Bonds.
9.7 Amendator Endorsement of Bonds. The provisions of this Article IX shall not
prevent an Owner from acceptin an amendment as to the particular Bonds held b him,
provided that due notation thereof is made on such Bonds.
9.8 Opinion of Bond Counsel. In connection with an Supplemental A the
Fiscal A shall be entitled to receive an opinion of Bond Counsel that an such Supplemental
77772972.1 42
A is authorized or permitted b this A and the Fiscal A ma conclusivel
rel upon such opinion.
10.1 Benefits of A Limited to Parties. Nothin in this A
expressed or implied, is intended to g ive to an person other than the District, Cit the Fiscal
A and the Owners, an ri remed or claim under or b reason of this A An
covenants,, stipulations, promises or a in this A contained b and on behalf of
the District shall be for the sole and exclusive benefit of the Owners and the Fiscal A
10.2 Successor is Deemed Included in All References to Predecessor. Whenever in
this A or an Supplemental A either the District or the Fiscal A is named
or referred to, such reference shall be deemed to include the successors or assi thereof, and all
the covenants and a in this A contained b or on behalf of the District or the
Fiscal A shall bind and inure to the benefit of the respective successors and assi thereof
whether so expressed or not.
10.3 Dischar of A The District shall have the option to pa and dischar
the entire indebtedness on all or an portion of the Bonds Outstandin in an or more of the
followin wa
(a) b well and trul pa or causin to be paid the principal of, and interest
and an premium on, such Bonds Outstandin as and when the same become due and pa
(b) b depositin with the Fiscal A in trus at or before maturit mone
which, to with the amounts then on deposit in the funds and accounts provided for in
Section 4.2 hereof is full sufficient to pa such Bonds Outstanding, includin all principal,
interest and redemption premiums or
(c) b irrevocabl depositin with the Fiscal A in trust, cash and Federal
Securities and/or investments described in clause (i) of the definition of Permitted Investments in
such amount as the District shall determine as confirmed b Bond Counsel or an independent
certified public accountant will, to with the interest to accrue thereon and mone then on
deposit in the fund and accounts provided for in Section 4.2 hereof, be full sufficient to Da and
dischar the indebtedness on such Bonds (includin all principal, interest and redemption
premiums) at or before their respective maturit dates.
If the District shall have taken an of the actions specified in (a), (b) or (c) above,
and if such Bonds are to be redeemed prior to the maturit thereof, notice of such redemption
shall have been g iven as in this A provided or provision satisfactor to the Fiscal A
shall have been made for the g ivin g of such notice, then, at the election of the District, and
notwithstandin that an Bonds shall not have been surrendered for pa the pled of the
Special Taxes and other funds provided for in this A and all other obli of the
District under this A with respect to such Bonds Outstandin shall cease and terminate.
Notice of such election shall be filed with the Fiscal A Notwithstanding the fore the
obli of the District to pa or cause to be paid to the Owners of the Bonds not so
77772972.1 43
Pa 131
surrendered and paid all sums due thereon and all amounts owin to the Fiscal A pursuant to
Section 8.5 hereof, and otherwise to assure that no action is taken or failed to be taken if such
action or failure adversel affects the exclusion of interest on the Bonds from g ross income for
federal income tax purposes, shall continue in an event.
Upon compliance b the District with the fore with respect to all Bonds
Outstandin an funds held b the Fiscal A after pa of all fees and expenses of the
Fiscal A which are not re for the purposes of the precedin para shall be paid
over to the District and an Special Taxes thereafter received b the District shall not be remitted
to the Fiscal A but shall be retained b the District to be used for an purpose permitted
under the Act.
Notwithstandin the fore the pa of Outstandin Bonds and the
termination of the pled of the Special Tax Revenues shall not prevent the District from issuin
Additional Bonds secured b a pled of the Special Tax Revenues.
10.4 Execution of Documents and Proof of Ownership b Owners. An re
declaration or other instrument which this A ma re or permit to be executed b
Owners ma be in one or more instruments of similar tenor, and shall be executed b Owners in
person or b their attorne appointed in writin
Except as otherwise herein expressl provided, the fact and date of the execution
b an Owner or his attorne of such re declaration or other instrument, or of such writin
appointin such attorne ma be proved b the certificate of an notar public or other officer
authorized to take acknowled of deeds to be recorded in the state in which he purports to
act, that the person si such re declaration or other instrument or writin
acknowled to him the execution thereof, or b an affidavit of a witness of such execution,
dul sworn to before such notar public or other officer.
Except as otherwise herein expressl provided, the ownership of re Bonds
and the amoun maturit number and date of holdin the same shall be proved b the re
books.
An re declaration or other i n strument or writin of the Owner of an Bond
shall bind all future Owners of such Bond in respect of an done or suffered to be done b
the District or the Fiscal A in g ood faith and in accordance therewith.
10.5 Waiver of Personal Liabilit No member, officer, a or emplo of the
District or the Cit shall be individuall or personall liable for the pa of the principal of,
or interest or an premium on, the Bonds but nothin herein contained shall relieve an such
member, officer, a or emplo from the performance of an official dut provided b law.
10.6 Notices to and Demands on District and Fiscal A An notice or demand
which b an provision of this A is re or permitted to be g iven or served b the
Fiscal A to or on the District ma be g iven or served b bein deposited posta prepaid in a
post office letter box addressed (until another address is filed b the District with the Fiscal
A as follows:
77772972.1 44
Pa 132
Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can
c/o Cit of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Attn: Cit Mana
An notice or demand which b an provision of this A is re or
permitted to be g iven or served b the District to or on the Fiscal A ma be g iven or served
b bein deposited posta prepaid in a post office letter box addressed (until another address is
filed b the Fiscal A with the District) as follows:
Union Bank, N.A.
120 South San Pedro Stree 4th Floor
Los An California 90012
Attention: Corporate Trust Department
10.7 Partial Invalidit If an Section, para sentence, clause or phrase of this
A shall for an reason be held ille or unenforceable, such holdin shall not affect the
validit of the remainin portions of this A The District hereb declares that it would
have adopted this Agreement and each and ever other Section, para sentence clause or
phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that
an one or more Sections, para sentences, clauses, or phrases of this Agreement ma be
held ille invalid or unenforceable.
10.8 Unclaimed Mone An contained herein to the contrar notwithstandin
an mone held b the Fiscal A for the pa and dischar of the principal of, and the
interest and an premium on, the Bonds which remains unclaimed for two (2) y ears after the date
when the pa of such principal, interest and premium have become pa if such mone
was held b the Fiscal A at such date, shall be repaid b the Fiscal A to the District as its
absolute propert free from an trust, and the Fiscal A shall thereupon be released and
dischar with respect thereto and the Bond Owners shall look onl to the District for the
pa of the principal of, and interest and an premium on, such Bonds.
10.9 Applicable Law. This A shall be g overned b and enforced in
accordance with the laws of the State of California applicable to contracts made and performed
in the State of California.
10.10 Conflict with Act. In the event of a conflict between an provision of this
A with an provision of the Act as in effect on the Closin Date, the provision of the
Act shall prevail over the conflictin provision of this A
10.11 Conclusive Evidence of Re Bonds issued pursuant to this A
shall constitute conclusive evidence of the re g ularit y of all proceedin under the Act relative to
their issuance and the lev of the Special Taxes.
10.12 Pa on Business Da In an case where the date of the maturit of interest
or of principal (and premium, if an of the Bonds or the date fixed for redemption of an Bonds
77772972.1 45
Pa 133
or the date an action is to be taken pursuant to this A is other than a Business Da the
pa of interest or principal (and premium, if an or the action need not be made on such
date but ma be made on the next succeedin da which is a Business Da with the same force
and effect as if made on the date re and no interest shall accrue for the period after such
date.
10.13 Counterparts. This A ma be executed in counterparts, each of which
shall be deemed an ori
77772972.1
Ere
IN WITNESS WHEREOF,, the District has caused this A to be executed
in its name and the Fiscal A has caused this A to be executed in its name, all as of
1, 2012.
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
ATTEST:
LIDA
Cit Clerk
UNION BANK,, N.A.,
as Fiscal A
Authorized Officer
77772972.1
47
aAni
No.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
SPECIAL TAX BOND, SERIES
INTEREST RATE MATURITY DATE DATED DATE
September 1,
REGISTERED OWNER: UNION BANK, N.A., AS TRUSTEE FOR THE LAKE
ELSINORE PUBLIC FINANCING AUTHORITY
PRINCIPAL AMOUNT:
The Cit of Lake Elsinore Communit Facilities District No. 2005-5 (Villa at
Wasson Can (the "District"), for value received, hereb promises to pa solel from the
Special Tax (as hereinafter defined) to be collected within the District or amounts in the funds
and accounts held under the A (as hereinafter defined), to the re owner named
above,, or re assi on the maturit date set forth above, unless redeemed prior thereto
as hereinafter provided, the principal amount set forth above, and to pa interest on such
principal amount from the Interest Pa Date (as hereinafter defined) next precedin the date
of authentication thereof, unless (a) it is authenticated after a Record Date (as hereinafter
defined) and on or before an Interest Pa Date and after the close of business on the
precedin Record Date, in which event interest with respect thereto will be pa from such
Interest Pa Date (b) it is authenticated on or before . in which event interest
with respect thereto will be pa from its Dated Date or (c) interest with respect to an
Outstandin Bond is in default, in which event interest with respect thereto will be pa from
the date to which interest has been paid in full, pa on each Interest Pa Date, pa
semiannuall on March I and September I in each y ear, commencin (each an
"Interest Pa Date"), at the interest rate set forth above, until the principal amount hereof is
paid or made available for pa The principal of this Bond is pa to the re owner
hereof in lawful mone of the United States of America upon presentation and surrender of this
Bond at the Corporate Trust Office of Union Bank, N.A. (the "Fiscal A Interest on this
Bond shall be paid b check of the Fiscal A mailed on each Interest Pa Date to the
re owner hereof as of the close of business on the fifteenth da of the month precedin
the month in which the interest pa date occurs (the "Record Date") at such re
owner's address as it appears on the re books maintained b the Fiscal A
77772972.1 A-1
This Bond is one of a dul authorized issue of bonds in the a principal
amount of $ approved b the q ualified electors of the District on
pursuant to the Mello-Roos Communit Facilities Act of 1982, as amended, Section 53311 et
se of the California Government Code (the "Mello-Roos Act") for the purpose of financin the
ac of certain facilities (the "Pr and is one of the Bonds desi "Cit of Lake
Elsinore Communit Facilities District No. 2005-5 (Villa at Wasson Can Special Tax
Bonds,, " (the "Bonds"). The creation of the Bonds and the terms and conditions
thereof are provided for b the Fiscal A A dated as of L 2012, [and a
Supplemental A dated as - l ( [collectivel y , the] "A [each] b
and between the District and the Fiscal A and this reference incorporates the A
herein, and b acceptance hereof the owner of this Bond assents to said terms and conditions.
Pursuant to the Mello-Roos Act and the A the principal of and interest
on this Bond are pa solel from the annual special tax authorized under the Mello-Roos Act
to be collected within the District (the "Special Tax") and certain funds held under the
A
An tax for the pa hereof shall be limited to the Special Tax,, except to the
extent that provision for pa has been made b the Cit as ma be permitted b law. The
Bonds do not constitute obli of the Cit of Lake Elsinore for which said Cit is obli
to lev or pled or has levied or pled g eneral or special taxation other than described
hereinabove. The District has covenanted for the benefit of the owners of the Bonds that it will
order,, and cause to be commenced as provided in the A and thereafter dili
prosecute to jud an action in the superior court to foreclose, under the circumstances set
forth in the A the lien of an Special Tax or installment thereof not paid when due.
[Insert Redemption Terms.] For the 2012 Bonds: The Bonds are subject to
redemption prior to maturit at the option of the District from an source of funds, as a whole or
in part, on an date on or after . from such maturities as selected b the District
and b lot within a maturit at the redemption prices and schedules applicable to the Authorit
Bonds (as defined in the Fiscal A A Notwithstandin an in this A
to the contrar with respect to optional redemptions related to the Authorit Bonds, the District
shall abide b the priorit of redemption relatin to the Authorit Bonds permitted b the
Authorit Indenture (as defined in the Fiscal A A
The Bonds shall also be subject to mandator redemption on an date on or after
. in whole or in part from such maturities as selected b the District and b lot
within a maturit from amounts constitutin prepa of Special Taxes, from amounts
transferred from the Residual Fund hereunder and from amounts transferred b the Authorit to
the District from the Residual Fund under the Authorit Indenture at the followin redemption
prices (expressed as a percenta of the principal amount of Bonds to be redeemed) to
with accrued interest thereon to the redemption date:
77772972.1 A-2
Pa 137
The Bonds are not subject to mandator sinkin pa redemption.
The Bonds are subject to special mandator redemption on an date to which
timel notice of redemption ma be g iven, in inte multiples of $5,000 from unused proceeds
of the Bonds after completion or abandonment of the improvements to be financed with such
proceeds, and from insurance or condemnation proceeds, without premium, plus accrued interest
to the redemption date, from such maturities as selected b the District and b lot within a
maturit
Notice of redemption with respect to the Bonds to be redeemed shall be g iven to
the re owners thereof, in the manner, to the extent and subject to the provisions of the
A
This Bond shall be re in the name of the owner hereof, as to both principal
and 'interest.
Each re and transfer of re of this Bond shall be entered b the
Fiscal A in books kept b it for this purpose and authenticated b its manual si upon
the certificate of authentication endorsed hereon.
Except as provided in the A an Bond ma in accordance with its
terms, be transferred, upon the books re to be kept pursuant to the provisions of the
A b the person in whose name it is registered, in person or b his dul authorized
attorne upon surrender of such Bond for cancellation, accompanied b deliver of a dul
written instrument of transfer in a form approved b the Fiscal A The cost for an services
rendered or an expenses incurred b the Fiscal A in connection with an such transfer shall
be paid b the District. The Fiscal A shall collect from the Owner re such transfer
an tax or other g overnmental char re to be paid with respect to such transfer.
Whenever an Bond or Bonds shall be surrendered for transfer, the District shall
execute and the Fiscal A shall authenticate and deliver a new Bond or Bonds, for like
a principal amount.
No transfers of Bonds shall be re to be made (i) fifteen (15) da prior to
the date established b the Fiscal A for selection of Bonds for redemption, (ii) with respect
to a Bond, after such Bond has been selected for redemption, or ( iii) between the last da of the
month next precedin an Interest Pa Date and such Interest Pa Date.
77772972.1 A-3
t5onds ma be exchan at the Corporate Trust Office of the Fiscal A for
like a principal amount of Bonds of authorized denominations and of the same maturilo
The cost for an services rendered or an expenses incurred b the Fiscal A in connectio
with an such exchan shall be paid b the District. The Fiscal A shall collect from
Owner re such exchan an tax or other g overnmental char re to be paid wil*
respect to such exchan
No exchan of Bonds shall be re to be made (i) fifteen (15) da prior to
the date established b the Fiscal A for selection of Bonds for redemption, (ii) with respect
to a Bond, after such Bond has been selected for redemption, or (iii) between the last da of the
month next precedin an Interest Pa Date and such Interest Pa Date.
The A and the ri and obli of the District thereunder ma be
modified or amended as set forth therein.
This Bond shall not become valid or obli for an purpose until the
certificate of authentication and re hereon endorsed shall have been dated and si b
the Fiscal A
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,,
conditions and thin re b law to exist, happen and be performed precedent to and in the
issuance of this Bond have existed, happened and been performed in due time, form and manner
as re b law, and that the amount of this Bond does not exceed an debt limit prescribed
b the laws or Constitution of the State of California.
IN WITNESS WHEREOF, the Cit of Lake Elsinore on behalf of Cit of Lake
Elsinore Communit Facilities District No. 2005-5 (Villa at Wasson Can has caused this
Bond to be dated as of the date first above written and to be si b the manual si of its
Ma and countersi b the manual si of the Cit Clerk.
CITY OF LAKE ELSINORE
BY:
77772972.1
Ma
BY:
Cit Clerk
M.
FISCAL A GENT'S CE R TIFICA TE OF A UTHENTICA 'ION
This is one of the Bonds described in the Resolution and the A which
has been authenticated on I
UNION BAND, N.A.,
as Fiscal A
Authorized Officer
77772972.1
W n
ASSIGNMENT
For value received, the undersi do(es) hereb sell, assi and transfer unto
(Name, Address and Tax Identification or Social Securit Number of Assi
the within Bond and do hereb irrevocabl constitute and appoint
attorne to transfer the same on the re books of the Fiscal A
full power of substitution in the premises.
Dated..
Si Guaranteed: Si
with
Note: Si must be g uaranteed b an Note: The si on this assi g nment
eli g uarantor institution. must correspond with the name(s) as written on
the face of the within re Bond in ever
particular without alteration or enlar or
an chan whatsoever.
77772972.1
AMEM
104M o f I 113 V d
Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can
Officer's Certificate
Directin Disbursements From the Improvement Fund
The undersi hereb states and certifies:
(i) That he is the dul q ualified Cit Mana of the Cit of Lake
Elsinore, a g eneral law cit and public bod corporate and -politic, dul or and existin
under the laws of the State of California (the "Cit actin on behalf of Cit of Lake Elsinore
Communit Facilities District No. 2005-5 (Villa at Wasson Can (the "District"), and as
suck, is familiar with the facts herein certified and is authorized and q ualified to execute and
deliver this certificate
(ii) That he is an "Authorized Officer" as defined in the Fiscal A
A dated as of L 2012 (the "Fiscal A A b and between the
District and Union Bank,, N.A., as Fiscal A (the "Fiscal A
(iii) That pursuant to Section 3.7(b) of the Fiscal A A the
Fiscal A is hereb directed to disburse this date from the Improvement Fund established
pursuant to the Fiscal A A to the pa desi on Exhibit A attached hereto
and b this reference incorporated herein, at the address set forth below such pa name, the
respective sums set forth opposite such pa in pa for the obli described on said
Exhibit "A
(iv) That each obli shown on Exhibit A has been properl
verified and approved b the District and is a proper char a the Improvement Fund and
that all conditions to release of such funds have been satisfied, includin those conditions in
Section 3.7(b) of the Fiscal A A
(v) That no item to be paid pursuant to this Officer's Certificate has
been previousl paid or reimbursed from the Improvement Fund
( vi ) That capitalized terms used herein and not otherwise defined shall
have the meanin ascribed thereto in the Fiscal A A and
77772972.1 B-1
( vii ) That there has not been filed or served upon the District notice of
an lien, ri to lien or attachment,, stop not-ice or claim affectin the ri to receive pa of
an mone pa to an of the persons named in this re which has not been released
or which will not be released simultaneousl with the pa of such obli other than
materialmen's or mechanic's liens accruin b mere operation of law.
*ATED: 1 200
77772972.1
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
Cit Mana
M
Do
_ OW
W#
Cit of Lake Elsinore
Communit Facilities District No. 2005-5
( Villa g es at Wasson Can
Special Tax Bonds, 2012 Series A
THIS COMMITMENT AGREEMENT AND PURCHASE CONTRACT (the "Purchase
Contract"), dated , 2012, is b and between the LAKE ELSINORE PUBLIC
FINANCING AUTHORITY,, a joint exercise of powers authorit or and existin under
and b virtue of the laws of the State of California (the "Authorit and the CITY OF LAKE
ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-5 (VILLAGES AT WASSON
CANYON), a communit facilities district dul or and existin under the laws of the
State of California (the "District").
WITNESSETH:
WHEREAS, pursuant to Articles I throu 4 (commencin with Section 6500) of
Chapter 5, Division 7, Title I of the Government Code of the State of California (the "Act"), the
Redevelopment A of the Cit of Lake Elsinore (the "A and the Cit of Lake
Elsinore (the "Cit have b Joint Exercise of Powers A dated Jul 25, 1989 (the
"A created the Authorit for the purposes, amon other thin of assistin the Cit
and the A in the financin and refinancin of public capital improvements pursuant to the
Marks-Roos Local Bond Poolin Act of 1985, bein Article 4 of the Act (commencin with
Section 6584) (the "Bond Law")
WHEREAS, the Authorit for the purpose of ac certain local obli bonds, has
determined to issue its Local A Revenue Bonds (Villa at Wasson Can 2012 Series
A (the "Authorit Bonds"), pursuant to an Indenture of Trust, dated as of 1, 2012
WHEREAS, a portion of the proceeds of the Authorit Bonds will be used to purchase
local obli of the District desi as "Cit of Lake Elsinore Communit Facilities
District No. 2005-5 (Villa at Wasson Can Special Tax Bonds, 2012 Series A" in the
initial principal amount of $ (referred to herein as the "Local Obli Bonds"); and
WHEREAS, the Authorit and the District desire to enter into this Purchase Contract
providin for the purchase and sale of the Local Obli Bonds and containin the other
a herein set forth.
NOW, THEREFORE,, in consideration of the mutual a herein contained, and
for other g ood and valuable consideration the receipt and sufficienc of which is hereb
acknowled the Authorit and the District a as follows:
1. Upon the terms and conditions and upon the basis of the representations,,
warranties and a hereinafter set forth, the District hereb sells to the Authorit and the
Authorit hereb purchases from the District all of the a principal amount of the Local
77775835.1
Pa 144
Obli Bonds, such Local Obli Bonds to bear the annual interest rates and to be sold to
the Authorit at the purchase price set forth in Exhibit A attached hereto and hereb made a part
hereof, plus accrued interest, if an from the date of the Local Obli Bonds to the date of
deliver of the Local Obli Bonds to the Authorit (the "Closin Date").
2. The Cit hereb specifies , 2012 ( or as soon thereafter as shall be
feasible as the Closin Date and the District hereb confirms that it reasonabl expects to
deliver the Local Obli Bonds to the Authorit on such date.
3. The Authorit a that Union Bank, N.A., will act as Fiscal A for the
Local Obli Bonds under and as further provided in the Fiscal A A dated as
of I , 2012 (the "Fiscal A A b and between the District and such Fiscal
A
4. The Local Obli Bonds shall be issued and secured under the provisions of a
resolution authorizin the issuance of the Local Obli Bonds, adopted b the Cit Council
of the Cit actin as the le bod of the District, on , 2012 ( the "Resolution"
and related proceedin authorizin the issuance of the Local Obli Bonds, includin
without limitation, the Fiscal A A ( collectivel y , the "Proceedin The Local
Obli Bonds and interest thereon will be pa from Special Taxes ( as defined in the
Fiscal A A Proceeds of the sale of the Local Obli Bonds will be used b
the District in accordance with the Proceedin
5. An action under this Purchase Contract taken b the Authorit includin
pa for and acceptance of the Local Obli Bonds, and deliver and execution of an
receipt for the Bonds and an other instruments in connection with the closin on the Closin
Date, shall be valid and sufficient for all purposes and bindin upon the Authorit provided that
an such action shall not impose an obli or liabilit upon the Authorit other than as ma
arise as expressl set forth in this Purchase Contract.
6. It is a condition to the District's sale of the Local Obli Bonds and the
obli of the District to deliver the Local Obli Bonds to the Authorit and to the
Authorit purchase of the Local Obli Bonds and the obli of the Authorit to
accept deliver of and to pa for the Local Obli Bonds, that the entire a principal
amount of the Local Obli Bonds of $ shall be delivered b the District, and
accepted and paid for b the Authorit on the Closin Date. The Authorit will pa for the
Local Obli Bonds with the proceeds of the Authorit Bonds.
7. The District represents and warrants to the Authorit that:
( a ) The District is an entit dul or and validl existin under the laws
of the State of California, and has, and on the Closin Date will have, full le ri
power and authorit (i) to enter into this Purchase Contract, (ii) to adopt or enter into the
Proceedin relatin to the Local Obli Bonds, (iii) to issue, sell and deliver the
Local Obli Bonds to the Authorit as provided herein and in the Fiscal A
A and (iv) to carr out and consummate the transactions on its part
77775835.1
0)
Pa 145
contemplated b this Purchase Contract, the Proceedin and the Fiscal A
A
(b) The District has complied, and will on the Closin Date be in compliance
in all respects, with the Proceedin
(c) B official action of the Cit prior to or concurrentl with the acceptance
hereof, the Cit has dul adopted the Resolution, has dul authorized and approved the
execution and deliver of, and the performance b the District of the District's
obli contained in, the Fiscal A A the Local Obli Bonds, this
Purchase Contract and the other Proceedin and the consummation b the District of all
other transactions on its part contemplated b the Proceedin includin without
limitation, the application of Special Taxes to the pa of the Local Obli
Bonds
( d) The execution and deliver of this Purchase Contract and the Local
Obli Bonds, the adoption of the Resolution and the adoption or enterin into of the
other Proceedin includin without limitation, the Fiscal A A and
compliance with the provisions of each thereof will not conflict with or constitute a
breach of or a default under an applicable law or administrative re of the State
of California or the United States of America, or an applicable jud decree,
a or other instrument to which the District is a part or is otherwise subject
(e) There is no action, suit, proceedin or investi before or b an court,
public board or bod pendin or, to the knowled of the District, threatened, wherein an
unfavorable decision, rulin or findin would: (i) affect the creation, or
existence or powers of the District or the titles of its members and officers to their
respective offices, (ii) enjoin or restrain the issuance, sale and deliver of the Local
Obli Bonds, the lev and receipt of the Special Taxes, or the pled thereof under
the Fiscal A A (iii) in an wa q uestion or affect an of the ri powers,
duties or obli of the District with respect to the mone pled or to be pled
to pa the principal of, premium, if an or interest on the Local Obli Bonds, (iv) in
an wa q uestion or affect an authorit for the issuance of the Local Obli Bonds,
or the validit or enforceabilit of the Local Obli Bonds, the Fiscal A
A or the other Proceedin or (v) in an wa q uestion or affect this Purchase
Contract or the transactions contemplated b this Purchase Contract, the Fiscal A
A or an other a or instrument to which the District is a part relatin
to the Local Obli Bonds
(f) The issuance and sale of the Local Obli Bonds is not subject to an
transfer or other documentar stamp taxes of the State of California or an political
subdivision thereof
(g) The District has not been notified of an listin or proposed listin b the
Internal Revenue Service to the effect that the District is a bond issuer whose arbitra
certifications ma not be relied upon
77775835.1
9
9��I
(h) An certificate si b an official of the District authorized to do so
and delivered to the Authorit shall be deemed a representation and warrant b the
District to the Authorit as to the statements made therein and
(i) The District will appl the proceeds of the Local Obli Bonds,
includin the investment thereof, in accordance with the Fiscal A A and the
other Proceedin
8. At 8:00 a.m., Los An Time, on the Closin Date, or at such other time or on
such other date as is mutuall a b the District and the Authorit the District will deliver
the Local Obli Bonds to the Authorit in definitive form, dul executed, to with the
other documents hereinafter mentioned, and,, subject to the terms and conditions hereof, the
Authorit will accept such deliver and pa or cause to be paid the purchase price of the Local
Obli Bonds as referenced in para I hereof b certified or bank cashier's check or
wire transfer or other funds which are g ood funds on the Closin Date. Deliver and pa
as aforesaid, shall be made at such place as shall have been mutuall a upon b the District
and the Authorit
9. The Authorit has entered into this Purchase Contract in reliance upon the
representations,, warranties and a of the District contained herein and to be contained in
the documents and instruments to be delivered on the Closin Date, and upon the performance
b the District of its obli hereunder, both as of the date hereof and as of the Closin Date.
Accordin the Authorit obli under this Purchase Contract to purchase, to accept
deliver of and to pa for the Local Obli Bonds shall be subject to the performance b the
District of its obli to be performed hereunder and under such documents and instruments
at or prior to the Closin Date, and shall also be subject to the followin conditions:
( a ) The representations and warranties of the District contained herein shall be
true and correct on the date hereof and on and as of the Closin Date, as if made on the
Closin Date;
( b ) On the Closin Date, the Proceedin shall be in full force and effect, and
shall not have been amended, modified or supplemented, except as ma have been a
to b both the Authorit and the District;
(c) As of the Closin Date, all official action of the District relatin to the
Proceedin shall be in full force and effect, and there shall have been taken all such
actions as,, in the opinion of Fulbri & Jaworski L.L.P. ("Bond Counsel"), shall be
necessar or appropriate in connection therewith, with the issuance of the Local
Obli Bonds and with the transactions contemplated hereb
( d ) The Authorit shall have the ri to terminate the Authorit obli
under this Purchase Contract to purchase, to accept deliver of and to pa for the Local
Obli Bonds b notif the District of their election to do so if, after the execution
hereof and prior to the Closin (i) the marketabilit of the Local Obli Bonds or
the market price thereof, in the opinion of the Authorit has been materiall and
adversel affected b an decision issued b a court of the United States (includin the
77775835.1
11
United States Tax Court) or of the State of California, b an rulin or re (final,
temporar or proposed) issued b or on behalf of the Department of the Treasur of the
United States, the Internal Revenue Service,, or other g overnmental a of the United
States,, or an g overnmental a of the State of California, or b a tentative decision
with respect to le reached b a committee of the House of Representatives or the
Senate of the Con of the United States, or b le enacted b pendin in, or
favorabl reported to either the House of Representatives or the Senate of the Con of
the United States or either house of the Le of the State of California,,, or formall
proposed to the Con of the United States b the President of the United States or to
the Le of the State of California b the Governor of the State of California in an
executive communication, affectin the tax status of the District, its propert or income,
its bonds (includin the Local Obli Bonds) or the interest thereon, or an tax
exemption g ranted or authorized b the Bond Law (ii) the United States shall have
become en in hostilities which have resulted in a declaration of war or national
emer or there shall have occurred an other outbreak of hostilities, or a local,
national or international calamit or crisis, financial or otherwise, the effect of such
outbreak, calamit or crisis bein such as, in the reasonable opinion of the Authorit
would affect materiall and adversel the marketabilit of the Bonds (it bein a b
the Authorit that there is no outbreak, calamit or crisis of such a character as of the date
hereof) (iii) there shall have occurred a g eneral suspension of tradin on the New York
Stock Exchan or the declaration of a g eneral bankin moratorium b the United States,
New York State or California State authorities; ( iv ) there shall have occurred a
withdrawal or down of an ratin assi to an securities of the District b a
national municipal bond ratin a ( v ) an proposed development described in the
Proceedin shall have been repudiated b the applicable developer, or, an liti or
proceedin shall be pendin or threatened q uestionin g the proposed development or
seekin to enjoin the development thereof, or the District shall have received notice from
the applicable developer that it will be unable to proceed with the development as
described in the Proceedin (vi) an Federal or California court, authorit or re
bod shall take action materiall and adversel affectin the abilit of a developer to
proceed with the development as contemplated b the Proceedin
(e) On or prior to the Closin Date, the Authorit shall have received each of
the followin documents:
( 1 ) All documents and opinions re to be received b the trustee
for the Authorit Bonds prior to the application of proceeds of the Authorit
Bonds to the purchase of the Local Obli Bonds;
(2) An opinion, in form and substance satisfactor to the District and
the Authorit dated as of the Closin Date, of Bond Counsel approvin without
customar q ualifications, the validit of the Local Obli Bonds
(3) A supplementar opinion, dated the date of the Closin and
addressed to the Authorit of Bond Counsel to the effect that (i) this Purchase
Contract has been dul authorized, executed and delivered b and, assumin due
authorization, execution and deliver b the Authorit constitutes a le valid
W&S149111M
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and bindin a of the District enforceable 'in accordance with its terms,
except as such enforceabilit ma be limited b the application of e
principles if e remedies are sou and ( ii ) the Local, Obli Bonds
are not sub e e ct to th re istration re of the Securities Act of 1933, as
i 9
amended, and the Fiscal Aent A is exempt from q ualification under the
g
Trust Indenture Act of 1939, as amended
(4 A certificate dated the Closin Date, addressed to the Authorit
si b the Cit Mana of the Cit and b the Cit Clerk, on behalf of the
District!, to the effect that:
(i) The representations and warranties of the District contained
herein are true and correct in all material respects on and as of the Closin
Date as if made on the Closin Date
(ii) There is no action, suit, proceedin or investi before
or b an court, public board or bod pendin or threatened, wherein an
unfavorable decision,, rulin or findin would: (A) affect the creation,
or existence or powers of the District, or the titles of its
members and officers to their respective offices, (B) enjoin or restrain the
issuance, sale and deliver of the Local Obli Bonds, the lev or
collection of the Special Taxes or an other mone or propert pled or
to be pled under the Fiscal A A or the pled thereof,
(C) in an wa q uestion or affect an of the ri powers, duties or
obli of the District with respect to the Special Taxes or mone and
assets pled or to be pled to pa the principal of, premium, if an or
interest on the Local Obli Bonds, (D) in an wa q uestion or affect
an authorit for the issuance of the Local Obli Bonds, or the
validit or enforceabilit of the Local Obli Bonds or the
Proceedin or (E) in an wa q uestion or affect this Purchase Contract or
the transactions contemplated b this Purchase Contract, the Fiscal A
A or the other Proceedin and
(iii) The District has complied with all a covenants
and arran and satisfied all conditions, on its part to be complied
with or satisfied on or prior to the Closin Date
FWA1,011912
( 5 ) An opinion, dated the date of Closin and addressed to the
Authorit of the Cit Attorne of the Cit as Special Counsel to the District, that
there is no action, suit, proceedin or investi before or b an court, public
board or bod pendin or threatened, wherein an unfavorable decision, rulin or
findin would: ( i ) affect the creation, or existence or powers of the
District, or the titles of its members and officers to their respective offices ( ii )
enjoin or restrain the issuance, sale and deliver of the Local Obli Bonds,
the receipt of an other mone or propert pled or to be pled under the
Fiscal A A or the pled thereof; ( iii ) in an wa q uestion or affect
an of the ri powers, duties or obli of the District with respect to the
'Ell
Special Taxes or the mone and assets pled or to be pled to pa the
principal of, premium, if an or interest on the Local Obli Bonds-, ( iv ) in
an wa q uestion or affect an authorit for the issuance of the Local Obli
Bonds, or the validit or enforceabilit of the Local Obli Bonds or (v) in
an wa q uestion or affect this Purchase Contract or the transactions
contemplated b this Purchase Contract, the Fiscal A A or the other
Proceedin and
( 6 ) Such additional le opinions, certificates, instruments and
documents as the Authorit ma reasonabl re to evidence the truth and
accurac as of the date hereof and as of the Closin Date, of the District's
representations and warranties contained herein.
In addition to the fore the District shall on the Closin Date provide the
Proceedin certified b authorized officers of the Cit on behalf of the District,
under its seal as true copies and as havin been adopted or executed (as
applicable), with onl such amendments, modifications or supplements as ma
have been a to b the Authorit
All of the opinions, letters,, certificates, instruments and other documents mentioned
above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the
provisions hereof if, but onl if, the are in form and substance satisfactor to the Authorit but
the approval of the Authorit shall not be unreasonabl withheld. Receipt of, and pa for,
the Local Obli Bonds shall constitute evidence of the satisfactor nature of such as to the
Authorit The performance of an and all obli of the District hereunder and the
performance of an and all conditions contained herein for the benefit of the Authorit ma be
waived b the Authorit in its sole discretion.
If the District shall be unable to satisf the conditions to the obli of the Authorit
to purchase, accept deliver of and pa for the Bonds contained in this Purchase Contract, or if
the obli of the Authorit to purchase, accept deliver of and pa for the Bonds shall be
terminated for an reason permitted b this Purchase Contract, this Purchase Contract shall
terminate, and neither the Authorit nor the District shall be under further obli hereunder,
except that the respective obli of the District and the Authorit set forth in para 11
and 12 hereof shall continue in full force and effect.
10. The Authorit shall be under no obli to pa and the District shall pa the
followin expenses incident to the performance of the District's obli hereunder: (i) the
cost of the preparation of the Local Obli Bonds (ii) the fees and disbursements of Bond
Counsel and of Special Counsel to the District and (iii) the fees and disbursements of
accountants, advisers and of an other experts or consultants retained b the District.
11. This Purchase Contract is made solel for the benefit of the District and the
Authorit (includin their successors and assi and no other person shall ac or have an
ri hereunder or b virtue hereof. All of the District's representations, warranties and
a contained in this Purchase Contract shall remain operative and in full force and effect
re of: (i) an investi made b or on behalf of the Authorit or (ii) deliver of and
77775835.1 7
pa for the Bonds pursuant to this Purchase Contract. The a contained in this
para and in para 11 shall survive an termination of this Purchase Contract.
12. This Purchase Contract shall become effective upon the execution of the
acceptance hereof b the si of the Ma or Ma Pro Tem of the Cit and the
Executive Director of the Authorit and shall be valid and enforceable as of the time of such
execution.
13. This Purchase Contract ma be executed b the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an ori but all such
counterparts shall to constitute but one and the same instrument.
14. In case an one or more of the provisions contained herein shall for an reason be
held to be invalid, ille or unenforceable in an respect, such invalidit ille or
unenforceabilit shall not affect an other provision hereof.
15. The validit interpretation and performance of this Purchase Contract shall be
g overned b the laws of the State of California applicable to contracts made and performed in
such State.
77775835.1 8
IN WITNESS WHEREOF,, the Authorit and the District have each caused this Purchase
Contract to be executed b their dul authorized officers all as of the date first above written.
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
Executive Director
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005-5 (VILLAGES AT
WASSON CANYON)
Ma of the Cit of Lake Elsinore
77775835.1
66
Pa 152
1 *04 of I rvTffwMA1
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2005-5
(VILLAGES AT WASSON CANYON)
SPECIAL TAX BONDS, 2012 SERIES A
Annual Interest Rates
and Purchase Price
PURCHASE PRICE —Return of Cit of Lake Elsinore Communit Facilities District No. 2005-5
(Villa at Wasson Can Special Tax Bonds, 2008 Series B and $
Maturit Date Principal Interest
(September 11 Amount Rate
Total
77775835.1
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Pa 153