HomeMy WebLinkAboutUnion Bank Agreement CFD 88-3 West LEESCROW AGREEMENT
by and between the
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
and
UNION BANK, N.A.,
as Prior Bonds Fiscal Agent, Prior Authority Bonds Trustee and
as Escrow Agent
Dated as of 1, 2013
Pertaining to the Defeasance of
All of the Currently Outstanding
City of Lake Elsinore
Community Facilites District No. 88 -3 (West Lake Elsinore)
Subordinate Special Tax Bonds, 2008 Series
"Redemption Date" means October], 2013, the date oil which the Prior Bonds are to be
redeemed.
SECTION 2. The Authority hereby appoints Union Bank, N.A., as Escrow Agent,
under this Agreement for the benefit of the holders of the Prior Bonds and the Prior Authority
Bonds. The Escrow Agent hereby accepts the duties and obligations of Escrow Agent under this
A „rcenrent and agrees that the irrevocable instructions to the Escrow Agent herein provided are
n a form satisfactory to it. The applicable and necessary provisions of the Prior Bonds Fiscal
Agcni Agreement, including particularly the redemption provisions thereof, are incorporated
hercin by reference. Reference herein to, or citation herein of, any provisions of the Prior Bonds
Fiscal Agent Agreement 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 fully set forth herein.
SECTION 3. Pursuant to this Agreement, there is created and established with the
crov� Agent a special and irrevocable trust fund designated the Escrow Fund, to be held by the
F.';crow Agent separate and apart from all other funds and accounts, and used only for the
purposes and in the manner provided in this Agreement.
SECTION 4. The Authority herewith deposits, or causes to be deposited, with the
scrow A i2ent into the Escrow Fund, to be held in irrevocable trust by the Escrow Agent and to
e aTl lic(,l solely as provided in this Agreement, the sum of$
as follows:
(i) from the proceeds of the Bonds, the sum of $.; and
(ii) fi•om moneys held by the Prior Bonds Fiscal Agent pursuant to the Prior
Bonds fiscal Agent Agreement, the sum of $
SECTION S. The Escrow Agent acknowledges receipt of the moneys described in
"1 he Escrow Agent agrees to immediately invest $ of such amounts in the
Securities set forth in Exhibit B hereto, and to deposit such Escrow Securities in the
kscrow Fund and to retain the amount of $
in the Escrow Fund uninvested. Such
oh3lmints shall be applied by the Escrow Agent to the payment of the Escrow Requirements for
is eTNii ttnd ratable henefit of the holders of the Prior Bonds and the Prior Authority Bonds.
fhe Escrow Agent shall not have the power to sell, transfer, request the redemption of or
dispose of some or all of the Escrow Securities in the Escrow Fund or to substitute
oihr i -scrow Securities therefor.
SECTION 6. The Authority hereby directs and the Escrow Agent hereby agrees that
lava Agent will take all the actions required to be taken by it hereunder, in order to
�.ici uriie (his Agreement. The liability of the Escrow Agent for the payment of the Escrow
11.cquiremenis shall be limited to the application, in accordance with this Agreement, of the
moneys and Escrow Securities available for such purposes in the Escrow Fund.
SECTION 7, The Authority irrevocably instructs the Escrow Agent (i) to pay to the
1>ol)(k Fiscal Agent, from amounts held in the Escrow Fund, such amounts as are required
i"n payment of principal of and interest on the Prior Bonds coming due through and including the
R( :dCmPrion Date; and (ii) to pay to the Prior Bonds Fiscal Agent, from amounts held in the
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the moneys or Escrow Securities in the Escrow Fund for the payment of such proper fees and
expenses.
SECTION 11. The Escrow Agent at the time acting hereunder may at any time resign
and be discharged from the trusts hereby created by giving not less than 60 days' written notice
to the Authority and the Prior Bonds Fiscal Agent, specifying the date when such resignation will
takceffect in the same manner as a notice is to be mailed pursuant to Section 7 hereof, but no
such resignation shall take effect unless a successor Escrow Agent shall have been appointed by
lic holders of the Prior Bonds or by the Authority as hereinafter provided and such successor
I ,wiow Agent shall have accepted such appointment, in which event such resignation shall take
effect immediately upon the appointment and acceptance of a successor Escrow Agent.
File Escrow Agent may be removed at any time by an instrument or concurrent
instruments in writing, delivered to the Escrow Agent and to the Authority and the Prior Bonds
I iscal Agent and signed by the holders of a majority in principal amount of the Prior Bonds.
In the event the Escrow Agent hereunder shall resign or be removed, or be dissolved, or
shall be in the course of dissolution or liquidation, or otherwise become incapable of acting
hereunder, or in the case the Escrow Agent shall be taken under the control of any public officer
or oll iccr�, or of a receiver appointed by a court, a successor Escrow Agent may be appointed by
ih, holders of a majority in principal amount of the Prior Bonds, by an instrument or concurrent
Insiruuients in writing, signed by such holders, or by their attorneys -in -fact, duly authorized in
wining;; provided, nevertheless, that in any such event, the Authority shall appoint a temporary
(!si imv Agent to fill such vacancy until a successor Escrow Agent shall be appointed by the
huldc's of a majority in principal amount of the Prior Bonds, and any such temporary Escrow
Agent so appointed by the Authority shall immediately and without further act be superseded by
e F;scrc,w Agent so appointed by such holders.
In the event that no appointment of a successor Escrow Agent or a temporary successor
l iscrerw Agcnt shall have been made by such holders or the Authority pursuant to the foregoing
prr)vkions of this Section within 60 days after written notice of the removal or resignation of the
J.,Vimv Agent has been given to the Authority, the holder of any of the Prior Bonds or any
ctirin�t Escrow Agent may apply to any court of competent jurisdiction for the appointment of a
wc_cessor I_'scrow Agent, and such court may thereupon, after such notice, if any, as it shall deem
pf oper, appoint a successor Escrow Agent.
No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall
he a corporation or institution with trust powers organized under the financial institution laws of
the ['Hued States or any state., and shall have at the time of appointment capital and surplus of
not less than $50,000,000. For purpose of this Section 11, a corporation or institution with trust
p�� <vcas organized under the financial institution laws of the United States of America or any
stave shall be deemed to have combined capital and surplus of at least $50,000,000 if it has a
cr,mbincd capital surplus of at least $20,000,000 and is a wholly -owned subsidiary of a
curporatiou having a combined capital and surplus of at least $50,000,000.
1 very successor Escrow Agent appointed hereunder shall execute, acknowledge and
iyn:r w its predecessor and to the Authority, an instrument in writing accepting such
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indemnities contained in this Section shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent.
SECTION 14. The recitals of fact contained in the "Whereas" clauses herein shall be
taken as the statements of the Authority, and the Escrow Agent assumes no responsibility for the
correctness thereof. The Escrow Agent makes no representation as to the sufficiency of the
moneys to accomplish the redemption of the Prior Bonds pursuant to the Prior Bonds Fiscal
iA(Wnt Agreement or to the validity of this Agreement as to the Authority and, except as
oliucrwisc provided herein, the Escrow Agent shall incur no liability in respect thereof. The
Escrow Agent shall not be liable in connection with the performance of its duties under this
Agreement except for its own negligence or willful misconduct, and the duties and obligations of
Ili, Escrow Agent shall be determined by the express provisions of this Agreement. The Escrow
At %cnt may consult with counsel, who may or may not be counsel to the Authority, and in
r(�diance upon the written opinion of such counsel shall have full and complete authorization and
pif)1cction in respect of any action taken, suffered or omitted by it in good faith in accordance
tlu°rcwith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be
proved or established prior to taking, suffering, or omitting any action under this Agreement,
such matter (except the matters set forth herein as specifically requiring a certificate of a
rnliowdly recognized firm of independent certified public accountants or an opinion of
nziuom,lk recognized bond counsel) may be deemed to be conclusively established by a written
csrti f ;cation of the Authority. Whenever the Escrow Agent shall deem it necessary or desirable
;iuu ;� matter specifically requiring a certificate of a nationally recognized firm of independent
ccrfified public accountants or an opinion of nationally recognized bond counsel be proved or
u;Llish�xl prior to taking, suffering, or omitting any such action, such matter may be established
only by �Iuch a certificate or such an opinion. The Escrow Agent shall incur no liability for
Josses arising from any investment made pursuant to this Agreement.
No
provision of this Agreement shall require
the Escrow Agent to expend or
risk its own
;rinds or otherwise
incur any financial liability in the
performance or exercise of any
of its duties
lrorei.mdcr,
or in the exercise of its rights or powers.
Any company into which the Escrow Agent may be merged or converted or with which it
;c consolidated or any company resulting from any merger, conversion or consolidation to
it shall be a party or any company to which the Escrow Agent may sell or transfer all or
,abstantially all of its corporate trust business shall be the successor to the Escrow Agent without
he execution or filing of any paper or further act, anything herein to the contrary
i!ohvidietanding.
SFICTION 15. This Agreement shall' terminate upon payment of all Prior Bonds on the
(Xd =,iwwion Date. Upon such termination, all moneys remaining in the Escrow Fund after
paymCnt o' all fees and expenses of the Escrow Agent shall be released to the Authority.
SECTION 16. This Agreement is made in the State of California under the
C'on stitution and laws of the State of California and is to so be construed.
SFUTI.ON 17. If any one or more of the covenants or agreements provided in this
: fr ( nu:nt on the part of the Authority or the Escrow Agent to be performed should be
Exhibit A
Refunded Prior Authority Bonds
The Refunded Prior Authority Bonds have the maturity dates and CUSIP numbers as set
Ibrth below:
Principal Principal
Maturity Amount Amount to be CUSIP
(September 1) Outstanding Redeemed Number
Purchase Contract
June ,2013
Lake Elsinore Public Financing Authority
1 M South Main Street
Lalu: Elsinore, California 92530
C it ol'Lake Elsinore
Community Facilities District No. 88 -3
(W(,st I .ake Elsinore)
c'n C;ily of Lake Elsinore
1310 South Main Street
lasinore, California 92530
ulics and Gentlemen:
O'Connor & Company Securities, Inc. (the "Underwriter ") hereby offers to enter
info the following agreement (the "Purchase Contract ") with the Lake Elsinore Public Financing
tilhorily (the "Authority ") and the City of Lake Elsinore Community Facilities District No. 88-
3 (W(,st Lakc Elsinore) (the "District "). Upon the acceptance hereof by you, this offer will be
hin Jim upon the Authority, the District and the Underwriter. This offer is made subject to
60 the written acceptance hereof by you and (ii) withdrawal by the Underwriter upon written
nonce? (by facsimile or otherwise) delivered to you at any time prior to the acceptance hereof by
you.
The Authority and the District acknowledge and agree that: (i) the purchase and
�.;de of the Bonds (as defined below) pursuant to this Pin -chase Contract is an arm's- length
c<nnmercial transaction among the Authority, the District and the Underwriter; (ii) in connection
vkilh such transaction, the Underwriter is acting solely as a principal and not as an agent or a
fiduciary of the Authority or the District; (iii) the Underwriter has not assumed (individually or
cc 1licctively) a fiduciary responsibility in favor of the Authority or the District with respect to: (x)
he ofjcring of the Bonds or the process leading thereto (whether or not any Underwriter, or any
ni'liliatc ol'the Underwriter, has advised or is currently advising the Authority or the District on
other matters); or (y) any other obligation to the Authority or the District except the obligations
cxpressly set forth in the Purchase Contract; and (iv) the Authority and the District have
consulted with their own legal and financial advisors to the extent they deemed appropriate in
(,onnc °etion with the offering of the Bonds. The Authority and the District acknowledge that each has
i,W\ Moray provided the Underwriter with an acknowledgement of receipt of the required Underwriter
disclosure under Rule G -17 of the MSRB.
LE8 8 -3 2013 13NAb.doc
Lake Elsinore Public
Financing
Authority
Local Agency
Revenue Bonds (Community
Facilities
District No.
88 -3), 2013 Series B
Purchase Contract
June ,2013
Lake Elsinore Public Financing Authority
1 M South Main Street
Lalu: Elsinore, California 92530
C it ol'Lake Elsinore
Community Facilities District No. 88 -3
(W(,st I .ake Elsinore)
c'n C;ily of Lake Elsinore
1310 South Main Street
lasinore, California 92530
ulics and Gentlemen:
O'Connor & Company Securities, Inc. (the "Underwriter ") hereby offers to enter
info the following agreement (the "Purchase Contract ") with the Lake Elsinore Public Financing
tilhorily (the "Authority ") and the City of Lake Elsinore Community Facilities District No. 88-
3 (W(,st Lakc Elsinore) (the "District "). Upon the acceptance hereof by you, this offer will be
hin Jim upon the Authority, the District and the Underwriter. This offer is made subject to
60 the written acceptance hereof by you and (ii) withdrawal by the Underwriter upon written
nonce? (by facsimile or otherwise) delivered to you at any time prior to the acceptance hereof by
you.
The Authority and the District acknowledge and agree that: (i) the purchase and
�.;de of the Bonds (as defined below) pursuant to this Pin -chase Contract is an arm's- length
c<nnmercial transaction among the Authority, the District and the Underwriter; (ii) in connection
vkilh such transaction, the Underwriter is acting solely as a principal and not as an agent or a
fiduciary of the Authority or the District; (iii) the Underwriter has not assumed (individually or
cc 1licctively) a fiduciary responsibility in favor of the Authority or the District with respect to: (x)
he ofjcring of the Bonds or the process leading thereto (whether or not any Underwriter, or any
ni'liliatc ol'the Underwriter, has advised or is currently advising the Authority or the District on
other matters); or (y) any other obligation to the Authority or the District except the obligations
cxpressly set forth in the Purchase Contract; and (iv) the Authority and the District have
consulted with their own legal and financial advisors to the extent they deemed appropriate in
(,onnc °etion with the offering of the Bonds. The Authority and the District acknowledge that each has
i,W\ Moray provided the Underwriter with an acknowledgement of receipt of the required Underwriter
disclosure under Rule G -17 of the MSRB.
LE8 8 -3 2013 13NAb.doc
Authority dated of even
the appendices thereto,
!'urCh0W Contract and v
to by the Authority, the
Statement "
date herewith. Such Official Statement, including the cover page and
relating to the Bonds, as amended to conform to the terms of this
,ith such changes and amendments thereto as have been mutually agreed
District and the Underwriter, is hereinafter referred to as the "Official
This Purchase Contract, the Escrow Agreement and the Indenture are referred to
herein as the "Authority Documents." This Purchase Contract, the Fiscal Agent Agreement and
Um Continuing Disclosure Agreement, dated as of July 1, 2013 (the "Continuing Disclosure
Agreement "), by and between the District and Union Bank, N.A., as dissemination agent, are
rct'erred to herein as the "District Documents."
3. Offering by the Underwriter. It shall be a condition to the Authority's
obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's
oJkligafion to purchase, to accept delivery of and to pay for the Bonds that the entire principal
amount of the Bonds shall be issued, sold and delivered by the Authority and purchased,
a.;crpled and paid for by the Underwriter at the Closing. It is understood that the Underwriter
proposes to offer the Bonds for sale to the public (which may include selected dealers) at prices
or yields as set forth on the inside cover page of the Official Statement. Concessions from the
11H offering price may be allowed to selected dealers. It is understood that the initial public
csf(srinv Ian ice and concessions set forth in the Official Statement may vary after the initial public
offcrinrt. It is further understood that the Bonds may be offered to the public at prices other than
Ilk.' par value thereof. The net premium on the sale of the Bonds to the public, if any, shall
1� M the benefit of the Underwriter.
4. Official Statement, Delivery of Other Documents, Use of Documents.
(a) The Authority and the District hereby authorize the use by the Underwriter
of dui Prcliminary Official Statement and the Official Statement (including any supplements or
anu:ndme:nts thereto) and the Indenture and the Fiscal Agent Agreement and the information
thcrcin contained, in connection with the public offering and sale of the Bonds.
(b) The Authority shall deliver to the Underwriter, within seven business days
iium the date hereof, such number of copies of the final Official Statement, executed on behalf
of rout approved for distribution by the Authority, as the Underwriter may reasonably request in
order for the Underwriter to comply with the rules of the Municipal Securities Rulemaking
hoard (the "MSRB ") and Rule 15c2- 12(b)(4) under the Securities Exchange Act of 1934.
(c) As soon as practicable following receipt thereof, the Underwriter shall
deliver the Official Statement, and any supplements or amendments thereto, to the Electronic
1\1laiiic1pal Market Access system ( "EMMA ") through the MSRB.
5. Representations, Warranties and Agreements of the Authority. The
A uthorily represents, warrants and agrees as follows:
(a) The Authority is a joint exercise of powers authority duly organized and
afkll�/ existing under the laws of the State of California.
91
(f) The Bonds when issued will conform to the descriptions thereof contained
in the Official Statement under the captions "SUMMARY STATEMENT" and "THE BONDS,"
and the Authority Documents when executed and delivered will conform to the descriptions
thereof contained in the Official Statement under the captions "SUMMARY STATEMENT,"
'THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS" and "APPENDIX A —
SUMMARY OF THE INDENTURE."
(g) The Bonds, when issued, authenticated and delivered in accordance with
the Indenture, and sold to the Underwriter as provided herein, will be validly issued and
onlstanding obligations of the Authority, entitled to the benefits of the Indenture, and upon such
issuance and delivery, the Indenture will provide, for the benefit of the owners from time to time
of the Bonds, the legally valid and binding pledge of and lien and security interest it purports to
create.
(h) As of the date hereof, there is no action, suit, proceeding, inquiry or
nvesn,oation, notice of which has been served on the Authority, at law or in equity before or by
ny court. government agency, public board or body, pending or to the best knowledge of the
olTwer of the City executing this Purchase Contract on behalf of the Authority, threatened
a��ain,vi the Authority, affecting the existence of the Authority, or affecting or seeking to prohibit,
esuaiin or enjoin the sale, issuance or delivery of the Bonds or the pledge and lien on the
Rt venues pursuant to the Indenture, or contesting or affecting as to the Authority the validity or
rniorceahility of the Bond Law, the Bonds or the Authority Documents, or contesting the tax -
cVcmpt status of interest on the Bonds, or contesting the completeness or accuracy of the
e�.liminvy Official Statement or the Official Statement, or contesting the powers of the
Authcnily for the issuance of the Bonds, or the execution and delivery or adoption by the
Authority of the Authority Documents, or in any way contesting or challenging the
eonxunmation of the transactions contemplated hereby or thereby; nor, to the best knowledge of
!hc Authority, is there any basis for any such action, suit, proceeding, inquiry or investigation,
�v hcrcin an unfavorable decision, ruling or finding would materially adversely affect the validity
of the Bond Law, as to the Authority, or the authorization, execution, delivery or performance by
the Authority of the Bonds or the Authority Documents.
(i) The Authority will furnish such information, execute such instruments and
ial:e such olhcr action in cooperation with the Underwriter as the Underwriter may reasonably
ralucst in order (x) to qualify the Bonds for offer and sale under the `Blue Sky" or other
;ecru hies laws and regulations of such states and other jurisdictions of the United States as the
Underwriter may designate, (y) to determine the eligibility of the Bonds for investment under the
.r vs of such states and other jurisdictions, and will use its best efforts to continue such
quiihhcations in effect so long as required for the distribution of the Bonds; provided, however,
that the Authority shall not be required to execute a general or special consent to service of
I)rocess of qualify to do business in connection with any such qualification or determination in
xmy jurisdiction, provided that the Underwriter shall bear all costs in connection with the
Authority's action under (x) and (y) herein, and (z) to assure or maintain the tax- exempt status of
the interest on the Bonds.
Q) As of the date thereof, the Preliminary Official Statement does not, except
Icr the. omission of certain information permitted to be omitted in accordance with Rule 15e2 -12
5
Authority will not issue or sell any bonds or other obligations, other than the Bonds sold thereby,
the interest on and premium, if any, or principal of which will be payable from the payments to
be made under the Indenture.
(q) The Authority shall honor all other covenants on its part contained in the
Indenture which are incorporated herein and made a part of this Purchase Contract.
6. Representations, Warranties and Agreements of the District. The
District represents, warrants and agrees as follows:
(a) The District is a community facilities district duly organized and validly
existing under the laws of the State of California.
(b) The District has full legal right, power and authority (i) to enter into the
District Documents, and (ii) to carry out and consummate the transactions on its part
contemplated by the District Documents and the Official Statement.
(c) By all necessary official action, the District has duly authorized and
.reproved the District Documents, has duly authorized and approved the Preliminary Official
Statement and the Official Statement and has duly authorized and approved the execution and
d"liven- of, and the performance by the District of the obligations in connection with the
i�suturce of the Bonds on its part contained in the Bonds and the District Documents, and the
consummation by it of all other transactions contemplated by the District Documents in
� onncction with the issuance of the District Bonds.
(d) To the best of its knowledge, the District is not in any material respect in
hrcacFr of or default under any applicable constitutional provision, law or administrative
rc[,ulaiion of any state or of the United States, or any agency or instrumentality of either, or any
;I011hc:ihk: judgmait or decree, or any loan agreement, indenture, bond, note, resolution,
agreement (including, without limitation, the Fiscal Agent Agreement) or other instrument to
which the District is a party which breach or default has or may have an adverse effect on the
;d);hty, of the District to perform its obligations under the Fiscal Agent Agreement, and no event
fins occurred and is continuing which with the passage of time or the giving of notice, or both,
wnuld constitute such a default or event of default under any such instrument; and the execution
and delivery of the Bonds and the District Documents, and compliance with the provisions on the
Okine�t's part contained therein, will not conflict in any material way with or constitute a
material breach of or a material default under any constitutional provision, law, administrative
regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or
odtor instrument to which the District is a party nor will any such execution, delivery, adoption
or complianc.c, . result in the creation or imposition of any lien, charge or other security interest or
er;cn:n brance of any nature whatsoever upon any of the property or assets of the District or under
flit, terms of any such law, regulation or instrument, except as provided by the District
Doi:une:nts.
(e) To the best of its knowledge, all authorizations, approvals, licenses,
urn?ii ; consents and orders of any governmental authority, legislative body, board, agency or
cummissiou having jurisdiction of the matters which are required for the due authorization by, or
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(i) [RESERVED.]
(j) As of the date thereof, the Preliminary Official Statement does not, except
for the omission of certain information permitted to be omitted in accordance with Rule 15c2 -12,
contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements therein with respect to the District, in light of the circumstances under which they
were made, not misleading.
(k) At the time of the District's acceptance hereof, and (unless an event occurs
of the nature described in paragraph (m) of this Section 6) at all times subsequent thereto up to
Mid including the date of the Closing, the Official Statement does not and will not contain any
on!ruc statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that these representations and warranties of the District shall apply only to
tho information contained in the Official Statement relating to the District.
(1) If the Official Statement is supplemented or amended pursuant to
paragraph (m) of this Section 6, at the time of each supplement or amendment thereto and
'unless subsequently again supplemented or amended pursuant to such paragraph) at all times
bscyucm thereto up to and including the date of the Closing, the Official Statement as so
.Upi d m ented or amended will not contain any untrue statement of a material fact or omit to state
a niate.rial fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that these representations and
�.Y;uru��icr; of the District shall apply only to the information contained in the Official Statement
rclat ing to the District.
(m) If between the date of this Purchase Contract and that date which is 25
d,i%r after the end of the underwriting period (as determined in accordance with Section 14
i1c!eoi) any event known to the District shall occur affecting the District which might adversely
affect the marketability of the Bonds or the market prices thereof, or which might cause the
Official Statement, as then supplemented or amended, to contain any untrue statement of a
m:uerial fact or to omit to state a material fact necessary to make the statements therein, in light
td tike t ircuwnstances under which they were made, not misleading, the District shall notify the
i JndcrN%riter thereof, and if in the opinion of the Underwriter such event requires the preparation
and publication of a supplement or amendment to the Official Statement, the District will, at its
expense, prepare and furnish to the Underwriter a reasonable number of copies of such
upilenxs7t to, or amendment of, the Official Statement in a form and in a manner approved by
the Underwriter.
(n) The District will refrain from taking any action, or permitting any action
i�, be taken, with regard to which the District may exercise control, that results in the loss of the
(aXx exempt status of the interest on the Bonds or the District Bonds.
(o) Any certificate signed by any officer of the City on behalf of the District
and delivered to the Underwriter pursuant to the Fiscal Agent Agreement, this Purchase
( ootmw!, the Local Obligation Purchase Contract or any document contemplated thereby shall be
00]
(d) Subsequent to the date hereof, there shall not have occurred any change in
or affecting particularly the Authority, the District, the Bonds or the District Bonds, as the
ibrcp,oing matters are described in the Official Statement, which in the reasonable opinion of the
Underwriter materially impairs the investment quality of the Bonds;
(e) At or prior to the Closing, the Underwriter shall have received copies of
each of the following documents:
(1) The Official Statement and each supplement or amendment, if any,
thereto, executed by the Executive Director of the Authority;
(2) A copy of the Indenture, executed by the Authority and the
Trustee;
(3) A copy of the Second Supplement to Fiscal Agent Agreement,
executed by the District and the Fiscal Agent;
(4) A copy of this Purchase Contract, executed by the Authority, the
District and the Underwriter;
(5) A copy of the Escrow Agreement, executed by the Authority and
the Escrow Agent;
(6) A copy of the Local Obligation Purchase Contract, executed by the
Authority and the District;
(7) Certificates of the Authority and the District, respectively, with
respect to the matters described in Sections 5 and 6 and in paragraphs (a), (b), (c) and (d)
ofthis Section 8;
(8) An opinion (the "Final Approving Legal Opinion'), dated the date
Of the Closing and addressed to the District, of Fulbright & Jaworski, L.L.P., Bond
Counsel for the Authority, substantially in the form set forth in Appendix E to the
Official Statement;
(9) A supplemental opinion, dated the date of the Closing and
addressed to the Underwriter, of Fulbright & Jaworski L.L.P., Bond Counsel for the
Authority, in substantially the form attached hereto as Exhibit B;
(10) An opinion, dated the date of the Closing and addressed to the
Underwriter, of the City Attorney of the City, as Special Counsel for the District and the
Authority, in substantially the form attached hereto as Exhibit C;
(11) A reliance letter, dated the date of the Closing and addressed to the
Underwriter and the Fiscal Agent, respectively, of Fulbright & Jaworski L.L.P., Bond
Counsel for the Authority, regarding the final approving opinion;
(15) The general resolutions of the Trustee, the Fiscal Agent and the
Escrow Agent authorizing the execution and delivery of certain documents by certain
officers of the Trustee, the Fiscal Agent and the Escrow Agent, which resolutions
authorize the execution and delivery of the Indenture, the Fiscal Agent Agreement and
the Escrow Agreement;
(16) A certificate of the Trustee, the Fiscal Agent and the Escrow
Agent, dated the date of Closing, certifying that, subject to the limitations provided
herein, the Trustee, the Fiscal Agent and the Escrow Agent represent and warrant and
agree with the Underwriter that as of the date of Closing:
(i) Due Organization and Existence — the Trustee, the Fiscal
Agent and the Escrow Agent are duly organized and existing as a national
banking association in good standing under the laws of the United States of
America having the full power and authority to enter into and perform their duties
under the Indenture, the Fiscal Agent Agreement and the Escrow Agreement,
respectively, and to authenticate and deliver the Bonds and the District Bonds to
the Underwriter pursuant to the terns of the Indenture, the Fiscal Agent
Agreement and the Escrow Agreement, respectively;
(ii) No Conflict —to the best of the knowledge of the Trustee,
the Fiscal Agent and the Escrow Agent, after due investigation, the execution and
delivery by the Trustee of the Indenture, by the Fiscal Agent of the Fiscal Agent
Agreement and by the Escrow Agent of the Escrow Agreement and the
authentication and delivery by the Trustee and the Fiscal Agent of the Bonds and
the District Bonds, respectively, and compliance with the terms thereof will not,
in any material respect, conflict with, or result in a violation or breach of, or
constitute a default under, any loan agreement, indenture, bond, note, resolution
or any other agreement or instrument to which the Trustee, the Fiscal Agent or the
Escrow Agent is a party or by which it is bound, or any law or any rule,
regulation, order or decree of any court or governmental agency or body having
jurisdiction over the Trustee, the Fiscal Agent or the Escrow Agent or any of its
activities or properties, or result in the creation or imposition of any lien, charge
or other security interest or encumbrance of any nature whatsoever upon any of
the property or assets of the Trustee, the Fiscal Agent or the Escrow Agent; and
(iii) No Litigation —to the best of the knowledge of the Trustee,
the Fiscal Agent and the Escrow Agent, no litigation has been served upon the
Trustee, the Fiscal Agent or the Escrow Agent to restrain or enjoin the Trustee's,
the Fiscal Agent's or the Escrow Agent's participation in, or in any way
contesting the powers of the Trustee, the Fiscal Agent or the Escrow Agent with
respect to, the transactions contemplated by the Indenture, the Fiscal Agent
Agreement or the Escrow Agreement, respectively;
(17) Executed
copies of the
Continuing Disclosure
Agreement, by and
w1ween the District and Union
Bank, N.A.,
as dissemination agent,
substantially in the
forrn presented in Appendix D to the Official
Statement;
13
become engaged in hostilities which have resulted in a declaration of war or a national
emergency; (b) there shall have occurred the declaration of a general banking moratorium by any
authority of the United States or the States of New York or California; (c) an event shall have
occurred or been discovered as described in paragraph (in) of Section 5 or paragraph (in) of
Suction 6 hereof which, in the opinion of the Underwriter, requires the preparation and
publication of disclosure material or a supplement or amendment to the Official Statement; (d)
any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any
t_ =overmnental body, department or agency in the State of California, or a decision by any court of
competent jurisdiction within the State of California shall be rendered which, in the
Under" niter's reasonable opinion, materially adversely affects the market price of the Bonds; (e)
legislation shall be introduced, by amendment or otherwise, or be enacted by the House of
Representatives or the Senate of the Congress of the United States, or a decision by a court of the
united States shall be rendered, or a stop order, ruling, regulation or official statement by or on
behalf of the Securities and Exchange Commission or other governmental agency having
jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance,
oflcrin,g or sale of obligations of the general character of the Bonds, or the Bonds, as
onlemplated hereby or by the Official Statement, is or would be in violation of any provision of
tic Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of
19 id, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as
then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale
of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by
the tfficial Statement; (f) additional material restrictions not in force as of the date hereof shall
have been imposed upon trading in securities generally by any governmental authority or by any
n_�tional securities exchange; (g) the New York Stock Exchange, or other national securities
exchange or association or any governmental authority, shall impose as to the Bonds, or
ohligations of the general character of the Bonds, any material restrictions not now in force, or
ncrctcsc materially those now in force, with respect to the extension of credit by or the charge to
11r.: ItCi capital requirements of broker- dealers; (h) trading in securities on the New York Stock
xclrangc or the American Stock Exchange shall have been suspended or limited or minimum
prices have been established on either such exchange; or (i) any action shall have been taken by
'Mly govcrnmcut in respect of its monetary affairs which, in the reasonable opinion of the
ili,derwriter, has a material adverse effect on the United States securities market.
If this Purchase Contract shall be terminated pursuant to Section 8 or this
5a�tion 9., or if the purchase provided for herein is not consummated because any condition to
the Underwriter's obligation hereunder is not satisfied or because of any refusal, inability or
failure on the part of the Authority or the District to comply with any of the terms or to fulfill any
of the conditions of this Purchase Contract, or if for any reason the Authority or the District shall
he io perform all of its obligations under this Purchase Contract, neither the Authority nor
the 0ist6ct shall be liable to the Underwriter for damages on account of loss of anticipated
1�10lits arising out of the transactions covered by this Purchase Contract.
10. Payment of Costs and Expenses. (a) All costs and expenses incident to
the safe and delivery of the Bonds to the Underwriter, including, but not limited to: (i) the fees
rind expenses of the Authority and its Counsel, the Financing Consultant, Disclosure Counsel and
n(hc?r consultants; (ii) the fees and expenses of the District, its Counsel, the Financing
e_'rxisrdhant, Disclosure Counsel and other consultants; (iii) the fees and expenses of Bond
IN
This Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any
investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the
ii0nds pursuant to this Purchase Contract; and (iii) any termination ofthis Purchase Contract.
14. Determination of land of the Underwriting Period. For purposes of this
Purchase Contract, the "End of the Underwriting Period" for the Bonds shall mean the earlier of
(a) the day of the Closing unless the Authority and the District have been notified in writing by
the Underwriter, on or prior to the day of the Closing, that the "end of the underwriting period"
for the Bonds for all purposes of Rule 15c2 -12 of the Securities and Exchange Commission
promulgated under the Securities Exchange Act of 1934 (the "Rule ") will not occur on the day of
the Closing, or (b) the date on which notice is given to the Authority and the District by the
Underwriter in accordance with the following sentence. In the event that the Underwriter has
p,ivcn notice to the Authority and the District pursuant to clause (a) above that the "end of the
underwriling period" for the Bonds will not occur on the day of the Closing, the Underwriter
wwcs to notify the Authority and the District in writing as soon as practicable following the
"e'od ofthe underwriting period" for the Bonds for all purposes of the Rule.
15. Effectiveness. This Purchase Contract shall become effective upon the
ctxrcution of the acceptance by the designees of the Authority and the District and shall be valid
and Cn forceable at the time of such acceptance.
16. Readings. The headings of the sections of this Purchase Contract are
inserted for convenience only and shall not be deemed to be a part hereof.
17. Governing Law. This Purchase Contract shall be construed in
acarrdance with the laws of the State of California.
C0 1!11 crparis.
18. Counterparts. This Purchase Contract may be executed in any number of
17
Exhibit A
Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds (Community Facilities District No. 88 -3), 2013 Series B
Maturity Date
(S eptembeer—, )
Serial Bonds:
2013
2014
2015
2016
2017
2018
)_019
2020
'I of In Bond:
JI)
Principal
Amount Coupon Yield Price
$
$
Y;eIE: to first par call date of September 1, 20.
A -1
$
Y;eIE: to first par call date of September 1, 20.
A -1
2. The Purchase Contract has been duly executed and delivered by the
Authority and the District and (assuming due authorization, execution and delivery by, and
vodidity against, the Underwriter) is a valid and binding agreement of the Authority and the
District. We call attention to the fact that the rights and obligations raider the Purchase Contract
may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance,
moratorium and other laws relating to or affecting creditors' rights, to the application of
equitable principles, to the exercise of judicial discretion in appropriate cases and to the
limitations on legal remedies against entities formed pursuant to Government Code Section 6500
,;;d following in the State of California. We express no opinion with respect to any
indemnification, contribution, choice of law, choice of forum or waiver provisions contained
(herein.
3. The statements contained in the Official Statement, dated June , 2013,
with respect to the Authority Bonds, on the cover of the Official Statement and under the
caixion:; "SUMMARY STATEMENT," "THE BONDS," "SOURCES OF PAYMENT FOR
1 ! Ili BONDS," "LEGAL MATTERS - TAX MATTERS," "APPENDIX A - SUMMARY OF
i?Ili INDENTURE" and "APPENDIX B — SUMMARY OF THE FISCAL AGENT
AGREC.MEN'I T" insofar as such statements expressly summarize certain provisions of the
n(lcntu v, the Fiscal Agent Agreement, the Authority Bonds and our opinion concerning certain
cderal tax matters relating to the Authority Bonds, are accurate in all material respects.
This letter is furnished by us as bond counsel to the Authority. No attorney- client
relationship has existed or exists between our firm and you in connection with the Authority
and ur by virtue of this letter. Our engagement with respect to the Authority Bonds has
ca f! matcd its of the date hereof, and we disclaim any obligation to update this letter. This letter
is delivered to you as Underwriter, is solely for your benefit as such Underwriter and is not to be
iised, "irculated, quoted or otherwise referred to or relied upon for any other purpose or by any
oihei pr_rson. ']'his letter is not intended to be relied upon by owners of the Authority Bonds.
The foregoing represent our interpretation of applicable law to the facts as
described herein. We bring to your attention the fact that our conclusions are an expression of
pwf"sicnal ,judgment and are not a guarantee of a result.
Respectfully submitted,
B -2
resolutions, ordinances and public proceedings of the Authority and the District, we are of the
following opinions:
(1) The Authority is duly organized and existing under the laws of the
State of California.
(2) The District is duly organized and existing under the laws of the
State of California.
(3) The City is duly organized and existing under the laws of the State
of California.
(4) To the best of our knowledge, the Resolution of the Authority
authorizing the Indenture, the Purchase Contract and the Local Obligation Purchase
Contract were duly adopted at meetings of the Authority which were duly called and
held.
(5) To the best of our knowledge, the Resolutions of the City Council,
acting on behalf of the District, relating to formation of the District, the levy of the
Special Tax in the District and authorizing the Fiscal Agent Agreement and the Local
Obligation Purchase Contract were duly adopted at meetings of the City Council which
1A ON duly called and held.
(6) To the best of our knowledge, the Ordinance of the City
authorizing the levy of the Special Tax in the District was duly read and adopted at a
meeting ofthe City Council which was duly called and held.
(7) To the best of our knowledge, the statements and information
contained in the Official Statement in the section entitled "LEGAL MATTERS," as of
the date thereof and as of the date hereof, does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made,
not misleading.
(8) To the best of our knowledge, there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any covet, governmental agency,
public board or body, pending or threatened against the Authority, the District or the
City, wherein an unfavorable decision, ruling or finding would: (i) affect the creation,
organization, existence or powers of the Authority, the District or the City, or the title of
their respective members and officers to their respective offices; (ii) enjoin or restrain the
issuance, sale or delivery of the Authority Bonds or the District Bonds, the receipt of any
other moneys or property pledged or to be pledged under the Indenture, the Fiscal Agent
Agreement or the pledge thereof; (iii) in any way question or affect any of the rights,
powers, duties or obligations of the Authority under the Indenture or of the District under
the Fiscal Agent Agreement or with respect to the Special Taxes in the District or the
moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or
ijacrest on the Bonds or the District Bonds; (iv) in any way questioning or affecting any
cunhority for the issuance of the Bonds, the District Bonds or the validity or
C -2
This opinion is rendered only with respect to the laws of the State of California
Mid the United States and is addressed only to the Authority, the District, the City and O'Connor
�l' Company Securities, Inc. This letter is furnished by us as counsel to the Authority, the
Oi sirict and the City. Other than the Authority, the District and the City, no attorney- client
red., i ionship has existed or exists between us and O'Connor & Company Securities, Inc. in
connection with the Bonds or by virtue of this letter. Our engagement with respect to the Bonds
has terminated as of the date hereof, and we disclaim any obligation to update this letter. This
Ictter is delivered to you, is solely for your benefit and is not to be used, circulated, quoted or
ouhcnwi se: referred to or relied upon for any other purpose or by any other person. This letter is
nnl in(coded to, and may not, be relied upon by owners of the Bonds. No other person is entitled
to rely on this opinion, nor may the addressees rely on it in connection with any transactions
otharthan those described herein.
Respectfully submitted,
C -4
This opinion is limited to matters governed by the federal securities law of the
United States, and we assume no responsibility with respect to the applicability or effect of the
laws of otherjurisdiction.
In our capacity as Disclosure Counsel, we have rendered certain legal advice and
assistance to you in connection with the preparation of the Official Statement. Rendering such
lel;al advice and assistance involved, among other things, discussions and inquiries concerning
various legal matters, review of certain records, documents and proceedings, and participation in
confi,renccs with, among others, your representatives and representatives of Bond Counsel, the
I'inancing Consultant, the Authority, the City, the District, and other consultants, at which
conferences the contents of the Official Statement and related matters were discussed. On the
h�;.ms of the information made available to us in the course of the foregoing (but without having
undertaken to determine or verify independently, or assuming any responsibility for, the
accuracy, completeness or fairness of any of the statements contained in the Official Statement),
ne (Acts have come to the attention of the personnel in our firm directly involved in rendering
ci.)al advice and assistance in connection with the preparation of the Official Statement which
courted its to believe that the Official Statement as of its date (excluding therefrom financial,
cnginccring and statistical data; forecasts, projections, estimates, assumptions and expressions of
ul)inions; the treatment of the Bonds or the interest, discount or premium related thereto for tax
n,rlro,a under the law of any jm•isdiction; and the statements contained in the Official Statement
antler the caption "LEGAL MATTERS —TAX MATTERS," and in the Appendices thereto, as to
Fill of which we express no view) contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of the circumstances
,mulct which they were made, not misleading.
During the period from the date of the Official Statement to the date of this
upirrirn,, except. for our review of the certificates and opinions regarding the Official Statement
delivered on the date hereof, we have not undertaken any procedures or taken any actions which
1"(1W inwndcd or likely to elicit information concerning the accuracy, completeness or fairness of
any of [tie statements contained in the Official Statement.
We are furnishing this opinion to you, as Disclosure Counsel to the Issuer, solely
w ynm, benefit. This opinion is rendered in connection with the transaction described herein,
ar,d may not be relied upon by you for any other purpose. This opinion shall not extend to, and
nuty not be used, circulated, quoted, referred to, or relied upon by, any other person, firm,
torpor ;aion or other entity without our prior written consent. Our engagement with respect to
this matter terminates upon the delivery of this opinion to you at the time of the closing relating
r.,, the Bonds, and we have no obligation to update this opinion.
Very truly yours,
D -2
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement'), dated as of
1, 2013, is executed and delivered by the City of Lake Elsinore Community Facilities
District No. 88 -3 (West Lake Elsinore) (the "District') and Union Bank, N.A., as Dissemination
Agent (the "Dissemination Agent'), in connection with the issuance of the $ Lake
Elsinore Public Financing Authority Local Agency Revenue Bonds (Community Facilities
District 88 -3), 2013 Series B (the "Bonds "). The Bonds are being issued pursuant to provisions
of an Indenture of Trust, dated as of 1, 2013 (the "Indenture "), by and between the
i nke Elsinore Public Financing Authority (the "Authority ") and Union Bank, N.A. (the
"IYustee "). The District and the Dissemination Agent covenant and agree as follows:
Sl ;CTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the District and the Dissemination Agent for the benefit of the
Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying
with Securities and Exchange Commission Rule 15c2- 12(b)(5).
SIVTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
.poly to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Annual Report' shall mean any Annual Report provided by the District pursuant to, and
as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly,
o vole or consent with respect to, or to dispose of ownership of, any Bonds (including persons
Loldinp) Bonds through nominees, depositories or other intermediaries), or (b) is treated as the
Owncs o f an.y Bonds for federal income tax purposes.
"Disclosure Representative" shall mean the City Manager of the City or his or her
designee, or such other officer or employee as the District shall designate in writing to the
Dissemination Agent from time to time.
"Dissemination Agent' shall mean Union Bank, N.A., acting in its capacity as
Oisscrnination Agent hereunder, or any successor Dissemination Agent designated in writing by
the District.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
/i;,rec.mcnt.
"MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to
Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or
authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.
Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings
with the MSRB are to be made through the Electronic Municipal Marketplace Access (EMMA)
,�� °bssia of the MSRB, cun•ently located at http: / /ernma.msrb.org.
(d) A table showing value -to -lien ratios (either individually or in categories
such as "below 3:1," "3:1 to 4:1," "4:1 to 5:1," etc.) for all parcels subject to special taxes in the
District based on the ratio of assessed valuation of such parcels to all overlapping direct debt.
Such information shall be provided separately for Approved Property and Developed Property
(a ; such terms are defined in the RMA).
(e) The status of the payment of special taxes for the properties within the
District which were due and payable during the preceding fiscal year (the "Special Taxes "),
including as to delinquent parcels:
(1) the number of parcels delinquent in the payment of Special Taxes;
(2) the aggregate amount of the delinquent Special Taxes;
(3) as to
any
parcel for
which the
delinquent Special Taxes represent
more
than
5% of the
aggregate
Special Taxes within the District;
(i) the assessor's parcel number;
(ii) the identity of the owner(s) of such parcel based on the
County of Riverside Assessor's Roll or County of Riverside (the
"County ") delinquency report received by the City, whichever is more
current; and
(iii) the aggregate amount of delinquent property taxes,
assessments (both fixed lien and annual) and Special Taxes and the
accrued penalties and interest on such aggregate amount; and
(4) the assessment delinquency rate for such preceding fiscal year.
(f) The status of any judicial foreclosure proceedings initiated by the District
a result of the delinquency in the payment of Special Taxes and the summary of the results of
�reclosure sales, if available.
(1) names of the owners of such parcels as shown on the Assessor's
Roll or County delinquency report received by the City, whichever
is more current;
(2) percentage of the special tax levy allocated to such parcels;
(3) Developed Property or Undeveloped Property status (as such terms
are defined in the RMA) of such parcels;
(4) significant amendments to applicable District granted land use
entitlements;
.i �, M 1 3
(g) As
to any
parcel for which
the annual
special tax
levy represents more
than 5%
of the aggregate
special
tax levy within the
District:
(1) names of the owners of such parcels as shown on the Assessor's
Roll or County delinquency report received by the City, whichever
is more current;
(2) percentage of the special tax levy allocated to such parcels;
(3) Developed Property or Undeveloped Property status (as such terms
are defined in the RMA) of such parcels;
(4) significant amendments to applicable District granted land use
entitlements;
.i �, M 1 3
respect to the tax status of the Bonds or other material events affecting the
tax status of the Bonds;
unscheduled draws on the debt service reserves reflecting financial
difficulties;
unscheduled draws on the credit enhancements reflecting financial
difficulties;
10. substitution of the credit or liquidity providers or their failure to perform;
H. release, substitution or sale of property securing repayment of the Bonds,
if material;
12. bankruptcy, insolvency, receivership or similar proceedings of the
Authority, which shall occur as described below;
13. appointment of a successor or additional trustee or the change of name of
a trustee, if material, or;
14. the consummation of a merger, consolidation, or acquisition involving the
Authority or the sale of all or substantially all of the assets of the
Authority other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terns, if material.
For these purposes, any event described in item 12 of this Section 5(a) is considered to
(W( III when any of the following occur: the appointment of a receiver, fiscal agent, or similar
oiYiccr lur the Authority in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
assumc(l jurisdiction over substantially all of the assets or business of the Authority, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
)n(sScssion but subject to the supervision and orders of a court or governmental authority, or the
cmrl ol' an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business ofthe Authority.
(b) Upon receipt of notice from the District and instruction by the District to
Import Ute occurrence of any Listed Event, the Dissemination Agent shall provide notice thereof
to the MSRB in accordance with Section 5(c) hereof. In the event the Dissemination Agent shall
obtain actual knowledge of the occurrence of any of the Listed Events, the Dissemination Agent
hali, immediately after obtaining such knowledge, contact the Disclosure Representative,
nform such person of the event, and request that the District promptly notify the Dissemination
Arent in writing whether or not to report the event pursuant to Section 5(c). For purposes of this
Di >,vao,urc Agreement, "actual knowledge" of the occurrence of such Listed Event shall mean
❑ctu:d knowledge by the Dissemination Agent, if other than the Trustee, and if the Dissemination
%peni is the Trustee, then by the officer at the corporate trust office of the Trustee with regular
i.eses;17 1. i
have no obligation under this Disclosure Agreement to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Filings with the MSRB. All financial information, operating data,
financial statements, notices, and other documents provided to the MSRB in accordance with this
Disclosme Agreement shall be provided in an electronic format prescribed by the MSRB and
shall be accompanied by identifying information as prescribed by the MSRB.
SECTION 11. Default. In the event of a failure of the District or the Dissemination
Ao'cni to comply with any provision of this Disclosure Agreement, any Owner or Beneficial
Owner of the Bonds may take such actions as may be necessary and appropriate, including
wcking mandate or specific performance by court order, to cause the District or Dissemination
hbent, as the case may be, to comply with its obligations under this Disclosure Agreement. A
dcltault under this Disclosure Agreement shall not be deemed an Event of Default under the
Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the
i }iytrict or the Dissemination Agent to comply with this Disclosure Agreement shall be an action
to compel performance.
SI?CT1ON 12. Duties, Immunities and Liabilities of Dissemination Agent. Article VI of
thc Indenture pertaining to the Trustee is hereby made applicable to this Disclosure Agreement
iii it this Disclosure Agreement were (solely for this purpose) contained in the Indenture and the
i,1�,cminmion Agent shall be entitled to the protections, limitations from liability and
indemnities afforded the Trustee thereunder. The Dissemination Agent shall have only such
duties as arc specifically set forth in this Disclosure Agreement, and the District agrees to
!Idcouiify and save the Dissemination Agent, its officers, directors, employees and agents,
harmless against any loss, expense and liabilities which they may incur arising out of or in the
C�cTcke or performance of its powers and duties hereunder, including the costs and expenses
(including attorneys' lees) of defending against any claim of liability, but excluding liabilities
duc u) the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent
shill be paid compensation by the District for its services provided hereunder in accordance with
schedule of fees as amended from time to time and all expenses, legal fees and advances made
ncurred by the Dissemination Agent in the performance of its duties hereunder. The
)i>scniination Agent shall have no duty or obligation to review any information provided to it
h. ivundcr and shall not be deemed to be acting in any fiduciary capacity for the District, the
Hond Owners, or any other party. The Dissemination Agent shall not have any liability to the
130nd Owners or any other party for any monetary damages or financial liability of any kind
wi misoever related to or arising from this Disclosure Agreement. The obligations of the District
mider this Section shall survive resignation or removal of the Dissemination Agent and payment
Grl the Bonds.
rr,ays/i 1 7
SECTION
15. Counterparts.
This Disclosure
Agreement may be executed in several
counterparts, each
of which shall be
an original and all
of which shall constitute but one and the
same i1strwn1ent.
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 88 -3 (WEST
LAKE ELSINORE)
C
Mayor, on behalf of the District
UNION BANK, N.A.,
as Dissemination Agent
By
Authorized Officer
7'"%( S -,?1 i 9
FISCAL AGENT AGREEMENT
by and between
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3
(WEST LAKE ELSINORE)
and
UNION BANK OF CALIFORNIA, N.A.
as Fiscal Agent
Dated as of January 1, 2008
Relating to:
$24,670,000
City of Lake Elsinore Community Facilities District No. 88 -3
(West Lake Elsinore) Special Tax Bonds, 2008 Series
and
$7,175,000
City of Lake Elsinore Community Facilities District No. 88 -3
(West Lake Elsinore) Subordinate Special Tax Bonds, 2008 Series
TABLE OF CONTENTS
(continued)
Page
5.3
Extension of Time for Payment .............................................. .............................24
33
5.4
Against Encumbrances .......................................................... ...............................
24
5.5
Books and Records ............................................................... ...............................
24
5.6
Protection of Security and Rights of Owners ....................... ...............................
24
5.7
Reserved .................................................................................. .............................25
34
5.8
Collection of Special Tax Revenues ..................................... ...............................
25
5.9
Further Assurances ................................................................ ...............................
25
5.10
Tax Covenants ...................................................................... ...............................
26
5.11
Covenant to Foreclose ........................................................... ...............................
29
5.12
Annual Reports to CD1AC .................................................... ...............................
30
5.13
Continuing Disclosure to Owners ......................................... ...............................
30
5.14
Reserve Fund Replenishment ............................................... ...............................
30
AI "fICLI VI INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE DISTRICT ................................... ............................... 30
6.1 Deposit and Investment of Moneys in Funds ....................... ............................... 30
(i.2 Limited Obligation ................................................................ ............................... 32
6.3 Liability of District ............................................................... ............................... 32
6.4 Employment of Agents by District or the City ..................... ............................... 33
,IRiICI.P. VII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS............ 33
7.1
Events of Default ..................................................................
33
...............................
7.2
Remedies of Bond Owners ................................................... ...............................
33
7.3
Application of Special Taxes and Other Funds After Default .............................
34
7.4
Absolute Obligation of the District ....................................... ...............................
34
7.5
Termination of Proceedings .................................................... .............................34
7.6
Remedies Not Exclusive
35
7.7
....................................................... ...............................
No Waiver of Default
35
7.8
............................................................ ...............................
Actions by Fiscal Agent as Attorney -in- Fact ........................ ...............................
35
/ \1"IICH, VIII THE FISCAL AGENT ....
...... 35
8.1 Appointment of Fiscal Agent ................................................ ............................... 35
8.2 Liability of Fiscal Agent ....................................................... ............................... 36
83 Information ........................................................................... ............................... 37
8.4 Notice to Fiscal Agent .......................................................... ............................... 37
8.5 Compensation, Indemnification ............................................ ............................... 38
A k H(1LE IX MODIFICATION OR AMENDMENT OF THIS AGREEMENT ............... 38
9. I Amendments Permitted ......................................................... ............................... 38.
9.2 Owners' Meetings ................................................................... .............................39
i n;i ii
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the "Agreement') is made and entered
into as of January 1, 2008, by and between the City of Lake Elsinore Community Facilities
District No. 88 -3 (West Lake Elsinore) (the "District'), a community facilities district organized
and existing under and by virtue of the laws of the State of California, and Union Bank of
Cali(brnia, N.A., a national banking association organized and existing under the laws of the
United States of America, as fiscal agent (the "Fiscal Agent').
WITNESSETH:
WHEREAS, the City Council of the City of Lake Elsinore (the "Council "),
ocated in Riverside County, California, has heretofore undertaken proceedings and declared the
necessity to issue bonds on behalf of the City of Lake Elsinore Community Facilities District No.
t,X -3 (Wost Lake Elsinore) (the "CFD ") pursuant to the terms and provisions of the Mello -Roos
onrnxmity Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of
the ( lovcrnment Code of the State of California (the "Act'); and
WHEREAS the qualified electors within the CFD approved the levy of a special
t,rx .rud the issuance of bonds by the CFD and the CFD authorized the issuance of bonds in one
ur more series, pursuant to the Act, in an aggregate principal amount not to exceed $30,000,000;
�d
WHEREAS, the Council intends to accomplish the refinancing of the purchase,
coti li uction, expansion or rehabilitation of certain real and other tangible property with an
cal'imatcd useful life of five years or longer, including public infi-astructur•e facilities and other
go%crnmental facilities, which were necessary to meet increased demands placed upon the City
a> ;; result of development or rehabilitation occurring within the CFD (collectively, the
iIif ics ") through the issuance of (i) bonds in the aggregate principal amount of $24,670,000
�lcsQ1111Acd as the "City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake
Elsinore) Special Tax Bonds, 2008 Series" (the "Senior Bonds ") and (ii) bonds in the aggregate
I rincipal amount of $7,175,000 designated as the "City of Lake Elsinore Community Facilities
LuPrrct No. 88 -3 (West Lake Elsinore) Subordinate Special Tax Bonds, 2008 Series" (the
Subordinate Bonds," and together with the Senior Bonds, the "Bonds "); and
WHEREAS, it is in the public interest and for the benefit of the City, the District,
I he pcesons responsible for the payment of special taxes and the owners of the Bonds that the
Disu id enters into this Agreement to provide for the issuance of the Bonds, the disbursement of
proceeds of the Bonds, the disposition of the special taxes securing the Bonds, and the
� I mistration and payment of the Bonds; and
WHEREAS, all things necessary to cause the Bonds, when authenticated by the
fiscal Agent and issued as provided in the Act, the Resolution and this Agreement, to be legal,
valid and binding and limited obligations in accordance with their terms, and all things necessary
to cause the creation, authorization, execution and delivery of this Agreement and the creation,
audrorizrrtion, execution and issuance of the Bonds, subject to the terns hereof, have in all
:shcois been duly authorized;
;apt r.�i
"Administrative Expenses" means any or all of the following: the fees and
expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the
City or the District in carrying out their duties hereunder (including, but not limited to, the
levying and collection of the Special Taxes, complying with the disclosure provisions of the Act,
the Continuing Disclosure Agreement and this Agreement, including those related to public
inquiries regarding the Special Tax and disclosures to Bond Owners and the Original Purchaser;
the costs of the City and the District or their designees related to an appeal of the Special Tax;
any costs of the City and the District (including fees and expenses of counsel) to defend the first
lien on and pledge of the Special Taxes to the payment of the Bonds or otherwise in respect of
litigation relating to the District or the Bonds or with respect to any other obligations of the
District; any amounts required to be rebated to the federal government in order for the District to
comply with Section 5.10(h), including the fees and expenses of its counsel; the costs of any
dissemination agent under the continuing disclosure agreements entered into by the City and the
District; an allocable share of the salaries of City staff directly related thereto and a proportionate
amount of City general administrative overhead related thereto, and all other costs and expenses
of the City, the District, or the Fiscal Agent incurred in connection with the discharge of their
respective duties hereunder, and in the case of the City, in any way related to the administration
of the District and all actual costs and expenses incurred in connection with the administration of
the Bonds and the Authority Bonds.
"Agreement" means this Fiscal Agent Agreement, as it may be amended or
supplemented from time to time by any Supplemental Agreement adopted pursuant to the
provisions hereof.
"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due
on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as
scheduled, and (ii) the principal amount of the Outstanding Bonds due in such Bond Year.
"Auditor" means the auditor /tax collector of the County of Riverside.
"Authority Bonds" means $22,295,000 Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds (CFD 88 -3 Refunding) 2008 Series A.
"Authority Indenture" means the Indenture of Trust, dated as of January 1, 2008,
between the Lake Elsinore Public Financing Authority and Union Bank of California, N.A., as
trustee, relating to the Authority Bonds.
"Authorized Officer" means the City Manager, Assistant City Manager, Director
of Administrative Services or City Clerk of the City, or any other officer or employee authorized
by the City Council of the City or by an Authorized Officer to undertake the action referenced in
this Agreement as required to be undertaken by an Authorized Officer.
"Bond Counsel" means (i) Fulbright & Jaworski L.L.P., or (ii) any attorney or
firm of attorneys acceptable to the District and nationally recognized for expertise in rendering
opinions as to the legality and tax - exempt status of securities issued by public entities.
"Bond Fund" means the fund by that name established by Section 4.2(a) hereof.
45936447.4
during such period which relate to principal which has been retired before the beginning of such
period.
"Delinquency Management Fund" means the fund by that name established by
Section 3.9(a) hereof.
"Delinquency Management Fund Requirement" means, as of any calculation date,
an amount equal to 15% of the Maximum Annual Debt Service.
"Dissemination Agent" means Union Bank of California, N.A. or such other
Dissemination Agent as may be appointed by the District pursuant to the Continuing Disclosure
Agreement.
"District" means the City of Lake Elsinore Community Facilities District No. 88-
3 ( West Lake Elsinore), formed pursuant to the Resolution of Formation.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is traded
on an established securities market (within the meaning of Section 1273 of the Code) and,
oihi .rllvise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length
ransactiou (as retbrenced above) if (i) the investment is a certificate of deposit that is acquired in
accordance with applicable regulations under the Code, (ii) the investment is an agreement with
l,pmihcAly negotiated withdrawal or reinvestment provisions and a specifically negotiated
inicrest rate (for example, a guaranteed investment contract, a forward supply contract or other
mvcst ment agreement) that is acquired in accordance with applicable regulations under the Code,
(iii) the investment is a United States Treasury Security- -State and Local Government Series that
is; ZiCkli iced in accordance with applicable regulations of the United States Bureau of Public Debt,
or (iv) any commingled investment fund in which the City and related parties do not own more
(han a ten percent (10 %) beneficial interest therein if the return paid by the fund is without
res,ard to the source of the investment.
"Federal Securities" means any of the following which are non - callable and
e�Ioclt eat the time of investment are legal investments under the laws of the State of California
ihr Funds held by the Fiscal Agent, as shall be certified by the District to the Fiscal Agent:
(1) Cash (insured at all times by the Federal Deposit Insurance Corporation),
(2) Obligations of or obligations guaranteed as to principal and interest by, the U.S.
(Al any agency or instrumentality thereof, when such obligations are backed by the full
hiith and credit of the U.S. including:
U.S. treasury obligations
All direct or fully guaranteed obligations
Farmers Home Administration
General Services Administration
Guaranteed Title X1 financing
Government National Mortgage Association (GNMA)
State and Local Government Series
"Participating Underwriter" means any of the original underwriter(s) of the
Authority Bonds required to comply with Rule 15c2- 12(b)(5) adopted by the Securities and
1'1xchange Commission under the Securities and Exchange Act of 1934, as the same may be
;,mended from time to time, in connection with the offering of the Authority Bonds.
"Permitted Investments" means any of the following which at the time of
investment are legal investments under the laws of the State for the moneys proposed to be
invested therein (the Fiscal Agent entitled to rely on written investment direction of the
Authority as a determination that such investment is a legal investment), but only to the extent
thal the same are acquired at Fair Market Value:
(a) Federal Securities;
(b) Obligations of any of the following federal agencies which obligations
represent the full faith and credit of the United States of America, including:
— Export- Import Bank
—Rural Economic Community Development Administration
—U.S. Maritime Administration
—Small Business Administration
—U.S. Department of Housing & Urban Development (Pl IAs)
— Federal Housing Administration
— Federal Financing Bank
(c) Direct obligations of any of the following federal agencies which
obligations are not fully guaranteed by the full faith and credit of the United States of
America:
— Senior debt obligations issued by the Federal National Mortgage
Association
(FNMA) or Federal Home Loan Mortgage Corporation (FHLMC).
— Obligations of the Resolution Funding Corporation (REFCORP)
— Senior debt obligations of the Federal Home Loan Banl< System
— Senior debt obligations of other Government Sponsored Agencies
approved by the Bond Insurer
(d) U.S. dollar denominated deposit accounts, federal funds and bankers'
acceptances with domestic commercial banks which have a rating on their short term
ccrl ificates of deposit on the date of purchase of "P -1" by Moody's and "A -1" or "A -1 +"
b} S&P and maturing not more than 360 calendar days after the date of purchase.
{Ratings on holding companies are not considered as the rating of the bank);
(e) Commercial paper which is rated at the time of purchase in the single
highest classification, "P -1" by Moody's and "A -1 +" by S &P and which matures not
more than 270 calendar days after the date of purchase;
I,. 1,,r:19., 7
(c) As to any investment not specified above: the value thereof established by
prior agreement among the District, the Fiscal Agent and the Bond Insurer.
"Person" means an individual, corporation, firm, association, partnership, trust, or
other legal entity or group of entities, including a governmental entity or any agency or political
subdivision thereof.
"Principal Account" means the account by that name established in the Bond
Fund pursuant to Section 4.2 hereof.
"Record Date" means the fifteenth day of the month next preceding the month of
the applicable Interest Payment Date.
"Redemption Fund" means the fund by that name established by Section 3.11
hereof.
"Redemption Revenues" means (a) prepayments of the Special Taxes, (b) any
amounts transferred pursuant to the Authority Indenture for the redemption of Bonds, (c)
amounts transferred from the Residual Fund for the redemption of Bonds and (d) any amounts
deposited for the Special Mandatory Redemption of Bonds pursuant to Section 3.1 1(b)(3).
"Registration Books" means the records maintained by the Fiscal Agent pursuant
to Section 2.8 for the registration and transfer of ownership of the Bonds.
"Reserve Account" means the account by that name established pursuant to the
Authority Indenture.
"Residual Fund" means the fund by that name established by Section 3.10(a)
hereof.
"Resolution" means Resolution No. 2007 -210 adopted by the Legislative Body on
December 11, 2007, as now in effect or as it may hereafter be amended from time to time.
"Resolution of Formation" means Resolution No. 89 -76 adopted by the
Legislative Body on March 13, 1990, as now in effect or as it may hereafter be amended from
time to time.
"RMA" means the Modified Rate and Method of Apportionment of the Special
Tax for the District.
"S &P" means Standard & Poor's, a division of The McGraw -Hill Companies,
Inc., and its successors.
"Senior
Bonds"
means
the
City of
Lake
Elsinore Community Facilities District
No. 88 -3 (West Lake Elsinore)
Special
Tax
Bonds,
2008
Series.
"Special Tax Fund" means the fund by that name established by Section 3.4(a)
hereof.
45936447.4 9
(b) Date of the Bonds. The Senior Bonds shall be dated the Closing Date and
the Subordinate Bonds shall be dated as of September 1, 2007.
(c) Maturities, Interest Rates. The Bonds shall mature on the dates and shall
bear interest at the rates as follows:
Senior Bonds
Maturity Date Principal
(September l) Amount
2008
$1,040,000
2009
1,350,000
2010
1,450,000
2011
1,545,000
2012
1,640,000
2013
1,745,000
2014
1,865,000
2015
1,980,000
2016
2,11Q000
2017
2,240,000
2018
2,385,000
2019
2,5359000
2020
2,7855000
�;r) I -, i
Coupon
4.00%
4.00
3.50
3.50
3.50
4.00
4.00
4.00
4.00
4.00
4.30
4.00
4.00
All Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by
the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds.
2.3 Redemption.
(a) Redemption Dates.
(i) Optional Redemption. The Senior Bonds are subject to redemption
prior to maturity at the option of the District from any source of funds, as a whole or in part, on
any date on or after September 1, 2015, on a pro rata basis, at the following redemption prices
(expressed as a percentage of the principal amount of the Senior Bonds or portions thereof to be
rcdi erred), together with accrued interest thereon to the date fixed for redemption as follows:
Redemption Dates Redemption Prices
September 1, 2015 through August 31, 102.0%
2016
September 1, 2016 through August 31, 101.0
2017
September 1, 2017 and thereafter 100.0
The Subordinate Bonds are subject to optional redemption prior to maturity with
thc. prior written approval of the Authority or its designee in whole, or in part by lot, on any date
:md at a redemption price to be agreed upon by the City and the Authority, from any available
<ourcc of funds.
(ii) Special Mandatory Redemption from Prepayment of Special Taxes.
khc Rcnior Bonds are subject to redemption prior to maturity, on any date on or after March 1,
)(Y' T", in whole or in part, on a pro rata basis, from prepayments of Special Taxes at the following
edemption prices (expressed as a percentage of the principal amount of the Senior Bonds or
portions thereof to be redeemed) together with accrued interest thereon to the date fixed for
cdcmphon as follows:
Redemption Date Redemption Price
March 1, 2008 through August 31,
2009
103.0%
September
1, 2009
through
August
31,
2010
102.5
September
1, 2010
through
August
31,
2011
102.0
September
1, 2011
through
August
31,
2012
101.5
September
1, 2012
through
August
31,
2013
101.0
September
1, 2013
through
August
31,
2014
100.5
September
1, 2014
and thereafter
100.0
The Subordinate Bonds shall be subject to optional redemption in part on any
hale c;t Payment Date from the proceeds of the prepayments of Special Taxes, at a redemption
1)ri0¢ � lual to the principal amount thereof plus accrued interest to the date of redemption;
kogcthc+ with a premium equal to three percent (3 %) of the principal amount of Subordinate
13
arid any
expenses incurred by the
Fiscal Agent in connection therewith shall be paid
by the
District.
Redemption.
If in the event only a portion of any
Bond is called
Upon the payment of the redemption price of Bonds being redeemed, each check
or other Iransfer of funds issued for such purpose shall, to the extent practicable, bear the Bond
number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such
check or other transfer.
Whenever provision is made in this Agreement for the redemption of less than all
of the Bonds or any given portion thereof, the Fiscal Agent shall select the Bonds to be
redeemed, from all Bonds or such given portion thereof not previously called for redemption,
among maturities as specified by the District in a written certificate delivered to the Fiscal Agent,
and by lot within a maturity in any manner which the District in its sole discretion shall deem
appropriate and fair. In providing such certificate, the District shall provide for the redemption
of !3onds such that the remaining Debt Service payable on the Bonds shall remain as level as
posihlc.
Upon surrender of Bonds redeemed in part only, the District shall execute and the
fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the District,
I uew Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate
�uincipal runount equal to the unredeemed portion of the Bond or Bonds.
(d) Effect of Redemption. From and after the date fixed for redemption, if
unds available for the payment of the principal of, and interest and any premium on, the Bonds
c gilled for redemption shall have been deposited in the Bond Fund, such Bonds so called shall
cease to be entitled to any benefit under this Agreement other than the right to receive payment
ol' the redemption price, and no interest shall accrue thereon on, or after the redemption date
s:Pk_Ti(icd in such notice.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section
?3 shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds.
2.4 Form of Bonds. The Bonds, the form of Fiscal Agent's certificate of
anihattication and the form of assignment to appear thereon, shall be substantially in the forms,
pectively, set forth in Exhibit A and Exhibit B, as applicable, attached hereto and by this
rcicrence incorporated herein, with necessary or appropriate variations, omissions and insertions,
as pcnnuied or required by this Agreement, the Resolution and the Act.
15 Fxecution of Bonds. The Bonds shall be executed on behalf of the District by
tlu minitial or facsimile signatures of the Mayor or the City Manager, and City Clerk, who are in
o!ht,c on the date of adoption of this Agreement or at any time thereafter. Unless otherwise
,i1(;.1,11 , 15
(e)
Partial
Redemption.
If in the event only a portion of any
Bond is called
ibr redemption,
then
upon surrender of such Bond the City will execute, on behalf
of the District,
:iod
the Fiscal Agent
will authenticate and deliver to the Bond Owner thereof, at
the expense of
ihr,
District, a new
Bond or Bonds of the same series and maturity date,
of authorized
denominations
in an
aggregate principal amount equal to the unredeemed portion
of the Bond to
1w redeemed.
2.4 Form of Bonds. The Bonds, the form of Fiscal Agent's certificate of
anihattication and the form of assignment to appear thereon, shall be substantially in the forms,
pectively, set forth in Exhibit A and Exhibit B, as applicable, attached hereto and by this
rcicrence incorporated herein, with necessary or appropriate variations, omissions and insertions,
as pcnnuied or required by this Agreement, the Resolution and the Act.
15 Fxecution of Bonds. The Bonds shall be executed on behalf of the District by
tlu minitial or facsimile signatures of the Mayor or the City Manager, and City Clerk, who are in
o!ht,c on the date of adoption of this Agreement or at any time thereafter. Unless otherwise
,i1(;.1,11 , 15
such reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on said books, the ownership of the Bonds as hereinbefore provided.
The District and the Fiscal Agent will treat the Owner of any Bond whose name
appcars on the Bond register as the absolute Owner of such Bond for any and all purposes, and
the District and the Fiscal Agent shall not be affected by any notice to the contrary. The District
and the Fiscal Agent may rely on the address of the Bond Owner as it appears in the Bond
re(,Jster for any and all purposes.
2.9 Temporary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
prinled, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the District, and may contain such reference to any of the provisions of this
Agreement as may be appropriate. Every temporary Bond shall be executed by the District upon
he same conditions and in substantially the same manner as the definitive Bonds. If the District
„ucs temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon
nc� temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds
at the Corporate trust Office of the Fiscal Agent or at such other location as the Fiscal Agent
will designate, and the Fiscal Agent shall authenticate and deliver in exchange for such
cmporuy Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits
un <Icr this Agreement as definitive Bonds authenticated and delivered hereunder.
2.141 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
❑uiidoled, the District at the expense of the Owner of said Bond, shall execute, and the Fiscal
Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in exchange
and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the
'bond so mutilated. Lvery mutilated Bond, so surrendered to the Fiscal Agent shall be canceled
by d rnd destroyed by the Fiscal Agent who shall deliver a certificate of destruction thereof to
the District. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or
then may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and
indemnity for the District and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the
Oistrici, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and
deliver a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond
so lost, destroyed or stolen. The District may require payment of a sum not exceeding the actual
cost of preparing each new Bond delivered under this Section and of the expenses which may be
incurred by the District and the Fiscal Agent for the preparation, execution, authentication and
delivery. Any Bond delivered under the provisions of this Section in lieu of any Bond alleged to
be lost, destroyed or stolen shall constitute an original additional contractual obligation on the
hart o(' the District whether or not the Bond so alleged to be lost, destroyed or stolen is at any
iinrc. enforceable by anyone, and shall be equally and proportionately entitled to the benefits of
ibis i,glcement with all other Bonds issued pursuant to this Agreement.
211 Limited Obligation. All obligations of the District under this Agreement and the
Bonds shall be special obligations of the District, payable solely from the Special Tax Revenues
cold uic funds pledged therefor hereunder. Neither the faith and credit nor the taxing power of
17
establish a fund know as the "Special Taxes Receipt Fund" (in which there shall be established
and created an account for each community facilities district within the City). The City shall
deposit Special Taxes when received in the account established for the District and immediately
thcrcafter transfer such amounts to the Fiscal Agent for deposit in the Special Taxes Fund.
Moneys in the Special Tax Fund shall be held by the Fiscal Agent for the benefit of the District
and the Owners of the Bonds, shall be disbursed as provided below and, pending any
disbursement, shall be subject to a lien in favor of the Owners of the Bonds.
(b)
Disbursements.
After
depositing an
amount
of Special Tax Revenues
budgeted for Administrative Expenses to
the
Administrative
Expense
Fund pursuant to a written
direction of the District, no later than ten
(10)
Business Days
prior to each Interest Payment Date
W, determined by the District, the Fiscal
Agent shall withdraw from
the Special Tax Fund and
uanstcr to the Bond Fund as follows:
(1) To the Interest Account of the Bond Fund, an amount such that the
Mietnce in the hnterest Account shall be equal to the installment of interest due on the Bonds on
srid Interest Payment Date and any installment of interest due on a previous Interest Payment
1)atc which remains unpaid.
(2) To the Principal Account of the Bond Fund, an amount such that the
hnlant::? in the Principal Account shall at least equal the principal payment (including any
nundator,y sinking payments) due on the Bonds on said Interest Payment Date and any
installment of principal due on a previous Interest Payment Date which remains unpaid.
Notwithstanding the foregoing, on any September 1, in the event amounts
deposited to the Principal Account are insufficient to pay in full the principal payments
Qnchidhip any mandatory sinking payments) then coining due on the Senior Bonds, an amount
Up to the amount of interest then coming due on the Subordinate Bonds shall be transferred from
he Mwi csi Account to the Principal Account to be used for payment of the principal (including
anv mandatory sinking payments) on the Senior Bonds.
Notwithstanding the foregoing, amounts shall be transferred to the Interest
Accouni or the Principal Account from the Special Tax Fund and immediately be paid to the
t Yl%nc rs of 1hC Bonds in respect of past due payments on the Bonds.
(c) Investment. Moneys in the Special Tax Fund shall be invested and
deposited in accordance with Section 6.1. Interest earnings and profits resulting from such
mcminent and deposit shall be retained in the Special Tax Fund to be used for the purposes
Ihcreol'.
(d) Disposition of Surplus. On September 2 of each year, commencing
Scptenihur 2, 2008, the Fiscal Agent shall transfer any amounts remaining in the Special Tax
Piind foliowing payment of each disbursement required pursuant to subsection (b) above, to the
Acsldual 1 and.
.•,,..., 1 19
are insufficient therefor. If the amounts in the Bond Fund are insufficient to pay the principal of
or interest on any Bonds when due, the Fiscal Agent shall withdraw from the Delinquency
Management Fund for deposit in the Bond Fund moneys necessary for such purposes.
In connection with any redemption of the Bonds, or a partial defeasance of the
Bonds in accordance with Section 10.3 hereof, amounts in the Delinquency Management Fund
may be applied to such redemption or partial defeasance so long as the amount on deposit in the
Delinquency Management Fund following such redemption or partial defeasance equals the
Delinquency Management Fund Requirement. To the extent that the Delinquency Management
Fund is at the Delinquency Management Fund Requirement as of the first day of the final Bond
Year for the Bonds, amounts in the Delinquency Management Fund may be applied to pay the
principal of and interest due on the Bonds in the final Bond Year for such issue. Moneys in the
Delinquency Management Fund in excess of the Delinquency Management Fund Requirement
not transferred in accordance with the preceding provisions of this paragraph shall be withdrawn
from the Delinquency Management Fund on September 2 of each year and transferred to the
Residual Fund.
(c) Investment. Moneys in the Delinquency Management Fund shall be
invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting
from said investment shall be retained in the Delinquency Management Fund to be used for the
purposes of such fund.
3.10 Residual Fund.
(a) Establishment of Residual Fund. There is hereby established as a separate
fund to be held by the Fiscal Agent, the "Residual Fund," to the credit of which a deposit shall be
made as required by Sections 3.4(d) and 3.9(b) hereof. Moneys in the Residual Fund shall be
held by the Fiscal Agent for the benefit of the District, and shall be disbursed as provided below.
The amounts in the Residual Fund are not pledged to the repayment of the Bonds.
(b) Disbursement. On September 2 of each year, commencing September 2,
2008, the Fiscal Agent shall transfer any amounts in the Residual Fund for the following
purposes in the following order of priority:
(1) to the Delinquency Management Fund an amount, if any, required to
restore the amount on deposit in the Delinquency Management Fund to the Delinquency
Management Fund Requirement;
(2) to the Administrative Expense Fund an amount determined by the District
to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative
Expense Fund are insufficient to pay Administrative Expenses; or
(3) to the Special Mandatory Redemption Account for redemption of the
Bonds unless the Fiscal Agent has received written direction from the District to expend such
remaining funds held in the Residual Fund for any lawful purposes of the District including, but
not limited to, paying costs of public capital improvements or reducing the Special Taxes which
are to be levied in the current or the succeeding Fiscal Year upon the properties which are
subject to the Special Tax.
45936447.4 21
of'. and interest and any premium on the Senior Bonds on a senior basis and the Subordinate
Bonds on a subordinate basis as provided herein and in the Act until all of the Bonds have been
paid and retired or until moneys or Federal Securities have been set aside irrevocably for that
purpose in accordance with Section 10.3. To the extent Special Tax Revenues and moneys
deposited into said funds (except as otherwise provided herein) are insufficient, the Senior Bonds
shall be paid prior to the Subordinate Bonds.
Amounts in the Administrative Expense Fund and the Residual Fund are not
pledged to the repayment of the Bonds.
4.2 Bond Fund.
(a) Establishment of Bond Fund. There is hereby established as a separate
fund to be held by the Fiscal Agent 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 required by Section 3.4(b) and Section 3.9, and any other amounts
required to he deposited therein by this Agreement or the Act. Moneys in the Bond Fund shall
he hcJd by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the
paiynient of the principal of (including any mandatory sinking payments) and interest on the
13on& as provided below, and, pending such disbursement, shall be subject to a lien in favor of
dw Owners of the Bonds.
(b) Disbursements. On each Interest Payment Date, the Fiscal Agent shall
m1hdr ov from the Principal Account and the Interest Account and pay to the Owners of the
Bonds the principal of (including any mandatory sinking payments) and interest on the Bonds,
respectively; provided that available amounts in the Principal Account and the Interest Account
,hall lust be used to pay any past due installments of principal of (including any mandatory
M111 611h payments) and interest on the Bonds, respectively. Notwithstanding the foregoing,
Amounts hansferred to the Principal Account or the Interest Account from the Special Tax Fund
:hall immediately be paid to the Owners of the Bonds in respect of past due payments on the
Bonds.
Any installment of principal (including any mandatory sinking payments) or
mwivst ou 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 any time the Fiscal Agent fails to pay principal and interest due on any
scheduled payment date for the Bonds, the Fiscal Agent shall notify the District and the Director
01 Administrative Services in writing of such failure, and the Director of Administrative Services
Ii;dl nr�tily the GDIAC of such failure within 10 days of the failure to make such payment, as
rcyuircd by Section 53359(c)(1) of the Act.
(c) Investment. Moneys in the Bond Fund shall be invested and deposited in
accordance with Section 6.1. Interest earnings and profits resulting from the investment and
deposit of amounts in the Bond Fund shall be retained in the Bond Fund.
23
principal amount of the Bonds then Outstanding, or their representatives duly authorized in
writing.
5.6 Protection of Security and Rights of Owners. The District will preserve and
protect the security of the Bonds and the rights of the Owners, and will warrant and defend their
rights against all claims and demands of all persons. From and after the delivery of any of the
Bonds by the District, the Bonds shall be incontestable by the District.
5.7 Reserved.
5.8 Collection of Special Tax Revenues. The District shall comply with all
requirements of the Act so as to assure the timely collection of Special Tax Revenues, including
Without limitation, the enforcement of delinquent Special Taxes.
The Director of Administrative Services shall effect the levy of the Special Taxes
such fiscal Year on the parcels within the District in accordance with the Ordinance, such that
Uic ciunputation of the levy is complete before the final date on which the Auditor will accept the
Iransn-lission of' the Special Tax amounts for the parcels within the District for inclusion on the
ucxt secured tax roll. Upon the completion of the computation of the amounts of the levy, the
0ircctot of Administrative Services shall prepare or cause to be prepared, and shall transmit to
tic Auditor. Such data as the Auditor requires to include the levy of the Special Taxes on the next
ecurcd tax roll. The Special "Taxes so levied shall be payable and be collected in the same
manner and at the same time and in the same installments as the general taxes on real property
ar�i partible, and have the same priority, become delinquent at the same time and in the same
liroportionate amounts and bear the same proportionate penalties and interest after delinquency
as do the general taxes on real property, unless otherwise provided by the District.
In the event that the Director of Administrative Services determines to levy all or
n nortiort of the Special Taxes by means of direct billing of the property owners of the parcels
tia,itltin thc. District, the Director of Administrative Services shall, not less than forty -five (45)
days prior to each Interest Payment Date, send bills to the owners of such real property located
thin the District subject to the levy of the Special Taxes for Special Taxes in an aggregate
amount necessary to meet the financial obligations of the District due on the next Interest
�o mcni Date, said bills to specify that the amounts so levied shall be due and payable not less
than thirty (30) days prior to such Interest Payment Date and shall be delinquent if not paid when
due.
In any event, the Director of Administrative Services shall fix and levy the
anu,imt of Special Taxes within the District required (i) for the payment of principal of and
ifterest on any outstanding Bonds of the District becoming due and payable during the ensuing
year iaftiug into consideration anticipated delinquencies), and (ii) to pay the Administrative
Irxpens_ during such year, all in accordance with the RMA and the Ordinance. The Special
l axes so levied shall not exceed the authorized amounts as provided in the proceedings pursuant
to the Resolution of Formation.
The Director of Administrative Services is hereby authorized to employ
.on:,ultanis to assist in computing the levy of the Special Taxes hereunder and any reconciliation
a�,t
It /A 25
wriucn opinion of Bond Counsel to the effect that failure to comply with such covenant will not
adversely affect such exclusion of the interest on any Bond from the gross income of the owner
thereof for federal income tax purposes, the City shall comply with each of the specific
covenants in this Section.
(c) Private Use and Private Payments. Except as would not cause any Bond to
become a "private activity bond" within the meaning of section 141 of the Code and the Tax
Regulations, the District shall take all actions necessary to assure that the District at all times
prior to the final cancellation of the last of the Bonds to be retired:
(i) exclusively owns, operates and possesses all property the
acquisition, construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds and not use or permit the use of such Gross
Proceeds (including through any contractual arrangement with terms different than those
applicahle to the general public) or any property acquired, constructed or improved with such
Gross Proceeds in any activity carried on by any person or entity (including the United States or
ain%/ zwency, department and instrumentality thereof) other than a state or local government,
unless such use is solely as a member of the general public; and
(ii) does not directly or indirectly impose or accept any charge or other
pad mcol by any person or entity (other than a state or local government) who is treated as using
any i rocs Proceeds of the Bonds or any property the acquisition, construction or improvement of
which is to be financed or refinanced directly or indirectly with such Gross Proceeds.
(d) No Private Loan. Except as would not cause any Bond to become a
"private activity bond" within the meaning of section 141 of the Code and the Tax Regulations
and rulings thereunder, the District shall not use or permit the use of Gross Proceeds of the
onds to make or finance loans to any person or entity other than a state or local government.
i�or purposes of the foregoing covenant, such Goss Proceeds are considered to be "loaned" to a
person or entity if: (i) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction that creates a debt for federal income tax
Iwrpos:r (ii) capacity in or service from such property is committed to such person or entity
u'cr a IAe-or --pay, output or similar contract or arrangement; or (iii) indirect benefits of such
firor;_s Proceeds, or burdens and benefits of ownership of any property acquired, constructed or
improved with such Gross Proceeds, are otherwise transferred in a transaction that is the
cconom is equivalent of a loan.
(e) Not to Invest at Higher Yield. Except as would not cause the Bonds to
,ecoioe "arbitrage bonds" within the meaning of section 148 of the Code and the Tax
ic,uiaiions and rulings thereunder, the District shall not (and shall not permit any person to), at
vay timc prior to the final cancellation of the last Bond to be retired, directly or indirectly invest
Proceeds in any Investment, if as a result of such investment the Yield of any Investment
ncgriired with Gross Proceeds, whether then held or previously disposed of, would materially
yrecd the Yield of the Bonds within the meaning of said section 148.
(t) Not Federally Guaranteed. Except to the extent.perrnitted by section
0(b) of the Code and the Tax Regulations and rulings thereunder, the District shall not take or
1,9x 1 r,; 27
larger loss than would have resulted if the transaction had been at arm's length and had the
Yields on the Bonds not been relevant to either party.
0) Bonds Not Hedge Bonds.
0) The District represents that none of the Bonds is or will become a
"hedge bond" within the meaning of section 149(g) of the Code.
(ii) Without limitation of paragraph (i) above: the District believes
(upon appropriate investigation) (A) that on the date of issuance of the Bonds the District
reasonably expected that at least 85% of the spendable proceeds of the Bonds will be expended
e, ithin the three -year period commencing on such date of issuance, and (B) no more than 50% of
the proceeds of the Bonds will be invested in Nonpurpose Investments having a substantially
guaranteed yield for a period of four years or more.
(k) Elections. The District hereby directs and authorizes any Authorized
Cffl iccr to make elections permitted or required pursuant to the provisions of the Code or the Tax
12e1;ulations, as such Representative (after consultation with Bond Counsel) deems necessary or
appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or
odtcr appropriate certificate, form or document.
(1) Closing Certificate. The District agrees to execute and deliver in
connection with the issuance of the Bonds a Tax and Nonarbitrage Certificate, or similar
dkur;mcnt containing additional representations and covenants pertaining to the exclusion of
i:iwrest on the Bonds from the gross income of the owners thereof for federal income tax
purposes, which representations and covenants are incorporated as though expressly set forth
herein.
5.11 Covenant to Foreclose. The District will review the public records of the County
of k ivccside, California, in connection with the collection of the Special Tax not later than July l
of each year to determine the amount of Special Tax collected in the prior Fiscal Year; and with
respect to individual delinquencies, if the District determines that any single property owner
SUhic( t to the Special Tax is delinquent in the payment of Special Taxes in the aggregate of
$2.500 or more or that the delinquent Special Taxes represent more than 5% of the aggregate
`)pccial "faxes within the District, then the District will send or cause to be sent a notice of
delinquency (and a demand for immediate payment thereof) to the property owner within 45
den, of such determination, and (if the delinquency remains uncured) the District will cause
judicial foreclosure proceedings to be filed in the Superior Court within ninety (90) days of such
dctcrm ination against all properties for which the Special Taxes remain delinquent.
The City Attorney is hereby authorized to employ counsel to conduct any such
foreclosure proceedings. The fees and expenses of any such counsel and costs and expenses of
the City Attorney (including a charge for City or District staff time) in conducting foreclosure
p;occedings shall be an Administrative Expense hereunder.
Notwithstanding any provision of the Act or other law of the State to the contrary,
HI c;onncetion with any foreclosure related to delinquent Special Taxes:
() t ;/ ,i 29
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE DISTRICT
6.1 Deposit and Investment of Moneys in Funds. Moneys in any fund or account
created or established by this Agreement and held by the Fiscal Agent shall be invested by the
Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with
the Fiscal Agent at least two (2) Business Days, in advance of the making of such investments.
hr the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in
Permitted Investments described in clause (f) of the definition thereof to the extent practicable
which by their terms mature prior to the date on which such moneys are required to be paid out
hereunder, or are held uninvested. The Director of Administrative Services shall make note of
any investment of funds hereunder in excess of the yield on the Bonds, so that appropriate
actions can be taken to assure compliance with Section 6.2.
Moneys in any fund or account created or established by this Agreement and held
by the Director of Administrative Services shall be invested by the Director of Administrative
Services in Permitted Investments, which in any event by their terms mature prior to the date on
which such moneys are required to be paid out hereunder. Obligations purchased as an
investment of moneys in any fund shall be deemed to be part of such fund or account, subject,
however, to the requirements of this Agreement for transfer of interest earnings and profits
resulting from investment of amounts in funds and accounts. Whenever in this Agreement any
moneys are required to be transferred by the District to the Fiscal Agent, such transfer may be
accomplished by transferring a like amount of Permitted Investments.
The Fiscal Agent or an affiliate or the Director of Administrative Services may
act as principal or agent in the acquisition or disposition of any investment and shall be entitled
to its customary fee therefor. Neither the Fiscal Agent nor the Director of Administrative
Services shall incur any liability for losses arising from any investments made pursuant to this
Section. For purposes of determining the amount on deposit in any fund or account held
hereunder, all Permitted Investments or investments credited to such fund or account shall be
valued at the cost thereof (excluding accrued interest and brokerage commissions, if any).
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund, or account created by or pursuant to this Agreement, or otherwise
containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be
acquired, disposed of, and valued (as of the date that valuation is required by this Agreement or
the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are
subject to a yield restriction under the applicable provisions of the Code shall be valued at their
present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be
liable for verification of the application of such sections of the Code.
Investments in any and all funds and accounts may be commingled in a separate
fund or funds for purposes of making, holding and disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular funds or accounts of
amounts received or held by the Fiscal Agent or the Director of Administrative Services
hereunder, provided that the Fiscal Agent or the Director of Administrative Services, as
45936447.4 31
The District shall not be bound to recognize any person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if required, and his title thereto
srriisfactorily established, if disputed.
Whenever in the administration of its duties under this Agreement the District
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of willful misconduct on the part of the District, be
deemed to be conclusively proved and established by a certificate of the Fiscal Agent, and such
ccrtilicatc shall be full warranty to the District for any action taken or suffered under the
provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its
discretion the District may, in lieu thereof, accept other evidence of such matter or may require
such additional evidence as to it may seem reasonable.
6A Employment of Agents by District or the City. In order to perform their
('Vc.dive duties and obligations hereunder, the City, the District and /or the Director of
ldminisurative Services may employ such persons or entities as they deem necessary or
,rdvisable. The City, the District and /or the Director of Administrative Services shall not be
linhlc f6r any of the acts or omissions of such persons or entities employed by them in good faith
hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the
opinion,, calculations, determinations and directions of such persons or entities.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
7.1 Events of Default. The following events shall be Events of Default:
(a) Failure to pay any installment of principal of any Bonds when and as the
;ainc ,hal I become due and payable whether at maturity as therein expressed, by proceedings for
edemption or otherwise.
(b) Failure to pay any installment of interest on any Bonds when and as the
smnc Al,dl become due and payable.
(c) Failure by the District to observe and perform any of the other covenants,
ap r�:ements or conditions on its part in this Agreement or in the Bonds contained, if such failure
sliali have continued for a period of 60 days after written notice thereof, specifying such failure
and requiring the same to be remedied, shall have been given to the District by the Fiscal Agent
or the Owners of not less than 25% in aggregate principal amount of the Bonds at the time
t)l.,tstauding; providers however, if in the reasonable opinion of the District the failure stated in
die notice can be corrected, but not within such 60 day period, such failure shall not constitute an
invent of Default if corrective action is instituted by the District within such 60 day period and
the Oisirict shall thereafter diligently and in good faith cure such failure in a reasonable period of
161w.
(d)
Commencement
by the District of a
voluntary case under Title I I of the
LJ iited `hates Code
or any substitute or
successor statute.
c:�,1(,i!! 1 33
7.4 Absolute Obligation of the District. Nothing in Section 7.7 or in any other
provision of this Agreement or in the Bonds contained shall affect or impair the obligation of the
I )istrict, which is absolute and unconditional, to pay the principal of and interest on the Bonds to
the respective Owners of the Bonds at their respective dates of maturity, or upon call for
redemption, as herein provided, but only out of the Special Taxes and other moneys herein
pledged therefor and received by the District or the Fiscal Agent, or affect or impair, the right of
such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the
contract embodied in the Bonds.
7.5 Termination of Proceedings. In case any proceedings taken by any one or more
Bond Owners on account of any Event of Default shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Bond Owners, then in every such case
the District, and the Bond Owners, subject to any determination in such proceedings, shall be
restored to their former positions and rights hereunder, severally and respectively, and all rights,
rcmedics, powers and duties of the City, and the Bond Owners shall continue as though no such
proceedings had been taken.
7.6 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the
Fiscal Agent or to the Owners of the Bonds is intended to be exclusive of any other remedy or
cmedics, and each and every such remedy, to the extent permitted by law, shall be cumulative
o)nd in addition to any other remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.
707 No Waiver of Default. No delay or omission of any Owner of the Bonds to
o;;crcisc any right or power arising upon the occurrence of any default shall impair any such right
or power or shall be construed to be a waiver of any such default or acquiescence therein; and
c�er'V power and remedy given by this Agreement to the Owners of the Bonds may be exercised
from time to time and as often as may be deemed expedient.
7.8 Actions by Fiscal Agent as Attorney -in -Fact. Any suit, action or proceeding
sk: hich any Owner shall have the right to bring to enforce any right or remedy hereunder may be
nrxwht by the Fiscal Agent for the equal benefit and protection of all Owners, and the Fiscal
:A,: cni is hereby appointed (and the successive respective Owners of the Bonds, by taking and
h( din:; the same, shall be conclusively deemed so to have appointed it) the true and lawful
�aUornay -in -fact of the Owners for the purpose of bringing any such suit, action or proceeding
;Wd to do and perform any and all acts and things for and on behalf of the Owners as a class or
clrr�;:,es. as may be necessary or advisable in the opinion of the Fiscal Agent as such attorney -in-
fact.
ARTICLE VIII
THE FISCAL AGENT
8.1 Appointment of Fiscal Agent. Union Bank of California, N.A., is hereby
�q)pointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform
such duties, and only such duties, as are specifically set forth in this Agreement, and no implied
c�,cnaiw , or obligations shall be read into this Agreement against the Fiscal Agent.
orr7s1 35
liable in connection with the performance of its duties hereunder, except for its own negligence
ur willful default. The Fiscal Agent assumes no responsibility or liability for any information,
statement or recital in any offering memorandum or other disclosure material prepared or
distributed with respect to the issuance of the Bonds.
In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Fiscal Agent and conforming to the procedural requirements of this
Agreement; but in the case of any such certificates or opinions by which any provision hereof are
Specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to
cramine the same to determine whether or not they conform to the procedural requirements of
ihi5 !agreement. Except as provided above in this paragraph, Fiscal Agent shall be protected and
shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith,
reasonably and in accordance with the terms of this Agreement, upon any resolution, order,
noth:c.. request, consent or waiver, certificate, statement, affidavit, or other paper or document
which it shall in good faith reasonably believe to be genuine and to have been adopted or signed
bti the proper person or to have been prepared and furnished pursuant to any provision of this
Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such instrument.
The Fiscal Agent shall not be bound to ascertain or inquire as to the performance
or oh.vervance of any of the terms, conditions, covenants or agreements of the City or the District
herein or of any of the documents executed by the City or the District in connection with the
Bond,. or es to the existence of a default or event of default thereunder.
The Fiscal Agent shall not be liable for any error of judgment made in good faith
by a responsible officer unless it shall be proved that the Fiscal Agent was negligent in
artatininp, the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties
lu,rcundcr, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for
,Ich, ving that repayment of such funds or adequate indemnity against such risk or liability is not
arson 1hly assured to it.
The Fiscal Agent shall be under no obligation to exercise any of the rights or
wxkc is vested in it by this Agreement at the request or direction of any of the Owners pursuant
to Ibis Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security
or M(Ic unity against the costs, expenses and liabilities which might be incurred by it in
cNll,Ph mce with such request or direction.
The Fiscal Agent may become the owner of the Bonds with the same rights it
vrould have if-it were not the Fiscal Agent.
All indemnifications and releases from liability granted to the Fiscal Agent
hctcuoder Shall extend to the directors, officers and employees of the Fiscal Agent.
a =e,n; 37
written consent without a meeting, of the Owners of at least sixty percent (60 %) in aggregate
principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in
Section 9.4. No such modification or amendment shall (i) extend the maturity of any Bond or
reduce the interest rate thereon, or otherwise alter or impair the obligation of the District to pay
the principal of, and the interest and any premium on, any Bond, without the express consent of
the. Owner of such Bond, or (ii) permit the creation by the District of any pledge or lien upon the
Special "faxes superior to or on a parity with the pledge and lien created for the benefit of the
Bonds (except as otherwise permitted by the Act, the laws of the State of California or this
ApIlrccmcnt), or (iii) reduce the percentage of Bonds required for the amendment hereof. Any
such amendment may not modify any of the rights or obligations of the Fiscal Agent without its
written consent.
This Agreement and the rights and obligations of the District and of the Owners
may also be modified or amended at any time by a Supplemental Agreement, without the consent
of any ( )"iners, only to the extent permitted by law and only for anyone or more of the following
pill poses:
(a)
to add to
the covenants and agreements of the
District in this Agreement
contained, other covenants
and
agreements thereafter to be observed,
or to limit or surrender any
rittht m power herein
reserved to or conferred upon the District;
this Agreement, as the
(b)
to make modifications
not adversely
affecting
any Outstanding Bonds of
the District in any
material respect;
any defective provision
collthined in this
Agreement, or in regard to questions arising under
(c)
to snake
such provisions for the purpose of
curing any ambiguity,
inconsistency or
omission of
curing, correcting or supplementing
any defective provision
collthined in this
Agreement, or in regard to questions arising under
this Agreement, as the
su ic( and the Fiscal Agent may deem necessary or desirable and not inconsistent with this
;�recmcni, and which shall not adversely affect the rights of the Owners of the Bonds;
(d) to make such additions, deletions or modifications as may be necessary or
ic�siraille to assurre the exclusion from gross income for federal income tax purposes of interest
un the Bonds.
9.2 Owners' Meetings. The District may at any time call a meeting of the Owners.
ha such event the District is authorized to fix the time and place of said meeting and to provide
for dic giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said
Illecting.
9.3 Procedure for Amendment with Written Consent of Owners. The District and
the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of
rile Bonds or of this Agreement or any Supplemental Agreement, to the extent that such
amcn(Iment is permitted by Section 9.1, to take effect when and as provided in this Section. A
copy of such Supplemental Agreement, together with a request to Owners for their consent
thereto, stlall be mailed by first class mail by the Fiscal Agent to each Owner of Bonds
h�.tnta�li!inl;, but failure to mail copies of such Supplemental Agreement and request shall not
nficct the validity of the Supplemental Agreement when assented to as in this Section provided.
,16(:,14! 1 39
I rust Office of the Fiscal Agent or at such other office as the District may select and designate
I'm r that purpose, a suitable notation shall be made on such Bond. The District may determine
that new Bonds, so modified as in the opinion of the District is necessary to conform to such
Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the
Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Corporate
'trust Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon
surrender of such Bonds.
9.7 Amendatory Endorsement of Bonds. The provisions of this Article 1X shall not
prevent any Owner from accepting any amendment as to the particular Bonds held by him,
provided that due notation thereof is made on such Bonds.
9.8 Opinion of Bond Counsel. In connection with any Supplemental Agreement, the
Fiscal Agent shall be entitled to receive an opinion of Bond Counsel that any such Supplemental
\grecinent is authorized or permitted by this Agreement and the Fiscal Agent may conclusively
ly upon such opinion.
ARTICLE X
MISCELLANEOUS
1€1.1 Benefits of Agreement Limited to Parties. Nothing in this Agreement,
c>;pressed or implied, is intended to give to any person other than the District, City, the Fiscal
\;; ent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any
cuve.nants, stipulations, promises or agreements in this Agreement contained by and on behalf of
h�. Di.s el shall be for the sole and exclusive benefit ofthe Owners and the Fiscal Agent.
1Q.2 Successor is Deemed Included in All References to Predecessor. Whenever in
tili5 /orieement or any Supplemental Agreement either the District or the Fiscal Agent is named
or re R ]real to, such reference shall be deemed to include the successors or assigns thereof, and all
the covenants and agreements in this Agreement contained by or on behalf of the District or the
fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof
%,deli cr so expressed or not.
103 Discharge of Agreement. The District shall have the option to pay and discharge
the entire indebtedness on all or any portion of the Bonds Outstanding in anyone or more of the
following ways:
(a) by well and truly paying or causing to be paid the principal of, and interest
and 1111v premium on, such Bonds Outstanding, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at or before maturity, money
vdiich.. together with the amounts then on deposit in the funds and accounts provided for in
Sct, lion 4.2 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and
e4cmption premiums; or
(c) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal
7ccurii5cs aid /or investments described in clause (i) of the definition of Permitted Investments in
ucf� anjount as the District shall determine as confirmed by Bond Counsel or an independent
41
10.5 Waiver of Personal Liability. No member, officer, agent or employee of the
l?isti ict or the City shall be individually or personally liable for the payment of the principal of,
or intrrest or any premium on, the Bonds; but nothing herein contained shall relieve any such
member, officer, agent or employee from the performance of any official duty provided by law.
10.6 Notices to and Demands on District and Fiscal Agent. Any notice or demand
%Vhich by any provision of this Agreement is required or permitted to be given or served by the
Fiscal Agent to or on the District may be given or served by being deposited postage prepaid in a
post office letter box addressed (until another address is filed by the District with the Fiscal
Agent) as follows:
City of Lake Elsinore Community Facilities
District No. 88 -3 (West Lake Elsinore)
c/o City of Lake Elsinore
130 South Main Street
Lake Elsinore, California 92530
Attn: City Manager
Any notice or demand which by any provision of this Agreement is required or
tuCrrnilicd to be given or served by the District to or on the Fiscal Agent may be given or served
h% hemp deposited postage prepaid in a post office letter box addressed (until another address is
crl by the Fiscal Agent with the District) as follows:
Union Bank of California, N.A.
120 South San Pedro Street, Suite 400
Los Angeles, California 90012
Attention: Corporate Trust Services
10.7 Partial Invalidity. if any Section, paragraph, sentence, clause or phrase of this
Agi cenumi. shall for any reason be held illegal or unenforceable, such holding shall not affect the
validity of the remaining portions of this Agreement. The District hereby declares that it would
adopted this Agreement and each and every other Section, paragraph, sentence, clause or
he] rCOf and authorized the issue of the Bonds pursuant thereto irrespective of the fact that
rniy:n k, or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement maybe
Wid II legal, invalid or unenforceable.
10A Unclaimed Moneys. Anything contained herein to the contrary notwithstanding,
rmy moneys held by the Fiscal Agent for the payment and discharge of the principal of, and the
mereA and any premium on, the Bonds which remains unclaimed for two (2) years after the date
uh(,n the payments of such principal, interest and premium have become payable, if such money
Wlc"' held Ley the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the District as its
A)soluic property free from any trust, and the Fiscal Agent shall thereupon be released and
discharged with respect thereto and the Bond Owners shall look only to the District for the
payment of the principal of, and interest and any premium on, such Bonds.
i 43
IN WITNESS WHEREOF, the District has caused this Agreement to be executed
in its name and the Fiscal Agent has caused this Agreement to be executed in its name, all as of
lanuary 1, 2008.
l I ISST:
City Clerk
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 88 -3 (WEST LAKE
ELSINORE)
By:
Mayor of the City of Lake Elsinore, acting in
capacity as the legislative body of City of Lake
Elsinore Community Facilities District No. 88 -3
(West Lake Elsinore)
UNION BANK OF CALIFORNIA, N.A.,
as Fiscal Agent
By:
(,,� a 45
Authorized Officer
This Bond is one of a duly authorized issue of bonds in the aggregate principal
amount of $24,670,000 approved by the qualified electors of the District, pursuant to the Mello -
Poos Community Facilities Act of 1982, as amended, Sections 53311 et seq., of the California
Government Code (the "Mello -Roos Act ") for the purpose of refinancing the acquisition of
certain facilities, and is one of the Bonds designated "City of Lake Elsinore Community
Facilities District No. 88 -3 (West Lake Elsinore) Special Tax Bonds, 2008 Series" (the
'Bonds "). The creation of the Bonds and the terms and conditions thereof are provided for by
the Fiscal Agent Agreement, dated as of January 1, 2008 (the "Agreement'), by and between the
District: and the Fiscal Agent and this reference incorporates the Agreement herein, and by
acceptance hereof the owner of this Bond assents to said terms and conditions.
Pursuant to the Mello -Roos Act and the Agreement, the principal of and interest
on this Bond are payable solely fi•om 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
Apiccmcnt.
Any tax for the payment hereof shall be limited to the Special Tax, except to the
extent that provision for payment has been made by the City, as may be permitted by law. The
i,on& do not constitute obligations of the City of Lake Elsinore for which said City is obligated
to Icvy or pledge, or has levied or pledged, general or special taxation other than described
�crcinohovc. The District has covenanted for the benefit of the owners of the Bonds that it will
ureic;, and cause to be commenced as provided in the Agreement, and thereafter diligently
prosecute to ,judgment, an action in the superior court to foreclose, under the circumstances set
ihrth in the Agreement, the lien of any Special Tax or installment thereof not paid when due.
The Bonds are subject to redemption prior to maturity at the option of the District
from .mY dource of funds, as a whole or in part, on any date on or after September 1, 2008, on a
IM, rrta basis at the following redemption prices (expressed as a percentage of the principal
tunounl of the Bonds or portions thereof to be redeemed), together with accrued interest thereon
I
o the date fixed for redemption as follows:
Redemption Dates Redemption Prices
September 1, 2015 through August 31, 102.0%
2016
September 1, 2016 through August 31, 101.0
2017
September 1, 2017 and thereafter 100.0
;wi( Ii -t A -2
to a Bond after such Bond has been selected for redemption, or (iii) between the last day of the
month next preceding any Interest Payment Date and such Interest Payment Date.
Bonds may be exchanged at the Corporate Trust Office of the Fiscal Agent for a
like aggregate principal amount of Bonds of authorized denominations and of the same maturity.
The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection
vwith any such exchange shall be paid by the District. The Fiscal Agent shall collect from the
Owner requesting such exchange any tax or other governmental charge required to be paid with
respect to such exchange.
No exchanges of Bonds shall be required to be made (i) fifteen (I5) days prior to
the date established by the Fiscal Agent 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 day of the
month next preceding any Interest Payment Date and such Interest Payment Date.
The Agreement and the rights and obligations of the District thereunder may be
modihcd or amended as set forth therein.
This Bond shall not become valid or obligatory for any purpose until the
ccoificaw of authentication and registration hereon endorsed shall have been dated and signed by
�Le I iti,;cal Agent.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
�.00ditirms and things required by 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
a; roquired by law, and that the amount of this Bond does not exceed any debt limit prescribed
by the I:M'S or Constitution of the State of California.
11141r. : i A -4
FISCAL AGENT'S CERTIFICATE OF A UTHENTICA 77ON
This is one of the Bonds described in the Resolution and the Agreement which
has been authenticated on January 17, 2008.
UNION BANK OF CALIFORNIA, N.A., as Fiscal
Agent
BY:
Authorized Officer
A -6
No.
EXHIBIT B
FORM OF SUBORDINATE BOND
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 88 -3 (WEST LAKE ELSINORE)
SUBORDINATE SPECIAL TAX BOND, 2008 SERIES
INTEREST RATE MATURITY DATE DATED DATE
12.00% September 1, September 1, 2007
RI'GISfERED OWNER: UNION BANK OF CALIFORNIA, N.A., AS TRUSTEE FOR
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY
i'kiN(`IPAL AMOUNT:
DOLLARS
The City of Lake Elsinore Community Facilities District No. 88 -3 (West Lake
Hshwlc) (the "District "), for value received, hereby promises to pay solely from the Special Tax
(as 1wicinalter defined) to be collected within the District or amounts in the funds and accounts
held under the Agreement (as hereinafter defined), to the registered owner named above, or
kl �iswrcd assigns, on the maturity date set forth above, unless redeemed prior thereto as
aerciw01cr provided, the principal amount set forth above, and to pay interest on such principal
antwunt from the Interest Payment Date (as hereinafter defined) next preceding the date of
authentication thereof, unless (a) it is authenticated after a Record Date (as hereinafter defined)
and on or before an Interest Payment Date and after the close of business on the preceding
Record Date, in which event interest with respect thereto will be payable from such Interest
11a' nxrnt Date: (b) it is authenticated on or before February 15, 2008, in which event interest with
respect thereto will be payable from its Dated Date; or (c) interest with respect to any
Ow tanding Bond is in default, in which event interest with respect thereto will be payable from
he datc to which interest has been paid in full, payable on each Interest Payment Date, payable
semiannually on March 1 and September 1 in each year, commencing March 1, 2008 (each an
`" Interest Payment Date "), at the interest rate set forth above, until the principal amount hereof is
ixc'id w Made available for payment. The principal of this Bond is payable to the registered owner
hereof in lawful money of the United States of America upon presentation and surrender of this
kond at the Corporate Trust Office of Union Bank of California, N.A. (the "Fiscal Agent").
f ntcrest on this Bond shall be paid by check of the Fiscal Agent mailed on each Interest Payment
D) Jle to the registered owner hereof as of the close of business on the fifteenth day of the month
prccMing (lie month in which the interest payment date occurs (the "Record Date ") at such
c Ji Icicd owner's address as it appears on the registration books maintained by the Fiscal
'v'ow,
1 i, Ar B -1
Notice of redemption with respect to the Bonds to be redeemed shall be given to
the registered owners thereof, in the manner, to the extent and subject to the provisions of the
Agreement.
This Bond shall be registered in the name of the owner hereof, as to both principal
rind interest.
Each registration and transfer of registration of this Bond shall be entered by the
Fiscal Agent in books kept by it for this propose and authenticated by its manual signature upon
the ccrtilicate of authentication endorsed hereon.
Except as provided in the Agreement, any Bond may, in accordance with its
ams; be transferred, upon the books required to be kept pursuant to the provisions of the
Agreement by the person in whose name it is registered, in person or by his duly authorized
utorncy. upon surrender of such Bond for cancellation, accompanied by delivery of a duly
cn IrlSlrmnent of transfer in a form approved by the Fiscal Agent. The cost for any services
cmicrcd or any expenses incurred by the Fiscal Agent in connection with any such transfer shall
he paid by the District. The Fiscal Agent shall collect from the Owner requesting such transfer
:Pi tax or other governmental charge required to be paid with respect to such transfer.
Whenever any Bond or Bonds shall be surrendered for transfer, the District shall
cxrcuic and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like
aeregatc principal amount.
No transfers of Bonds shall be required to be made (i) fifteen (15) days prior to
he date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect
o a (x,nd after such Bond has been selected for redemption, or (iii) between the last day of the
hest preceding any Interest Payment Date and such Interest Payment Date.
Bonds may be exchanged at the Corporate Trust Office of the Fiscal Agent for a
like_ a,( *gregate principal amount of Bonds of authorized denominations and of the same maturity.
;w cosh loi any services rendered or any expenses incurred by the Fiscal Agent in connection
idl ,rny st( ,;h exchange shall be paid by the District. The Fiscal Agent shall collect from the
"WI)Ci requesting such exchange any tax or other governmental charge required to be paid with
cspect to such exchange.
No exchanges of Bonds shall be required to be made (i) fifteen (15) days prior to
dw datc established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect
to a liond after such Bond has been selected for redemption, or (iii) between the last day of the
01011J! preceding any Interest Payment Date and such Interest Payment Date.
The Agreement and the rights and obligations of the District thereunder may be
rriodilicd or amended as set forth therein.
This Bond shall not become valid or obligatory for any purpose until the
ctrl Gc<tte of authentication and registration hereon endorsed shall have been dated and signed by
the I iscai Agent.
B -3
IN WITNESS WHEREOF, the City of Lake Elsinore on behalf of City of Lake
I'Isinore Community Facilities District No. 88 -3 (West Lake Elsinore) has caused this Bond to
he elated as of the date first above written and to be signed by the manual signature of its Mayor
and countersigned by the manual signature of the City Clerk.
CITY OF LAKE ELSINORE
BY:
Mayor
BY:
City Clerk
, ;'fl/ i B -5
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint
attorney, to transfer the same on the registration books of the Fiscal Agent, with
Fail power of substitution in the premises.
Bated:
NOTICE: The signature(s) on this assignment
must correspond with the name(s) as written on the
face of the within Bond in every particular without
alteration or enlargement or any change whatsoever.
;iv,r�,�nue Guaranteed:
G1'[ClI: Signature(s) must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank
or trust company.
B -7
COMMITMENT AGREEMENT AND PURCHASE CONTRACT
FOI2 PURCHASE AND SALE OF LOCAL OBLIGATION BONDS
City of Lake Elsinore
Community Facilities District No. 88 -3 (West Lake Elsinore)
Special Tax Bonds, 2013 Series
THIS COMMITMENT AGREEMENT AND PURCHASE CONTRACT (the "Purchase
ontract "), dated , 2013, is by and between the LAKE ELSINORE PUBLIC
FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under
Mid by virtue of the laws of the State of California (the "Authority "), and the CITY OF LAKE
I?I,SINORE COMMUNITY FACILITIES DISTRICT NO. 88 -3 (WEST LAKE ELSINORE), a
community facilities district duly organized and existing under the laws of the State of California
(1h 1)istrict ").
WITNESSETH:
WHEREAS, pursuant to Articles 1 through 4 (commencing with Section 6500) of
' :haplcr 5, Division 7, Title 1 of the Government Code of the State of California (the "Act "), the
:�dcvclopment Agency of the City of Lake Elsinore (the "Agency ") and the City of Lake
!,worc (thc "City ") have, by Joint Exercise of Powers Agreement, dated July 25, 1989 (the
`Agreement "), created the Authority for the purposes, among other things, of assisting the City
nd the Agency in the financing and refinancing of public capital improvements pursuant to the
Mad< s -Roos Local Bond Pooling Act of 1985, being Article 4 of the Act (commencing with
Section 6584) (the "Bond Law ");
IVIILREAS the Authority, for the purpose of acquiring certain local obligation bonds, has
determined to issue its Local Agency Revenue Bonds (Community Facilities District 88 -3), 2013
�i ies 13 (the "Authority Bonds "), pursuant to an Indenture of Trust, dated as of 1,
2013;
IVIJ 'REAS, a portion of the proceeds of the Authority Bonds will be used to purchase
local obligations of the District designated as "City of Lake Elsinore Community Facilities
District No. 88 -3 (West lake Elsinore) Subordinate Special Tax Bonds, 2013 Series" in the initial
principal amount of $ (referred to herein as the "Local Obligation Bonds "); and
WHEREAS, the Authority and the District desire to enter into this Purchase Contract
providing for the purchase and sale of the Local Obligation Bonds and containing the other
uerc.cmcnts herein set forth.
NOW, T] IEREFORE, in consideration of the mutual agreements herein contained, and
foi- other good and valuable consideration the receipt and sufficiency of which is hereby
acluu;wledged, the Authority and the District agree as follows:
1. Upon the terms and conditions and upon the basis of the representations,
v, ,ti ics and agreements hereinafter set forth, the District hereby sells to the Authority, and the
it _ith:;rity hereby purchases from the District all of the aggregate principal amount of the Local
7hsn s;io. i
contemplated by this Purchase Contract, the Proceedings and the Fiscal Agent
Agreement;
(b) The District has complied, and will on the Closing Date be in compliance
in all respects, with the Proceedings;
(c) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Resolution, has duly authorized and approved the
execution and delivery of, and the performance by the District of the District's
obligations contained in, the Fiscal Agent Agreement, the Local Obligation Bonds, this
Purchase Contract and the other Proceedings, and the consummation by the District of all
other transactions on its part contemplated by the Proceedings, including, without
limitation, the application of Special Taxes to the payment of the Local Obligation
Bonds;
(d) The execution and delivery of this Purchase Contract and the Local
Obligation Bonds, the adoption of the Resolution and the adoption or entering into of the
other Proceedings, including, without limitation, the Fiscal Agent Agreement, and
compliance with the provisions of each thereof will not conflict with or constitute a
breach of or a default under any applicable law or administrative regulation of the State
of California or the United States of America, or any applicable judgment, decree,
agreement or other instrument to which the District is a party or is otherwise subject;
(e) There is no action, suit, proceeding or investigation before or by any court,
public board or body pending or, to the knowledge of the District, threatened, wherein an
unfavorable decision, ruling or finding would: (i) affect the creation, organization,
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 delivery of the Local
Obligation Bonds, the levy and receipt of the Special Taxes, or the pledge thereof under
the Fiscal Agent Agreement, (iii) in any way question or affect any of the rights, powers,
dufles or obligations of the District with respect to the moneys pledged or to be pledged
t +:r hay the principal of, premium, if any, or interest on the Local Obligation Bonds, (iv) in
any way question or affect any authority for the issuance of the Local Obligation Bonds,
or the validity or enforceability of the Local Obligation Bonds, the Fiscal Agent
Agreement or the other Proceedings, or (v) in any way question or affect this Purchase
Contract or the transactions contemplated by this Purchase Contract, the Fiscal Agent
Agreement, or any other agreement or instrument to which the District is a party relating
to the Local Obligation Bonds;
(f) The issuance and sale of the Local Obligation Bonds is not subject to any
tmnsicr or other documentary stamp taxes of the State of California or any political
subdivision thereof;
(g) The District has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that the District is a bond issuer whose arbitrage
(ortitications may not be relied upon;
,',, ; /0 1
United States Tax Court) or of the State of California, by any ruling or regulation (final,
temporary or proposed) issued by or on behalf of the Department of the Treasury of the
l lnited States, the Internal Revenue Service, or other governmental agency of the United
States, or any governmental agency of the State of California, or by a tentative decision
with respect to legislation reached by a committee of the House of Representatives or the
Senate of the Congress of the United States, or by legislation enacted by, pending in, or
favorably reported to either the House of Representatives or the Senate of the Congress of
the United States or either house of the Legislature of the State of California, or formally
proposed to the Congress of the United States by the President of the United States or to
the Legislature of the State of California by the Governor of the State of California in an
executive communication, affecting the tax status of the District, its property or income,
its bonds (including the Local Obligation Bonds) or the interest thereon, or any tax
exemption granted or authorized by the Bond Law; (ii) the United States shall have
become engaged in hostilities which have resulted in a declaration of war or national
emergency, or there shall have occurred any other outbreak of hostilities, or a local,
national or international calamity or crisis, financial or otherwise, the effect of such
outbreak, calamity or crisis being such as, in the reasonable opinion of the Authority,
would affect materially and adversely the marketability of the Bonds (it being agreed by
dw.. Authority that there is no outbreak, calamity or crisis of such a character as of the date
hereof); (iii) there shall have occurred a general suspension of trading on the New York
Siock Exchange or the declaration of a general banking moratorium by the United States,
New York State or California State authorities; (iv) there shall have occurred a
withdrawal or downgrading of any rating assigned to any securities of the District by a
national municipal bond rating agency; (v) any proposed development described in the
Proceedings shall have been repudiated by the applicable developer, or, any litigation or
Proceedings shall be pending or threatened questioning the proposed development or
seeking 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 Proceedings; or (vi) any federal or California court, authority or
regulatory body shall take action materially and adversely affecting the ability of a
developer to proceed with the development as contemplated by the Proceedings;
(e)
On or prior to
the Closing
Date, the Authority shall have received each of
the following
documents:
(1) All documents and opinions required to be received by the trustee
for the Authority Bonds prior to the application of proceeds of the Authority
Bonds to the purchase of the Local Obligation Bonds;
(2) An opinion, in form and substance satisfactory to the District and
the Authority, dated as of the Closing Date, of Bond Counsel approving, without
customary qualifications, the validity of the Local Obligation Bonds;
(3) A supplementary opinion, dated the date of the Closing and
addressed to the Authority, of Bond Counsel to the effect that (i) this Purchase
Contract has been duly authorized, executed and delivered by, and, assuming due
authorization, execution and delivery by, the Authority, constitutes a legal, valid
Special Taxes or the moneys and assets pledged or to be pledged to pay the
principal of premium, if any, or interest on the Local Obligation Bonds; (iv) in
any way question or affect any authority for the issuance of the Local Obligation
Bonds, or the validity or enforceability of the Local Obligation Bonds; or (v) in
any way question or affect this Purchase Contract or the transactions
contemplated by this Purchase Contract, the Fiscal Agent Agreement or the other
Proceedings; and
(6) Stich additional legal opinions, certificates, instruments and
documents as the Authority may reasonably request to evidence the truth and
accuracy, as of the date hereof and as of the Closing Date, of the District's
representations and warranties contained herein.
In addition to the foregoing, the District shall on the Closing Date provide the
Proceedings, certified by authorized officers of the City, on behalf of the District, under its seal
cill uvc copies and as having been adopted or executed (as applicable), with only such
unondments, modifications or supplements as may have been agreed to by the Authority.
All of the opinions, letters, certificates, instruments and other documents mentioned
abiwe or elsewhere in this Purchase Contract shall be deemed to be in compliance with the
provisions hereof if, but only if, they are in form and substance satisfactory to the Authority, but
the aIppioval of the Authority shall not be unreasonably withheld. Receipt of, and payment for,
the I,ocal Obligation Bonds shall constitute evidence of the satisfactory nature of such as to the
\uihority. The performance of any and all obligations of the District hereunder and the
peri_omwMcc of any and all conditions contained herein for the benefit of the Authority may be
�,vaivcd by the Authority in its sole discretion.
11' thy.° District shall be unable to satisfy the conditions to the obligations of the Authority
to pow h:iw, accept delivery of and pay for the Bonds contained in this Purchase Contract, or if
the obligations of the Authority to purchase, accept delivery of and pay for the Bonds shall be
Winiinated for any reason permitted by this Purchase Contract, this Purchase Contract shall
lamu;atrr, and neither the Authority nor the District shall be under further obligation hereunder,
e>:ac1 >i thai the respective obligations of the District and the Authority set forth in paragraphs 10
rind I I Ixn 4of shall continue in full force and effect.
10. The Authority shall be under no obligation to pay, and the District shall pay the
i011owiiil, expenses incident to the performance of the District's obligations hereunder: (i) the
i osi of the preparation of the Local Obligation Bonds; (ii) the fees and disbursements of Bond
t'olmscl and of Special Counsel to the District; and (iii) the fees and disbursements of
accounuints; advisers and of any other experts or consultants retained by the District.
11. This Purchase Contract is made solely for the benefit of the District and the
Aidhoi ity (including their successors and assigns), and no other person shall acquire or have any
ight hereunder or by virtue hereof. All of the District's representations, warranties and
arecmcnt s contained in this Purchase Contract shall remain operative and in full force and effect
cl;ai d fe 1� 01 (i) any investigations made by or on behalf of the Authority or (ii) delivery of and
;m 1 7
IN WITNESS WHEREOF, the Authority and the District have each caused this Purchase
Contract to be executed by their duly authorized officers all as of the date first above written.
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
By:
Executive Director
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 88 -3 (WEST LAKE
ELSINORE)
By:
City Manager of the City of Lake Elsinore
,ri 9
7 °HGS t70 !
INDENTURE OF TRUST
by and between the
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
and
UNION BANK, N.A.,
as Trustee
Dated as of I, 2013
Relating to
Lake Elsinore Public Financing Authority
Local Agency Revenue Bonds (Community Facilities District 88 -3), 2013 Series B
78863368.1
TABLE OF CONTENTS
(continued)
Page
Section
5.07
Tax Covenants Relating to Bonds ....................... ...............................
25
Section
5.08
District Bonds ..................................................... ...............................
29
Section
5.09
Further Assurances .............................................. ...............................
29
Section5.10
9.04
Immunity ............................................................... .............................29
41
Section
5.11
No Acceleration .................................................. ...............................
29
/ %RTICLEVI
9.05
THE
TRUSTEE ................................................................ .............................29
Section
6.01
Appointment of Trustee ........................................ .............................29
Section
6.02
Acceptance of Trusts ........................................... ...............................
30
Section
6.03
Fees, Charges and Expenses of Trustee ................ .............................32
Section
6.04
Notice to Bond Owners of Default
32
..................... ...............................
Section
6.05
Intervention by Trustee ....................................... ...............................
32
Section
6.06
Removal of Trustee ............................................. ...............................
32
Section
6.07
Resignation by Trustee ........ ............................... .6444..........................
33
Section
6.08
Appointment of Successor Trustee ..................... ...............................
33
Seel ion
6.09
Merger or Consolidation ........ .............................66 66...........................33
Scction
6.10
Concerning any Successor Trustee ....................... .............................33
Section
6.11
Appointment to Co- Trustee ................................ ...............................
34
Section
6.12
Indemnification; Limited Liability of Trustee ...... .............................34
tl !C 'l� VII
MODIFICATION AND AMENDMENT OF THE INDENTURE ..............6
35
Section
7.01
Amendment Hereof ............................................. ...............................
35
Section
7.02
Effect of Supplemental Indenture ..............6666..... 666..............6.............
36
Section
7.03
Endorsement or Replacement of Bonds After Amendment ..............
36
Section
7.04
Amendment by Mutual Consent ......................... ...............................
36
W I'ICLE VIII
EVENTS OF DEFAULT AND REMEDIES ................... .............................36
Section
8.01
Events of Default ................................................ ...............................
36
Section
8.02
Remedies Upon Event of Default... ...................................................
37
Section
8.03
Application of Revenues and Other Funds After Default ..................
37
Section
8.04
Power of Trustee to Control Proceedings ............. .............................38
Section
8.05
Appointment of Receivers ... ........................4.466.. .................6..466........
38
Section
8.06
Non- Waiver ........................................................... .............................38
Section
8.07
Right to Institute Suit, Action or Proceeding... ................ 6 ... 466 ... 6 .......
39
Section
8.08
Termination of Proceedings ................................ ...............................
39
!8k I !CI,E IX MISCELLANEOUS
M
Section
9.01
Limited Liability of Authority .............................. .............................40
Section
9.02
Benefits of Indenture Limited to Parties ............. ...............................
40
Section
9.03
Discharge 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 by Bond Owners.. .............. o ..... 0 . 0 ............
00.42
Section
9.07
Disqualified Bonds ................................................ .............................42
INDENTURE OF TRUST
TI IIS INDENTURE OF TRUST (this `Indenture ") is made and entered into as of
I, 2013, by and between the LAKE ELSINORE PUBLIC FINANCING AUTHORITY, ajoint
powers authority organized and existing under the laws of the State of California (the
"Autl -Lority "), and UNION BANK, N.A., a national banking association organized and existing
under the laws of the United States of America having a corporate trust office in Los Angeles,
California, and being qualified to accept and administer the trusts hereby created (the "Trustee ");
WITNESSETH:
WHEREAS, the Authority is ajoint powers authority duly organized and existing under
Mid pursuant to that certain Joint Exercise of Powers Agreement, dated July 25, 1989, by and
hetween the City of Lake Elsinore (the "City ") and the Redevelopment Agency of the City of
I.lrl.c Elsinore (the "Agency "), and under the provisions of Articles 1 through 4 (commencing
with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of
aliJornia (the "Act "), and is authorized pursuant to Article 4 of the Act (the "Bond Law ") to
frorroW money for the purpose of financing the acquisition of bonds, notes and other obligations
oi: or for the purpose of making loans to, the City, the Agency and any associate member to
pro% do financing for public capital improvements of the City, the Agency and any associate
n! 'Ml)cr; and
WHEREAS, the City of Lake Elsinore Community Facilities District No. 88 -3 (West lake
I sin)re) (the "District ") previously issued its Subordinate Special Tax Bonds, 2008 Series (the
`20o' Oktrict Bonds "); and
WHEREAS, for the purpose of assisting the District in refunding the 2008 District
orrds, thc° Authority desires to provide for the issuance of its Local Agency Revenue Bonds
(L 0111M Lill ity Facilities District 88 -3), 2013 Series B (the "Bonds "); and
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
estahlish and declare the terms and conditions upon which the Bonds are to be issued and to
seem -e the payment of the principal thereof, premium (if any) and interest thereon, the Authority
has authorized the execution and delivery of this Indenture; and
WHEREAS, the Authority has found and determined, and hereby affirms, that all acts
and proceedings required by law necessary to make the Bonds, when executed by the Authority,
ruthenticated and delivered by the Trustee and duly issued, the valid, binding and legal special
ohli} ,_ttions of the Authority, and to constitute this Indenture a valid and binding agreement for
OW ,rscs and purposes herein set forth in accordance with its terms, have been done and taken,
❑nd the execution and delivery of this Indenture have been in all respects duly authorized:
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium (if any) on all Bonds at any time issued
and Outstanding under this Indenture, according to their tenor, and to secure the performance and
�,hwrvance of all the covenants and conditions therein and herein set forth, and to declare the
ioi ns and conditions upon and subject to which the Bonds are to be issued and repaid, and in
coasidcration of the premises and of the mutual covenants herein contained and of the purchase
rts<,iws i
"Bond Purchase Fund" means the fund established pursuant to Section 3.03 hereof.
"Bond Year" means each twelve -month period beginning on September 2 of each year
and ending September 1 of the following year, except that the first Bond Year shall begin on the
Closing Date and end on September 1, 20
"Bonds" means the Lake Elsinore Public Financing Authority Local Agency Revenue
Bonds (Community Facilities District 88 -3), 2013 Series B, authorized by, and at any time
Outstanding pursuant to, the Bond Law and this Indenture.
"Business Day" means any day other than (i) a Saturday or a Sunday, (ii) a day on which
the offices of the City are not open for business, or (iii) a day on which banking institutions in
the state in which the Trustee has its principal corporate trust office is authorized or obligated by
law or executive order to be closed.
"Cash
Flow Management Fund" means
the fund by
that name established by
Section 4.03(a)
hereof.
State.
writing to the Authority
"Cash Flow Management Fund Requirement" means, as of any calculation date, an
amount equal to 15% of the Maximum Annual Debt Service.
"Certificate" or "Written Request' of the Authority means a written certificate or written
request signed in the name of the Authority by an Authority Representative. Any such certificate
or request may, but need not, be combined in a single instrument with any other instrument,
opinion or representation, and the two or more so combined shall be read and construed as a
single instrument.
"City"
means
the City
of Lake Elsinore, a political subdivision organized and existing
under the laws
of the
State.
writing to the Authority
"Closing
Date" means the date of delivery
of the Bonds to the original
purchasers
thereof.
and such office as the Trustee
may designate in
writing to the Authority
"Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Bonds, together with applicable proposed,
temporary and final regulations promulgated, and applicable official public guidance published,
under the Code.
"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
may designate in
writing to the Authority
from time to time.
"Costs of Issuance" means all expenses incurred in connection with the authorization,
issuance, sale and delivery of the Bonds, the purchase of the District Bonds, including, but not
limited to, all compensation, fees and expenses (including, but not limited, to fees and expenses
for legal counsel) of the Authority, the Trustee and the developer, compensation to any financial
78863368.1 3
(2) any of the following obligations of the following agencies of the United States of
America: (a) direct obligations of the Export - Import Bank, (b) certificates of
beneficial ownership issued by the Farmers Home Administration, (c)
participation certificates issued by the General Services Administration, (d)
mortgage- backed bonds or pass- through obligations issued and guaranteed by the
Government National Mortgage Association, (e) project notes issued by the
United States Department of Housing and Urban Development, and (f) public
housing notes and bonds guaranteed by the United States of America; or refunded
municipal obligations, the timely payment of principal of and interest on are fully
guaranteed by the United States of America.
"Fiscal Agent" means Union Bank, N.A., as fiscal agent under the Fiscal Agent
Agreement.
"Fiscal Agent Agreement" means the Fiscal Agent Agreement, dated as of January 1,
2008, by and between the District and Union Bank, N.A., as said agreement may be amended
from time to time in accordance with its terms, including the First Amendment to Fiscal Agent
Agreement, dated as of February 1, 2010, and the Second Amendment to Fiscal Agent
Agreement, dated as of 152012.
"Fiscal Year" means any twelve -month period extending from July 1 in one calendar year
to .tune 30 of the succeeding calendar year, both dates inclusive, or any other twelve -month
period selected and designated by the Authority as its official fiscal year period and certified to
the Trustee in writing by an Authority Representative.
"Indenture" means this Indenture of Trust, as originally executed or as it may from time
to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the
provisions hereof.
`Independent Accountant' means any certified public accountant or firm of certified
public accountants appointed and paid by the Authority, and who, or each of whom (a) is, in fact,
independent and not under domination of the Authority or the City; (b) does not have any
substantial interest, direct or indirect, in the Authority or the City; and (c) is not connected with
the Authority or the City as an officer or employee of the Authority or the City but who may be
regularly retained to make annual or other audits of the books of or reports to the Authority or
the City.
"Information Services" means Electronic Municipal Market Access system (referred to as
"EMMA "), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org;
and, in accordance with then current guidelines of the Securities and Exchange Commission,
such other services providing information with respect to the redemption of bonds as the
Authority may designate in a Written Request of the Authority delivered to the Trustee.
"Interest Account" means the account by that name established and held by the Trustee
pursuant to Section 4.02(c)(i) hereof.
"Interest Payment Date" means March 1 and September 1 in each year, beginning
_ 1, 201_, and continuing thereafter so long as any Bonds remain Outstanding.
78863368.1 5
debentures and U.S. public housing notes and bonds of the U.S. Department of Housing
and Urban Development;
(c) bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non -full faith and credit U.S. government agencies
(stripped securities are only permitted ifthey have been stripped by the agency itself): (i)
senior debt obligations of the Federal Home Loan Bank System; (ii) participation
certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation;
(iii) mortgage- backed securities and senior debt obligations of the Federal National
Mortgage Association (excluding stripped mortgage securities which are valued greater
than par on the portion of unpaid principal); (iv) senior debt obligations of the Student
Loan Marketing Association; (v) obligations (but only the interest component of stripped
obligations) of the Resolution Funding Corporation; and (vi) consolidated systemwide
bonds and notes of the Farm Credit System;
(d) money market funds (including funds of the Trustee or its affiliates)
registered under the Federal Investment Company Act of 1940, whose shares are
registered under the Federal Securities Act of 1933, and having a rating by S &P of
"AAAm -G," "AAAm," or "AAm," and, if rated by Moody's, rated "Aaa," "Aal" or
-Aa2;"
(e) certificates of deposit secured at all times by collateral described in (a) or
(b) above, which have a maturity of one year or less, which are issued by commercial
hanks, savings and loan associations or mutual savings banks, and such collateral must be
held by a third party, and the Trustee must have a perfected first security interest in such
collateral;
(f) certificates of deposit, savings accounts, deposit accounts or money
market deposits (including those of the Trustee and its affiliates) which are fully insured
by the Federal Deposit Insurance Corporation or secured at all times by collateral
described in (a) or (b) above;
(g) investment agreements, including guaranteed investment contracts,
Ibrward purchase agreements and Reserve Account put agreements, which are general
obligations of an entity whose long -term debt obligations, or claims paying ability,
respectively, is rated in one of the two highest rating categories by Moody's or S &P or
Collateralized by Federal Securities;
(h) commercial paper rated, at the time of purchase, "Prime -l" by Moody's
and "A -1" or better by S &P;
(i) bonds
or notes
issued by any state or municipality which are rated by
Moody's and S &P in
one of the
two highest rating categories assigned by such
agencies;
0) federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation rating of
"Prime -I" or "A3" or better by Moody's and "A -1" or "A" or better by S &P;
saa 1 7
"Rebate Account" means the account established and held by the Trustee pursuant to
Section 4.02(c)(v) hereof.
"Record Date" means, with respect to any Interest Payment Date, the fifteenth (15th)
calendar day of the month preceding such Interest Payment Date.
"Redemption Fund" means the fund by such name established and held by the Trustee
pursuant to Section 4.04 hereof.
"Redemption Revenues" means (a) amounts received from the redemption of the District
Bonds from amounts constituting prepayments of Special Taxes, (b) amounts received from the
optional redemption of the District Bonds, and (c) amounts received from the special mandatory
redemption and mandatory redemption of the District Bonds.
"Registration Books" means the records maintained by the Trustee pursuant to
ection 2.07 for the registration and transfer of ownership of the Bonds.
"Reserve Account" means the account by that name established and held by the Trustee
pi.nsuant to Section 4.02(c)(iii) hereof.
"Reserve Requirement" means, as of any calculation date, an amount equal to the least of
0) ten percent (10 %) of the proceeds of the Bonds (within the meaning of section 148 of the
( odc); (ii) 125% of average Annual Debt Service; or (iii) Maximum Annual Debt Service.
l'im ided.. however, the Reserve Requirement on any calculation date shall not be greater than the
Rcsetve Requirement amount on the Closing Date.
"Revenue Find" means the
fund by that name established and held
by the Trustee
pursuant to Section
4.02(a) hereof.
"Revenues" means: (a) all amounts received by the Authority from the District as
principal of or interest on the District Bonds; (b) all moneys deposited and held from time to
time by the Trustee in the funds and accounts established hereunder for the Bonds, other than the
kebatc Account, the Redemption Fund and the Cash Flow Management Fund; and (c) income
df)d ;),gins with respect to the investment of amounts on deposit in the funds and accounts
�s(aidished hereunder for the Bonds, other than the Rebate Account, the Redemption Fund and
(lie Cash Flow Management Fund.
"S &P" means Standard & Poor's, a division of The McGraw -Hill Companies, Inc., its
successors and assigns.
"Securities Depositories" means DTC, 55 Water Street, New York 10041, Attention:
(.';ill Notification Department, Fax -(212) 855 -7232 and, in accordance with then current
ttuidclines of the Securities and Exchange Commission, such other addresses and /or such other
eccurities depositories as the Authority may designate in a Certificate of the Authority delivered
io Iho 1)'ustee.
"State" means the State of California.
1 9
The Bonds shall be issued in fully- registered form without coupons in denominations of
V,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
[repository Trust Company, New York, New York, and shall be evidenced by one Bond for each
01' 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 lorth 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
mmmc appears on the Registration Books 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
❑uriled by first -class mail, postage prepaid, on each Interest Payment Date to the Owner at the
❑ddress 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
pi incipal amount of Outstanding Bonds filed with the Trustee prior to any Record Date, interest
on ;uch Bonds shall be paid to such Owner on each succeeding Interest Payment Date by wire
n;m;lcr of immediately available funds to an account in the continental United States designated
in such written request. Any such written request shall remain in effect until rescinded in writing
h-v the Owner. Principal of and premium (if any) on any Bond shall be paid upon presentation
and srtrcnder thereof, at maturity or the prior redemption thereof, at the Corporate Trust Office.
I'he principal of and interest and premium (if any) on the Bonds shall be payable in lawful
mclneV of the United States of America.
Each Bond shall bear
interest
from the Interest
Payment Date
next preceding the date of
<u;rhentication thereof, unless
(a) it is
authenticated on
or before the
Interest Payment Date and
;t,x 11
Bonds Maturing on September 1, 20
Sinking Fund
Redemption Date Principal Amount
(September 1) to be Redeemed
Bonds Maturing on September 1, 20.
Sinking Fund
Redemption Date Principal Amount
(September 1) to be Redeemed
(c) Special Mandatory Redemption From Prepayment of Special Taxes and
from Surr)lus Funds. The Bonds shall also be subject to mandatory redemption prior to maturity
oi: any date on or after , in whole or in part from such maturities as selected by the
.tnhori�y and by lot within a maturity, from the redemption of District Bonds from amounts
�sn ±stiurting prepayments of Special Taxes and from amounts held in the Delinquency
Management Fund under the Fiscal Agent Agreement and from amounts in the Cash Flow
Manfigemr..nt Fund at the following redemption prices (expressed as a percentage of the principal
aImoufl of Bonds to be redeemed) together with accrued interest thereon to the redemption date.
Redemption Dates Redemption Prices
through 102.0%
and thereafter 100.0%
(d) Selection of Bonds for Redemption. If less than all of the Bonds
01!'sJanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000
to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof. In
selecting portions of such Bonds for redemption, the Trustee shall treat such Bonds as
representing that number of Bonds of $5,000 denominations which is obtained by dividing the
I incipal amount of such Bonds to be redeemed in part by $5,000. The Trustee shall promptly
)�N oL the Authority in writing of the Bonds, or portions thereof, selected for redemption.
i', %( 1 13
(g) Effect of Redemption. From and after the date fixed for redemption, if
lunds available for the payment of the principal of and interest (and premium, if any) on the
k3 )m s so called for redemption shall have been duly provided, such Bonds so called shall cease
to be entitled to any benefit under this Indenture other than the right to receive payment 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
destroyed.
(h) Purchase in Lieu of Redemption. In lieu of redemption of any Bond,
amounts on deposit in the Revenue Fund may also be used and withdrawn by the Trustee at any
lime, upon the Written Request of the Authority, for the purchase of such Bonds at public or
private sale as and when and at such prices (including brokerage and other charges, but
excluding accrued interest, which is payable from the Interest Account) as the Authority may in
its discretion determine in accordance with all applicable laws and in accordance with the
priority afforded the relative Bond under the Indenture.
(i) Authority Notice. Notwithstanding any provisions in this Indenture to the
Wdurnry, upon any optional redemption or mandatory redemption fi-om Special Taxes in part, the
AAuthority shall deliver a Written Certificate to the Trustee at least sixty (60) days prior to the
,mnosed redemption dale or such later date as shall be acceptable to the Trustee so stating that
im remaining payments of principal and interest on the District Bonds, together with other
Revenues will be sufficient on a timely basis to pay debt service on the Bonds. The Authority
shall certify in such Written Certificate that sufficient moneys for purposes of such redemption
ere or will he on deposit in the Redemption Fund, and is required to deliver such moneys to the
I'wstee iuc;eth e'r with other Revenues, if any, then to be delivered to the Trustee, which moneys
arc required to be identified to the Trustee in the Written Certificate delivered with the Revenues.
€,vtion 2.03 Form of the Bonds. The Bonds, the form of Trustee's certificate of
';,irlu�nlication, and the form of assignment to appear thereon, shall be substantially in the form
sct 1�)rth in Fxhibit A attached hereto and by this reference incorporated herein, with necessary oi-
1
ppropriate variations, omissions and insertions, as permitted or required by this Indenture.
Section 2.04 Execution of Bonds. The Bonds shall be signed in the name and on
1-e_ half ol the Authority with the manual or facsimile signatures of its Chairperson or Executive
1)irector and attested with the manual or facsimile signature of its Secretary or any assistant duly
appoinrcd by the Board, and shall be delivered to the Trustee for authentication by it. In case any
o(liccr al the Authority who shall have signed any of the Bonds shall cease to be such officer
bcforo the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by
dw !luthority, such Bonds may nevertheless be authenticated, delivered and issued and, upon
such authentication, delivery and issue, shall be as binding upon the Authority as though the
individual who signed the same had continued to be such officer of the Authority. Also, any
Hond may be signed on behalf of the Authority by any individual who on the actual date of the
e.xccution of such Bond shall be the proper officer although on the nominal date of such Bond
such individual shall not have been such officer.
t)nly such of the Bonds as shall bear thereon a certificate of authentication in
ll
)SIflowiliv the form set forth in Exhibit A manually executed by the Trustee, shall be valid or
15
wlcmnity satisfactory to the Trustee). The Authority may require payment of fee for preparing
and authenticating each new Bond issued under this Section and of expenses which may be
kicurted by the Authority and the Trustee. Any Bond issued under the provisions of this
Section 2.08, in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an
original contractual obligation on the part of the Authority whether or not the Bond alleged to be
lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other Bonds secured by this
Indenture.
Section 2.09 CUSIP Numbers. The Trustee and the Authority shall not be liable for
any defect or inaccuracy in the CUSIP number that appears on any Bond or in any redemption
notice. The Trustee may, in its discretion, include in any redemption notice a statement to the
effect that the CUSIP numbers on the Bonds have been assigned by an independent service and
me included in such notice solely for the convenience of the Owners and that neither the Trustee,
nor the Authority shall be liable for any inaccuracies in such numbers.
Section 2.10 Use of Securities Depository.
(a) The Bonds shall be initially registered as provided in Section 2.01.
;:e¢ istcrcd ownership of the Bonds, or any portion thereof, may not thereafter be transferred
�sccpC
(ii) to any substitute depository upon (1) the resignation of DTC or its
';ua;essor (or any substitute depository or its successor) from its functions as depository, or (2) a
determination by the Authority to substitute another depository for DTC (or its successor)
OC;Mtie DTC or its successor (or any substitute depository or its successor) is no longer able to
carr\1 ow its functions as depository; provided, that any such substitute depository shall be
quali herd ruula- any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of DTC
cr its 1A6CCCSs0r (or substitute depository or its successor) from its functions as depository, or (2)
a dcwrm ination by the Authority to remove DTC or its successor (or any substitute depository or
sru;cesor) from its functions as depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection
(a) hereof, upon receipt of the Outstanding Bonds by the Trustee, together with a Written
Kequesi of the Authority to the Trustee, a new Bond for each maturity shall be authenticated and
dcliv\�red in the aggregate principal amount of the Bonds then Outstanding, registered in the
oI'such successor or such substitute depository, or their nominees, as the case may be, all
a; : +Wcilled in such Written Request of the Authority.
17
(i) to any successor of Cede & Co.,
as nominee of DTC, as its
ruaninec,
or to any substitute depository designated
pursuant to
clause (ii) of this Section (a
;Hl!stiww
depository"); provided, that any successor
of Cede &
Co., as nominee of DTC or a
subslitute
depository, shall be qualified under any
applicable
laws to provide the services
proposed
to be provided by it;
(ii) to any substitute depository upon (1) the resignation of DTC or its
';ua;essor (or any substitute depository or its successor) from its functions as depository, or (2) a
determination by the Authority to substitute another depository for DTC (or its successor)
OC;Mtie DTC or its successor (or any substitute depository or its successor) is no longer able to
carr\1 ow its functions as depository; provided, that any such substitute depository shall be
quali herd ruula- any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of DTC
cr its 1A6CCCSs0r (or substitute depository or its successor) from its functions as depository, or (2)
a dcwrm ination by the Authority to remove DTC or its successor (or any substitute depository or
sru;cesor) from its functions as depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection
(a) hereof, upon receipt of the Outstanding Bonds by the Trustee, together with a Written
Kequesi of the Authority to the Trustee, a new Bond for each maturity shall be authenticated and
dcliv\�red in the aggregate principal amount of the Bonds then Outstanding, registered in the
oI'such successor or such substitute depository, or their nominees, as the case may be, all
a; : +Wcilled in such Written Request of the Authority.
17
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
Section 3.01 Issuance of Bonds. Upon the execution and delivery of this Indenture,
the Authority shall execute and deliver the Bonds in the aggregate principal amount of
Dollars ($ to the Trustee for authentication and delivery to the
original purchaser thereof upon the Written Request of the Authority.
Section 3.02 Application of Proceeds of Sale of Bonds and Other Amounts. Upon
the receipt of payment for the Bonds on the Closing Date, the Trustee shall apply the proceeds of
vale thereof in the amount of $ (being the principal amount of $ .00, plus net
original issue premium of $ , and less an underwriter's discount of $ ),
along with other available moneys 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)
The Trustee
shall
deposit
the amount of
$ in the Reserve
Account, which amount
equals the
initial
Reserve
Requirement.
(c)
The 'Trustee
shall
deposit
the amount of
$ in the Costs of
ISSUanee fund.
(d) The Trustee shall deposit the amount of $ in the Cash Flow
Niarugcnient Fund.
Section 3.03 Bond Purchase Fund. The Trustee shall establish and maintain a
>;epara c 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
shall disburse all amounts in the Bond Purchase Fund on the Closing Date to purchase the
>i drict I;onds. The Trustee shall transfer all amounts in the Bond Purchase Fund to the Fiscal
Agent for deposit pursuant to the Fiscal Agent Agreement. The Trustee shall hold the District
> , in the Bond Purchase Fund.
Section 3.04 Costs of Issuance Fund. There is hereby established a fund to be held by
iic'i'h ustec known as the "Costs of Issuance Fund" into which shall be deposited a portion of the
I ond proceeds as set forth in Section 3.02(c). The moneys in the Costs of Issuance Fund shall
be Oscd to pay Costs of Issuance from time to time upon receipt of a Written Request of the
;ihurity. On the date which is one hundred twenty (120) days following the Closing Date or
rpon 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 llmd to the Revenue Fund. The Authority may at any time file a Written Request of
rue 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
ei ueta.
_�s�«,,; 1 19
(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,
uw.intain and hold intrust separate special accounts entitled "Interest Account," "Principal
ACCOnnt" and "Reserve Account." On or before each Interest Payment Date, the Trustee shall
transfer from the Revenue Fund for deposit into the Bond Fund the following amounts, in the
priority set forth in Subsection (c) below.
(c) Application of Revenues; Bond Fund. On or before each Interest Payment
I)ntc, the Trustee shall transfer from the Revenue Fund and deposit into the Bond Fund and the
lollowing respective special accounts therein, the following amounts in the following order of
priority, the requirements of each such special account (including the making up of any
dcliciencics in any such account resulting from lack of Revenues sufficient to make any earlier
I equired deposit) at the time of deposit to be satisfied before any transfer is made to any account
subsequent in priority:
(i) hrterest Account. On or before each Interest Payment Date, the
l iustec shall deposit in the Interest Account an amount required to cause the aggregate amount
un deposit in the Interest Account to equal the amount of interest becoming due and payable on
such Interest Payment Date on all Outstanding Bonds. No deposit need be made into the Interest
Acr..onni if the amount contained therein is at least equal to the interest becoming due and
pa.�, -nbhr upon all Outstanding Bonds on such Interest Payment Date. All moneys in the Interest
Account =,hall be used and withdrawn by the Trustee solely for the purpose of paying the interest
on the Bonds as it shall become due and payable (including accrued interest on any Bonds
cdc¢mcd prior to maturity).
(ii) Principal Account. On or before each date on which the principal
of the Bonds shall be payable, the Trustee shall deposit in the Principal Account an amount
�'Liuiwd to cause the aggregate amount on deposit in the Principal Account to equal the
;g,re;�.ote amount of principal (including sinking fund payments) coining due and payable on
such date on the Bonds pursuant to Section 2.01. All moneys in the Principal Account shall be
used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds
(iuclniing sinking fund payments).
(iii) Reserve Account. All amounts on deposit in the Revenue Fund on
cr hefore each Interest Payment Date, to the extent not required to pay any interest on or
hincipa! of any Outstanding Bonds then having come due and payable, shall be credited to the
reTlcnishment of the Reserve Account in an amount sufficient to maintain the Reserve
R_cquirement therein.
he Authority shall deposit from the repayment of the District Bonds, and, to the extent
�rccs�ary and to the extent permitted by law, from available surplus revenues with respect to
ohci series of bonds issued by the Authority relating to community facilities districts, and
nurintuin an amount of money equal to the Reserve Requirement in the Reserve Account at all
times vdi le the Bonds are Outstanding. Amounts in the Reserve Account will be used to pay
dchi service on the Bonds to the extent other moneys (including amounts in the Cash Flow
�1:.uui „c;ucart Fund) are not available therefor. Earnings on amounts in the Reserve Account in
rcre> of the Reserve Requirement shall be deposited into the Revenue Fund, if and to the extent
;xs,i 21
(iv) Upon the written direction of the Authority, the Trustee shall
transfer any amounts in the Cash Flow Management Fund to the trustee of any other series of
local agency revenue bonds issued by the Authority in an amount estimated by the Authority to
be necessary to prevent a shortfall in the amount required to pay debt service on such other series
of local agency revenue bonds or to the fiscal agent of any local agency bonds issued by the City
an amount estimated by the Authority necessary to prevent a shortfall in the amount required to
pay debt service on such local agency bonds, which all such transfers shall be treated as loaned
amounts.
(v) On or after September 2 of each year, commencing September 2,
2013, upon the written direction of the Authority, the Trustee shall transfer all remaining
unounts in the Cash Flow Management Fund in excess of the Cash Flow Management Fund
Rc..quircment to the Fiscal Agent for the District Bonds for deposit in the Delinquency
Management Fund held under the Fiscal Agent Agreement.
Section 4.04 Redemption Fund. There is hereby established as a separate fund to be
hold by the Trustee, the "Redemption Fund," to the credit of which the Authority shall deposit,
kmnediately upon receipt, all Redemption Revenues. Moneys in the Redemption Fund shall be
held in trust by the Trustee for the benefit of the Authority and the Owners of the Bonds, and
shall be used and withdrawn by the Trustee to redeem Bonds pursuant to Sections 2.02(a),
?10.)(c) and 2.02(d) hereof on the applicable date thereof.
Section 4.05 Reserved.
Section 4.06 Investments. All moneys in any of the funds or accounts established with
the 'trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted
Investments pursuant to the Written Request ofthe Authority given to the Trustee at least two (2)
?�isni�?ss Lays in advance of the making of such investments, which by their terms mature prior
to the dale on which such moneys are required to be paid out hereunder. Each such written
direction shall contain the representation of the Authority that the investments identified therein
constitute Permitted Investments hereunder upon which the Trustee may conclusively rely. In
the ahsencc of any such direction from the Authority, the Trustee shall invest any such moneys
in clausr, (d) of the definition of Permitted Investments. Obligations purchased as an investment
of moneys in any funds shall be deemed to be part of such fund or account.
All interest or gain derived from the investment of amounts in any of the funds or
aceounls established hereunder shall be deposited in the fund or account from which such
nvestment was made. For purposes of acquiring any investments hereunder, the Trustee may
annmintrle funds held by it hereunder upon the Written Request of the Authority. The Trustee
or it aliiliate may (but shall not be obligated to) act as principal or agent in the acquisition or
dik ;posiiion ofany investment and shall be entitled to its customary fees therefor. The Trustee is
I quircd to sell or present for redemption, any Permitted Investment it purchases whenever it
shell be necessary to provide moneys to meet any required payment, transfer, withdrawal or
d:shursement fi•om the fund to which such permitted investment is created. The Trustee shall
im,m- no liability for losses arising from any investments made pursuant to this Section.
7;; r ?o'N 1 23
Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance
shall not be deemed to constitute an extension of maturity of the Bonds.
Section 5.03 Against Encumbrances. The Authority shall not create, or permit the
creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets
pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the
pledge and assignment created by this Indenture. Subject to this limitation, the Authority
expressly reserves the right to enter into one or more other indentures for any of its corporate
purposes, including, but not limited to, the purchase of programs under the Bond Law, and
reserves the right to issue other obligations for such purposes.
Section 5.04 Power to Issue Bonds and Make Pledge and Assignment. The
Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture
>md to pledge and assign the Revenues, the District Bonds and other assets purported to be
pledged and assigned, respectively, under this Indenture in the manner and to the extent provided
in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid
and binding special obligations of the Authority in accordance with their terms and priority of
payment, and the Authority and the Trustee, subject to the provisions of this Indenture, shall at
all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment
oP Revenues and other assets and all the rights of the Bond Owners under this Indenture against
al I :;Inim s and demands of all persons whomsoever.
Section 5.05 Accounting Records and Financial Statements. The Trustee shall at all
tines kCCII. or cause to be kept, proper books of record and account, prepared in accordance with
iudustr\ - Aandards, in which complete and accurate entries shall be made of all transactions made
tw the "1 "rustee relating to the proceeds of Bonds, the Revenues and all funds and accounts
osuiblishcd by the Trustee pursuant to this Indenture. Such books of record and account shall be
av<jilal�le for inspection by the Authority, dining regular business hours with reasonable prior
notiCC.
Section 5.06 No Parity Debt. Except for the Bonds, or bonds issued for the purpose of
j"umling the Bonds, the Authority covenants that no additional bonds, notes or other
nde:btcdncs�a shall be issued or incurred which are payable out of the Revenues in whole or in
rt.
Section 5.07 Tax Covenants Relating to Bonds.
(a) Special Definitions. When used in this Section, the following terms have
the Ibllowinf; meanings:
(i) "Code" means the Internal Revenue Code of 1986.
(ii) "Computation Date" has the meaning set forth in section 1.148-
1 H of the Tax Regulations.
(iii) "Gross Proceeds" means any proceeds as defined in section 1.148-
!lk} of ihC. "Tax Regulations (referring to sales, investment and transferred proceeds), and any
cplac <�mcnt proceeds as defined in section 1.148 -1(c) of the Tax Regulations, of the Bonds.
25
any Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of
Which is to be financed or refinanced directly or indirectly with such Gross Proceeds.
(d) No Private Loan. Except as would not cause any Bond to become a
`private activity bond" within the meaning of section 141 of the Code and the Tax Regulations
and rulings thereunder, the Authority shall not use or permit the use of Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
1'or purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (i) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction that creates a debt for federal income tax
purposes; (ii) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (iii) indirect benefits of such
(;ross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or
improved with such Gross Proceeds, are otherwise transferred in a transaction that is the
cconomic equivalent ofaloan.
(e) Not to Invest at Higher Yield. Except as would not cause the Bonds to
become "arbitrage bonds" within the meaning of section 148 of the Code and the Tax
:egulafions and rulings thereunder, the Authority shall not (and shall not permit any person to),
art any ume prior to the final cancellation of the last Bond to be retired, directly or indirectly
ryes( 61oss Proceeds in any Investment, if as a result of such investment the Yield of any
invcsUnent acquired with Gross Proceeds, whether then held or previously disposed of, would
materially exceed the Yield of the Bonds within the meaning of said section 148.
(t) Not Federally- Guaranteed. Except to the extent permitted by section
149(b) of the Code and the Tax Regulations and rulings thereunder, the Authority shall not take
or emit to take (and shall not permit any person to take or omit to take) any action that would
cjww :in) kond to be "federally guaranteed" within the meaning of section 149(b) of the Code
arc; the ('sax kCgulations and rulings thereunder.
(g) Information Report. The Authority shall timely file any information
required by section 149(e) of the Code with respect to Bonds with the Secretary of the Treasury
ruA Form 803841 or such other farm and in such place as the Secretary may prescribe.
(i) The Authority shall account for all Gross Proceeds (including all
reccip(s, expenditures and investments thereof) on its books of account separately and apart from
;iii crtircr hinds (and receipts, expenditures and investments thereof) and shall retain all records of
accormtim; for at least six years after the day on which the last Bond is discharged. However, to
the cx e!it permitted by law, the Authority may commingle Gross Proceeds of Bonds with its
txhec morays, provided that it separately accounts for each receipt and expenditure of Gross
Pi wk!eds and the obligations acquired therewith.
(ii)
(h)
frequently
Rebate
each
of
Arbitrage
the Authority
Profits.
Amount in
Except to
the extent otherwise provided in
section 1480
of the
Code and
the Tax Regulations:
(i) The Authority shall account for all Gross Proceeds (including all
reccip(s, expenditures and investments thereof) on its books of account separately and apart from
;iii crtircr hinds (and receipts, expenditures and investments thereof) and shall retain all records of
accormtim; for at least six years after the day on which the last Bond is discharged. However, to
the cx e!it permitted by law, the Authority may commingle Gross Proceeds of Bonds with its
txhec morays, provided that it separately accounts for each receipt and expenditure of Gross
Pi wk!eds and the obligations acquired therewith.
(ii)
Not less
frequently
than
each
Computation
Date,
the Authority
shall calculate the Rebate
Amount in
accordance
with
rules
set forth in
section
148(f) of the
27
(1) Closing Certificate. The Authority agrees to execute and deliver in
connection with the issuance of the Bonds a Tax Certificate as to Arbitrage and the Provisions of
Scctiorrr 103 and 141 -150 of the Internal Revenue Code of 1986, or similar document containing
additional representations and covenants pertaining to the exclusion of interest on the Bonds
from the gross income of the owners thereof for federal income tax purposes, which
representations and covenants are incorporated as though expressly set forth herein.
Section 5.08 District Bonds. The Trustee, as assignee of the Authority rights pursuant
to Section 4.01, shall (subject to the provisions of this Indenture) promptly 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 proceedings reasonably necessary for the
on fbrcement of all of the rights of the Authority thereunder and for the enforcement of all of the
obligations of the Districts thereunder.
Section 5.09 Further Assurances. The Authority shall cause to be collected and paid
to the I rmtee all Revenues as such Revenues become due and payable. The Authority will
adopt, make, execute and deliver any and all such further resolutions, instruments and assurances
as may be reasonably necessary or proper to carry out the intention or to facilitate the
perti;rmance of this Indenture, and for the better assuring and confirming unto the Owners of the
konds (hc rights and benefits provided in this Indenture.
Section 5.10 Immunity. The Authority is not entitled to any immunity, sovereign or
otherwise, from any legal proceedings to enforce or collect upon this Indenture or the Bonds. To
the extent That the Authority has or hereafter may acquire any right to immunity, the Authority
hereby waives such rights for itself in respect of its obligations arising under this Indenture and
Ow Bonds.
Sanction 5.11 No Acceleration. The principal of the Bonds shall not be subject to
aece r:ratiun hereunder. Nothing in this Section shall in any way prohibit the prepayment or
rcd(;mption of Bonds or the defeasance ofthe Bonds and discharge ofthis Indenture.
ARTICLE VI
THE TRUSTEE
Section 6.01 Appointment of Trustee. Union Bank, N.A., in Los Angeles, California,
s I�creby appointed Trustee by the Authority for the purpose of receiving all moneys required to
be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in
flli> In(k,i ire. 'the Authority agrees that it will maintain a Trustee having a corporate trust
r;ffice in the State, with a combined capital and surplus of at least Seventy -Five Million Dollars
(.`75,000,000), and subject to supervision or examination by federal or State authority, so long as
arry 1?orul s are Outstanding. If such bank or trust company publishes a report of condition at
zut annually pursuant to law or to the requirements of any supervising or examining authority
ai)ovc rctccrred to, then for the purpose of this Section 6.01 the combined capital and surplus of
sut:h bank or trust company shall be deemed to be its combined capital and surplus as set forth in
ii< wcent report ofcondition so published.
1 29
(I) As to the existence or non - existence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a
( citificale of the Authority 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 given notice or is
deemed to have notice, as provided in Section 6.02(h) hereof, shall also be at liberty to accept a
Certificate of the Authority to the effect that any particular dealing, transaction or action is
necessary or expedient, but may at its discretion secure such further evidence deemed by it to be
ncccssary or advisable, but shall in no case be bound to secure the same.
(g) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and it shall not be answerable for other than its
ne„ ligence or willful misconduct. The immunities and exceptions from liability of the Trustee
shall extend to its officers, directors, employees and agents.
(h) 'The Trustee shall not be required to take notice or be deemed to have
notice of any Event of Default hereunder except failure by the Authority to file with the Trustee
<rk\,, document required by this Indenture to be so filed subsequent to the issuance of the Bonds,
unless the 'Trustee shall be specifically notified in writing of such default by the Authority or by
he Owners of at least twenty -five percent (25 %) in aggregate principal amount of the Bonds
Ihcn Outstanding and all notices or other instruments required by this Indenture to be delivered
In the 7Yastee must, in order to be effective, be delivered at the Corporate Trust Office, and in
the absence of such notice so delivered the Trustee may conclusively assume there is no Event of
I)�'fei.lh hereunder except as aforesaid.
(i) At any and all reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, accountants and representatives, shall have the right (but not the duty) fully to
inspect all books, papers and records of the Authority pertaining to the Bonds, and to make
cc >niC!, 01 aW of such books, papers and records such as may be desired but which is not
ilcgcd by statute or by law.
Q)
The Trustee
shall not
be required
to give any bond or surety in respect of
tii<^ Cxecution of the
said trusts and
powers or
otherwise
in respect of the premises hereof.
(k) Notwithstanding anything elsewhere in this Indenture with respect to the
execution of any Bonds, the withdrawal of any cash, the release of any property, or any action
what<xwcr within the purview of this Indenture, the Trustee shall have the right, but shall not be
.A aired, lo demand any showings, certificates, opinions, appraisals or other information, or
corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing
the rig;hl of the Authority to the execution of any Bonds, the withdrawal of any cash, or the
Jljm oi'any other action by the Trustee.
(1) Before taking the action referred to in Section 8.02, the Trustee may
raiuire that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to
which it may be put and to protect it against all liability, except liability which is adjudicated to
hm:, Rrsulted from its negligence or willful default in connection with any such action.
1 31
notice to be given to the Authority and the District by registered or certified mail. Upon
receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee.
Section 6.08 Appointment of Successor Trustee. In the event of the removal or
resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, with the prior written
consent of the District, the Authority shall promptly appoint a successor Trustee. In the event the
/authority shall for any reason whatsoever fail to appoint a successor Trustee within ninety (90)
days following the delivery to the Trustee of the instrument described in Section 6.06 or within
ninety (90) days following the receipt of notice by the Authority pursuant to Section 6.07, the
Trustee may apply to a court of competent jurisdiction for the appointment of a successor
Trustee meeting the requirements of Section 6.01 hereof. Any such successor Trustee appointed
by such court shall become the successor Trustee hereunder notwithstanding any action by the
Authority purporting to appoint a successor Trustee following the expiration of such 90 -day
period.
A ny resignation or removal of the Trustee pursuant to Section 6.06 or Section 6.07 and
rppointmecnt of a successor Trustee shall become effective upon written acceptance of
appointment by the successor Trustee. Upon such acceptance, the Authority shall cause notice
thereof to be given by first -class mail, postage prepaid, to the Bond Owners at their respective
addres,es set forth on the Registration Books.
Section 6.09 Merger or Consolidation. Any company into which the Trustee may be
mer;2ed or converted or with which it may be consolidated or any company resulting from any
conversion or consolidation to which it shall be a party or any company to which the
I may sell or transfer all or substantially all of its corporate trust business, provided that
such company shall meet the requirements set forth in Section 6.01, shall be the successor to the
I tustcc and vested with all of the title to the trust estate and all of the trusts, powers, diseretions,
mronnitics, privileges and all other matters as was its predecessor, without the execution or
filing nd any paper or further act, anything herein to the contrary notwithstanding.
Section 6.10 Concerning any Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an
mslronront in writing accepting such appointment hereunder and thereupon such successor,
vOthow any further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor
shall, oc\1crtheless, on the request of the Authority, or of the Trustee's successor, execute and
riciiver <ur iustrument transferring to such successor all the estates, properties, rights, powers and
rnsis of such predecessor hereunder; and every predecessor Trustee shall deliver all securities
andl moneys held by it as the Trustee hereunder to its successor. Should any instrument in
wntin_; hom the Authority be required by any successor Trustee for more fully and certainly
vciing, in such successor the estate, rights, powers and duties hereby vested or intended to be
cstcd in the predecessor Trustee, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Authority.
Section 6.11 Appointment to Co- Trustee. It is the purpose of this Indenture that there
;hji1 he no violation of any law of any jurisdiction (including particularly the law of the State)
do nyinf, or restricting the right of banking corporations or associations to transact business as
�tsss �sa 1 33
ARTICLE VII
MODIFICATION AND AMENDMENT OF THE INDENTURE
Section 7.01 Amendment Hereof.
(a) This Indenture and the rights and obligations of the Authority and of the
')wners of the Bonds may be modified or amended at any time by a Supplemental Indenture
which shall become binding upon execution by the Authority and the Trustee and upon prior
vYl iacn consent of the District, without consent of any Bond Owners, to the extent permitted by
law but only for any one or more of the following proposes:
(i) to add to the covenants and agreements of the Authority contained
in this Indenture, other covenants and agreements hereafter to be observed, to pledge or assign
additional security for the Bonds (or any portion thereof), or to surrender any right or power
;usrin reserved to or conferred upon the Authority;
(ii) to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission, or of curing or correcting any defective provision, contained in this
hxlentnir., or in any other respect whatsoever, as the Authority may deem necessary or desirable,
ovidcd chat such modification or amendment does not materially adversely affect the interests
the Bond Owners in the opinion of Bond Counsel;
(iii) to modify, amend or supplement the Indenture in such manner as
xrmit the qualification of this Indenture under the Trust Indenture Act of 1939, as amended,
car :it)) similar federal statute hereafter in effect, and to add such other terms, conditions and
piovisions as may be permitted by said act or similar federal statute; or
(iv)
to make such
additions, deletions or modifications as may
be
necessary or desirable to
assure exemption
fi•om federal income taxation of interest on
the
Bonds.
(b) Except as set forth in the preceding paragraph of this Section 7.01, this
n,+CnturC and the rights and obligations of the Authority and of the Owners of the Bonds may
oalv he modified or amended at any time by a Supplemental Indenture which shall become
Lindinh . when the written consents of the Owners of a majority in aggregate principal amount of
th, Bonds Then Outstanding are filed with the Trustee. No such modification or amendment shall
bl) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the
�_lhlipatiou of the Authority to pay the principal, interest or premiums (if any) at the time and
I;wc anti at the rate and in the currency provided therein of any Bond without the express
ref inen consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the
%arilicn consent to any such amendment or modification, or (c) without its written consent
tliercto, modify any of the rights or obligations of the Trustee.
(c) The Trustee shall be provided an opinion of Bond Counsel that any such
>u }�hka�n.r�tal Indenture entered into by the Authority and the Trustee complies with the
provisions of this Article VII and the Trustee may conclusively rely upon such opinion.
110:, 1 35
ihirty (30) day period, such failure shall not constitute an Event of Default if corrective action is
instituted by the Authority within such thirty (30) day period and diligently pursued until such
ail ire is corrected.
(d) The filing by the Authority of a petition or answer seeking reorganization
or arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America, or if a court of competent jurisdiction shall approve a petition, filed with or
without the consent of the Authority, seeking reorganization under the federal bankruptcy laws
or any other applicable law of the United States of America, or if, under the provisions of any
other law for the relief or aid of debtors, any court of competent jurisdiction shall assume
custody or control of the Authority or of the whole or any substantial part of its property.
Section 8.02 Remedies Upon Event of Default. Upon the occurrence and during the
cominuance of an Event of Default, the Trustee may pursue any available remedy at law or in
ct.l;iicy to enforce the payment of the principal of and interest and premium (if any) on the Bonds,
.uUd to cntbrce any rights of the Trustee under or with respect to this Indenture.
If an I"vent of Default shall have occurred and be continuing, the Trustee may, if
,quested so to do by the Owners of a majority in aggregate principal amount of Outstanding
I3011ls and indemnified as provided in Section 6.02(1), the Trustee shall be obligated to exercise
b ogre or more of the rights and powers conferred by this Article V111, as the Trustee, being
au% -iscd by counsel, shall deem most expedient in the interests ofthe Bond Owners.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
it1( i Bond Owners) is intended to be exclusive of any other remedy, but each and every such
11 IWdy shall be cumulative and shall be in addition to any other remedy given to the Trustee or
to the Bond Owners hereunder or now or hereafter existing at law or in equity.
No delay or omission to exercise any rights or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver of any such Event of
I It or acquiescence therein; such right or power may be exercised from time to time as often
ns Y)MY her deemed expedient.
Section 8.03 Application of Revenues and Other Funds After Default. All amounts
rcvccivcd by the Trustee pursuant to any right given or action taken by the Trustee under the
of this Indenture shall be applied by the Trustee in the following order upon
nrescnta(iou of the several Bonds, and the stamping thereon of the amount of the payment if only
partiaily paid, or upon the surrender thereof if fully paid.
St,
to the payment of the fees, costs and expenses of the Trustee in declaring such
cnt ol' I )cfault and in carrying out the provisions of this Article VIII, including reasonable
(:ornpen,ation to its agents, attorneys and counsel and any outstanding fees and expenses of the
IIusiec; and
Second, to the payment of the whole amount of interest on and principal of the Bonds
100n duw and unpaid, with interest on overdue installments of principal and interest to the extent
)omitted by law at the net effective rate of interest then borne by the Outstanding Bonds;
WM,idcd, however, that in the event such amounts shall be insufficient to pay in full the full
sr,s 37
owners of the Bonds at the respective dates of maturity, as herein provided, out of the Revenues
Mid other moneys herein pledged for such payment.
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 m
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 Vlll may be enforced and exercised fi•om time
to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case
m.iy be.
Section 8.07 Right to Institute Suit, Action or Proceeding. No Owner of any Bond
sued hereunder shall have the right to institute any suit, action or proceeding at law or in
cyuify. Ibr any remedy under or upon this Indenture, unless (a) such Owner shall have previously
e ivcn 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
cascrnably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in
compli;rncc with such request; (d) the Trustee shall have refused or omitted to comply with such
c -guest for a period of sixty (60) days after such written request shall have been received by, and
aid tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent
with wch written request has been given to the Trustee during such sixty (60) day period by the
( )Nvners of majority in aggregate principal amount of the Bonds then Outstanding.
Such notification, request, tender of indemnity and refusal or omission are hereby
dc( cl urd, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any
enaedy hereunder; it being understood and intended that no one or more Owners of Bonds shall
lmry : 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
llolv(: any provision of this Indenture shall be instituted, had and maintained in the manner
tWrcio 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
rn;d premium (if any) on such Bond as herein provided or to institute suit for the enforcement of
;)ny such payment, shall not be impaired or affected without the written consent of such Owner,
not���ithst,,nding the foregoing provisions of this Section 8.07 or any other provision of this
h0clIiurc.
Swetion 8.08 Termination of Proceedings. In case the Trustee shall have proceeded to
cnlbrcc 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
dctcrmined adversely, then and in every such case, the Authority, the Trustee and the Bond
�
:'M�ncr;, s;rall be restored to their former positions and rights hereunder, respectively, with regard
Kira -a<s i 39
discharge the indebtedness on such Bonds (including all principal, interest and redemption
prCmiums) at or before their respective maturity dates.
If the Authority shall have taken any of the actions specified in (a), (b) or (c) above, and
if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall
have been mailed pursuant to Section 2.02(f) or provision satisfactory to the Trustee shall have
been made, for the mailing of such notice, then, at the election of the Authority, and
m1withstanding that any of such Bonds shall not have been surrendered for payment, the pledge
of the Revenues and other funds provided for in this Indenture with respect to such Bonds,
hledpe. of Revenues and all other pecuniary obligations of the Authority under this Indenture
with respect to all such Bonds, shall cease and terminate, except only the obligation of the
Authority to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all
sums due thereon fi•om amounts set aside for such purpose as aforesaid, and all expenses and
c.o ([s of the Trustee. Any funds held by the Trustee following any payments or discharge of the
)wt if ending Bonds pursuant to this Section 9.03, which are not required for said purposes, shall
be paid over to the Authority.
Section 9.04 Is Deemed Included in All References to Predecessor. Whenever in
this Indenture or any Supplemental Indenture the Authority is named or referred to, such
rciercnce shall be deemed to include the successor to the powers, duties and functions, with
,c;pcct to the managemcnt, administration and control of the affairs of the Authority, that are
nrctirntly vested in the Authority, and all the covenants, agreements and provisions contained in
this hldenture by or on behalf of the Authority shall bind and inure to the benefit of its successors
,t;hethcr so expressed or not.
Section 9.05 Content of Certificates. Every certificate with respect to compliance
�%Jlh a condition or covenant provided for in this Indenture shall include (a) a statement that the
.x.rson or persons making or giving such certificate have read such covenant or condition and the
dohimions herein relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in such certificate
are based; (c) a statement that, in the opinion of the signers, they have made or caused to be
ruadC sm . h examination or investigation as is necessary to enable them to express an informed
�I,inion as to whether or not such covenantor condition has been complied with; and (d) a
statetne�d pis to whether, in the opinion of the signers, such condition or covenant has been
COMplied with.
Any such certificate made or given by an officer of the Authority may be based, insofar
as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless
such ofiiccr loxw�s that Phe certificate or opinion or representations with respect to the matters
post V;hich his certificate may be based, as aforesaid, are erroneous, or in the exercise of
ca,on�ii;lc care should have known that the same were erroneous. Any such certificate or
Opinion or representation made or given by counsel may be based, insofar as it relates to factual
iwincrs, on information with respect to which is in the possession of the Authority, or upon the
ccri i (waie or opinion of or representations by an officer or officers of the Authority, unless such
connvcl that the certificate or opinion or representations with respect to the matters upon
hi( h hi,; certificate, opinion or representation may be based, as aforesaid, are erroneous, or in
the e, x;:r isc of reasonable care should have known that the same were erroneous.
41
paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application
tliereof to any person or circumstance may 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 Authority of any Bonds which have been paid or canceled pursuant
to the provisions of this Indenture, the Trustee shall destroy such Bonds and deliver a certificate
ofdeStruction to the Authority.
Section 9.11 Funds and Accounts. Any fund or account required by this Indenture to
be established and maintained by the Authority or the Trustee may be established and maintained
in the accounting records of the Authority or the Trustee, as the case may be, either as a fund or
ut account, and may, for the purpose of such records, any audits thereof and any reports or
statements with respect thereto, be treated either as a fund or as an account. All such records
wifh reshect to all such funds and accounts held by the Authority shall at all times be maintained
iH accordance with generally accepted accounting principles and all such records with respect to
al ,such funds and accounts held by the Trustee shall be at all times maintained in accordance
V1,ith industry practices; in each case with due regard for the protection of the security of the
bonds and the rights of every Owner thereof. Any fund or account required by this Indenture to
tu: cstal!Ilshed and maintained by the Authority or the Trustee may be established and maintained
i ;i ihk 161 Hi of multiple funds, accounts or sub - accounts therein.
Section 9.12 Payment on Business Days. Whenever in this Indenture any amount is
rcq iWkc"d to lx paid on a day which is not a Business Day, such payment shall be required to be
mode. on the Business Day immediately following such day, provided that interest shall not
flCCPne from and after such day.
�;ectinn 9.13 Notices. Any notice, request, complaint, demand or other communication
urnicr thi:: Indenture shall be given by first -class mail or personal delivery to the patty entitled
thereto ai its address set forth below, or by facsimile or other form of electronic communication,
at its numher set forth below. Notice shall be effective either (a) upon transmission by telecopy
or oihcr ionn of telecommunication, (b) 48 hours after deposit in the United States mail, postage
prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority,
thti District, or the Trustee may, by written notice to the other parties, from time to time modify
do address or number to which communications are to be given hereunder.
Ito the Authority: Lake Elsinore Public Financing Authority
130 South Main Street
Lake Elsinore, California 92530
Attention: Executive Director
(951) 674 -3124
(951) 674 -2392 - Fax
�;r,s 1 43
IN WITNESS WHEREOF, the LAKE ELSINORE PUBLIC FINANCING
Ati'fHORITY has caused this Indenture to be signed in its name and UNION BANK, N.A., in
toi:Cn of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its
corporate name by its officer identified below, all as of the day and year first above written.
Al "IBST:
l r:
Secretary
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
By:
Executive Director
UNION BANK, N.A., as Trustee
By:
45
Authorized Officer
Inicrest Payment Date occurs, in which event it shall bear interest from such Interest Payment
Da(e, or unless this Bond is authenticated on or prior to 15, 20 , in which event it
shall hear 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 fi-om
the Interest Payment Date to which interest hereon has previously been paid or made available
fur payment), payable semiannually on March 1 and September 1 in each year, commencing
1, 201 (each, an "Interest Payment Date "), until payment of such Principal
Amount in full. The Principal Amount hereof is payable upon presentation hereof at the
carporcae 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
herrof' at the address of the Registered Owner as it appears on the Registration Books of the
I rustec as of the first calendar day of the month in which such Interest Payment Date occurs;
c: <cept 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
ou such luterest Payment Date by wire transfer of immediately available funds to an account in
he 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,
he nuty relent of the principal of, and redemption premium, if any, and interest on, this Bond shall
:c paid ht immediately available funds in such manner as determined by the Authority, the
rustee and the Owner.
U is hereby certified that all things, conditions and acts required to exist, to have
h!allpcncd 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
Coristitutioll and statutes of the State of California and by the Act, and that the amount of this
Hfond, tot>cther with all other indebtedness of the Authority, does not exceed any limit prescribed
b; 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
oh;i;;;itory for any purpose, until the certificate of authentication hereon shall have been
uuur „I ly signed by the Trustee.
']'his Bond is one of a duly authorized issue of bonds of the Authority designated the
`Labe Elsinore Public Financing Authority Local Agency Revenue Bonds (Community Facilities
strie.t &8 -3), 2013 Series B” (the "Bonds "), limited in principal amount to $ , secured by
:m indenture of Trust, dated as of 1, 2013 (the "Indenture "), by and between the
,.utho� L'y and the Trustee. Reference is hereby made to the Indenture and all indentures
uppictzicnial thereto for a description of the rights thereunder of the owners of the Bonds, of the
muurc and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties
and iinjounities of the Trustee and of the rights and obligations of the Authority thereunder; and
:J1 o ( the: terms of the Indenture are hereby incorporated herein and constitute a contract between
he �; uthority and the Registered Owner hereof, and to all of the provisions of which Indenture
c it� Owner hereof, by acceptance hereof, assents and agrees.
i A -2
Bonds Maturing on September I, 20
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be Redeemed
Bonds Maturing on September 1, 20
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be Redeemed
Bonds Maturing on September 1, 20
Sinking Fund
Redemption Date
(September 1)
,..; ;a;. i A -4
Principal Amount
to be Redeemed
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within - mentioned Indenture and registered on
the registration books of the Trustee.
Dated: 2013
UNION BANK, N.A.,
as Trustee
By:
Authorized Signatory
r „�,_ A -6